BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, BANGALORE.
DATED THIS THE 22nd DAY OF JUNE 2021
PRESENT
MR. RAVISHANKAR : JUDICIAL MEMBER
MRS. SUNITA CHANNABASAPPA BAGEWADI : MEMBER
APPEAL NO. 1780/2012
1. | The Divisional Officer, Life Insurance Corporation of India, Divisional Office, Swaroopa Plaza, Shukrawarpeth, Tilakwadi, Belgaum 590 006. | ……Appellant/s |
2. | The Branch Manager, Life Insurance Corporation of India, Bijapur, Near Samrat Hotel, Mukund Nagar, Station Road, Bijapur. Rep. by Manager (Legal and HPF), Life Insurance Corporation of India, Divisional Office, 1, P.B. No.6694, Jeevan Prakash, J.C. Road, Bangalore 560 002. (By Sri Prashanth .T. Pandith | |
V/s
1. | Shri Shrishal Janatraya Managuli, Aged about 49 years, Occ: Business, R/o Kerosine Business, Near Mollayyana Gudi, Jorpur Peth, Bijapur. (By Sri Nagarale) | …Respondent/s |
2. | Shri Rajeshree Sankand, LIC Agent, The Office of LIC, Mukund Nagar, Station Road, Bijapur. | |
ORDER
BY SMT. SUNITA CHANNABASAPPA BAGEWADI, MEMBER
1. The appellants/Opposite Parties have preferred this appeal being aggrieved by the Order dt.17.07.2012 passed in CC.No.63/2012 on the file of District Consumer Disputes Redressal Commission, Bijapur.
2. The facts leading to the appeal are as hereunder;
It is the case of the complainant that he had obtained “Jeevan Anand” Insurance Policy No. 634458391 for an assured sum of Rs.12 lakhs on 15.11.2005 from the Opposite Party. The policy was commencing from 15.11.2005 and the quarterly premium to be paid by the complainant at Rs.21,051/-. The complainant has paid seven premium installments at Rs.1,47,357/- to the Opposite Parties, but, he has not paid the premium installment due on 15.08.2007 in time and even within the grace period of 30 days and further installments also. Therefore, the said policy was in lapsed condition, as the complainant has not fulfilled the condition for surrender of the policy & Opposite Party No.2 has stated no amount will be paid for such surrender of policy. The complainant further stated that he has not taken any benefit under the policy and without there being any reasons and grounds, the premium amount of Rs.1,47,357/- not refunded to the complainant by the Opposite Parties. The complainant has asked the Opposite Parties only to return the premium amount not any benefits under the policy. Therefore, the complainant has issued the legal notice to the Opposite Parties on 02.04.2011, but the Opposite Party Nos. 1 & 2 have not complied the notice and Opposite Party No.1 has given evasive reply. Hence, the complaint.
3. After service of notice, the Opposite Parties appeared before the District Commission through their counsel and Opposite Party No.2 filed their version. Opposite Party No.1 adopted the version of Opposite Party No.2. Opposite Party No.3 did not file any version. The Opposite Party Nos. 1 & 2 in their version have admitted the policy in question, but, denied the other allegations made by the complainant. The Opposite Parties further contended that the policy was commencing from 15.11.2005 and the quarterly premium to be paid by the complainant at Rs.21,051/-. The complainant has paid only seven premium installments, but the complainant has not paid the premium installment due on 15.08.2007 in time and even within the grace period of 30 days and further installments also. Therefore, the said policy was in lapsed condition from 15.08.2007. On the date of lapse only 7 quarterly premium (1 and ¾ years) were paid on the policy. As per the terms and conditions of the policy, the policy condition No. 7 deals with payment of guaranteed surrender value. Accordingly, during tenure of the policy, the policy holder may surrender the policy and get the surrender value on the same, provided the premium on the policy is paid for minimum period of three years. It is mandatory, where the premium have been paid for at least three years to pay the minimum surrender value. The minimum surrender value payable shall be equal to 30% of the total premium paid excluding the first year premium and all extra and additional premium and this mandatory requirement of the insurance laws has been included as one of the privilege in the policy bond under the head Guaranteed Surrender Value. Therefore, as per the terms and conditions of the policy the complainant not entitled for surrender value. The conditions in the policy have been overlooked by the District Consumer Commission. Therefore, the said policy was lapsed. The Opposite Party issued a letter to the complainant on 06.06.2009, but, the complainant did not respond to this letter. Hence, there is no deficiency in service on the part of the Opposite Parties and prayed to dismiss the complaint.
4. After trial, the District Commission partly allowed the complaint directing the Opposite Party Nos.1 & 2 to pay a sum of Rs.1,47,357/- with interest at 9% p.a. from 16.08.2007, till realization along with cost of litigation. In default, the amount of Rs.1,47,357/- shall carry interest at 12% from 16.08.2007, till realization.
5. Being aggrieved by the said Order, the appellants/ Opposite Parties are in appeal. Heard the arguments of appellant side. Inspite of granting sufficient opportunities, the Respondent No.1 has not advance his arguments.
6. Perused the appeal memo, the Order passed by the District Commission and materials on record, it is an undisputed fact that the complainant had obtained “Jeevan Anand” Insurance Policy No.634458391 for an assured sum of Rs.12 lakhs on 15.11.2005 from the Opposite Parties and policy was commenced from 15.08.2005. The complainant has paid quarterly premium of Rs.21,051/-. Totally the complainant has paid Rs.1,47,357/- in seven installments. It is also an undisputed fact that in the month of February-March, the complainant approached the Opposite Party to surrender the policy and asked to pay the surrender value, but the Opposite Parties denied to pay as the complainant has violated the terms and conditions of the policy. According to the appellants, the respondent has paid seven premiums and has not paid the premium installment due on 15.08.2007 in time and even within the grace period of 30 days and further premium installments also. Therefore, the said policy was in lapsed condition. The policy was lapsed from 15.08.2007. The policy documents were duly received by the Respondent No.1/ complainant. Therefore, all the terms and conditions of the policy came to be known to the Respondent No.1/complainant. As per the terms and conditions of Policy Clause No.7 of the policy deals with the payment of ‘Guaranteed Surrender Value’. Accordingly, during the tenure of the policy, the policy holder may surrender the policy and get the surrender value on the same provided the premium and the policy is paid for minimum period of first three years. It is mandatory, where the premium have been paid for at least three years to pay the minimum surrender value. The minimum surrender value payable shall be equal to 30% of the total premium paid excluding the first year premium and all extra and additional premium and this mandatory requirement of the insurance laws has been included as one of the privilege in the policy bond under the head Guaranteed Surrender Value. Therefore, as per the terms and conditions of the policy the complainant not entitled for surrender value.
7. In the present case, the complainant has paid seven quarterly premium installments of Rs.21,051/- i.e. he had paid totally a sum of Rs.1,47,357/- in seven installments for 1 ¾ years. As per the policy condition No.7, the complainant has to pay premium atleast three years to seek the minimum surrender value equal to 30% of total premium paid excluding the first year premium, but, the complainant has not paid the premium installments for first three years. Hence, the policy was lapsed and he was not entitled to get surrender value of the policy as per the policy terms and conditions. Anyhow, when the complainant approached the Opposite Parties in the month of February and March, he has an option for revival of the policy as per the terms and conditions of the policy Clause-3. The Clause-3 reads as under;
“Revival of Discontinued Policies : If the policy has lapsed, it may be revived during the life time of the life assured, but within a period of 5 years from the date of first unpaid premium to the satisfaction of the Corporation and the payment of all the arrears of premium together with interest at such rate as may be prevailing at the time of payment”.
However, the respondent/complainant never sought revival of the policy. Hence in our opinion the respondent has violated the terms and conditions of the policy as per Clause No.7. Anyhow the complainant has paid seven installments total of Rs.1,47,357/- and due to financial recession he was unable to pay the further premium installments, hence, he was decided to surrender the policy and asked to refund the premium amount. However, the Opposite Parties are denied to refund the amount paid because the complainant has not fulfilled the terms and conditions of the policy.
8. The terms and conditions are binding between both the parties. In the present case, the Opposite Parties are not informed to the complainant about the lapse of the policy, it is the duty of the Opposite Parties to intimate about the lapse of the policy through any letter or email etc., and for such the District Commission after discussion came to the conclusion that “unless any intimation of cancel the policy is given to the insured personally such policy cannot be treated as cancelled”. Hence, in our opinion, it is a deficiency in service on the part of the Opposite Parties. Moreover, the complainant has paid Rs.1,47,357/- is his hard earned money. Hence, the Opposite Parties have no authority to withheld the premium amount of the complainant with them. Hence, after consideration we are of the opinion that after exclusion of Clause-7 of the policy, the complainant is entitled the surrender value of the policy only after deduction of surrender charges if any because there is no any provision clause for full refund of premium paid on foreclosure of the policy. Moreover the complainant has also violated the policy terms and conditions so that the complainant is not entitled to any other compensation. Hence, the following;
ORDER
The appeal is allowed in part. The Order dt.17.07.2012 passed in CC.No.63/2012 on the file of District Consumer Disputes Redressal Commission, Bijapur is hereby set-aside and modified as under;
The Opposite Party Nos. 1 & 2 jointly and severally liable to pay Rs.1,47,357/- after deducting surrender charges if any to the complainant with interest at 6% p.a. from 16.08.2007, till realization along with Rs.5,000/- towards litigation charges within 30 days from the date of this Order.
Forward free copies to both parties.
Sd/- Sd/-
MEMBER JUDICIAL MEMBER
KCS*
