Haryana

StateCommission

A/359/2016

SBI LIFE INSURANCE CO.LTD. - Complainant(s)

Versus

NEHA SHOREE - Opp.Party(s)

RAJNEESH MALHOTRA

26 May 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

 

                                     First Appeal No  :          328 & 359 of 2016

Date of Institution:       18.04.2016 & 25.04.2016     

                                     Date of Decision:          26.05.2016

 

 

Appeal No.328 of 2016

 

 

Ms. Neha Shoree daughter of Capt. Kailash Kumar Shoree, resident of House No.267, Sector 12, Panchkula – 134112 (Haryana).

                             Appellant-Complainant

 

Versus

 

1.      SBI Life Insurance Company Limited, Registered and Corporate Office, Natraj, M.G. Road and Western Express High Way Junction, Andheri (East), Mumbai -400069 through its Director.

 

2.      Regional Director, SBI, Life Insurance Company Limited, SCO 127-128, 3^rd Floor, Sector 17-C, Chandigarh.

 

3.      Branch Manager, Serving Branch, SBI Life Insurance Company Limited, SCO No.304, 2^nd Floor, Sector 9, Panchkula, Haryana -134109.

 

4.      Umesh Bali (Agent) of SBI Insurance Company Limited, SCO No.304, 2^nd Floor, Sector 9, Panchkula, Haryana-134109.

Respondents-opposite parties

 

Appeal No.359 of 2016

 

 

 

1.      SBI Life Insurance Company Limited, Registered and Corporate Office, Natraj, M.G. Road and Western Express High Way Junction, Andheri (East), Mumbai -400069 through its Director.

 

2.      Regional Director, SBI, Life Insurance Company Limited, SCO 127-128, 3^rd Floor, Sector 17-C, Chandigarh.

 

3.      Branch Manager, Serving Branch, SBI Life Insurance Company Limited, SCO No.304, 2^nd Floor, Sector 9, Panchkula, Haryana -134109.

                             Appellants-Opposite Parties No.1 to 3

 

Versus

 

1.      Ms. Neha Shoree daughter of Capt. Kailash Kumar Shoree, resident of House No.267, Sector 12, Panchkula – 134112 (Haryana).

Respondent-complainant

 

 

2.      Umesh Bali (Agent) of SBI Insurance Company Limited, SCO No.304, 2^nd Floor, Sector 9, Panchkula, Haryana-134109.

Respondent-opposite party No.2

 

 

CORAM :            Hon’ble Mr. Justice Nawab Singh, President

                             Mr. B.M. Bedi, Judicial Member.

                  

Present:              Mr. Deepak Aggarwal, Advocate for Neha Shoree-complainant

                             Mr. Rajneesh Malhotra, Advocate for the SBI Insurance Company.

 

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

          This order shall dispose of afore-mentioned appeals bearing No.328 & 359 of 2016 filed by Neha Shoree-complainant and SBI Life Insurance Company (for short ‘Insurance Company’) and others respectively because they have arisen out of common order dated March 15^th, 2016 passed by District Consumer Disputes Redressal Forum, Panchkula (for short ‘District Forum’) in complaint No.242 of 2015. 

2.      In her appeal, Neha Shoree-complainant seeks enhancement of compensation awarded by the District Forum. 

3.      On the other hand, Insurance Company has challenged the impugned order on the ground that District Forum has wrongly directed the Insurance Company to restrict the deduction of surrender charges only to the extent mentioned under the Insurance Regulatory and Development Authority (IRDA) (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010; allowed compensation of Rs.10,000/- and Rs.5000/- litigation expenses to the complainant. 

4.      Complainant purchased insurance policy No.38007532607 (Annexure R-2) under the Product Name: SBI Life – Unit Plus III Pension dated August 31^st, 2010. The amount paid was Rs.5,00,000/-.  The mode of the premium was single premium.  The complainant filed surrender/partial withdrawal application form (Annexure C) before the Insurance Company on October 04^th, 2013 whereby she proposed to surrender the policy and requested the Insurance Company to settle the surrender value against her policy.  The Insurance Company vide payment voucher for ULIP Surrender (Annexure E) after calculating the amount, that is, Net Surrender Value,  paid Rs.5,56,424.63 to the complainant on October 09^th, 2013, that is, after five days of the request made by the complainant.  After deducting surrender charges at the rate of 2%, that is, Rs.12,792.34 inclusive of Rs.1407.10 as service tax.  In the complaint filed by the complainant, she asked for the refund of Rs.12,492.34 to say Rs.13,000/- from the Insurance Company, which they had wrongly charged. 

5.      In the reply, Insurance Company pleaded that 2% charges were deducted from the amount accrued, that is, total fund value of Rs.5,79,216.97 per the clause 12.3.2 of the insurance policy.   

6.      The District Forum directed the Insurance Company to deduct the surrender charges only to the extent mentioned under the IRDA regulations alongwith interest at the rate of 9% besides Rs.10,000/- for mental agony and Rs.5000/- litigation expenses.

7.      Learned counsel for the complainant has urged that Insurance Company should have deducted surrender charges as per the IRDA regulations issued vide notification dated July 01^st, 2010 and not as per the clause 12.3.2 of the insurance policy.

8.      Learned counsel for the Insurance Company has urged that in the case in hand IRDA notification dated July 01^st, 2010 is not applicable because the scheme, that is, SBI Life – Unit Plus III Pension under which complainant had purchased the insurance policy was opened on December 22^nd, 2009 and withdrawn on August 31^st, 2010 as per Product List updated on March 11^th, 2016 (Annexure K) of Insurance Company.

9.      The question arises as to whether surrender charges should have been deducted as per the table mentioned under clause 12.3.2 of the insurance policy or as per the notification of the IRDA dated July 01^st, 2010. 

10.    It is not in dispute that as per clause 12.3.2, 2% surrender charges was to be deducted of the fund value in case of surrender of the policy in the fourth year of the policy.  Regulation 1 (2) of the notification dated July 01^st, 2010 reads as under:-

                   “1.     xxxxxxxxx

                   (2)     They shall come into force on the date of their publication in the official gazette and shall apply to all products of linked life insurance cleared by the Authority thereafter.”

          A reading of regulation 1 (2) shows that these regulations would come into force on the date of publication of the official gazette and shall apply to all products linked life insurance cleared by the Authority thereafter, which makes it clear that these regulations were applicable only from the date of publication of all products of linked life insurance cleared by the authority thereafter.  The product, that is, SBI Life – Unit Plus III Pension was floated on December 22^nd, 2009 as mentioned in Product List updated on March 11^th, 2016 (Annexure K).  So, IRDA, 2010 was not applicable to the insurance policy in question.  In view of this, Insurance Company had rightly deducted 2% as surrender charges of the fund value, that is, Rs.12,792.34 inclusive of Rs.1407.10 as service tax.  This being so, the District Forum has fell in error in allowing the complaint. 

11.    For the reasons recorded supra, the appeal No.359 of 2016 filed by Insurance Company is allowed, the impugned order is set aside and the complaint is dismissed.  Consequently, appeal No.328 of 2016 filed by the complainant stands dismissed.   

12.    The statutory amount of Rs.15,356/- deposited at the time of filing the appeal No.359 of 2016 be refunded to the SBI Life Insurance Company Limited - appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

13.    The original order is attached with appeal No.328 of 2016 and certified copy be attached with appeal No.359 of 2016.

 

Announced 26.05.2016

(B.M. Bedi) Judicial Member

(Nawab Singh) President

U.K