Delhi

New Delhi

CC/1675/2008

Raj Kumari Gupta - Complainant(s)

Versus

M/S. ING Vyasya Life Insurance Company Ltd. - Opp.Party(s)

-

09 May 2016

ORDER

CONSUMER DISPUTES REDRESSAL FORUM-VI

(DISTT. NEW DELHI),

 ‘M’ BLOCK, 1^STFLOOR, VIKAS BHAWAN, I.P.ESTATE, NEW DELHI-110001.

 

 

Case No.C.C./1675/08                                                                                                                       Dated:

In the matter of:

SMT. RAJ KUMARI GUPTA,

W/o Sh. Raj Kumar Gupta,

R/o 362, Sunehri Bagh Appartments,

Sector-13, Rohini,

Delhi-110085.

        ……..COMPLAINANT

 

VERSUS

 

ING VYASYA LIFE INSURANCE CO. (P) LTD.

Upper Ground Floor, Gopal Dass Bhavan,

28, Barakhamba Road, Connaught Place,

New Delhi-110001

Also At:

ING VYASYA LIFE INSURANCE CO. (P) LTD.

ING Vyasya House,

5^th Floor, No.22, MG Road,

Banglore-560001

 

               .... OPPOSITE PARTY

 

ORDER

PRESIDENT: S.K. SARVARIA

        This complaint under Section 12 of the Consumer Protection Act, 1986 (in short ‘Act’) is filed by the complainant alleging, in brief, that the complainant was covered under the Life Insurance Policy bearing No. 00001046 which policy commenced on 01/11/2001 and its date of maturity 01/11/2038 and the sum assured of the said policy is Rs. 4,00,000/- and ADDD benefit of Rs.4,00,000/-.  The complainant had been paying quarterly premium regularly since 2001 except 3 quarterly installments  in the year 2008 which was subsequently paid by the complainant on 1^st July 2008 in cash alongwith interest and penalty amount and revival form and again by cheque in the first week of September 2008 alongwith application for revival of the policy and other documents.

        Vide OP’s letter dated 01/09/2008 and 26/09/2008 OP refused to revise the said life insurance policy due to medical reasons.  The grievance of the complainant is that the OP did not disclose or specify any medical reason for refusing the revival of the life insurance policy.  The OP has concealed the medical reports of the complainant which were got conducted by the OP.  The complainant has got her medical checkup from the reputed diagnostic center on her own, where upon the complainant came to know that there is nothing negative in her medical reports and the complainant is medically fit and is in sound health.

        The allegation of the complainant is that the OP ;has deliberately and intentionally refused to revive the above mentioned life insurance policy pertaining to the complainant and is intentionally causing financial loss to the complainant and is escaping its liability to advance the life insurance cover to the complainant, which is against the insured. It amounts to deficiency in service the OP has not revived the insurance policy despite registered legal notice dated 23/10/08.

        The complainant has prayed for directions to OP to revive the life insurance policy bearing No.00001046 pertaining to the complainant and further directions to the OP to pay compensation for negligence and deficiency of service and mental agony and pain amounting to Rs. 70,000/- and Advocate’s fees and costs Rs. 22,000/- making total amount of Rs. 92,000/-.

        Notice was issued to OP who contested the complaint and filed reply and preliminary objection alleging that the complainant is guilty of suppressing material facts and she has failed to set up  a nexus between the compensation claimed in the present complaint and the damages suffered by her and she has failed to make out a case of “Deficiency of Service” and “Unfair Trade Practice”.

        The  OP has stated that that the complainant has applied for a “Fulfilling Life AWL Plan” a Life Insurance Policy offered by the OP and approved by the Insurance Regulatory and Development Authority (IRDA).  The premium opted by the complainant was Rs. 15,501/- quarterly and payment term was 16 years.  According to the OP Clauses 5 & 6 of the conditions applicable to basic policy and riders govern the premium payments terms, grace periods allowed, lapse of a policy for non-payment of premium within grace period and the reinstatement of policy.  Clause 6 indicates the procedure to be followed in case a policy is in lapsed stage. Clause 6 (II) gives clear direction to OP for  reinstatement of policy provided a written application for reinstatement is received from the policy holder by the company, together with evidence of insurability and health of life assured, if required, to the satisfaction of the company.  According  to OP as per Clause 6 OP has right to reinstate a policy either on its original terms or on modified terms or to completely reject the revival of a policy.  According to OP the policy of the complainant was in the lapsed condition for the following periods due to nonpayment of premium:

Period		Revived on
From	To
01.11.04	31.01.05	01.02.2005
01.08.2005	31.10.2005	26.10.2005
01.08.2006	31.10.2006	02.11.2006
01.08.2007	31.10.2007	29.10.2007

 

        The OP has set up the pleas that all the medical tests and/or other investigations are directed to be carried out solely with intent to evaluate risk which OP company is exposed to.  In- other words the sole purpose of asking the Life Assured to undergo medical tests is to find out, whether the OP Company is willing to cover the risk involved is insuring the life (either as proposed or on the modified terms).  The OP does not intend to diagnose the medical status of the life to be assured (the insurability is based on prognosis of the information available) through the medical tests done.  Moreover the OP did not charge any extra money from the policy holder for the medical tests carried out.  Further, in order to avoid unwarranted interpretation of the medical reports (which at times may only be superficial) the OP does not share the medical reports with the customers.  As the medical reports are meant only to evaluate the insurability of the life assured and/or policy holder to the satisfaction of the company, the Insurance Companies do not normally share the copies of the medical reports with the customers.   According to OP, the OP Insurance company have neither caused any financial loss to the complainant nor are escaping from its liability to advance the life insurance cover to the complainant.   If that the case, the OP could have very well refused to revive the policy of the complainant which was on lapsed stage on several previous occasions due to the nonpayment of the premium by the complainant.  The OP has denied that there was any deficiency in service on this part.  The OP had issued a proper reply to the legal notice dated 18/11/2008 issued by the complainant.  The OP has also denied the liability to pay Rs.70,000/- or any other amount towards compensation for mental agony to the complainant.  The OP has also denied the liability to pay Rs. 22,000/- claimed by the complainant towards cost and Advocate’s Fees.  The OP has prayed for dismissal of the complaint with exemplary costs.

In the rejoinder, the complainant has denied the averments made in the reply of the OP and has reaffirmed the facts stated in the complaint.

In support of her case the complainant has filed affidavit in evidence.  On 9/7/2010 when the case was fixed for OP’s evidence, none appeared for the OP so OP was proceeded ex-parte.  However, later on the OP joined the proceedings but with no evidence as the OP being ex-parte at the stage of its evidence Both parties have filed written arguments.

We have heard the Ld. Counsel for both  the parties and have gone through the records of the case and relevant provisions of law.

 The basic facts are not disputed.   It is admitted the complainant was issued Life Insurance Policy bearing No. 00001046 commencing from 01/11/2001 and date of maturity as 01/11/2038 and sum assured of Rs. 4,00,000/-. It is also not disputed that the complainant who made quarterly installment has defaulted in payment of 3 quarterly installments in the year 2008.  It is also not disputed that the said 3 installments were paid by the complainant subsequently with late fee and interest alongwith application for revival of the policy.  It is also not disputed that OP Insurance Company has refused revival of the  policy on medical grounds after getting the medical examination of the complainant done at the expanses of the OP.

In the backdrop of the above admitted position the bone of contention between the parties is regarding revival of the policy.  According to the complainant she made her medical examination done from reputed doctors and has filed here copy of reports alongwith complaint and rejoinder to show that she was medically fit during the relevant period.  On behalf of the OP, Clause 5 & 6 of the ‘Insurance Policy’ in question which is a part of the record are relied upon. The contention of the OP is that OP has sole discretion to refuse or allow the revival of the policy or grant reinstatement.

In the written arguments the OP has alleged that the health condition of the complainant was not proper and she had under gone medical examination on 01/08/2008 at Nanda Diagnostics New Delhi.  As per medical report of the complainant, the TMT (Exercise ECD) undergone revealed poor exercise tolerance (4.6 mts) and had to be terminated due to breathlessness.  Moreover, blood test done revealed that the complainant has elevated Fasting Blood Sugar Level (FBS).  As the health condition of the complainant was not satisfactory, OP was constrained to decline the application of the complainant for revival of the policy.      

The first question which arises is whether the above plea regarding deficiency in the medical condition of the complainant as per medical test relied upon by the OP Insurance Company in the written argument could be taken cognizance of by this District Forum?

We may like to point out that the said medical tests are nowhere pleaded by the OP Insurance Company in the reply to the complaint. At the time of proceeding the OP was called upon to give evidence on 9/7/2010 instead of filing affidavit in evidence OP abstained from the proceeding and therefore, was proceeded with ex-party.  The OP has joined the proceedings at the stage of arguments.  Therefore, the OP is without any evidence and without pleadings on the question of evidence or details of the poor health condition of the complainant as alleged in the written argument.  Therefore, we are, of the considered view that the written argument to this effect cannot be taken note of by this District Forum.  The proper way for the OP was to get ex-parte proceedings set-aside from the appropriate Forum and then file affidavit in evidence with relevant medical records to justify the plea on the ground of poor health condition of the complainant based on the medical records.   Copies of the letters dated 26/9/2008 and 1/9/2008 rejecting the request of the complainant for revival of insurance policy in question are filed on behalf of the complainant.  These letters were issued by Manager/Customer Services Deptt.  of OP Insurance Company and show that while rejecting the revival of the policy, the un-adjusted amount is refunded to the complainant .  These letters of the OP do not specify, due to which medical problem of the complainant the insurance policy of the complainant could not be revived.   The non giving of the detailed particulars or reasons about ill health of the complainant in the letters of the OP Insurance Company refusing revival of the insurance policy,  in our view,  amounts to deficiency in service on the part of OP Insurance Company.

It is true that Clause 5 of the insurance policy in question indicates about the payment of premium and grace period and Clause 6 of the said policy deals with reinstatement of the policy within 5 years from the due date of the first unpaid premium provided certain conditions indicated in this clause are fulfilled.  It is also admitted position during the arguments that in case of nonpayment of premium for six months or more the revival of policy is to be sought from the OP Insurance Company by the policy holder.  But when the complainant had deposited the premium amount with interest and late fees alongwith requests for revival policy with the revival form, the rejection of the request without specifying the particular of medical problems of the complainant, in our view, amounts to deficiency in service and discretion given in Clause 6 of the insurance policy should have been exercised by the OP in favour of the complainant.  More so, when the complainant has got herself medically examined from other reputed doctors and she was found medically fit as per a copy of the medical laboratory report filed by her.  It would also not be out of place to point out that the insurance policy in question was obtained by the complainant w.e.f. 1/11/2001 and its revival was refused in 2008 after the complainant has deposited policy premium for about 7 years. In this view of the matter also it was incumbent upon the OP Insurance Company to revive the insurance policy after obtaining late fee charges and interest as per prevailing practice and rules.  We have also considered a hypothetical situation i.e. irrespective of the fact that insured person has ill health or medical problem and he continues to pay premium in time in respect of such a policy issued by the OP Company, there was no question of revival of the policy.  We find that in case of default of payment of the premium for about 6 months or more by complainant, the case of complainant stood almost on the same footings when she has deposited the premium of installment with interest and late fees, therefore, non revival of insurance policy of the complainant, in our view, amounts to deficiency in services provided by OP Insurance Company to the complainant.

In view of the above discussion, we allow the complaint and direct the OP Insurance Company to revive the insurance policy No. 00001046 subject to following conditions:-

(i)     The refund of the unadjusted amount alongwith Ops letters dated 01/09/2008 & 26/09/2008 by the OP be deposited by complainant with the OP within one month of receipt of this orders provided the chques sent by OP with said letters have been encashed by the complainant.

(ii)    The deposit of the up to date arrears of the quarterly premium installments within a period of one month from the date of receipt of this order by complainant with the OP Insurance Company.

        In case of the failure of complainant to deposit the above amount with OP within said period, the complainant shall forfeit the right to reward of insurance policy in question.

        Keeping in view, over all facts and circumstances of the case we do not feel it just to grant compensation as claimed in the complaint but feel that it would be in the interest of justice to grant the same on a lower side.

        We also direct the OP Insurance Company to make the payment in the sum of Rs. 40,000/- inclusive of compensation for negligence, deficiency in service and litigation cost within a period of one month from the date of this order by the OP.   In case the said amount is not paid by the OP to the complainant within said period the same shall be recoverable by the complainant from the OP alongwith simple interest at the rate of 10% p.a. from the date of this order till realization of the said amount.  

Copy of the order be sent by registered post to the parties free of cost. This order be sent to server www.confonet.nic.in

File be consigned to record room.

Announced in open Forum on 09/05/2016.

 

 

(S K SARVARIA)

PRESIDENT

 

                                                          (RITU GARODIA)                     (H M VYAS)

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