Tamil Nadu

South Chennai

CC/338/2015

M/s.M.Prema - Complainant(s)

Versus

TATA Aia Life Insurance Company Ltd - Opp.Party(s)

M/s.Sathish Parasaran

23 Jan 2023

ORDER

                                              Date of Complaint Filed : 23.07.2015

                                              Date of Reservation      : 09.01.2023

                                              Date of Order               : 23.01.2023

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (SOUTH), CHENNAI-3.

 

PRESENT: TMT. B. JIJAA, M.L.,                                                : PRESIDENT

                    THIRU. T.R. SIVAKUMHAR, B.A., B.L.,               :  MEMBER  I 

                   THIRU. S. NANDAGOPALAN., B.Sc., MBA.,         : MEMBER II

 

CONSUMER COMPLAINT No. 337/2015

MONDAY, THE 23^rd DAY OF JANUARY 2023

R. Murali,

No.15/8, Ponnambala Vathiar Street,

Mylapore,

Chennai – 600 004.                                                            …  Complainant

-Vs-

 

1.TATA AIA Life Insurance Company Ltd,

   (Previously known as TATA AIG Life Insurnace Company Ltd),

   Rep. by its Branch Manager / Authorised Signatory,

   2^nd Floor, Krishna Court,

   270 -274, R.K. Mutt Road,

   Luz, Mylapore,

   Chennai – 600 004.

 

2.TATA AIA Life Insurance Company Ltd,

   (Previously known as TATA AIG Life Insurnace Company Ltd),

   Rep. by its Managing Director / Authorised Signatory,

   Having its Registered Office at:

   14^th Floor, Tower A,

   Peninsula Business Park,

   Senapati Bapat Marg, Lower Parel,

   Mumbai – 400 013.

 

Having its Corporate Office at:

Delpi B Wing, 2^nd Floor,   Orchard Avenue,

Hivanandani Business Park,   Powal,

Mumbai – 400 076.                                                  ...  Opposite Parties

******

Counsel for the Complainant          : M/s. Satish Parasaran

Counsel for the Opposite Parties     : M/s. V Jayachandran& Associates

 

        On perusal of records and having heard the oral arguments of the Counsel for the Complainant and the Counsel for the Opposite Parties, we delivered the following:

ORDER

Pronounced by the President Tmt. B. Jijaa, M.L.,

1.      The Complainant has filed this complaint as against the Opposite Parties under section 12 of the Consumer Protection Act, 1986 and prays to direct the Opposite Parties to hold that the monthly deductions/debits of units under the caption “Monthly Charges” amounting to Rs.18,676.086  during the lapse period, as also the levy of “Force in adjustment” amounting to Rs.61,954.85 for the relevant period pertaining to Policy No.U173966686 of the Complainant are illegal and contrary to the terms of their own commitment and consequently reverse the charges and credit the Complainant’s account with the said amount by addition of the units calculated at a NAV as prevailing on the respective dates of such illegal deductions/adjustments and to pay a sum of Rs.8,00,000/- towards compensation for the unfair trade practice, deficiency in service committed by the Opposite Parties and to pay a sum of Rs.8,00,000/- as compensation for mental agony and hardship suffered by the Complainant.

2.     The averments of Complaint in brief are as follows:-

The Complainant and his wife subscribed to "Tata AIG Life Invest Assure Gold Plus (110L086V01)" plan bearing Policy No.U173966686 dated 28.06.2010 which is a Unit-Linked Insurance Policy (ULIP), as adviced by Mr.Rajamanickam, the representative of Opposite Party, who stated that the said policy is a combination of life insurance as well as an investment and the premium paid by the Complainant apart from being appropriated for providing life insurance cover to the Complainant the same premium is invested in various equity and debt schemes and promised high return from the said investment. The Policy No.U173966686 commenced on 28.06.2010 having a total benefit of Rs.5,00,500/- with premium paying term of 5 years and policy term of 39 years, towards which the Complainant paid an amount of Rs.1,00,100/- as the first annual premium comprising of four quarterly premiums. With regard to the Complainant's policy, the opposite parties allocated 4983.777262 Units @ Rs.13.4391/- per unit which was the then prevailing Unit Price/Net Assess Value (NAV). Thereafter, the Complainant paid a premium of Rs.25,025/- on 29.07.2011 towards quarterly premium for which the Complainant was allocated 1727.165736 Units @ Rs.13.8498/- per unit. As on 29.07.2011 the Complainant had 5884.724967 Units to the credit of his policy. To the utter disappointment of the Complainant, the Unit price started to further reduce from the existing rate, thereby causing loss to the Complainant. In view of the deteriorating rates and financial instability, the Complainant was unable to make further payment towards quarterly premium due to which the policy lapsed on 28.09.2011. Thereafter, the Complainant sent an e-mail dated 29.04.2014 from his e-mail ID customercare@tataaia.com enquiring the procedure to reinstate the lapsed policy, subsequent to which numerous e-mails/telephonic conversations/personal visits were exchanged between the Complainant and opposite parties with regard to the terms and conditions required to be followed for such reinstatement of the lapsed policy. During the course of such enquiry, the opposite parties vide its e-mail dated 23.05.2014, inter alia, claimed that the Complainant's insurance policy had been auto surrendered due to the expiry of revival period (i.e., two years from the date of first laps in payment of premium) and further informed that as a process the said policy could not be reinstated since the reinstatement period had already expired. The opposite parties represented that, as an exceptional case the policy will be sent to senior authorities for their approval and further informed that, in case of such approval by the senior authorities, the number of units held by the Complainant at the time of surrender will be reinvested in his policy at the current Net Asses Value (NAV). On the confirmation from the opposite parties that the number of units held by the Complainant at the time of surrender will be reinvested in the policy at the current Net Asses Value (NAV), consented to revive the policy by paying the outstanding due of Rs.3,00,300/-. In view of the above payment, the opposite parties apart from crediting 1224 Units @Rs.23.4377 Per unit on 18.08.2014 towards the premium of Rs.3,00,300/- paid by the Complainant reinvested the previous balance of 5884.724967 Units to the credit of the Complainant by causing the previous balance to continue at the NAV. The Complainant obtained a copy of the Statement of Accounts with regard to the policy on 09.01.2015 and to his utter shock and dismay, he noticed deductions of a number of units under the caption “Monthly Charges” (Monthly Charges + Policy Administration Charges + Morbidity Charges) for each and every month for the lapse period. Hence the complaint.

3.   Written Version filed by the Opposite Parties in brief are as follows:-

The Complainant obtained a policies bearing Policy No. U173966686 from the opposite party and the policy amount payable annually was at Rs.1,00,100/- at the time of inception of the policies. For the said policy, the complainant has to pay premium for a continuous period of 5 years and due date of maturity is on 28.06.2049. The 1^st premium for the said policy was initiated and paid on 28/06/2010, which policy is unit (market) linked policies and the sum assured for the policy is at Rs.5,05,000/- and as stated supra, the maturity date is on 28.06.2049 and the policy document was delivered to the complainant on 01.07.2010, notifying the terms and conditions, governing the policy. The Complainant accepting the terms and conditions governing the said policy made payment of premium for policy for the period upto 28.09.2011 and thereafter, the complainant stopped making premium. The policy has got life cover assured and in the event of death of the policy holder even after the 1^st premium, the sum assured is payable to the nominees or legal heirs. It is submitted that after paying premium upto 28.09.2011, the complainant did not make any payments thereafter, hence it was taken as auto surrender. After period of 3 years from the date of the payment of last premium, the Complainant during 2014 requested the opposite party to re-instate the policy, which request was considered as an exceptional case and upon receipt of payments, the policy was re-instated as per policy the terms and conditions. It is submitted that after re-instatement of the policy, the Complainant wanted the Opposite Party for reversal of mortality, fund management and other charges deducted during reinstatement, which was refused by the opposite party by explaining the policy terms and force-in-adjustment. The Complainant by accepting the terms of re-instatement of the policy made payments and after it was reinstated, the complainant started to request the opposite party to consider the reversal of charges. It is submitted that after exchange of mails, the opposite party has sent a letter dated April, 2015 notifying the policy terms and more particularly notifying the terms for discontinuance of policy within three years from inceptions and re- instatement. Even after notifying the policy terms, which terms was accepted by the complainant while re-instatement, the complainant is estopped from seeking any grievances for the very same terms, which was accepted by him at the time of re-instatement of the said policy. In the event of none acceptance of the policy terms of re-instatement, the policy would not have been re-instated by the opposite party. On account of discontinuity of the said policy, the opposite party deducted applicable charges as per the terms and conditions governing the said policy and as per the guidelines of IRDA, which is a governing body for all insurances. After permitting to go for auto surrender, the Complainant wanted the Opposite Party to re-instate the Policy, which could have been done within a period of 2 years from the lapse of the said policy and as a special case, the Opposite Party permitted re-instatement of the said policy by making it clear that any loss or gain should be borne by the Complainant, who accepted the same and the policy was re-instated. It is submitted that after filing of the present complaint, the Complainant requested for surrender of the Policy by submitting policy servicing payout request form on 24.12.2015, which is under process and the amount claimed in the said form is at Rs.5,34,955.22/-. Hence prayed to dismiss the complaint.

4.      The Complainant submitted his Proof Affidavit and Written Arguments. On the side of the Complainant, documents were marked as Ex.A-1 to Ex.A-21. The Opposite Parties submitted their Proof Affidavit and Written Arguments. On the side of the Opposite Parties, documents were marked as Ex.B-1 to Ex.B-6.

Points for Consideration:-

1.Whether the complaint is maintainable?

2. Whether there is deficiency in service on the part of the Opposite Parties?

3. Whether the Complainant is entitled for reliefs claimed?

4. To what other reliefs the Complainant is entitled to?

Point Nos.1 to 4:-

The undisputed facts are that the Complainant had subscribed “Tata AIG Life Invest Assure Gold Plus (110L086V01)” plan bearing Policy No.U173966686 dated 28.06.2010 which is a Unit Link Policy (ULIP), which is a combination of Life Insurance as well as investment.

The said Policy commenced on 28.06.2010 and the Policy amount payable annually was at Rs.1,00,100/- for a continued period of 5 years. The sum assured for the Policy is Rs.5,00,500/- and the maturity date is on 28.06.2049. It is also not in dispute that the Complainant stopped paying premium from 28.09.2011 later, after a period of 3 years at the request of the Complainant, the Opposite Party had reinstated the Policy.

        The dispute arose after reinstatement of Policy, when the Complainant sought from the Opposite Party for reversal of Monthly Charges and force-in adjustments.

The contention of the Complainant, is that the Complainant had paid an amount of Rs.1,00,100/- towards first annual premium. The Opposite Party allotted 4983.777262 units @ Rs.13.439/- per unit  which was the then prevailing Unit Price/Net Asses Value. Thereafter the Complainant paid a Quarterly Premium of Rs.25,025/- on 29.07.2011 for which the Complainant was allotted 1727.165736 Units @Rs.13.8498 per Unit. As the Complainant was unable to make further premiums the Policy lapsed. Thereafter on 29.04.2014 the Complainant had sent e-mail to the Opposite Party for reinstatement. 

The exchange of e-mail communications between the Complainant and Opposite Parties are Exs.A-2 to Ex.A-5. As per Ex.A-6, the Opposite Parties by e-mail dated 23.05.2014 had informed the Complainant that the Policy was auto-surrendered due to non-payment of premium and end of revival period and that they would send the Policy to Senior authorities for approval and on getting approval the number of Units held by the Complainant and the time of surrender will be reinvested in his Policy at the current Net Asses Value. Hence the Complainant paid Premium due of Rs.3,00,300/-. The Opposite Party apart from crediting 1224 units @ 23.4377 per unit on 18.08.2014 had reinvested the previous balance of 5884.724967 units to the Credit of the Complainant. However the Complainant was shocked to receive the Statement of the Account with regard to the Policy as the Opposite Party had made deductions under the head “Monthly Charges” and force in adjustments charges amounting to Rs.61,954.85/- and sought cancellation of deductions vide Exs.A-12 to Ex.A-17.

        The Opposite Party contended that the Complainant is not a consumer as the Policy taken by the Complainant is a Unit Linked Policy which is speculative in nature and taken for investment purpose, as such the Complainant is not a consumer. In support of which the Opposite Parties relied on the order passed by the National Commission, New Delhi in R.P No.658 of 2022, Ram Lal Aggarwala Vs. Bajaj Allianz Life Insurance Co., Ltd, wherein it was held that Unit Link Policy taken by the Complainant to gain profit and such speculative investment does not come under the Consumer Protection Act.

On the other hand the Complainant relied the following Judgements to show that he is a consumer.

1. 2016 SCC Online NCDRC 1168, Paramjit Kaur Vs. Aviva Life Insurance Co., India Ltd in F.A. No.1173/2014, wherein the Hon’ble National Commission by its order dated 14.03.2016 has observed that the Policy was covering life as well as accident benefit which cannot be equated in the case of Ram Lal Aggarwala which case was for investment purpose.

2. TATA AIG Life Insurance Vs. Prabakaran Kaiimal T M, the State Consuemr Disputes Redressal Commission, Tiruvanandahpuram by its order dated 23.03.2016 passed in R.P No.16/2022 was held that the Unit Linked Policy is the insurance cover which is dependent on human life and mere existence of additional investment factor cannot constitute as entirely as speculative investment and found that the complaint was maintainable.

        Both the cases are applicable, as the Complainant had subscribed Unit Linked Insurance Policy, which is combination of both life Insurance and Investment and hence the Complainant is a consumer and the complaint is maintainable.

        The Complainant submitted that deduction made under the caption Monthly charges, administration charges or any other charges during the lapse period was arbitrary and as against the terms of the revival of lapsed Policy. The Opposite Party contended that the Complainant was given a fair Look period of 15 days at the time of availing policy to cancel the Policy and to receive the premium invested, which the Complainant did not avail, thereby is bound by the terms and conditions of the Policy.

        Admittedly the Complainant had defaulted in payment of premiums and allowed the Policy to lapse, which was not even revised within 2 years from the first date of unpaid premium and as a special case the lapsed Policy was revived after 3 years.

        As per the terms and conditions of the Policy under the head “Discontinuance of Premium, within three years from inception’, it follows “ on revival all outstanding Policy Administration charges and applicable Premium allocation charges will be recovered”. Further it is stated “upon your request policy can be surrendered within the revised period of two years. The surrender value shall be Total fund value ceased at the end of grace period net of applicable surrender charges as on first unpaid premium date and will be payable at 3^rd Policy Anniversary or the date of Surrender which ever is later”.

Considering the facts and circumstances of this case and the submissions made on  both sides it is clear that the Complainant on revival of the Policy is bound by the terms and conditions set out in the Policy and as such the Complainant on revival of Policy is bound to pay the applicable charges. Further the Opposite Party by its E-mail dated 23.05.2014, Ex.A-6 has made it clear that post surrender reversal the same units (units at the time of surrender) will be reinvested with current NAV and customer need to borne gain/loss on surrender reversal request. Hence the Complainant had to bear the gain/loss on revival of Policy.

It is also pertinent to note that the Complainant had surrendered the Policy by submitting policy servicing pay out form on 31.12.2015, during the pendency of this complaint and a sum of Rs.5,36,252.35 was transferred to the account of the Complainant and the policy has been terminated as evident from Ex.B-6. On surrender of the Policy the Policy contract stood terminated and the Complainant had accepted the amount paid by the Opposite Party without any protest. Therefore, this Commission is of the considered view that the Opposite Party had not committed deficiency of service. Having received the surrendered value of the Policy the Complainant is not entitled for the reliefs sought for in the complaint. Hence the complaint is dismissed. Accordingly, Point Nos. 1 to 4 are answered.

        In the result the complaint is dismissed. No costs.

Dictated to Steno-Typist, transcribed and typed by her, corrected and pronounced by us in the Open Commission, on 23^rd of January 2022.

 

 

S. NANDAGOPALAN               T.R. SIVAKUMHAR                 B.JIJAA

         MEMBER II                       MEMBER I                        PRESIDENT

List of documents filed on the side of the Complainant:-

 

Ex.A1	28.06.2010	Photocopy of the Complainant’s Policy Document
Ex.A2	29.04.2014	Complainant’s E-mail to Opposite Parties to provide information regarding ‘surrender benefit’ of policy
Ex.A3	01.05.2014	Opposite Party’s reply e-mail with regard to “surrender benefit”.
Ex.A4	03.05.2014	Complainant’s E-mail requesting the Opposite Parties to furnish details with regard to continuance of the Policy
Ex.A5	05.05.2014	Opposite Party’s E-mail requesting the Complainant to visit the nearest branch to clear his queries
Ex.A6	23.05.2014	Opposite Party’s E-mail confirming credit of Units at current NAV
Ex.A7	26.05.2014	Complainant’s E-mail requesting the Opposite Parties to consider payment of outstanding amount in instalments
Ex.A8	12.06.2014	Opposite Party’s E-mail requesting the Complainant to pay the entire outstanding amount
Ex.A9	18.10.2014	Complainant’s E-mail intimating the Opposite Parties about the payment of outstanding amount and requesting details of investment and NAV
Ex.A10	18.10.2014	Opposite Party’s E-mail furnishing the Unit Statement
Ex.A11	09.01.2015	Complainant’s E-mail requesting the Opposite Parties to cancel the Monthly Charges
Ex.A12	10.01.2015	Complainant’s E-mail requesting the Opposite Parties to cancel the Force in Adjustment Charges
Ex.A13	12.01.2015	Opposite Party’s E-mail requesting 3 days time to respond to the Complainants’ queries
Ex.A14	03.02.2015	Complainant’s E-mail requesting the Opposite Parties to revers the monthly charges and force in Adjustment Charges
Ex.A15	03.02.2015	Opposite Party’s E-mail requesting 3 days time to respond to the Complainant’s queries
Ex.A16	19.02.2015	Complainant’s letter requesting the Opposite Parties to revers the monthly charges and force in Adjustment charges
Ex.A17	06.03.2015	Complainant’s letter requesting the Opposite Parties to revers the Monthly Charges and Force in Adjustment charges
Ex.A18	23.02.2015	Opposite Party’s reply E-mail
Ex.A19	15.07.2015	Complainant’s Unit transaction Statement
Ex.A20	01.04.2015	Opposite Party’s reply letter
Ex.A21	17.12.2015	Complainant’s letter to the Opposite Party seeking to surrender the subject policy without prejudice to his rights

 

List of documents filed on the side of the Opposite Parties:-

 

Ex.B1	-	Policy application form
Ex.B2	21.06.2010	General amendment form
Ex.B3	21.06.2010	Sales benefit illustration
Ex.B4	28.06.2010	Policy data
Ex.B5	05.11.2011	Request for change form
Ex.B6	31.12.2015	Payout details

 

 

 

S. NANDAGOPALAN               T.R. SIVAKUMHAR                   B.JIJAA

         MEMBER II                       MEMBER I                         PRESIDENT