Complainant Rajnish Aggarwal has filed the present complaint against the opposite parties U/S 12 of the Consumer Protection Act (for short, C.P.Act.) seeking necessary directions to the opposite parties to refund the amount of two premium under the policy in question together with interest @ 9% p.a. from the date of payment till its realization. Opposite parties be further directed to pay Rs.50,000/- as damages alongwith Rs.10,000/- as litigation expenses.
2. The case of the complainant in brief is that he hired the services of the opposite party in the year 2014 vide policy No.00743502 for Rs.7,51,000/- and the term of the policy was 18 years w.e.f. 31.01.2014. The period of paying term of premium was 10 years annually amounting to Rs.51,398/- besides service tax and the total amount of premium was fixed as Rs.52,986/-. He paid two installments for two years and could not continue further due to financial crisis. He has next pleaded that as per clause 5 of terms and conditions, it is the condition that "if the policy holder has not paid the due premium within the grace for the first three full years, the policy be considered as lapsed. The life cover ceases and no benefits are payable under the lapsed policy." He has further pleaded that the opposite party issued a letter dated 05.02.2018 vide which intimation regarding termination of his policy has been sent, which is against the terms and conditions as mentioned in clause of 8 of the policy as in case of neither of the two conditions of clause 8 have come in existence according to which his policy could be terminated. Thus, there is deficiency in service on the part of the opposite party. In the month of December, 2017, he visited the office of the opposite party no.2 at Amritsar to know the status of the policy wherein he was told that his policy has been lapsed due to non-payment of third premium and he was suggested to pay the same which he was planning to pay the same but unfortunately the letter dated 05.02.2018 was received. He has next pleaded that on receipt of the aforesaid letter, he made a request vide his letter dated 19.02.2018 with the opposite party to allow him to pay the third premium. In response, the opposite party informed him vide letter dated 28.02.2018 that the complaint has been registered vide token No.SUD-1732017-NOZI and the matter will be examined by the Grievances Redressal Unit and respond within 15 days. After a lapse of one month, no reply was received from the opposite party. He then through a telephonic call on 27.03.2018 requested to the Grievances redressal Unit (Mr.Sandeep Singh) to let him know the status of his complaint. He suggested him to send him some of the requisite documents which were sent through e-mail on 27.03.2018 itself. In response, it was intimated by the opposite party through an e-mail on the same day that the query will be responded within 48 hours. When after a lapse of 35 days, no response was received from the opposite party, he through an e-mail dated 01.05.2018 sent a reminder. In response, on 2.5.2018, the opposite party informed him that his complaint has been addressed to the concerned team and they will send him the response within next five days. On 11.05.2018, he received a letter dated 12.03.2018 purported to be dispatched by the opposite party on 7.05.2018 after a period of 8 weeks from the date of its writing with an ulterior motive to reach the said letter to him later after the expiry of 8 weeks stipulated for the redressal of the complaint. It was intimated in this letter that the policy has been terminated due to non-payment of payment of renewal premium. As advised by the opposite party, he wrote a letter dated 15.05.2018 to the Chief Grievances Redressal Office allowing him to continue the policy, but all in vain. Thus, there is deficiency in service on the part of the opposite party. Hence this complaint.
3. Notice of the complaint was issued to the opposite parties who appeared through their counsel and filed their written reply taking the preliminary objections that the complaint is liable to be dismissed for want of cause of action; the instant complaint is false, malicious, incorrect and has been filed with a malafide intent and is nothing but an abuse of the process of the law and is an attempt to waste the precious time of this Hon'ble Commission, as the same has been filed by the complainant just to avail undue advantage. The complaint is thus liable to be dismissed under Section 26 of the Consumer Protection Act, 1986. On merits, it was submitted that the complainant had submitted a duly filled and executed proposal form bearing No.11465345 to the opposite party and the opposite party in accordance with the same issued the policy to the complainant. As per terms and conditions of the policy, the complainant was bound to pay an annual premium of Rs.51,398/- for a period of 10 years to avail the benefits of the policy. The renewal premiums were to be paid annually for a period of ten years from the date of issuance of the policy, however, the complainant paid only one renewal premium of Rs.51,398/- on 9.01.2015. Thereafter no premium was received from the complainant. It has also relied upon a judgment of Hon'ble Supreme Court in the case of Life Insurance Corporation of India Vs. Mani Ram, III (2005) CPJ 31 (SC). It was next submitted that the complainant failed to revive the policy within the stipulated time period. The complainant had failed to pay the annual renewal premiums due within the grace period for the first three full years from the date of commencement of the policy i.e. 31.01.2014 and thus the policy is considered as lapse, as a result of which the life cover under the policy ceases and no benefits payable under the policy. The complainant had paid only one annual renewal premium against the first renewal premium due on 31.01.2015 and subsequent renewal premium which was due on 31.01.2016 remained unpaid. Further, the complainant had a period of two years from the said date of unpaid premium i.e. till 31.01.2018 to get the policy revived after paying the amount of unpaid and due premium alongwith applicable interest as per Clause 7 of the policy. It is reiterated that the complainant had paid only one annual renewal premium and had failed to pay the subsequent renewal premiums, hence, the policy had lapsed. Further the complainant failed to revive the policy within a period of two years from the date of last unpaid premium i.e. till 31.01.2018. Consequently, owing to non-revival of the lapsed policy all the benefits under the policy ceased to exist and no refund is payable under this Policy. The opposite party duly communicated the same to the complainant vide its letter dated 05.02.2018 as per terms and condition no.5 of policy is as under:
"If the policyholder has not paid the due premiums within the grace period for the first three full years, the policy be considered as lapsed. The life cover ceases and no benefits are payable under the lapsed policy".
The opposite party has rightly acted as per the terms and conditions of the policy. All other averments made in the complaint has been vehemently denied and lastly prayed that the complaint may be dismissed with costs.
4. Alongwith the complaint, complainant has filed his own affidavit Ex.C-1/A alongwith other documents Ex.C-1 to Ex.C-14 and Ex.C9A.
5. Alongwith the written statement opposite parties filed affidavit of Sh.Vasudev Gerewal, Deputy Vice President, Legal & Compliance Ex.OP-1 alongwith other documents Ex.OP-2 to Ex.OP-5.
6. Rejoinder filed by complainant.
7. Written arguments filed on behalf of opposite parties.
8. We have carefully gone through the pleadings of counsel for both the parties; arguments advanced by their respective counsels and have also appreciated the evidence produced on record with the valuable assistance of the learned counsels for the parties for the purposes of adjudication of the present complaint.
9. As narrated above present complaint is filed by the complainant for refund of two premium paid to opposite party against an insurance policy after termination of the policy. The complainant placed on record a copy of insurance policy at Ex.C-1, purchased from opposite party and paid Rs.53,000/- on 24.1.2014 as per copy of transaction detail and copy of first premium receipt of opposite party placed alongwith Ex.C-14 (page 3,4). As per renewal premium receipt placed at Ex.C-14 page 5 complainant paid an amount of Rs.52,192/- to opposite party and thereafter no premium is paid by the complainant. Insurance policy in question has been terminated by opposite party as per letter dated 5.2.2018 placed at Ex.C-2 wherein it is stated that "you may please note that since the policy now stands terminated effective 05.02.2018 all the benefits have been ceased and no refund is payable in this policy."
Complainant further pleaded that he has sent a request letter dated 19.2.2016 (Ex.C-3) to opposite party for continuation of policy by paying the required premium due to him but it is denied by opposite party.
10. Opposite party in their written statement stated that the policy of the complainant has been rightly terminated as per terms and conditions of the policy. Reference of Clause 5 - Discontinuance of due premium is given which is as under:-
"if the policyholder has not paid the due premiums within the grace period for the first three full years, the policy be considered as lapsed. The life cover ceases and no benefits are payable under the lapsed policy."
Regarding revival/reinstatement of the policy reference of caluse 7 is quoted by opposite party as under:-
Policy in lapsed status or Reduced Paid-up status can be revived/reinstated within a period of 2 years from the due date of the first unpaid premium by payment of all arrears of premium with interest at the applicable rate of interest (currently 9% p.a. the revision of this revival interest rate is subject to approval of IRDA) at the time of payment, and on submission of the satisfactory medical evidence as per the board approved underwriting rules applicable at that time. The cost of the required medical examination, if any will be borne by the policyholder."
From the above details, it is made out that the complainant has paid only two instalments, one at the time of policy and another after one year in 12.1.2015.
As per Clause 7, detailed above it could have been revived by complainant if the due premium is paid upto 31.1.2018. But complainant failed to do so and opposite party has rightly terminated the policy following the terms and conditions of the policy which is binding on both the parties.
It is seen that the contents of termination letter of opposite party are contradictory to policy terms and condition no.5 'Lapse' with regard to refund of the amount deposited by the policy holder. As per term 'Lapse as detailed in proceeding paras, life cover ceases and no benefits are payable under the lapsed policy. But it is silent over the refund of the amount deposited by the policy holder.
11. We are of the opinion that insurance company has no right to forfeit the full amount paid by a policy holder from his hard earned money without any reason. However, benefit under the lapsed policy can be rightly denied. Moreover, it is not explained in the terms and conditions of the policy to forfeit the amount deposited as yearly premium and opposite party failed to put on record any cogent evidence with regard to their action to forfeit the full amount deposited. No doubt opposite party can deduct their nominal charges for discontinuance of deposit of instalments as per rules and regulations from the amount paid but their action to forfeit the full amount deposited is not justified.
12. So in view of the abovesaid discussion based on the facts of the case the present complaint can be best disposed off by giving direction to the opposite party.
13. Hence the opposite party is hereby directed to refund the amount deposited by the complainant by deducting their nominal charges as per rules and regulations within 45 days from the receipt of copy of order failing which amount shall be paid with 6% p.a. interest from the date of order till its realization.
The present complaint is disposed off accordingly with no order as to costs.
14. The complaint could not be decided within the stipulated period due to heavy pendency of Court Cases, vacancies in the office and due to pandemic of Covid-19.
15. Copy of the order be communicated to the parties free of charges. After compliance, file be consigned.
(Naveen Puri)
President
Announced: (B.S.Matharu)
September 30, 2022 Member
*MK*
