Per Mr.Narendra Kawde, Hon’ble Member
This is a complaint filed by the complainant alleging deficiency in service on the part of opponent in settlement of complainant’s claim under the life insured policy.
2. Complainant is a Limited company incorporated and registered under the provisions of Indian Companies Act 1956 carrying business of diagnostic services by testing of human blood samples. Opponent is also a Limited company carrying on business of life insurance rendering services in respect of policies to the customers-policy holders.
3. The facts according to the complainant are that they have subscribed to the Endowment Assurance policy bearing No.000000142148 on 11/03/2003, which was issued by opponent assuring the life of Dr.A. Velumani, M.D. of the complainant company for a period of 10 years with annual premium of `21,18,150/- for sum assured of `2 crores with Guaranteed Surrender Value. Said policy is termed as Keyman’s policy. Annual premiums were paid and received for a period of 5 years effective from March 2003 to March 2008.
4. Instead of borrowing money from the open market for managing business, the complainant company decided to discontinue the said ‘Keyman’s policy’ and availed the proceeds of surrender value payable under the said policy. According to the complainant, in order to know the surrender value under the policy, complainant sent the letter to the opponent on 08/03/2008 specially mentioning therein the changed address of the complainant company with a request to communicate the surrender value of the policy on the new address mentioned in the said letter. This letter came to be sent on opponent’s notified address meant for correspondence for the policy holders. As no reply was received from the opponent, another letter was sent on 07/04/2008 by the complainant to Prabhadevi branch office of the opponent insisting to communicate surrender value under the policy. Even then no reply was received by the complainant and, therefore, they have made enquiries at branch office of the opponent on 13/05/2008 and, thereupon, the complainant came to know that the opponents have sent a reply dated 14/04/2008 on the complainant’s old address incorporated in the policy document though change of address was specifically intimated in first letter dated 08/03/2008 and, subsequently, in another letter of 07/04/2008 addressed by the complainant to the opponents. Therefore, again on request of complainant, opponent sent fax copy of letter dated 14/04/2008 to the complainant. By way of said letter dated 14/04/2008, opponent intimated accrual of `89,08,873/- as surrender value under the policy. The complainant tried to submit Discharge form and policy document to the nearest branch office at Vashi and Thane through representative and on refusal to accept the said Discharge form with original policy document at Vashi office, the complainant’s representative approached Thane Branch office of opponent as directed by Vashi Branch office. However, Thane office also refused to accept the documents and directed the complainant to approach Head office of the opponent.
5. As stated in the complaint, the complainant thereafter submitted Discharge form dated 17/06/2008 and original policy at Registered Head office of the opponent along with letter dated 16/07/2008, thereby requesting to settle surrender claim as there was already delay and claimed 18% interest on surrender value amount effective from 14/04/2008, if the claim was not honoured urgently. Complainant was directed by Head office of the opponent to approach Branch office of opponent at Churchgate, Mumbai where it was told that as policy value was expired and, therefore, Vashi and Thane Branch office of opponent did not accept the claim papers. Revised surrender value amount (P.V.) of `85,61,770/- was offered to the complainant on 21/07/2008 by opponent, with outright reduction of `3,47,103/- in comparison to earlier surrender value of `89,08,873/- as intimated by opponent by letter dated 14/04/2008. Complainant denied to accept the reduced surrender value alleging negligence of opponent in not dispatching the first letter dated 14/4/2008 to complainant’s new address, resulting into deliberate delay on part of opponent to settle the claim subjecting complainant to untold anxiety and harassment. Hence the complainant alleging negligent act and deficiency of service on the part of opponent to settle the due claim of the complainant in time filed this consumer complaint.
6. Undisputed facts of the case are that complainant is a Limited company engaged in business of providing diagnostic services. Subject Life Policy was subscribed by the complainant and issued by opponents assuring the life of Dr.A.Velumani, Managing Director of complainant company as a ‘Keyman’s Policy’. The said policy admittedly accrued surrender value of `89,08,873/- as on 14/04/2008. Complainant company decided to discontinue the said policy and availed surrender benefit payment under policy. Address of the complainant was changed and informed to opponent by way of complainant’s letter dated 08/03/2008 and 07/04/2008 for correspondence and first letter dated 14/04/2008 was reportedly sent by opponent to complainant’s old address covering surrender value of `89,08,783/-, which was not received by the complainant and fax copy thereof was sent by the opponent on request of complainant on 13/05/2008.
7. Heard the Ld.Advocates for the parties. Mr.A.S.Vidyarthi-Advocate for the opponent vehemently argued and opposed the complaint stating that complainant being the Limited company engaged in commercial activities cannot be called as ‘consumer’ within the provisions of Consumer Protection Act, 1986. Opponent has deposited the amount of `89,08,873/- with the permission of this Commission on 22/06/2010 as settlement outside the Commission did not materialize. Mr.T.J.Pandian-Ld.Advocate for the complainant pleaded that opponent compelled the complainant to run from pillar to post to settle lawful claim under subject policy. There was no clarity in any of the offices approached by complainant about accepting documents and honouring the claim and each office approached by the complainant was tossing towards another office. New address of the complainant though informed by first communication i.e. letter dated 08/03/2008 for correspondence, was deliberately ignored by opponent. Delay in settlement of the claim of agreed surrender value was deliberate attempt as no communication/reply was received at new postal address of the complainant. Discounted surrender value of `85,61,770/- was intimated on 13/05/2008 by the opponent and the complainant refused to accept the same. Complainant company though engaged in commercial activities, Keyman’s Life policy was subscribed to indemnify actual loss and was not certainly intended to generate profit. Therefore, the complainant fulfills definition of “consumer” for availing services of opponents for Life policy.
8. In Appeal nos.159, 160 & 161 of 2004 decided on 03/12/2004 in case of Harsolia Motors v/s. National Insurance Co.Ltd. (2005) CPJ 27 (NC), Hon’ble National Consumer Disputes Redressal Commission decided the issue of commercial unit as consumer to avail services of insurance company for policy as defined in section 2(1)(d)and 2(1)(o) of Consumer Protection Act, 1986, which reads as below:-
“12. Further, hiring of services of the Insurance Company by taking Insurance policy by complainants who are carrying on commercial activities cannot be held to be a commercial purpose. The policy is taken for reimbursement or for indemnify for the loss which may be suffered due to various perils. There is no question of trading or carrying on commerce in insurance policies by the insured. May be that insurance coverage is taken for commercial activity carried out by the insured.”
Therefore, submission of Ld.Advocate of opponent that complainant is not a ‘consumer’ does not hold good. Submissions of Ld.Advocate of the complainant are not out of context as they are based on facts.
9. We have perused relevant record, documents/evidence led by the parties. In absence of clarity as to which office of the opponent was authorized/empowered to honour surrender value claim, the complainant had to approach different offices of the opponent including Head office. Non-cognizance of new postal address of complainant by opponent delayed receipt of intimation by complainant about payable surrender value under the policy and the first intimated surrender value of `89,08,873/- by letter dated 14/04/2008 of the opponent was received after much follow up only by fax on 13/05/2008 by the complainant and, thereafter, on completing the formalities, claim papers (original policy and discharge voucher) carried by the complainant’s representative at Vashi and Thane branch office were not accepted and instead directed to approach Head office of opponent. Thereupon Branch office at Churchgate informed that new surrender value would be informed shortly as policy value had been lapsed. Opponent thereafter informed discounted surrender value of `85,61,770/- on 21/07/2008. There is perfect sequence in Line of action of the opponent even though they denied having informed of about Lapsation of P.V. by their Churchgate branch as there is handwritten note dated 18/07/2008 bearing seal of the opponent’s office with signature of Mr.Vinay Rahatwal. Intimation of revised discounted surrender value came to be issued only thereafter.
10. The concept of discounted/reduced surrender value under the Life Policy is not known and with the misconceived notion opponent informed at later date (on 21/07/2008) revised discounted surrender value of `85,61,770/- as against the first intimated surrender value of `89,08,873/-. On the contrary, with efflux of time, surrender value ought to have gone up. Upon realizing the mistake, opponent made efforts to settle the case with complainant, but did not succeed and, therefore, with permission of this Commission deposited an amount of `89,08,873/-, the first admitted claim of surrender value as against `85,61,770/- as subsequently informed though opponent’s intention would be settle claim of surrender value, first intimated to complainant.
11. Considering the present matter in the light of above observations, we are of the considered view that opponent had deliberately tried to protract settlement of claim under the policy and, therefore, there exist deficiency of service on the part of opponent. Hence, we pass the order as below:-
ORDER
1. Complaint is allowed.
2. Opponent is directed to make payment of `89,08,873/- as surrender value under the subject Life Policy to the complainant with interest @ 9% p.a. from the date of complaint till date of deposit of amount of `89,08,873/- in this Commission.
3. Registrar of the State Commission is directed to release payment of deposit of `89,08,873/- already deposited by the opponent on 17/06/2008 to the complainant together with interest accrued thereon after a period of revision is over. This payment shall be adjusted towards satisfaction or part satisfaction of the compensation awarded per paragraph 2 of this operative order.
4. No order as to costs.
5. Copies of the order be furnished to the parties.
Pronounced on 21st October, 2011.
