Haryana

StateCommission

A/331/2016

ARUN SHOREE - Complainant(s)

Versus

SBI LIFE INSURANCE CO. - Opp.Party(s)

DEEPAK AGGARWAL

07 Nov 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

 

                                     First Appeal No  :          331 & 356 of 2016

Date of Institution:       18.04.2016 & 25.04.2016     

                                     Date of Decision:          07.11.2016

 

 

Appeal No.331 of 2016

 

 

Ms. Arun Shoree daughter of late Sh. Sohan Lal, resident of House No.267, Sector 12, Panchkula.

                             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.356 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. Arun Shoree daughter of late Sh. Sohan Lal, resident of House No.267, Sector 12, Panchkula.

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. Diwan Singh Chauhan, Member.

                  

Present:              Mr. Deepak Aggarwal, Advocate for Ms. Arun 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.331 & 356 of 2016 filed by Ms. Arun 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.144 of 2015. 

2.      In appeal filed by complainant, she seeks enhancement of compensation awarded by the District Forum. 

3.      Insurance Company, in its, appeal has assailed 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.38007531210 (Annexure R-1/1) 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 annually. On October 04^th, 2013 the complainant filed surrender/partial withdrawal application form before the Insurance Company whereby she proposed to surrender the policy and requested the Insurance Company to settle the surrender value against her policy.  As is gleaned from letter dated October 08^th, 2013 (Annexure C-4), the complainant withdrew her request application dated October 04^th, 2013 for surrender of her policy. After paying the first premium on August 30^th, 2010, the complainant did not pay any premium thereafter.  Since, the complainant did not pay the premium, the Insurance Company issued a letter dated September 02^nd, 2014 (Annexure R1/6) to the complainant stating that her policy was cancelled and the fund value after deducting the applicable surrender charges and service tax would be paid to the complainant on receipt of requisite documents.  In response to the said letter, complainant sent Direct Credit Mandate (Annexure R1/7) mentioning her account number for receiving policy payment through NEFT.  After receipt of the Direct Credit Mandate (Annexure R1/7), the Insurance Company refunded the amount of Rs.5,14,001.89, that is, Fund Value=Rs.6,18,191.97 minus Charges Plus Service Tax = Rs.1,04,190.08.  The complainant filed the complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum seeking direction to the Insurance Company to refund Rs.1,04,190/- and Rs.1,26,999/- alongwith interest at the rate of 18% per annum; Rs.2,00,000/- as compensation; Rs.2,00,000/- damages and Rs.35,000/- litigation expenses.   

5.      The District Forum taking into consideration IRDA regulations without mentioning the date of notification, directed the Insurance Company to refund the charges levied in violation of letter dated October 08^th, 2013 (Annexure C-1) and the IRDA regulations alongwith the interest at the rate of 9% per annum with effect from the date of deduction and till the payment; Rs.10,000/- compensation and Rs.5000/- litigation expenses to the complainant.

6.      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.

7.      Per contra 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.

8.      It is not in dispute that complainant had purchased the insurance policy on August 30^th, 2010. She did not pay the premium thereafter inspite of reminder sent to her vide Regular Premium Notice (Annexure R1/3).  Intimation with regard to the lapse of insurance policy was also sent to her by the Insurance Company vide letter dated September 30^th, 2011 (Annexure R-1/4). Another notice (Annexure R-1/5) was issued on March 30^th, 2012 under reference Lapse cum Revival Notice wherein it was clearly stated as under:-

          “Please notice that if the policy is not revived before the end of the revival period which is 3 years from the date of First Unpaid Premium, the policy contract will be terminated at the end of the revival period and the “Surrender Value will be paid to you as full and final settlement under the policy”.

 

9.      Since no response came from the complainant, another letter dated September 02^nd, 2014 (Annexure R-1/6) was written by the Insurance Company to the complainant under the subject : Lapsed Terminated Refund against policy No.38007531210 wherein it was stated that policy stands cancelled and the fund value after deducting the applicable surrender charges and service tax would be paid to her on receipt of requisite documents.  Under clause 12.3.3 of the insurance policy, it is clearly mentioned that surrender charges would be 15% of the fund value against the policy under regular premium, which the Insurance Company has deducted. 

10.    Learned counsel for the complainant has referred to the letter dated October 08^th, 2013 (Annexure C-1) written by Insurance Company mentioning therein that surrender charges would be Nil from 6^th policy year onwards irrespective of the number of year premium paid even if the policy is a regular premium payment plan.  So, on the basis of that letter, Insurance Company could not deduct the surrender charges.

11.    The contention raised by the learned counsel for the complainant is not tenable in view of the fact that interpretation of this letter is that the Insurance Company would not have deducted surrender charges in case the payment of the policy was not made prior to the 6th policy year.  Hence, letters were written by the Insurance Company to the complainant and thereafter, she even sent Direct Credit Mandate (Annexure R1/7) mentioning her account number for receiving policy payment through NEFT.  The letter (Annexure C-1) was sent only to convey to the complainant that in case she does not withdraw the amount or the amount is not taken by her till 6^th year of the policy, the surrender charges would not be deducted from the fund value.  This being so, the District Forum has fell in error in allowing the complaint. 

12.    For the reasons recorded supra, the appeal No.356 of 2016 filed by Insurance Company is allowed, the impugned order is set aside and the complaint is dismissed.  Consequently, appeal No.331 of 2016 filed by the complainant stands dismissed.   

13.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal No.356 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.

14.    Certified copy of this order be placed on the file of Appeal No.356 of 2016.

 

Announced 07.11.2016

(Diwan Singh Chauhan) Member

(Nawab Singh) President

U.K