Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.98/12.11.2020
Sh. Ram Prakash Sharma
R/o 525-B, Sector-1, Vaishali Ghaziabad,
Uttar Pradesh-201010 ...Complainant
Versus
Star Union Dai-Ichi Life Insurance Co. Ltd.
2nd Floor, Samyak Towers, Pusha Road,
Karol Bagh, Delhi-110005
Also at: 501-507, Tolstoy House, Tolstoy Marg,
New Delhi-110001 Email id: customercare@sudlife. ...Opposite Party
Order Reserved on: 09.12.2022
Date of Order: 03.03.2023
Coram: Shri Inder Jeet Singh, President
Shri Vyas Muni Rai, Member
Ms. Shahina, Member -Female
Inder Jeet Singh
ORDER
1.1. (Introduction to consumer dispute between the parties) : Complainant's son Manoj Kumar took life insurance policy from Star Union Dai-Ichi Life Insurance Co. Ltd against premium payable in five annual installment, out of which four annual installments were paid by him, however, thence he died of un-natural death. The complainant, being nominee/father of deceased, lodged full claim amount of Rs.16,38,000/- but OP paid him Rs.4,76,384/- only, which is 80% of premium paid by the insured Manoj Kumr during his life time. There is deficiency of services.
1.2: Whereas, the OP has reservations that amount paid was in terms of policy condition/clause no.9(b) that firstly there was lapse of policy for want of payment of timely premium in time and secondly, in case suicide is committed by insured within 12 months from the date of revival/re-instatement of lapsed policy, 80% of the premium paid is to reimbursed, Manoj Kumar's policy had lapsed but he got his policy re-instated on 13.09.2019. He had committed suicide on 11.12.2019 within 3 months of reinstatement of policy; accordingly evaluated amount was settled to the claim of complainant. There is no deficiency of services.
2. (Case of complainant ) : The complainant is a father/nominee of deceased policy holder namely Manoj Kumar Sharma, who had been maintaining policy no. 00989193 of Sud Life Elite Assure Plan 142NO40V01 (pages 7-11 inclusive of first premium receipt dated 30.07.016 at page-09) under Insurer/OP for sum assured of Rs. 16,38,000/- against five annual premium installments. The insured/Manoj Kumar Sharma had paid four premium installments of Rs. 1,54,453/- each out of five installments. However, Manoj Kumar Sharma had accidently expired 11.12.2019. Then, claim along-with all original documents was lodged with OP in its Delhi Office at Karol Bagh for release of sum assured of Rs.16,38,000/-. It was assured by the officials of OP and also by official of Bank of India that claim amount of insurance of Rs.16,38,000/- would be released in the Bank A/c of the complainant but only a sum of Rs.4,76,384/- was sent in his account. The complainant made repeated visits in the office of opposite party but opposite party has been denying the same by one pretext or others but no result.
The complainant feeling aggrieved got served legal notice
18.08.2020 to OP but OP has neither replied nor paid balance assured amount. There is guaranteed maturity benefit scheme under the policy to the policy-holder. The complainant is entitled to get benefit of entire assured sum and liable to recover balance amount of Rs. 11,61,616/-along-with interest @ 18%pa besides costs from the opposite party under the said policy cover, which OP has intentionally and deliberately breached the terms of policy. There is deficiency in services by OP.
3.1 (Case of OP) : The OP opposed the complaint on the basis of terms and conditions of policy. The Complainant's son Manoj Kumar Sharma (since deceased) had furnished proposal form bearing no. 12518596 with the Opposite Party for availing "SUD Life Elite Assure Plan and upon receipt of proposal form, OP had carried out the underwriting on basis the information and documents provided along with the proposal form (page 13-22). Then policy no 00989193 (pages 23-34) was issued to Insured for sum assured of Rs.16,38,000/- against covenants of premium & other terms, inclusive of first Premium Receipt for the amount of Rs.1,54,453/- (page 27). The parties are bound by terms and conditions of policy.
3.2: It was 19.02.2020, when OP had received the death claim intimation of insured Manoj Kumar (page 65-63), wherein date of death mentioned was 11.12.2019 and cause of death as "suicide" (page 35). While evaluating the claim, it was brought to the attention complainant side, the deceased had remitted the insurance premium for the year 2017 and 2018 on due dates of 30th July but the premium for the year 2019 was received on 13.09.2019. As a consequence thereof, the subject policy "Lapsed" due to non-receipt of premium on due date, since as per the terms and conditions of the policy if the premiums under the policy is not remitted on due date then the policy is "Lapsed". Extract of the premium clause.
"4. Payment of Premium:
c) if the due but unpaid premium is not paid to the Company by the Policyholder on or before the expiry of the grace period, then this Policy will lapse and no benefits shall be payable by the Company under this policy except as mentioned under section 5 (d) for Reduced Paid up Benefit."
Moreover, the OP vide its letter dated 29 August 2019 (page 64), had informed the insured in writing, "we are unable to extend the risk cover for your lapsed policy. We urge you to kindly pay the outstanding premium (s) to revive your policy and enjoy continued benefits under your policy.".
It was 13.09.019, when Insured's policy was reinstated since he remitted the premium (which was due on 30.07.2019) and it was communicated to the insured by reinstatement letter dated 13.09. 2019 (page 65).
3.3. Apart from it, there is another covenant no. 9 under heading 'suicide' in the policy, it reads as :-
"9-SUICIDE:
b. During the Policy Term and provided this Policy is in force, in the event the Life Insured commits suicide, whether sane or insane at that time, within 12 months from the date of the last reinstatement/revival of this Policy, the insurance coverage under this Policy shall cease and the Policyholder/Beneficiary, as the case may be, shall be entitled to an amount which is higher of 80% of the Premiums paid (excluding extra premiums and taxes) till the date of death of the Life Insured or the Surrender Value, if any."
Since the Insurance policy was reinstated on 13.09.2019 and date of death of deceased assured is 11.12. 2019, which is within 3 months of reinstatement. Thus, in terms of Clause 9 of the Insurance Policy, in case, the event of death has occurred within 12 months from the date of last reinstatement, then the insurance coverage is ceased and the policyholder/ beneficiary will be eligible for 80% of the premium. Accordingly, OP had evaluated the death claim, which came out to be Rs.4,76,384/-and the same amount was credited into complainant's account maintained with the Bank Of India on 27.02. 2020, which has been admitted by the Complainant (copy of the claim settlement letter dated 03.03.2020 is at page 66). OP had also replied legal notice by reply dated 02.09.2020 bearing reference no.
SUD:HO:L&C:SB:100:2020-21 by vehemently denying all the contentions raised therein. The contract of Insurance is contract between the policyholder and the company, both parties are governed by its terms and conditions in the Policy document and all the benefits there-under are payable as per policy condition. However, relief sought by the Complainant is contrary to the terms and condition of policy and consequently the OP is not liable to pay any amount as claimed by the complainant herein. The complainant has made bald lie of the cause of death of accident, since it is suicide (and not accident) and in order to mislead this Hon'ble Commission, the complainant with-held the claim intimation form, apart from with-holding the reply to legal notice. The complaint deserves to be dismissed, there is no deficiency in service on the part of OP. The complainant is also liable to be dismissed since it was filed under repealed law of the Consumer Protection Act, 1986.
4. (Replication of complainant) : The complainant re-affirms the complaint as correct by way of replication. While responding other allegations of reply, complainant submits that in fact complainant has filed compliant u/s 35 of Consumer Protection 2019 but section 12 of Consumer Protection Act 1986 was mentioned inadvertently or by typographical error. Otherwise, in terms of section 36(3) of the Consumer Protection Act,2019, present compliant is deemed have been admitted.
5.1 (Evidence) : The complainant Shri Ram Prakash Sharma filed his compact affidavit and it is fortified with the documentary record of complaint.
5.2: On the other side, affidavit of evidence in detail of Shri Anis Kazi, AVP-Legal was filed , retreating the reply to complaint and document as an evidence.
6. (Submission of Parties) : Both sides have filed their respective arguments, apart from oral submission by Shri Mahendera Sharma, Advocate for the complainant and Shri Nishant Gaurav Gupta, Advocate for the OP. The written arguments are replica of pleadings with reference to documents proved in evidence, besides reproduction of clause of 'payment of premium' and 'suicide' from the insurance policy contract, however, during the oral arguments the parties referred and emphasized the documents or clause of insurance policies to oppose the plea of each other. They are not being repeated here, as the same will be discuss issue-wise.
7.1 (Findings) : The contention of both sides are considered, analysed and assessed. Not only the pleadings are lengthy but there is also reproduction of contents and texts from the documents. While assessing the record, there are undisputed facts as well as disputes matters. Therefore, the undisputed facts culled out are being firstly mentioned and then other disputed issues will be taken.
7.2. (undisputed facts) -At the out-set there are many undisputed facts like the complainant's son got the insurance policy from OP, complainant was nominated by the Insured, four annual installments out of five were paid by insured, the first premium receipt along-with policy filed on record by both sides, un-natural death of insured Manoj, inquest proceedings by UP Police u/s 174 Cr.P.C., post-mortem of dead body of Manoj, filing of insurance claim by complainant being nominee after death of Manoj, payment and receipt of Rs.4,76,384/-, which is 80% of paid premium, sum assured on maturity of Rs.16,38,000/- .
7.3: The OP has objection that the complaint was titled under the erstwhile repealed law of the Consumer Protection Act, 1986, but complainant has reservation that the moment complaint is admitted under new Act, 2019, the objection does not survive.
7.3A: The nomenclature of erstwhile Act,1986 in the title of complaint would not defeat the substantive contents of complaint, apart from the procedure established has been followed through-out the proceedings. Thus, it carries no weight in the contentions of OP that complaint is barred under law.
7.4.1: (Issue of lapse and reinstatement of policy)- Now, the crucial issue is with regard to lapse of policy as well as its reinstatement. In the undisputed policy document, the procedure is also laid down, which is strict in nature and parameters are mandatory in nature. However, there are rival plea as complainant contends that policy of Manoj Kumar was never lapsed but on the other side OP maintains that there was non-payment of premium, policy was lapsed, letter was issued and later-on it was reinstated. The insurance policy enumerates clause 11 regarding revival etc, it is appropriate to reproduce it to appreciate the contentions:-
11:Revival/Reinstatement of lapsed policy:
(a) A lapsed Policy or a Policy with Reduced Paid Up status can be revived/ reinstated at the Company’s sole discretion, within a period of two years from the due date of the first unpaid Premium provided;
(i). The Policyholder has submitted a written request to revive this Policy;
(ii). On production of proof of continued insurability to the satisfaction of the Company;
(iii). On submission of the satisfactory medical evidence (the cost of the required medical examination, if any will be borne by the Policyholder); and
(iv). On receipt of all arrears of Premium including extra premium and applicable taxes, if any with interest at the applicable rate of interest at the time of payment.
(b) The Company shall revive this Policy in accordance with the Company’s board approved underwriting policy and the revival shall take effect only after the Company has approved the same in writing. The Company reserves the right to accept or reject the revival/ reinstatement of the lapsed Policy or a Policy with Reduced Paid Up status as per the board approved underwriting guidelines.
(c) Once the Policy is revived/ reinstated, all the benefits under this Policy will be restored.
7.4.2. The OP relies upon letter dated 29.08.2019 under title " Lapsed " (page no. 64 of paper-book) that the premium was not received on due date (30.07.2019) till the date of letter and consequently for want of payment of premium in time, the policy was lapsed. Later on it was 13.09.2019 when the policy was revived and letter 13.09.2019 under title "reinstatement" (page no. 65 of the paper-book) was issued and that is why the other clause no.9 (Suicide) was invoked to pay reimbursed 80% of the paid premium to settle the claim.
7.4.3. On the other side, the complainant contends that insured Manoj Kumar had been paying the premium regularly, he had paid four annual installments out of five annual installments of premium. No such lapsed letter dated 29.08.2019 or reinstatement letter dated 13.09.2019 was received or served upon the insured or on the complainant. A false plea is being taken by the OP to decline valid claim.
7.4.A. In fact answer of this question lies in the documentary evidence/record of clauses of insurance policy and letters dated 19.08.2019 and 13.09.2019.
As per policy document and schedule for payment of premium, the due date is for payment of premium is 30th July of year, being annual premium, as this option of payment of annual premium was availed by insured. The Clause-11 of policy (already reproduced in paragraph 7.4.1. above) is in respect of reinstatement of lapsed policy. It is mandatory provision/procedure to be followed for all cases of reinstatement of policies. It provides the policy can be reinstated only after Company’s Board approves in writing, not otherwise. It is mandatory and strict policy to be followed as per terms of the policy.
The other covenant is of " clause no.4-Payment of premium" , one of its sub-clause-4c is reproduced in paragraph 3.2 above, as it was referred by OP in its reply and also in evidence. However, there are many other sub-clauses under clause-4, they were not referred by the OP in its reply, but its text can be read from Policy document. The other sub-clause of clause-4 are also about payment of premium and grace period for payments for different options (like annual or half yearly and so on). In case of annual premium payment option, there is grace period of 30 days from due date for payment of the premium and till that grace period exhausts, the policy does not lapse, or in order words when premium is not paid on due date but upto grace period, occasion for lapse of the policy does not arise.
In this case, firstly, the due date of premium was 30th July 2019, the grace period was for 30 days which was upto 29.8.2019, the lapse of police was possible after grace period expires on 29.8.2019, subject to non-payment of premium. However, the lapsed letter was issued on 29.08.2019 itself. On the face of this letter dated 29.08.2019, it does not mention as to when and by which mode it was actually sent to the Insured nor there is proof of service of that letter upon the insured. Secondly, the reinstatement letter dated 13.09.2019 reflects that the policy was revived on 13.09.2019 as if the premium was paid after lapse of policy. However, there is no indication as to when premium was paid by insured. The OP has also not filed and proved copy of premium paid receipt or whether it was issued, if the premium was so paid after lapse of policy. There is mandatory requirement for request application in writing with reasons by the insured to the OP for reinstatement of policy, however, there is no such application proved nor any order in writing by the Board of Company for reinstatement of the policy. Thus, there is clearly no record of compliance of Clause-11 of the policy, if the policy was actually lapsed and later reinstated. Therefore, preponderance of probabilities are leaning towards the Insured and complainant that the said letter dated 29.08.2019 or letter dated 13.09.2019 were not served upon the complainant. It is relevant to mention the OP has filed first premium receipt along with the policy with the reply, but in order to authenticate that insured Manoj Kumar had deposited the premium amount (after lapse of the policy), no payment receipt was filed by OP. Otherwise, it is undisputed fact insured Manoj Kuma had paid four annual premium installments. Therefore, it is held that for want of proof of lapse of the policy, eventuality of reinstatement of policy is not feasible.
7.5: (what is cause of death)- According to complainant, it was case of accidental death of insured Manoj Kumar. Whereas, according to OP it was a case of suicide by hanging, which was also stated in the claim form by the complainant but in the complaint it was pleaded an accidental death case.
7.5A. The answer to this issue is also in the record. Since, insured Manoj Kumar had died by unnatural death, he was taken to hospital, where he was declared 'brought dead' and local police was informed, who registered GD no.16 dated 11.12.2019 at P.S. Indrapuram. It was followed by inquest proceedings u/s 174 CrPC. The post-mortem was also conducted and it was opined ‘cause of death- asphyxia as a result of ante-mortem hanging’. There is no other record or contrary opinion proved by the complainant, therefore the cause of death is asphyxia as a result of ante-mortem hanging.
7.6: According to OP, since the policy was reinstated and in the eventuality of suicide by the insured within period of 12 months from the date of reinstatement of policy, the police ceases and beneficiary will be entitled for 80% of premium paid, which was settled by OP. Whereas, accordingly to complainant, the policy was never lapsed nor reinstated, the complainant is entitled for entire sum assured less the amount already paid.
7.6A: Since, there are rival stands of the parties on this issue vis a vis it has already been decided in paragraph above that OP failed to establish about lapse of policy and its reinstatement. Moreover, there are actually two sub clauses (a) or (b) under heading 'suicide', they are required to be reproduced, since OP had referred only one of them. Clause-9 (of suicide) reads as
9.Suicide
(a)During the Policy Term and provided this Policy is in force, in the event the Life Insured commits suicide, whether sane or insane at that time, within 12 months from the Date of Commencement of Risk, the insurance coverage under this Policy shall cease and the Policyholder/ Beneficiary, as the case may be, shall be entitled to 80% of the Premiums paid (excluding extra premiums and taxes).
(b) During the Policy Term and provided this Policy is in force, in the event the Life Insured commits suicide, whether sane or insane at that time, within 12 months from the date of the last reinstatement/revival of this Policy, the insurance coverage under this Policy shall cease and the Policyholder/ Beneficiary, as the case may be, shall be entitled to an amount which is higher of 80% of the Premiums paid (excluding extra premiums and taxes) till the date of death of the Life Insured or the Surrender Value, if any.
7.6B: The plain meaning of sub-clause (a) of Clause-9 is that if event of suicide by insured happens within 12 month of issue of policy, then the policy shall cease to operate and beneficiary of policy will be paid/returned 80% of premium paid, in order words out of premium paid an amount of 20% will be deducted by Insurer and 80% will be settled and paid to the beneficiary. Further, in the eventuality of suicide after that period of 12 month from the date of policy, then beneficiary will be entitled for all benefits of policy.
7.6C: The plain meaning of sub-clause (b) of Clause-9 is that if event of suicide by insured happens within 12 month of last reinstatement/revival of policy, then the policy shall cease to operate and beneficiary of policy will be paid/returned 80% of premium paid, in order words out of premium paid an amount of 20% will be deducted by Insurer and 80% will be settled and paid to the beneficiary. Further, in the eventuality of suicide after that period of 12 month from last reinstatement/revival of policy, then beneficiary will be entitled for all benefits of policy.
7.6D: Since, it is already held that the OP failed to establish that there was lapse of policy or reinstatement of policy, therefore, on plain literal meaning of these clause-9, its sub-clause (b) does not apply. Moreover, the insured had paid four annual premium installments after obtaining insurance policy on 30.7.2016, when first premium installment was paid. Thus by invoking sub-clause (a) of clause-9, the event of suicide happened on 11.12.2019, which is after about 40 months from date of policy of 30.7.2016.
7.6E: Accordingly, this case is covered by sub-clause (a) of clause-9, which complainant has proved against OP. The complainant, being nominee/legal heir of deceased, is entitled for balance amount of insurance claim.
8.1 The circumstances established by complainant are of deficiency in services of OP by declining him valid claim. Thus, complainant is held entitled for his valid claim of Rs.11,61,616/- The complainant has sought interest @18% pa, however, considering facts & features of case interest @ 4%pa would justified both the ends, it will be from the date of complaint till realisation of amount against the OP.
8.2.:The complainant has also sought amount of Rs.50,000/- towards harassment, inconvenience, mental pain & agony, to and for expenses and mental agony for this cause; considering the circumstances the damages are quantified as Rs. 10,000/- in his favour and against the OP apart from cost of litigation of Rs.5000/-.
8.3: Accordingly, the complaint is allowed in favour of complainant and against the OP to pay Rs.11,61,616/- along-with simple interest @ 4%pa from the date of complaint till realisation of amount, apart from damages of Rs. 10,000/- & litigation costs of Rs.5000/-. OP is also directed to pay the amount within 30 days from the date of receipt of this order.
8.4. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for necessary compliance.
9: Announced on this 3nd March, 2023 [फागुन 12, साका 1944]. It is necessary to record that great difficulties are being faced for want of stenographer & PA in the regular functioning of this Commission as a single stenographer Gr-III is provided.
[Vyas Muni Rai] [ Shahina] [Inder Jeet Singh]
Member Member (Female) President
