Karnataka

Belgaum

CC/209/2014

Shankar Y Maruche. - Complainant(s)

Versus

The Branch Manager. Bajaj Allianz Life Insurance Cmpy Ltd. - Opp.Party(s)

R.M.Ghiwari.

18 Feb 2016

ORDER

(Order dictated by Shri. B.V.Gudli, President)

ORDER

The complainant has filed complaint U/s.12 of C.P. Act. alleging deficiency of service for retaining the money and for non refund of the premium amount by the opponents under Life Insurance Policy.

2) O.P. appeared and filed his version denied certain facts in the complaint.

          3) Both parties have filed their affidavits and some documents are produced by both the parties.

          4) We have heard the arguments of the counsels on both sides and have perused the records.

5) Now the point for our consideration is that, whether the complainants has proved any deficiency in service on the part of the O.P. and that the complainant is entitled to the reliefs sought?

6) Our finding on the point is partly in Negative, for the following reasons.

: REASONS :

7)      The complainant has filed the complaint alleging that he opted life insurance policy under Bajaj Allianz New Unit Gain under policy No.0041770015 commenced from 15/3/2007 to be matured on 15/3/2017. The complainant further alleges that he had paid 1^st premium Rs.10,000/- on 15/3/2007 complying all the requirements of the policy and due to financial crisis the complainant was unable to pay remaining premium amount and the opponents issued lapse intimation on 25/10/2008 with the intimation that the policy is not revived within time. The complainant further alleged that it was not possible to him to revive the policy and he opted to refund the premium and wrote a demand letter on 7/1/2014 to the opponent No.1 and in-spite of receipt of the notice the opponent did not heed to the request made and for in action by the opponents on 21/1/2014 the complainant issued legal notice and the opponents after receipt did not appreciate the facts. The complainant further alleges that the retention of the money and non refund of premium amounts to deficiency of service etc., and prayed to direct the opponents to refund the premium amount of Rs.10,000/- with 18% P.A. interest and other prays etc.,

8) The opponents appeared through counsel and denied the contends of the complaint and allegations etc., the opponents contends that insurance policy is based on contract and from complainant the opponents have received 1^st insurance premium with the proposal as per the Insurance Act and the complainant has made a declaration that he has read the application and answered the application in full complete and true. The opponents further contends that both the policy holder and the company are bound by the terms and conditions of the insurance policy and the complainant has agreed for the terms and conditions and is well aware of the conditions of the policy and the complainant was under obligation to pay the renewal premium annually to keep insurance policy in active and to receive the benefit under the policy. The opponents further contends that the term of the policy was for 10 years and the same is mentioned in the policy and the policy issued to complainant came to be lapsed and foreclosed for non payment of renewal premium and the allegation made in the complaint are contrary to the terms and condition of the policy and the complaint deserve to be dismissed on the principles of “Nullus commodum capare potest xex sua inguria propria” as the complainant cannot drive and advantage from his own wrong. The opponents further contends that only one premium amount of Rs.10,000/- is paid by the complainant to the Insurance company in the March 2007 and the policy is unit linked policy depends on market conditions and the risk is to be borne by the policy holder. The opponent further contends that on 25/10/2008 the lapse intimation was sent to the complainant requesting to revive the policy within 30 days of the receipt of the notice but the complainant has not complied with the notice and as per the Section 6 (c) of the policy, 5 (b), 5(c) (iii) and section 25 (iv) all this sections the opponents are not liable to pay the amount to the complainant as the policy is terminated etc., and prayed to dismiss the complaint.

9) On perusal of the allegations and the objection as noted supra, the complainant has produced the original Life Insurance policy of the opponent company wherein on the first page there is receipt of 1^st premium paid and on the second page is the free lock period letter and the 3^rd page risk involved and premium paid and its sum assurance and benefits etc., the complainant has also produced the letter of acceptance, lapse intimation issued by the opponents, letter of offer on lapse intimation, legal notice sent by the complainant to the opponents, acknowledgements etc., The opponents have produced documents with memo that is the copy of the proposal form and units statement of the complainant, copy of policy and statement of account. Now the point for consideration is that whether the complainant is entitle for the refund of premium amount of Rs.10,000/- pay to the opponent under the policy? It is admitted fact that the complainant has proposed for the policy and also opponents have issued the policy as per the proposal of the complainant and also that the premium of Rs.10,000/- has been paid by the complainant under the policy terms and conditions. It is also admitted fact that the complainant has paid only one premium amount that the 1^st premium of Rs.10,000/- and subsequently the complainant has not paid the premium and the policy was lapsed and also the opponents intimated the same to the complainant and requested for revival of the policy. By the version of complainant himself he did not pay the subsequent premium due to finance crisis and also through the documents submitted by the complainant himself it was the complainants duty to revive the policy as the same was lapsed and the complainant himself has produced the document showing that on 25/10/2008 the lapse intimation was received by him and time was granted to revive the policy but the complainant fail to revive the same.

10) The another point to be considered here is that the complainant has produced the original policy wherein under the terms and conditions on page 6 clause/ Sec.12 under head Non forfeiture (a) if any regular premium is not paid before expiry of grace period, within the 3 years of inception of the policy, the policy shall lapse immediately for all insurance covers. The policy hold get an opportunity to revive the policy within a revival period of 2 years from the due date of last unpaid premium and if policy holder does not revive during this period the contract shall be terminated. The surrender value, if any, shall be paid at the end of 3^rd year or at the end of the revival period, whichever is later.

By reading the above clause it is clear that after lapse of the policy the holder of the policy shall revive the policy within period of 2 years from the due date of last unpaid premium. In the present complaint on hand as the complainant himself has admitted that he paid a single premium of Rs.10,000/-on 15/3/2007 at the time of taking the policy and it was frequent annual payment under unit link and the complainant himself contends that he did not pay the subsequent premiums due to financial problems and we can also notice that even after the revival intimation and lapse intimation, the complainant did not take any steps to revive the policy within 2 years from the date of 1^st premium paid, therefore the opponents as per the terms and conditions as mentioned supra under bold letters terminated the contract under the policy.

11) The another clause/Sec.31 on page 12 of the terms and conditions of the policy under the head options (c) surrender i) The surrender Value of the Policy will be equal to the Fund Value less Surrender Charge, if any. The company shall thereafter terminate the policy upon payment of the full Surrender Value. The Policy will acquire a Surrender Value after three years from the Date of Commencement of the policy, provided three full year’s premiums have been paid. During first three policy years, no Surrender Value is payable.

ii) So far Company does not impose any Surrender Charge currently on surrender after three-policy year but Company keeps right to impose Surrender Charge of up to a maximum of 10% of the Fund Value subjects to approval from the IRDA.

By reading the above clause the policy if surrender the value of the policy will be equal to be fund value less surrender charges, if any. The another sentence reads that the policy will acquired a surrender value after three years from the date of commencement of the policy, provided three full years premium has been paid during first three policy years no surrender value is payable. In the present case on hand the complainant as per the terms and conditions of the policy has fail to pay regular premium for the period upto 3 years as we understood by reading the above clause mentioned in bold letters that if the policy holder under this policy page in continues premium for three years then the policy holder is entitled for the surrender value by keeping right by the company to deduct the surrender charges of 10% of fund value subject to approval of IRDA. In this context the complainant has fail to comply with the terms and conditions of the policy hence in our opinion the complainant is not entitle for refund of the premium amount as claimed by him and also that for the non payment of other premium the policy has been terminated by the opponents is correct and to be accepted.

12) The another objection of the opponents is that the complaint is time barred as the intimation of lapse of the policy was given to the complainant in the year 2008 and the complainant has not taken any steps to revive the policy nor continued the premium, therefore the cause of action has been arrised in the year 2008 itself. It is true that the complainant has received the lapse intimation in the year 2008 but have not taken any steps to revive the policy and the cause of action to file the complaint arrised in the year 2008 itself, hence we are of the opinion that the complaint is time barred.  The complainant has issued legal notice to opponent No.2 on 21/1/2014 which is after a lapse of 6 years and the opponents have replied to the legal notice and in the said reply notice on page 2 the opponents under the bold letters have stated that policy lapsed and foreclosed for nonpayment of the said regular premium. Hence in our opinion the complaint is not maintainable and the complainant has not proved his allegations against the opponents.

13)    The opponents have relied on the reported rulings of the Hon’ble National Commission reported in

1) 2015 (1) CPR 801 (NC) in between Batta Valji Laxman V/s. ICICI Lombard General Insurance Co. Ltd.,

Important Point

Breach of term of policy entitles insurance company to repudiate claim.

2) Hon’ble National Commission reported in 2014 (2) CPR 500 (NC) in between Abdul Rehman V/s. Oriental Insurance Co. Ltd. Through its Regional Manager.

Important Point

Terms and conditions of Insurance Policy have to be strictly followed;

3) Hon’ble National Commission reported in 2013 (1) CPR 81 (NC) in between New India Assurance Co. Ltd. V/s. M/s. Panchsheel Jewelers.

Important Point

Terms of policy need to be strictly construed.

4) Hon’ble National Commission reported in 2013 (1) CPR 378 (NC) in between Manoj Banerjee V/s. Oriental Insurance Co. Ltd.,

Important Point

Terms and conditions of Insurance Policy have to be construed strictly;

The opponents have relied upon the above reported rulings cited supra wherein the Hon’ble National Commission has held that the terms and conditions of the policy has to be strictly followed and breach of any policy condition the repudiation by the Insurance company is proper. In present complaint on hand the complainant has not followed the policy condition and there is breach of policy condition.

14) Taking into consideration of the facts, evidence on record and the discussion made here before deficiency in service on the part of the opponents have not been proved. Hence the following;

: ORDER :

The complaint is dismissed. No order as to cost.

(Order dictated, corrected & then pronounced in the Open Forum on this 18^th day of February 2016).

          Member                    Member                    President.

 

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