C.F. CASE No. : CC/12/50
COMPLAINANT : Mala Biswas,
W/o Late Asit Biswas,
Vill. Birnagar, Madhugachipara,
P.O. Birnagar, P.S. Ranaghat,
Dist. Nadia.
– Vs –
OPPOSITE PARTIES/OPs : 1) Tata AIG Life Insurance Company Ltd.
Bombay House, 24, Homi Modi Street,
Mumbai 400 001.
2) Branch Manager,
Tata AIG Life Insurance Co. Ltd.
Krishnagar Branch,
16/1, D.L. Roy Road,
P.O. Krishnagar, P.S. Kotwali, Dist. Nadia
3) Golden Corporate Services, Corporate Agent
Tata AIG Life Insurance Company Ltd.
16, R.N. Mukherjee Road, Kolkata – 01.
PRESENT : SHRI PRADIP KUMAR BANDYOPADHYAY, PRESIDENT
: SMT REETA ROYCHAUDHURY MALAKAR, MEMBER
DATE OF DELIVERY
OF JUDGMENT : 09th April, 2013
: J U D G M E N T :
The fact of the case of the petitioner, in a nutshell, is that the petitioner, Smt. Mala Biswas is the nominee beneficiary of her deceased husband Asit Biswas who purchased a policy named ‘Assure 21 years Money Saver Plan’ from OP No. 1 & 2 through OP No. 3. The policy (No. C201360992) was opened on 17.01.05, but issued on 29.01.05 for face amount of Rs. 30,000/- at the yearly premium of Rs. 2811/- to be paid within 17th January each year. Petitioner has annexed the photocopy of the receipts and application form while filing the case with the complaint case. The husband of the petitioner died at his workplace at Malaysia on 19.07.2011. Thereafter, the petitioner submitted a claim before the office of the opposite party and the same was duly received by the OP on 23.09.2011. On 04.10.11 the OP intimated the petitioner in writing that she is not entitled to get any claim against the policy standing in the name of his deceased husband due to non-payment of premium for the year 2010. OP also provided a chart along with this letter touching the limitation clauses of the death benefit of the said policy. The petitioner of this complaint admits that the husband has paid the premium till 29.08.2009 and hence, he premium for the years 2009, 2010, 2011 were due at the time of his death to the Insurance Company. The petitioner does not find the valid reason why the OP repudiated the claim when she was entitled to get the 100% death benefit as per schedule by this way the OP adopted an unfair trade practice and hence is liable to pay the petitioner the face amount of Rs. 30,000/- along with the compensation of Rs. 60,000/- and cost of Rs. 10,000/-
The above application has been opposed by the OPs by filing two sets of written versions, one by OP No. 1 & 2 jointly and another by OP No. 3 individually. OP No. 1 & 2 stated in their written version that the petitioner’s claim has been rightly and lawfully repudiated and there is no deficiency in service on their part. In support of their argument OP No. 1 & 2 has mainly banked on two points. Firstly the policy was not in force at the time of the death of the life assured due to non payment for the year 2010. Secondly the deceased husband of the petitioner i.e., the policy holder neither applied for non-forfeiture clause after the grace period unpaid the premium. According to the IRDA rules no Insurance Company can give death benefit to the death beneficiaries for a lapsed policy.
Written version also suggests the same thing that the Insurance Company cannot go beyond the IRDA guideline and the rules and regulations of the IRDA don’t confer any authority to the corporate agent about the settlement of the claim. OP No. 3 is merely an agent and so prayed before the Forum for expunction of his name from the instant case. He also submits that just by making him a party to this case would serve no purpose in the interest of justice & equity. Upon the above pleadings and the written argument submitted by the parties the following issues are framed.
- Is the petitioner a consumer?
- Is the Ops suffers from deficiency in service?
- Is the petitioner entitled to get the relief, if so, to what extent?
DECISIONS WITH REASONS
We have heard oral arguments of Sri Dilip Saha ld. Advocate for OP No. 3 who has submitted that OP No. 3 has no liability in the absence of right of settlement.
We have also heard Sri Subhasis Roy, ld. Advocate for the petitioner and Sri Pradyut Ganguly, ld. Advocate for the OP No. 1 & 2. We perused the written arguments filed by ld. Advocates to assist the Court.
Issue No. 1: The petitioner is the beneficiary of the policy purchased by her deceased husband Asit Biswas from OP No. 1 & 2 through OP No. 3 in the year 2004. The life assured paid requisite premium to the OP in lieu of receipts and hence, he was a consumer under the OP s by hiring service from the latter as per section 2(d)(ii) the petitioner being the beneficiary of the life assured is also a consumer under the OP and hence the issue is answered in the affirmative.
Issue No. 2 & 3: These issues being interrelated with each other are taken up together for the sake of the convenience and in order to avoid repetitions. Asit Biswas since deceased paid the premiums on 06.02.2004, 17.02.2005, 17.01.2006,27.01.2007, 13.02.2008 & 17.01.2009 @ Rs. 2811/- against the 21 years money back policy for the face amount of Rs. 30,000/- (SA). Now upon the non-receipt of the premium on 17.01.2010 the OP sent lapsed notice dtd. 17.02.2010 to a policy holder wherein the OP noted the following:
“We write to inform you that since we have not received your outstanding premium all benefits under your policy stand forfeited. However, we would like to continue our relationship with you & urge you to reinstate you’re your policy”. However, ld. Advocate for complainant has submitted that he received no notice to the factum lapse policy. We find no obligation on the part of the OP to establish service of that letter on petitioner, particularly when documents go to show forfeiture of policy for nonpayment of premium.
Now we have to discuss a few clauses relevant in this case before arriving at a final decision whether OP has adopted unfair trade practice by repudiating the claim of the petitioner.
Ld. Advocate for the complainant has impressed us with his eloquence while he relied mainly upon juvenile provision – (e) Limitation of Benefits as his case comes under “From 4 years upward ……. 100%.” Ld. Advocate for the complainant has drawn our attention to clause “Deduction of Premium at Death” and submitted that the widow is entitled to get Rs. 30,000/ - Rs. 2,841 (sum assured – unpaid premium) = Rs. 27,159/- with interest. Unfortunately, no reinstatement of policy could be proved by petitioner. And, hence, that submission does not hold much water.
According to the terms and conditions of the policy ‘Default’ means non-payment of the premium on or before the due date after payment of the first premium. ‘Grace period’ is a period of 31 days from the due date of premium which will be allowed to a policy holder for the payment of due premium and the policy will remain in force during this period. If not paid after that period, the policy shall lapse and no future value except as may be provided under non-forfeiture provision. Now we go to the Non-forfeiture Provision. The first provision is the elective provision which the policy holder is to elect by way of writing to the Insurance Company within 90 days after the due date of premium in default. The second provision is the Automatic Non-forfeiture Provision. According to this provision if premium is not paid within the due date and the insured does not elect for the other provision then the Insurance Company will advance the premium due as an automatic loan as long as the cash value is equal to or greater than the premium default plus indebtedness. In this case since the petitioner did not elect for any non-forfeiture provision OP applied the automatic provision as per contract and the coverage date was extended till November, 2010 when the petitioner was alive and the coverage was provided by utilizing the cash surrender value of the policy. After November, 2010 the policy got lapsed on 17.02.2010 and at the time of death of the petitioner i.e., 19.07.2011 the cash surrender value became zero as it was adjusted against the due premium. So the OP could not cash benefit to the petitioner.
We find from records that with residual cash value the insurance coverage was extended upto 03.11.2010. The OP has convinced us to believe that policy holder in the instant case comes under “default” clause of the agreement.
It is pertinent to mention here that the premium amount, the face amount the cash value or the surrender value are all decided by the insurer and the insured who was at the receiving end. So while taking the policy the insured never wanted to know the basis of calculation and signed the application form and hence the insured or the beneficiary has to accept the calculation of the insurer. Now in this case the OP has calculated and found that the cash value and the due premium got neutralized on November, 2010 leaving no cash value to the credit of the policy holder.
Hence, after the death of the life assured the Insurance Company could not honour the death claim to the beneficiary as the policy was lapsed due to non-payment of premium. Hence, the OP is not deficient in their services and the petitioner is not entitled to get any relief from the OP. The issues are thus disposed of. The case fails.
Hence,
Ordered,
that, the case CC/12/50 be and the same is dismissed on contest without cost.
The DD paid is correct.
Let a copy of this judgment be delivered to the parties free of cost.
