Punjab

Ludhiana

CC/15/46

Roop Kishore - Complainant(s)

Versus

Reliance General Ins.Co.Ltd - Opp.Party(s)

P.S.Sachdeva Adv.

27 Sep 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No. 46 of 19.01.2015

Date of Decision            :   27.09.2016 

 

Roop Kishore Fatehpuria, Fatehpuria House No.375-CX, Model Town Extension, Ludhiana.

….. Complainant

                                                         Versus

 

1.Reliance General Insurance Company Limited, Registered Office Reliance Centre, 19, Walchand Hirachand Marg, Ballard Estate, Mumbai 400001 through its Manager/M.D.

2.Reliance General Insurance Company Limited, Policy Serving Branch Office, 7th Floor, Surya Tower, 108 The Mall, Ludhiana through its Manager.

3.Insurance Regulatory & Development Authority of India, (I.R.D.A.) Gate No.3, Jeevan Tara Building, Ist Floor, Sansad Marg, New Delhi 110001 through its Chairman.

…Opposite parties

             (Complaint U/s 12 of the Consumer Protection Act, 1986)

 

QUORUM:

 

SH.G.K.DHIR, PRESIDENT                                     

MRS.          VINOD BALA, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant            :          Sh.Prabhjot Singh Sachdeva, Advocate

For OP1 and OP2           :          Sh.G.S.Kalyan, Advocate

For OP3                         :         Complaint already dismissed vide order dated

 16.09.2015.

 

PER G.K.DHIR, PRESIDENT

 

1.                Complainant by relying upon the representation of OP1 and Op2 made through their agents, obtained Reliance Individual Medi Claim policy bearing No.2001732811000664 with validity period from 29.11.2013 to 28.11.2014 for  assured sum of Rs.1,50,000/- on payment of premium of Rs.2191/-. This policy also provided the insurance cover for an amount of Rs.1,12,500/- for the wife of the complainant on payment of premium of Rs.1638/-. Total premium of Rs.3829/- was paid. Before that the complainant and his wife never got any claim during long period of 13 years, despite the fact that he had been availing these policies issued for the last 13 years. However, the policy in question was withdrawn w.e.f.9.6.2014 by disclosing as if the same is not available for renewal. Complainant visited Ludhiana office of Ops for requesting the officials of Ops to withdraw their letter dated 15.8.2014 as the withdrawal of the policy was illegal, arbitrary and illogical and unfair. The          matter was taken with Ops, but they kept on procrastinating the matter. Officials of Ops induced the complainant to have new policy out of the two following policies:-

i)Reliance Health Wise Policy in which amount insured is Rs.2,00,000/- & premium is Rs.16,837/-.

ii)Reliance Health Gain Policy in which amount insured is Rs.3,00,000/- & premium is Rs.38,764/-.

Withdrawal of the earlier policy is without issue of any prior notice or as per the agreed terms and conditions. By alleging the withdrawal to be amounting to deficiency in service and unfair trade practice by Ops, prayer made for directing Ops to withdraw the illegal letter dated 15.8.2014 providing for withdrawal of the policies. Even directions sought to Ops to continue to issue policy for next year 2014-2015 on existing terms and conditions. Compensation for mental harassment of Rs.2,50,000/- and litigation expenses of Rs.21,000/- more claimed. Complaint was filed after serving a legal notice dated 21.11.2014. That legal notice was served along with cheque No.018881 dated 21.11.2014 for Rs.3876/- drawn at Central Bank of India in the name of Reliance General Insurance Company Limited. That amount was sent as the premium for the year 2014-2015. Prayer made for continuing the policy for the year 2014-2015 on existing terms and conditions agreed with the complainant. OP1 and OP2 sent letter dated 25.11.2014 to the complainant for apologizing for their lapses and they assured to review the case. Later on another letter dated 19.12.2014 was sent by them on different footings. OP3 accorded permission for withdrawal of the policy in question on mere asking of OP1 and OP2, but for extraneous reasons and for ulterior motives.

2.                OP1 and OP2 filed written statement by claiming that address of         Ops to be noted as Reliance General Insurance Co.Ltd., for the purpose of service of all notices, process etc. Besides, it is claimed that the complaint is not maintainable for want of cause of action and there is no deficiency in service on the part of Ops. Ops are providing to different kind of insurance products with latest features to individual and groups as per their requirements to cover their risk in general insurance sector. IRDA is controlling body of all general insurance companies. The insurance company can provide any of its products with the approval of IRDA. Even the insurance company can withdraw any of its old products and launch new insurance products with the permission of IRDA only. No company can continue any of insurance products after withdrawal of the same with permission of IRDA. In view of stay in competitive insurance sector, latest featured insurance product with maximum benefits of the insured has to be provided. At the relevant time of issuance of policy, Ops were provided the said insurance product and that is why the complainant obtained individual mediclaim policy No.2001732811000664 from the company, but the said product was having some shortcomings and that is why, the same was discontinued /withdrawn with the approval of IRDA. Intimation was sent in this regard to the complainant vide letter dated 15.8.2014. Even suggestion was given to the complainant to migrate to other health insurance product for maintaining continuity in risk coverage.

3.                OP3 sent written reply through post. After hearing the complainant and counsel for OP1 and OP2, complaint against OP3 was found not maintainable and that is why, the same was dismissed vide order dated 16.09.2015 on the ground that services have not been provided by OP3 at all in respect of the insurance policy in question. Rather, OP3 has not  collected any fees or other charges and being    statutory body, the same just monitoring. Insurance policy provided by the companies, is regulated by OP3.

4.                Counsel for the complainant tendered in evidence affidavit Ex.CA        of complainant along with documents Ex.C1 to Ex.C8 and thereafter, closed the evidence.

5.                On the other hand, counsel for the OP1 and OP2 tendered in evidence affidavit Ex.RA of Sh.Amit Chawla, Manager of OP along with documents Ex.R1 to Ex.R8 and then closed the evidence on behalf of OP1 and OP2.

6.                Written arguments in this case submitted by OP1 and OP2 alone, but not by the complainant. Oral arguments of counsels for appearing parties even heard along with arguments on application dated 25.04.2016 filed by Ops for placing on record letter dated 28.2.2014 duly issued by IRDA. That application is also disposed of through this order itself. 

“ON APPLICATION DATED 25.04.2016”

7.                This application filed by OP1 and Op2 by claiming that permission to withdraw the product granted by IRDA vide letter dated 28.02.2014 and as such, placement of the same letter is essential for adjudication of the matter.

8.                In reply to this application, it is claimed that Ops cannot get benefit of their own wrong and as such, document cannot be allowed to be placed on record at such belated stage, when both the parties have already concluded their evidence.

9.                Placement of letter dated 28.02.2014 received from IRDA by the Ops is not essential for adjudication of the controversy in question because after going through insurance policy in question Ex.C8=Ex.R8, it is made out that Reliance Individual Mediclaim Policy was provided to the complainant with period of insurance from 29.11.2013 to midnight of 28.11.2014. In Ex.C8=Ex.R8 itself it has been mentioned that the insurance is subject to the terms and conditions of the policy attached with the insurance cover. As period of insurance cover specifically fixed through this cover note Ex.C8=Ex.R8 and as such, it was to lapse after midnight of 28.11.2014. Contract of insurance binding upon the parties and nothing can be added or subtracted thereto as per law laid down in cases titled as Ind Swift Limited vs. New India Assurance Co.ltd and others-IV(2012)CPJ-148(N.C.); Usha Sharma and others vs. New India Assurance Co.Ltd and others-I(2012)CPJ-488(N.C.); United India Insurance co.Ltd. vs. Harchand Rai Chandan Lal-IV(2004)CPJ-15(S.C.) and Deokar Exports Private Limited vs. New India Assurance co.Ltd-I(2009)CPJ-6(S.C.). In view of this legal position, it is obvious that contract between the complainant and Ops for providing benefits of Reliance Individual Mediclaim Policy was having the validity upto midnight of 28.11.2014. Terms and conditions of the policy has not been produced on record by any of the parties and as such, in view of the fact that policy in question was to lapse on 28.11.2014, no purpose would be served by allowing Ops to produce on record letter dated 28.02.2014, vide which, permission of withdrawal of the product in question was granted by IRDA to OP1 and OP2. So, application for placement on record copy of letter dated 28.02.2014 merits dismissal and the same is hereby dismissed.

“ON MERITS”

10.              Letter Ex.C1=Ex.R1 was issued by the Ops to the complainant on 15.8.2014 for informing him that after getting approval from IRDA, policy in question namely Individual Mediclaim policy has been withdrawn w.e.f.9.6.2014 and the same will be not available for renewal. Through this letter Ex.C1=Ex.R1, it was disclosed to the complainant that in order to maintain continuity of the health coverage, Ops proposed that the complainant may migrate to other two available health insurance products Reliance Health Gain policy or Reliance Health Wise Policy. As and when, the contract of insurance arrived at, then the terms of the same cannot be unilaterally changed. So, withdrawal of the policy Ex.C8=Ex.R8 with retrospective effect certainly is an illegal act of Ops. Terms of the contract of insurance with respect to validity period is binding on the parties and as such, after receipt of premium for issue of policy Ex.C8=Ex.R8, Ops could not have withdrawn the product in question unilaterally. As contract of insurance through Ex.C8=Ex.R8 was mutually arrived at between the parties on payment and receipt of the premium and as such, terms of the same could not have been rescinded or revoked or cancelled by Ops at their own.

11.              Section 37 of The Indian Contract Act, 1872 provides that the parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law. Promises bind the representatives of the promisors, in case of death of such promisors before performance. When such is the legal obligation caste by Section 37 of The Indian Contract Act, 1872, then certainly Ops could not refuse to perform their part of contract during validity period of insurance contract fixed through Ex.C8=Ex.R8.

12.              Likewise, complainant by sending premium amount of Rs.3873/- through cheque Ex.C5=Ex.R5 through postal receipts Ex.C3 and Ex.C4=Ex.R3 and Ex.R4 cannot force Ops to accept this premium amount for continuation of the earlier purchased policy for years 2014-2015  also because fresh contract of insurance for years 2014-2015 can be arrived at only with mutual consent of the parties and not unilaterally. So, just by sending of cheque of premium amount of Rs.3873/- alone, the complainant cannot force Ops to keep the earlier policy continued.

13.              Perusal of Ex.C6=Ex.R6 reveals that Ops apologized for their lapse for services by claiming that they will review the complaint of the complainant at once and complainant will receive the response from the customer service executive within 2 weeks. So, through Ex.C6=Ex.R6, promise was not at all made for continuation of the individual mediclaim policy for the years 2014-2015 also. Rather, promise through Ex.C6=Ex.R6 was made for responding to the complaint of the complainant only.

14.              Ex.C7=Ex.R7 is the reply sent by the Ops to the complainant in response to the legal notice Ex.C2=Ex.R2. Through Ex.C7=Ex.R7, complainant was informed that after approval from IRDA, the individual mediclaim policy has been withdrawn by offering the alternative products having superior benefits. That offer of continuity made through Ex.C7=Ex.R7 has not been accepted by the complainant and as such, fault lay with the complainant in that respect, particularly when after 28.11.2014, the earlier purchased policy through Ex.C8=Ex.R8 was to lapse. Cheque of Rs.3873/- dated 21.11.2014 was returned to the complainant through Ex.C7=Ex.R7 itself and as such, the offered premium amount for continuity was not accepted.

15.              Acceptance of offer is one of the essential conditions for entering into contract. That acceptance must be absolute and unqualified as per Section 7 of the Indian Contract Act, 1872. That acceptance may be expressed in some usual and reasonable manner. Return of the cheque through Ex.C7=Ex.R7 implies that offer for continuity of the individual mediclaim policy was not accepted by Ops and as such, contract for policy years 2014-2015 never came into existence. Being so, submissions advanced by counsel for the complainant has no force that complainant entitled for continuity of the Individual Mediclaim policy because he had been continuing the same for 13 years earlier to the issue of cover note Ex.C8=Ex.R8.

16.              Even as per law laid down in case titled as ICICI Bank Limited vs. Prem Kishan Garg and others-2015(1)CLT-110(N.C.), insurance company is under no obligation of renewing the insurance policy on the basis of previous premium amount on which earlier renewal was made. That preposition of law is binding and as such, complainant cannot claim that he had been paying the premiums earlier, due to which, the policy in question should be continued.

17.              As per Regulation 2(d) of IRDA(Health Insurance) Regulations, 2013, notified on 16.02.2013 through Notification F.No.IRDA/REG./14/72/2013, the break in policy occurs at the end of the existing policy term, when the premium due for renewal on a given policy is not paid on or before the premium renewal date or within 30 days thereof. As the break in policy purchased through Ex.C8=Ex.R8 to occur at the end of the existing policy term namely midnight of 28.11.2014 and as such, fresh agreement for the subsequent policy year was required. That fresh agreement was never arrived at because the sent premium through cheque Ex.C5=Ex.R5 was returned and as such, complainant not entitled to the continuation of the policy in question.

18.              Regulation 4(b)(i) of IRDA(Health Insurance) Regulations, 2013(supra) provides that any revision or modification in a policy which is approved by the authority, shall be notified to each policy holder at least three months prior to the date, when such revision or modification comes into effect. The notice shall set forth   the reasons for such revision or modification, in particular the reason for an increase in premium and the quantum of such increase. When such is the legal requirement of IRDA Regulations, 2013, then it was for Ops to prove that notice of revision or modification of the policy was sent at least 3 months prior to the date of such revision or modification, which in this case is served on 15.8.2014 as claimed through Ex.C1=Ex.R1. No notice of withdrawal of policy in question prior to 9.6.2014 shown to be served by Ops upon complainant and as such, retrospective withdrawal or withdrawal before the actual expiry of policy term of midnight of 28.11.2014 is against regulation 4(b)(i) of IRDA regulations of 2013 referred above. So,    withdrawal of the policy in question w.e.f.9.6.2014 is not permissible.

19.              The withdrawal of insurance product permissible with the approval of IRDA and same has been obtained by the Ops and as such, withdrawal after expiry date of midnight of 28.11.2014 is legally permissible in view of regulation 4(d) of the above pointed regulations. The withdrawn product is not to be offered to the prospective customers as per Regulation 4(d)(iv) of IRDA Regulations, 2013 and as such, Op company not bound to offer this withdrawn product to the complainant after midnight of 28.11.2014.

20.              Regulation 5(B) of IRDA Regulations, 2013(Supra) provides that insurer shall not compel the insured to migrate to other health insurance products, if it is to the disadvantage of insured. However, Ops through letters Ex.C1=Ex.R1 and Ex.C7=Ex.R7 claimed that offered new products are more beneficial than that of the existing Individual Mediclaim Policy and as such, offer of migration given for betterment of the complainant. It was for the complainant to accept that offer or not.

21.              Regulation 5(f)(i) of IRDA Regulations, 2013(Supra) provides that a health insurance policy shall ordinarily be renewable except on grounds of fraud, moral hazard or mis-representation or non-cooperation by the insured. In view of this regulation, it is vehemently contended by counsel for complainant that Ops are bound to renew the policy provided through Ex.C8=Ex.R8 because denial is not on the ground of fraud, moral hazard or mis-representation or non-cooperation by the complainant. However, this regulation 5(f)(i) is to be read in conjunction with regulation 4 referred above and if that be the position, then it is obvious that if the policy is withdrawn with the approval of IRDA, then the same policy not to be offered for feature years. So, benefit from regulation 5(f)(i) can’t be gained by the complainant. Regulation 5(J)(i) of IRDA Regulations, 2013(Supra) provides that the insurers offering health covers specific to age groups such as maternity covers, children under family floater policies, students etc, shall offer an option to migrate to a suitable health insurance policy at the end of the specified exit age or at the renewal of the policy by providing suitable credits for all the previous policy years, provided the policy has been maintained without a break. That offer of renewal by providing continuity given to the complainant by Ops through letters Ex.C1=Ex.R1 and Ex.C7=Ex.R7. Complainant himself has not availed that offer after the date of expiry of the earlier policy i.e. midnight of 28.11.2014. So, fault lay with the complainant and not with the Ops in this respect.

22.              Regulation 7(b)(ii) of IRDA Regulations, 2013(supra) provides that for all individual and family floater products, other than travel insurance products for at least one year, the policy premium shall remain unchanged. The policy in question also renewable on year to year basis and is an individual policy and besides the withdrawal took place with the approval of IRDA and as such, Ops cannot be forced to renew the withdraw policy with the approval of IRDA.

23.              Regulation 17(a)(iii) of IRDA Regulations, 2013(supra) provides that no new members shall be enrolled into the existing group policies once the product stands withdrawn. As the product in question has been withdrawn with the approval of IRDA and as such, complainant cannot be enrolled as a member for the year, for which, the policy has been withdrawn with the approval of IRDA. So, directions issued through letter Ex.C1=Ex.R1 liable to be quashed, but with the observations that complainant will be entitled to the benefits of individual mediclaim policy Ex.C8=Ex.R8 for the period from 29.11.2013 to midnight of 28.11.2014 only. However, the complainant not entitled to continuation of this policy for the next years of 2014 and 2015 on same terms. As retrospective withdrawal took place, albeit not permissible and as such, mental harassment of the complainant was caused, due to which, he is entitled for the compensation for mental harassment and also for litigation expenses.

24.              As a sequel of the above discussion, complaint allowed to the extent that directions issued through letter dated 15.8.2014 placed on record as Ex.C1=Ex.R1 are quashed, but with the observations that the complainant will be entitled to the benefits of individual medi-claim policy Ex.R8=Ex.C8 for the period from 29.11.2013 to midnight of 28.11.2014 only. However, complainant not entitled to continuation of this policy for the next year of 2014 and 2015 on same terms. Compensation for mental harassment of Rs.5000/-(Rupees Five thousand only) and litigation expenses of Rs.5000/-(Rupees Five Thousand only) more allowed in favour of the complainant and against Op1 and OP2. Payment of these amounts of compensation and litigation expenses be made by OP1 and OP2 within 40 days from the date of receipt of copy of this order. Complaint against OP3 has already been dismissed vide order dated 16.9.2015. Copies of order be supplied to the parties free of costs as per rules.

25.                        File be indexed and consigned to record room.

 

                   (Vinod Bala)                                (G.K. Dhir)

          Member                                          President

Announced in Open Forum

Dated:27.09.2016

Gurpreet Sharma.