C.C. No. 76/2010 (Filed on 27.05.2010)

                      3. The opposite parties entered appearance and filed version with the following main contentions:  They admitted that the complainant had purchased an endowment policy from the opposite parties and the complainant’s application for the surrender of the policy.  According to the opposite parties, the policy commenced on 08.07.2002 and the date of maturity is 08.07.2022.  According to the terms of the policy, ` 50,000 was the sum assured and in the case of the death of the policy holder before the date of maturity, the some assured was payable to his nominee.  The quarterly premium payable by the policy holder in 2002 at the time of issue of policy was ` 1,094 which includes the premium of ` 965 for the endowment policy and the premium of ` 129 for various riders associated with the policy like critical illness rider.  As per the terms of the policy, if the policy holder fails to pay any premium within the due date, the policy will not be forfeited on account of the automatic premium loan arrangement available to the policy holder.  As per the automatic premium loan arrangement, the premium remaining due beyond the grace period would be paid by the opposite parties and the said premium amount will be treated as a loan. 

                    4. The premium payable by the complainant is not fixed is ` 1,095 as claimed by the complainant.   As per the terms of the policy, the basic policy premium and the rider premium is susceptible to change with increase in age of the policy holder.  Further, along with premium, service tax also will be collected at the applicable rate.  At the time of surrender application on 23.04.2010, 28 premium instalments amounting to ` 33,961 had been collected from the complainant.  Out of the said 28 instalments, 11 instalments had been collected through the automatic premium loan process.  Out of the said 11 instalments, 4 instalments were subsequently cleared by the complainant.  Thus an amount of ` 8,583-66 is due from the complainant being the premium loan and its interest.  The opposite parties never informed the complainant that the surrender value of the policy would be ` 27,000.  In respect of the endowment policy, the policy holder is assured of a minimum guaranteed surrender value provided he has paid the premium for at least three consecutive years and the surrender value will be 30% of the premium paid on the basic policy excluding the premium paid for the first policy year less the dues on account of the automatic premium loan.  As per the above said calculation, the face value of the complainant’s policy as on 23.04.2010 is ` 5,784-40.  The complainant was not entitled to get any bonus as the complainant opted for a premature closure of the policy.  However, the opposite parties are willing to pay an amount of ` 4,899-32 as bonus.  However, during the process of the complainant’s surrender application, they found some discrepancy in the signature of the complainant.  So, the opposite parties directed the complainant to submit 3 specimen signatures for settling the complainant’s surrender application.  But the complainant had not complied the direction of the opposite parties, which prevented the disbursement of the surrender value.  The disbursement of the surrender value was not effected due to the attitude of the complainant in not furnishing the specimen signatures.  If the complainant is prepared to comply the direction of the opposite parties, the opposite parties are willing and ready to pay ` 9,468-74 as the surrender value, though the actual surrender value as per the calculations based on the terms and conditions of the policy is only ` 5,784-40.  Therefore, according to the opposite parties, they have not committed any deficiency in service or unfair trade practice.  In the light of the above said contentions, the opposite parties pray for the dismissal of the complaint.

                   5. On the basis of the pleadings of the parties, the only point to be considered is whether this complaint can be allowed or not?

                   6. The evidence of this complaint consists of the oral deposition of PW1 and DW1 based on their proof affidavits and Exts.A1 and A2 series and Exts.B1 to B6.  After closure of evidence, both sides were heard.

                   7. The Point:  The complainant’s allegation is that he had taken a life insurance policy of the opposite parties worth ` 1,00,000 in the year 2002 and the duration of the policy is for 20 years and the quarterly premium is ` 1,095.  The complainant had paid 23 quarterly premium instalments till 25.07.2006.  According to the complainant, as per the terms and conditions of the policy, the policy holder is entitled to surrender the policy at any time before the maturity.  Accordingly, the complainant submitted an application for surrendering the policy and as per the terms and conditions of the policy; the complainant is entitled to get ` 27,000 as the surrender value.  But the opposite parties denied the complainant’s demand for ` 27,000 and offered ` 10,000 to the complainant as the surrender value.  The above said act of the opposite parties is deficiency of service and unfair trade practice and the complainant is entitled to get the surrender value of ` 27,000 along with compensation, interest and cost and the opposite parties are liable to the complainant for the same. 

                   8. In order to prove the complainant’s case, the complainant’s father who is the authorized representative had filed a proof affidavit narrating his case.  On the basis of the proof affidavit, the authorized representative was examined as PW1 and the documents produced were marked as Exts.A1 and A2 series.  Ext.A1 is the authorisation executed by the complainant in favour of his father.  Ext.A2 series (Exts.A2 to A2(o) are the official receipts issued by the opposite parties in the name of the complainant for the quarterly premium amount.

                   9. The opposite parties’ contention is that as per the terms and conditions of the policy, in case of any fault in the payment of quarterly premium, the said premiums were paid by the opposite parties as a loan for the complainant under automatic premium loan payment scheme and the policy holders are at liberty to surrender the policy after 3 years regular payment and in such cases the surrender value will be given to the policy holders as per the terms and conditions of the policy.  In this case, the complainant had remitted ` 33,961 by 31 instalments either by direct payments or by automatic premium loan arrangements.  Out of the said 31 instalments, 11 instalments are made by automatic premium loan amounts and out of the said 11 automatic premium loan payments, the complainant had cleared 4 loan instalments and 7 instalments are still pending.  As per the terms and conditions of the policy, the total surrender value of the policy of the complainant was calculated as ` 9,468-74, which includes a bonus of ` 4,899-32 and they decided to accept the surrender application of the complainant by paying the said amount.  The opposite parties are ready and willing to pay the said amount.  But during the processing of the surrender application, opposite parties found certain discrepancies in the signatures of the complainant.  So they have directed the complainant to furnish 3 specimen signatures for processing the surrender application.  But the complainant failed to submit the specimen signatures as directed by the opposite parties.  Therefore, they could not settle the complainant’s demand for surrendering the policy.  They have also denied that they have informed the complainant that the complainant’s surrender value is ` 27,000.  With the above contentions, they argued that they have not committed any deficiency in service or unfair trade practice and the non-payment was due to the fault of the complainant. 

                   10. In order to prove the contentions of the opposite parties, the authorized representative of the opposite parties filed proof affidavit and 6 documents.  On the basis of the proof affidavit, the authorized representative of the opposite party was examined as DW1 and the documents produced were marked as Exts.B1 to B6.  Ext.B1 is the copy of the application form submitted by the complainant for taking the policy.  Ext.B2 is the copy of the terms and conditions of the policy in question.  Ext.B3 is the copy of the policy surrender application dated 20.04.2010 submitted by the complainant.  Ext.B4 is the letter-dated 27.04.2010 issued by the opposite parties in the name of the complainant requesting him to submit his specimen signatures.  Ext.B5 is the reminder letter dated 12.07.2010 issued by the opposite parties in the name of the complainant requesting him to comply the request made by them in Ext.B4.  Ext.B6 is the premium payment chart showing the details of the payment of the premiums from 08.07.2002 to 08.01.2010. 

                   11. On the basis of the contentions and arguments of the parties and on the basis of the materials available, it is found that the complainant is a policy holder of the opposite parties and there is no dispute between the parties with regard to the surrender application of the complainant.  As per Ext.B6, 31 instalments of ` 33,961 was paid in the complainant’s policy.  According to the complainant, they have paid only 23 instalments.  But as per Ext.B6 payment schedule, it is seen that 31 instalments were paid in the complainant’s policy.  Since the complainant had not challenged the entries in Ext.B6, we are constrained to relay on Ext.B6 with regard to the premium payments.  So we came to the conclusion that an amount of ` 33,961 is credited in the complainant’s policy.  But it includes uncleared automatic premium loan payments also.  As per Ext.B6, 7 automatic premium loan instalments were not cleared by the complainant.  So as per the terms and conditions of the policy, the complainant is entitled to get the surrender value of 31 premiums less outstanding uncleared automatic premium loan payments.

                   12. The complainant’s contention is that though they have submitted surrender application, opposite parties denied the payments.  But according to the opposite parties, the payment was denied due to the fault of the complainant in furnishing the specimen signatures as requested by the opposite parties.  As per Exts.B4 and B5, it is evident that the opposite parties requested the complainant to submit specimen signatures.  But there is no evidence to show that the complainant had furnished his specimen signatures for processing the surrender application.  So we cannot find any deficiency of service against the opposite parties in non-settling the complainant’s demand for surrender.  The complainant’s claim is that he is entitled to get an amount of ` 27,000 as the surrender value.  But according to the opposite parties, the complainant is not entitled to get ` 27,000 as surrender value.  Instead, as per the calculations based on the terms and conditions of the policy, the complainant is only entitled to get ` 9,468-75.  But the opposite parties had not produced any evidence to substantiate the calculation of the surrender value as ` 9,468-75.  So we are not inclined to accept the offer of the opposite parties that they are willing and ready to pay ` 9,468-75 to the complainant as the surrender value of the complainant’s policy.  However, it is an admitted fact that an amount of ` 33,961 is in the credit of the complainant subject to the clearance of 7 automatic premium loan payments.  Since the opposite parties failed to adduce any evidence to show that they have the right to reduce any amount stands in the credit of the complainant at the time of premature surrender of the policy, as per the terms and conditions of the policy as claimed by the opposite parties, we are of the view that the opposite parties are liable to return the amount stands in the credit of the complainant with its interest plus the bonus offered by the opposite parties less the outstanding uncleared automatic premium loan payment and its interest provided on submission of proper surrender application form by the complainant.  In the circumstances, this complaint is partly allowable as stated herein above. 

                   13. In the result, this complaint is allowed in part, thereby the opposite parties are directed to return the amount stands in the credit of the complainant plus the bonus of `4,899-32 (Rupees Four thousand eight hundred and ninety nine and 32 paise only) offered by the opposite parties less outstanding uncleared automatic premium loan payments and its interest to the complainant along with an interest at the rate of 10% per annum from the date of filing of this complaint along with cost of ` 1,500 (Rupees One thousand five hundred only) within 30 days from the date of receipt of this order, failing which the complainant is allowed to realise the whole amount as ordered herein above with 12% interest per annum from today till the realisation of the whole amount.  Since interest is allowed, no separate compensation is allowed.

                   Pronounced in the Open Forum on this the 16^th day of May, 2011.

                                                                                                           (Sd/-)

                                                                                                   Jacob Stephen,

                                                                                                       (President)

Smt. C. Lathika Bhai (Member)     :         (Sd/-)

Sri. N. Premkumar (Member)       :         (Sd/-)

Appendix:

Witness examined on the side of the complainant:

PW1  :         Thomas. P. Mathew.            

Exhibits marked on the side of the complainants:

A1     :         Authorisation executed by the complainant in favour of his

                      father. 

A2 series (Exts.A2 to A2(o) :  Official receipts (16 in number)  issued by the

                      opposite parties in the name of the complainant.

Witness examined on the side of the opposite parties:

DW1 :         Vijay Dharman.

Exhibits marked on the side of the opposite parties:

B1     :         Copy of the Life Insurance Application Form dated 08.07.2002

                     submitted by the complainant to the first opposite party.

B2     :         Copy of terms and conditions in respect of policy No.C

                     300129607 issued by the first opposite party to the complainant.

B3     :         Copy of policy surrender application dated 20.04.2010

                     submitted by the complainant to the first opposite party.

B4     :         Copy of letter dated 27.04.2010 issued by the first opposite

                     party to lthe complainant.

B5     :         Copy of letter dated 12.07.2010 issued by the first opposite

                     party to the complainant.

B6     :         Statement of premium collected and automatic premium loan

                     maintained by the first opposite party.

                                                                                                (By Order)

                                                                                      Senior Superintendent.

Copy to:- (1) Thomas Renjith Mathew, Padinjattumkara Veedu,

                       Kumbanadu P.O., Pathanamthitta – 689 547.

(2) Officer in Charge, Tata AIG Life Insurance Co. Ltd., Regd. Office at Peninsula Towers, 6^th Floor, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel,

     Mumbai – 400 013.

(3) Officer in Charge, Tata AIG Life Insurance Co. Ltd., 3^rd Floor, Deepa Tower, Deepa Junction, M.C. Road,

     Thiruvalla – 689 101.

(4) The Stock File.