Date of filing : 25-06-2012
Date of Disposal : 08-04-2013
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ANANTAPUR.
PRESENT: - Sri S.Niranjan Babu, B.A., B.L., President (FAC).
Smt. M.Sreelatha, B.A., B.L., Lady Member
Monday, the 8th day of April, 2013
C.C.NO.32/2012
Between:
C.Ramesh Reddy
S/o C.Venugopal Reddy
D.No.12-4-156-1
Obuladeva Nagar
Anantapur. … Complainant.
Vs.
1. The Branch Manager,
IndusInd Bank
Nama Towers
Subash Road
Anantapur.
2. The Branch Manager,
Aviva Life Insurance Company India Ltd.,
Ashirvad Towers, Plot No.2, Old No.182
3rd floor, Kodambakkam High Road
Nungambakam
Chennai – 600 034.
3. The Managing Director,
Aviva Life Insurance Company India Ltd.,
H.O. Aviva Towers, Sector Road
Opp: Gold Course, DLF Phase-V,
Sector 43, Gurugaon – 122 003,
Haryana State.
- The Branch Manager,
Aviva Life Insurance Company India Ltd.,
D.NO.6-3-907 to 912, 1st floor,
Challa Chambers Kapadiya Lane,
Rajbhavan Road, Somajiguda,
Hyderabad. …. Opposite parties
This case coming on this day for final hearing before us in the presence of Sri L.Narasimha Reddy, Advocate for the complainant and the 1st opposite party called absent and set-exparte and Sri N.U.Devanath Reddy, Advocate for the opposite parties 2 to 4 and after perusing the material papers on record and after hearing the arguments on the both sides, the Forum delivered the following:
O R D E R
Sri S.Niranjan Babu, President (FAC): - This complaint has been filed by the complainant under section 12 of Consumer Protection Act, 1986 against the opposite parties 1 to 4 claiming a sum of Rs.2,21,900/- .
2. The brief facts of the complaint are that: - The complainant is a permanent resident of Anantapur Town and opened Savings Bank Account with the 1st opposite party bearing No.0075-H-72778-001. The complainant has taken pension Plus Insurance Policy through the 1st opposite party on 19-06-2007. The opposite parties 2 to 4 issued a policy bearing No.RPG-1596847 and the policy name is Pension Plus regular unit linked policy, which is payable monthly premium of Rs.5,000/- for a period of 10 years commencing from 19-06-2007 and the said premium amount is to be deducted by the 1st opposite party from the complainant’s Savings Bank Account. Since the commencement of the policy, the complainant was regularly paying the monthly installments to the 1st opposite party. Subsequently, the complainant due to some personal problems he closed his Savings Bank Account bearing No.075-H-72778-001 and the same was intimated on 02-09-2008 to the 4th opposite party. Again the complainant opened a new Savings Bank Account No.0075-H-77188-001 and the same was intimated to the opposite parties to debit the monthly premiums from the new Savings Bank Account of the complainant. The monthly premiums were debited from the new account of the complainant upto 13-02-2009, but after that no installments were debited from the new account of the complainant. Then the complainant requested the opposite parties to deduct the monthly installment amounts for which the opposite parties did not respond. Then the complainant vexed with the attitude of the opposite parties got issued a legal notice on 23-01-2012 to the opposite parties to return the amount of Rs.1,05,000/- with interest @ 24% p.a. The said notices were served on the opposite parties but there was no reply nor payment made by the opposite parties. As the opposite parties did not pay the amount paid by the complainant, the complainant suffered mentally and claiming a sum of Rs.10,000/- towards mental agony and Rs.20,000/-towards deficiency of service and Rs.5,000/-towards costs of the complaint.
3. The 2nd opposite party filed counter stating that the complaint is barred by limitation under section 24-A of Consumer Protection Act, 1986. The opposite party states that at the very beginning , there is no negligence or deficiency in service whatsoever on the part of the opposite parties in dealing with the concerned policy, thus the present complaint is liable to be dismissed on that ground alone. Further the opposite party submits that the complaint is based on mere surmises and conjectures. As per IRDA Regulations, 2002 the policy terms and conditions specifically provides for a free look period of 15 days during which period the policy holder is entitled to review the policy terms and conditions and request for a cancellation if dissatisfied with the terms and conditions of the policy. It is a liberty and obligation of the complainant to go through the terms and conditions of the policy on receipt of the policy documents. Further the opposite party submits that the policy-holder does not raise any objection regarding the policy within free look period of 15 days or within the reasonable time thereafter. Thus the contract of insurance attained finality. As per the policy terms & conditions, the surrender of the policy is only after completion of 3 years, where the surrender value as payable in accordance with the policy terms and conditions shall be payable on surrender of the policy. Further the opposite party submits that the refund of the amount paid as premium can not be sought as the request for the same is made beyond the free look period of 15 days. The complainant having availed a life insurance cover from the opposite party and enjoyed the coverage for more than three years can not be permitted at this belated stage to claim refund of the premiums paid contrary to the terms and conditions of the respective policies. Further the opposite party submits that after duly deliberating on the terms and conditions of the “ Pension Plus Unit Linked Plan “ vide the key feature document of the complainant, the complainant signed the proposal form bearing No.NNU11082877 dt.15-12-2007 for a proposed premium amounting to Rs.5,000/- which has to be paid monthly. Basing on the declaration made and information provided in proposal form the policy bearing No.RPG1596847 was issued to the complainant having date of commencement as 19-06-2007. The policy document contains the policy schedule standard terms and conditions of the said policy which were sent to the complainant by speed post.
4. Further the opposite party submits that it is clearly mentioned in the head “ What happens if I am unable to pay premium?” that if policyholder failed to pay premium within first 2 years and grace period also over the policy will be lapsed and further if policy-holder failed to reinstate the said policy within a period of 2 years then the policy will be terminated.
What happens if I am unable to pay my premium:
“ If you are unable to pay premiums during the first 2 policy years, there is no benefit payable on your policy. The policy can be reinstated within 2 years from the due date of first unpaid premium. In case of death during this period, the fund value with respect to top up premiums (if any) will be paid to your nominee. If it is not reinstated within this period, the policy shall be terminated by paying the fund value with respect to top up premiums,(if any) after deduction of the surrender charge as applicable, at the end of the reinstatement period or the end of the 3rd policy anniversary, whichever is later.
If you have paid premiums for the first 2 policy years and are unable to pay subsequent premiums, the policy can be reinstated at any time within 2 years from the due date of first unpaid premium. If the policy is not reinstated within this period, the surrender value will be paid at the end of reinstatement period and the policy will terminate. If death occurs any time after the expiry of grace period, then the fund value shall be payable.
If you have paid premiums for the first 3 policy years and do not pay subsequent premiums, the policy will remain in force for 2 years from the due date of first unpaid premium, during which it can be reinstated. During the reinstatement period, you have the option to:
- continue the policy till the surrender value becomes equivalent to one year’s premium, upon which the surrender value is paid and the policy terminates.
- surrender the policy and take the surrender value if you do not choose any of the options, the policy shall terminate either at the end of the reinstatement period or in case the surrender value becomes.”
5. The opposite party submits that they have received the premium for the said policy for the period of May, 2008. Thereafter no premium was received. As per the terms and conditions of the said policy, the grace period of 180 days is available. The opposite party received the demand draft of Rs.30,000/- against the said policy alongwith the declaration of good health form from the complainant. Hence the said policy was again reinstated and the premium was updated in the system from June, 2008 to November, 2008 i.e. 19-11-2008. The opposite party submits that the complainant had also submitted a letter dt.02-09-2008 and informing the opposite party that the said saving bank account had been closed and made a request to the opposite party to debit the premium amount from the new account No.0075-H-77188-001. The opposite party accordingly up-dated the new bank details in the said policy and the same were also informed to the complainant vide letter dt.02-12-2008. Further the opposite party submits that direct debit standing instruction form states that the complainant had given a standing instruction to the opposite party No.1 i.e. his banker to debit the premium amount from the complainant’s Savings Account No.0075H72778-001 and remit the same to the opposite parties. It is further clarified from the account debited form of paying premiums to Aviva Life Insurance which states that policyholder authorizes Indusind Bank to periodically debit my Indusind Bank Account and remit the same to Aviva Life Insurance. Thus it is the liability of the opposite party No.1 and opposite parties 2 to 4 have no involvement.
6. However the opposite party states that as per their records, no amount had been credited in the account of the complainant thereafter as such the said policy was due for premium for the term of December, 2008. Since the opposite party had not received any renewal premium amounts from new account up-dated by the complainant, as a result of which status of the said policy was again changed to early lapse mode on 16-06-2009 and the same was communicated to the complainant vide letter dt.16-09-2009. Further the opposite party submits that early lapse occurs when the complainant discontinues premium payment within 36 months from the date of commencement and grace period also gets over. In view of such state risk cover alongwith rider benefit ceases. At the date of notification of the death of the insured only fund value is payable. The policyholder may reinstate the policy within 2 years of the due date of the first unpaid installment of regular premium. Further the opposite party submits that the complainant failed to reinstate the said policy within a prescribed time frame, the status of the said policy was changed to early lapse not payable on 20-12-2010. Hence the opposite parties 2 to 4 are not liable to pay any compensation to the complainant.
7. The opposite parties 3 & 4 filed adoption memo by adopting the counter of the opposite party No.2.
8. The 1st opposite party is called absent and set-exparte.
9. Basing on the above pleadings, the points that arise for consideration are:-
1. Whether there is deficiency of service on the part of the opposite parties 1 to 4 ?
2. To what relief?
10. On behalf of the complainant, evidence on affidavit has been filed and marked Ex.A1 to A7 documents. On behalf of the opposite parties 2 to 4, evidence on affidavit of the opposite party No.2 has been filed and marked Ex.B1 to B5 documents.
11. Heard on both sides.
12. POINT NO.1 – It is an admitted fact that the complainant has taken Pension Plus Regular Unit Linked Insurance Policy from the opposite parties 2 to 4 through the opposite party No.1 by paying monthly premium of Rs.5,000/-for a term of 10 years and the policy starts from 19-06-2007. The complainant has opened Savings Bank Account bearing No. 0075-H-72778-001 with the opposite party No.1 and the monthly premiums are paid to opposite parties 2 to 4 by deducting monthly premium of Rs.5,000/- from the Savings Bank Account of the complainant. Subsequently, the complainant for his personal reasons closed the said Savings Bank Account and opened a new Savings Bank Account No.0075-H-77188-001 on 02-09-2008 and the complainant informed the same to the opposite party No.4 to make necessary changes in his policy. After intimation some premiums were deducted from the complainant’s new Savings Bank Account upto February, 2009, but subsequently no premium installment amounts were deducted from the complainant’s Savings Bank Account, then the complainant requested the opposite parties to deduct the premium installment amounts for which there was no response by the opposite parties. As there was no proper response from the opposite parties, the complainant got vexed with the attitude of the opposite parties, issued a legal notice on 23-01-2012 to the opposite parties to return the amount paid by him i.e. Rs.1,05,000/- with interest @ 24% p.a. Though notices were served on the opposite parties, there was no reply nor payment made by the opposite parties. The counsel for the complainant argued that it is the duty of the opposite parties to debit the monthly premiums from his Savings Bank Account as he has given standing instructions to do the same. But as the opposite parties failed to debit the said monthly premiums as per his standing instructions, there is deficiency of service on the part of the opposite parties for which they are liable.
13. The counsel for the opposite parties 2 to 4 argued that they are not liable as it is the duty of the opposite party No.1 to debit the monthly premiums from the Savings Bank Account of the complainant and credit the same to the opposite parties 2 to 4 and even as per the terms and conditions of the policy also, it is the duty of the policy-holder to see that the monthly premiums are paid regularly and there will be no liability on the part of the opposite parties 2 to 4 for non-payment of the monthly installments.
14. After hearing the arguments of both sides and perusing the documents, it is the liability of the complainant to see that the monthly premium installments are paid to the opposite parties 2 to 4. In the instant case, the complainant opened Savings Bank Account with the opposite party No.1 and taken policy with the opposite parties 2 to 4 with standing instructions to the opposite party No.1 to debit the monthly premiums from his account and to pay it to the opposite parties 2 to 4 and the same was delayed for some period. Later the complainant due to personal reasons has closed his Savings Bank Account bearing No. 075-H-72778-001 and opened a new Saving Bank Account bearing No. 0075-H-77188-001 and the same was informed to the opposite parties 2 to 4 also. Some installments were also paid from the new account of the complainant. Subsequently the opposite party No.1 did not debit the monthly installment premium amounts from the complainant’s new Savings Bank Account. Even as per Ex.B5 the complainant had given standing instructions to debit the monthly premium from his account and authorized the opposite party No.1 to periodically debit the same from his new account and remit the same to the opposite parties 2 to 4. A sum of Rs.30,000/- was credited to the account of the opposite parties 2 to 4 for the period from June, 2008 to November, 2008 and there were no payments made for the term from December, 2008. Since the opposite party No.1 failed to debit the renewal premium amounts from new account up-to-date of the complainant himself due to insufficient funds as a result of which the status of the said policy was changed to early lapse on 16-06-2009 which was also communicated to the complainant vide letter on 16-06-2009.
15. An early lapse occurs when the complainant discontinues premium payment within 36 months from the date of commencement and grace period also gets over. In such the said risk cover along-with rider benefit ceases. Then the policyholder may reinstate the policy within 2 years of the due date of the first unpaid installment of regular premium. During the period from the due date of the first unpaid installments after regular premium upto the date of possible reinstatement, there is satisfied charges schedule, except morality charge and rider charge if any will continue to be deducted. Further the counsel for the opposite party No.2 argued that as the complainant failed to reinstate the said policy within prescribed time frame status of the said policy was changed to early lapse not payable on 20-12-2010 early policy does not acquire surrender value and if customer does not reinstate the policy within revival period as well then the policy gets terminated by converting an early lapse not payable and nothing is paid to the customer as per terms and conditions of the policy.
16. From the above arguments, it is clear that the complainant had given standing instructions to the opposite party No.1 to debit the monthly installments from his new Savings Bank Account and remit the same to the opposite parties 2 to 4. The important thing is that there should be sufficient funds in the account of the complainant in order to debit the monthly premium from his account. The complainant filed Ex.A5, which is the transaction history from 01-04-2008 to 31-03-2009 and Ex.A6 is from 31-03-2009 to 31-03-2010. In Ex.A5 the old account was closed in June, 2008 and a new account was opened and standing instructions were given to the 1st opposite party to debit a sum of Rs.5,000/- from the complainant’s account and as per standing instructions, a sum of Rs.5,000/- was also debited on 19-06-2008 and further the account extract, which is marked as Ex.A6 clearly establishes that there was a credit of Rs.46,160/- as on 18-07-2008. Further on 18-11-2008 demand draft was issued to opposite parties 2 to 4 for a sum of Rs.30,000/-. Again as on 23-12-2008 there was a credit of Rs.5,905/- in the account of the complainant. But the opposite party No.1 did not follow the standing instructions of the complainant to debit a sum of Rs.5,000/- from his account though there was balance in his account. This shows that though there was balance in the account of the complainant, the 1st opposite party failed to follow the standing instructions and send the same towards insurance premiums to the opposite parties 2 to 4. Thus, there is negligence on the part of the 1st opposite party, which is deficiency of service.
17. Hence, we are of the view that the 1st opposite party failed to follow standing instructions of the complainant and thereby caused deficiency of service, which in turn resulted in non-payment of the insurance premiums to the opposite parties 2 to 4. However, the opposite parties 2 to 4 are not liable as they are not responsible for non-payment of premiums. The 1st opposite party, who has to transfer the insurance premiums from the account of the complainant, did not transfer as per the standing instructions, which made the complainant a defaulter in paying the monthly premium. Hence, we have no hesitation to hold that the 1st opposite party has caused deficiency of service to the complainant which in turn made the complainant to become defaulter in payment of the insurance premiums. Hence, the 1st opposite party is alone liable to pay compensation for deficiency of service.
18. As seen from the documents submitted by the complainant, the complainant had paid only 17 installments X Rs.5,000/- which comes to Rs.85,000/- but whereas the complainant has claimed a sum of Rs.1,05,000/-, which is not correct. As per the terms of the policy, the grace period is 180 days only. Hence, the revival of the policy does not arise. As discussed above, it is only the liability of the 1st opposite party to send the insurance premium amounts to the opposite parties 2 to 4 and the opposite parties 2 to 4 are not liable for non-payment of the insurance premiums. Hence, we are of the view that there is deficiency of service on the part of the 1st opposite party and the 1st opposite party is liable to pay a sum of Rs.10,000/- towards deficiency of service. Further, the opposite parties 2 to 4 shall repay the amounts paid by the complainant as per the terms and conditions of the policy.
19. POINT NO.2 - In the result, the complaint is allowed by directing the 1st opposite party to pay a sum of Rs.10,000/- towards deficiency of service to the complainant and a sum of Rs.3,000/- towards costs. Further the opposite parties 2 to 4 are directed to refund the premium amounts paid by the complainant as per the terms and conditions of the policy. The period for compliance is four weeks from the date of this order.
Dictated to the Steno, transcribed by him, corrected and pronounced by us in open Forum, this the 8th day of April, 2013.
Sd/- Sd/-
LADY MEMBER PRESIDENT (FAC)
DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM
ANANTAPUR ANANTAPUR.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
ON BEHALF OF THE COMPLAINANT: ON BEHALF OF THE OPPOISITE PARTIES
-NIL- - NIL-
EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT
1. Ex.A1 - Original Policy bearing No.RPG1596847 issued by the opposite parties 2 to 4 in
favour of the complainant.
2. Ex.A2 - Office copy of legal notice dt.23-01-2012 got issued by the complainant to the
Opposite parties 1 to 4.
Anantapur.
3. Ex.A3 - Original Postal Receipts for sending legal notice dt.23-01-2012 to the opposite
Parties 1 to 4.
4. Ex.A4 - Transaction history relating to the complainant for the period 01-03-2007 to
04-02-2008 issued by Indusind Bank Ltd.,
5. Ex.A5 - Photo copy of Transaction History enquiry relating to the complainant for the
Period 01-04-2008 to 31-03-2009 issued by Indusind Bank Ltd.,
6. Ex.A6 - Photo copy of Transaction History enquiry relating to the complainant for the period
02-07-2008 to 31-03-2009 issued by Indusind Bank Ltd.,
7. Ex.A7 -Complaint dt.25-04-2009 given by Assistant Manager, Avivaindia to Head Office.
EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY NO.2
1. Ex.B1 - Photo copy of Policy conditions.
2. Ex.B2 - Photo copy of Proposal form submitted by the complainant to the opposite parties.
3. Ex.B3 - Photo copy of Standard terms & conditions of the opposite parties.
4. Ex.B4 - Photo copy of letter dt.02-12-2008 issued by the opposite parties 2 to 4 to the
Complainant.
5. Ex.B5 - Photo copy of Account Debit form of paying premiums to the opposite parties
2 to 4.\
Sd/- Sd/-
LADY MEMBER, PRESIDENT (FAC),
DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM
ANANTAPUR ANANTAPUR.
Typed by JPNN
