Per Sri A. Hazarath Rao,  President:-

        The complainant filed this complaint u/s 12 of the Consumer Protection Act seeking Rs.51,742/- being the less amount paid by the opposite party after surrendering the policies; Rs.4,941/- being eh interest @18% p.a., from 14-10-11; Rs.20,000/- towards mental agony besides Rs.5,000/- towards costs. 

2.   In brief the averments of the complaint are these:

        The complainant took two policies from the opposite party bearing Nos.840059644 and 840229128 on 28-09-95 and 15-08-96 for Rs.2,00,000/- and Rs.1,00,000/- respectively.   The said policies mature by 28-09-2021 and 15-08-2022.   The complainant paid             16 yearly installments @Rs.2,677/- amounting to Rs.42,832/- and                              15 installments @Rs.1421/- amounting to Rs.21,315/- towards the policies bearing Nos.840059644 and 840229128.   The complainant surrendered the above policies in view of his financial problems.   The opposite party paid Rs.19,013/- only against Rs.42,832/- for the policy bearing No. 840059644 and Rs.9,428/- only against Rs.21,315/- for the policy bearing No. 840229128 on 14-10-11.   As per the rules of the said policies the opposite party has to return the entire premium installments together with interest @18%p.a., and loyalty of 25% on the total premium amounts.    Inspite of several requests the opposite party protracted the matter without giving any reply.   The opposite party thus committed deficiency of service in not paying the amount paid by the complainant.   The complaint therefore be allowed.

3.    The contention of the opposite party in brief is thus:

The surrender values paid by the opposite party complaint covering the subject policies as per the Central Office circular ACTL/1540/4 dated 27-06-94.  The same was mentioned in the schedule portion of the said Bheema Kiran policy bonds in the front page itself.   The opposite party never violated rules and regulations covering the said policies.   The opposite party did not commit deficiency of service.   The complaint therefore be dismissed.

4.  Exs.A-1 to A-4 and Ex.B-1 were marked on behalf of complainant and opposite party respectively.

5.     Now the points that arose for consideration in this case are:

1. Whether the opposite party committed deficiency of service?
2. Whether the complainant is entitled to compensation and                 if so to what amount?
3. To what relief?

6.  POINT No.1:-   Exs.A-1 and A-2 policies amounted to contract between the insurer and the insured and their terms and conditions are binding on both.   

7.     The details of premature surrender of subject policies (Jeevan Bhima Kiran policies) and its paid up value did not find place in Ex.A-1 and   A-2.   But the opposite party paid surrender value of Ex.A-1 and A-2 according to Ex.B-1 circular. It can therefore be inferred that the subject policies can be prematurely surrendered and acquired surrender value.   Applicability of Ex.B-1 circular to Ex.A-1 and A-2 policies was not mentioned in them.   There is no occasion for any insured to take subject insurance policy after considering the advantage or disadvantage in case of premature surrender (in the absence of such clause like the one mentioned in Ex.B-1 circular) regarding premature surrender value and to opt for the policy advantageous for them.   Not mentioning of any thing regarding premature surrender of subject policies in our considered opinion therefore amounted to deficiency of service and answer this point against the opposite party.

8.  POINT No.2:-   The complainant did not ascertain from the opposite party regarding surrender value before surrendering them prematurely as rightly contended by the opposite party. The contention of the opposite party that it did not expect any insured to surrender the policies prematurely is also having considerable force. 

9.   The complainant relied on clause (9) of Exs.A-1 and A-2 and claimed loyalty also and it reads as follows:

“If after a policy duration of not less than 15 years, on the Life Assured surviving the stipulated date of maturity or on earlier death of the Life Assured and provided the Policy is in full force on the Date of Maturity or on the date of death, the following Loyalty Addition, will be paid along with the Death Benefit/Maturity Benefit.

NOTE: Policy duration means the number of completed years between the date of death or the date of maturity and the date of commencement of the policy.  In computing the number of completed years, fraction of a year shall be ignored”.

The complainant is not entitled to any loyalty as the maturity period is not over and the insured is alive.   The said contention of the complainant therefore is denial of merit.

10.   Under those circumstances directing the opposite party to pay the premiums paid by the complainant in respect of Ex.A-1 and A-2 policies will meet ends of justice. Since the complainant surrendered subject policies prematurely awarding compensation in our considered opinion is not just and proper.  We therefore hold that the complainant is not entitled to any compensation and answer this point accordingly.

11. POINT No.3:-   In view of above findings in the result the complaint is allowed partly as indicated below:

1. The opposite party is directed to pay Rs.35, 706/- (Rupees thirty five thousand, seven hundred and six only).
2. The above amount shall be deposited within a period of six weeks failing which it carries interest @9% p.a., from the date of order till realization.
3. There is no order as to costs.

            Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum dated this the 13^th day of September, 2012.

MEMBER                                             MEMBER                                         PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party: 

PRESIDENT