IN THE CONSUMER DISPUTES REDRESSAL FORUM, KOTTAYAM 

Present:

Hon’ble Mr. Bose Augustine, President

        Hon’ble Mrs.Renu.P.Gopalan, Member

CC No. 200/16

Tuesday the 30th      day of May, 2017.

Petitioner                                                     :          Shaji Abraham,

                                                                                    S/o. Abraham,

                                                                                    Thakidiyel, Vadavathoor P.O

                                                                                    Kottayam  – 686 010.

                                                                                     (Adv. Vivek Soman)

                                                            Vs.                                                                              

Opposite Parties                                         : 1)      The Canara-HSBC-OBC-

Life Insurance Co. Ltd.,

                                                                                    Policy  Service Department

                                                                                    Unitech Trade Centre, 2^nd Floor

                                                                                    Sushant Lok, Phase-1, Sector 43

                                                                                    Gurgaon, Haryana – 122009.

                                                                                    (Adv. M.C Suresh)

                                                                            2)    The Oriental Bank of Commerce,

                                                                                    Reptd. By its Manager,

                                                                                    Sasthri Road,  Kottayam – 686 001,

                                                                                    (Adv. Agi Joseph)                                                                                                                                             

O R D E R

Hon’ble Mr. Bose Augustine, President

             The case of the complainant filed on 27/06/16 is as follows.

            The complainant was a Life Insurance Policy holder  of the 1^st opposite party.  The said policy is a joint venture of Canara Bank, HSBC Bank and  Oriental Bank of Commerce and it is availed through the 2^nd opposite party.  The  period

of the said policy was for 7 years and  the annual premium  amount was

 Rs. 25,000/-.  Complainant had remitted two annual premiums to the 1^st opposite party through the 2^nd opposite party and threby the  total remitted amount was Rs. 50,000/-.   Thus  find value of the said policy was Rs. 53809/-.  According to the complainant the  1^st opposite party had terminated the above said  policy without any prior notice and issued a cheque for an amount of Rs. 23,580/- as  surrender  value instead of Rs. 53,809/-.  So in the month of October 2014 he had issued a lawyers notice to the 1^st opposite party demanding the balance amount of Rs. 30,229/-.  But opposite party has not cared to refund the said amount and the said act of 1^st opposite party amounts  to imperfection in the quality or standard required to be maintained by a  contract and law for the time being in force, it amounts  to deficiency in service.  Hence this complaint.

            1^st opposite party filed version contenting that the complaint is not maintainable,  as the complainant is not a consumer.   Furthermore the complaint is barred by limitation.  According to the 1^st opposite party, the complainant after completely understanding and satisfying himself with the terms and conditions of the policy, voluntarily applied for an  Insurance policy vide proposal form bearing No.  2000208918 and provided all the relevant details and information in the signed proposal form.  On the basis of said proposal form, a policy bearing No.0017375315 was issued  in favour of the complainant with the risk commencement from 07/08/10 stipulating for payment of Annual premium amounting to Rs. 25,000/- for a premium payment terms of 7 years. The policy terms was 15 years.  Under the said policy a free look period of 15 days  was specifically provided to the complainant to review the terms and conditions of the policy and to request for  cancellation of the same, in case the complainant was dissatisfied with the  features of the policy.  But the  complainant despite of receipt of the policy documents did not request for the cancellation of the policy nor raised any query concerning the said policy within the free look period or at any reasonable time.  The  disputed policy was due for renewal on 07/08/12, inspite of multiple reminder notice, the complainant has not cared to make the payment of  premium for the year 2012.  Accordingly, the policy got lapsed with  effect from 07/08/12 and the same was  informed to the complainant vide letter dated 22/09/12.  The complainant  has not remitted  the renewal premium for  reinstate the policy within the  prescribed time period of 2 years, the policy was terminated effectively on 07/08/14 and the surrender value of Rs. 23579.73 was paid to the complainant vide letter dated 08/08/14.  The surrender value was calculated after deduction of surrender charges of  Rs. 26,904.54, service tax of Rs. 3228.54. Education cess of Rs. 64.57 and  surcharge of Rs. 32.29 from the fund value of Rs. 53,809/-.  As per the said policy  condition, the premium payable tenure was 7 years, but the complainant paid the premium only for 2 years.  So as per clause 3.3.3 of the terms and conditions of the policy the policy was terminated.  According to the 1^st opposite party they had acted as per  the terms and conditions of the policy and  there is no deficiency in service or unfair trade practice on the part of  them.  1^st opposite party prayed for dismissal of the complaint with cost.

            Second opposite party filed version contenting that the complaint is not maintainable.  The claim submitted by the complainant is to be processed  by the 1^st opposite party and the 1^st opposite party is liable to pay the insurance claim if the said  claim is payable.  The 2^nd opposite party have no nexus or any relation to the process of claim of the 1^st opposite party.  The complainant has not issued any notice to the 2^nd opposite party.  According  to the 2^nd opposite party they have not issued any policy to the complainant and there is no deficiency  or unfair trade practice on the part  of them.   2^nd opposite party is also prayed for dismissal of the complaint with cost.

Points for considerations are:

1. Whether the complaint is maintainable?
2. Whether  there is any deficiency in service  or unfair trade practice      on the part of opposite parties?
3. Relief and cost?

Evidence in this case consists of the proof affidavitof the complainant

and 1^st opposite party. And Ext. A1 to A5 documents from the side of the complainant and Ext. B1 to B3 document from the side of  the 1^st opposite party.

 Point No. 1

            According to the 1^st opposite party since the  investment made by the complainant was to gain profit and it was invested for commercial purpose.  So the complaint is not maintainable.  Admittedly the  service availed by the complainant is  with regard to an insurance policy, it is a service as defined u/s. 2(0) of the  Consumer Protection Act 1986.  So the said contention raised by the opposite party is not  sustainable.  The second contention raised by the opposite party is that the complaint is not filed with the period of limitation.   So much, so the same is not maintainable.  Opposite party produced copy of the termination letter dated 08/08/14 and the same is marked as Ext. B3.  In Ext. B3 opposite party stated that the date of effective termination of the policy is 07/08/14.  The cheque for the surrender value is also issued along with Ext. B3.  The  present complaint is filed on 27/06/14 ie. within two years from the date of issuance   of Ext. B3 letter.  So the complaint is filed within the period of limitation.  Point No. 1 is found accordingly.

Point No. 2

            The crux of the allegation of the complainant is that he had deposited a sum of Rs. 50,000/- as two year insurance premium and the opposite party after termination of the policy issued  a cheque for Rs. 23580/- as surrender value.  The complainant alleges that the act of  opposite party in not refunding  entire amount with interest , amounts to deficiency in service.  Issuance of the policy and issuance of the cheque for Rs. 23,580/- is not disputed.  The only question is whether the complainant is entitled for the entire amount remitted by him.    Complainant produced IRDA (Treatment of discontinued linked Insurance policies)  Regulation 2010.  In the said Regulation the IRDA stated that in case of discontinuance of the policy, the maximum amount that can be deducted, if the policy is discontinued  during the   2^nd year policy period,  is 15% of AP or FV subject to a maximum of 2000  if  annualized premium is up to Rs. 25,000/- .  In the  present case the eligible amount that can be deducted by the  1^st opposite party is Rs. 2000/- from the fund value.   Admittedly   the fund value is

Rs. 53,809/-.  So  the   complainant is entitled for Rs. 51,809/- after deducting Rs. 2000/-.  Here 1^st opposite party had already paid Rs. 23580/-.  So the complainant is entitled to  get the balance amount of Rs. 28,229/-.   In our view, the act of 1^st opposite party in not  refunding the eligible amount, amounts to deficiency in service.  Point No. 2 is found accordingly.

Point No. 3

            In view of the finding in point No. 1 and 2, complaint is  allowed.  

In the result:

1. 1^st opposite party is   ordered to  pay Rs. 28,229/- to the complainant. 

 2)  .Considering  the fact and circumstances of the case no cost and compensation is ordered.   

 The Order shall be complied with within a period of 30 days from the

 date of receipt of copy order.  If not complied as directed, the award amount will carry 15% interest from the date of Order till realization.

            Pronounced in the Open Forum on this the  30^th     day of  May,  2017.

Hon’ble Mr. Bose Augustine, PresidentSd/-

          Hon’ble Mrs.Renu.P.Gopalan, Member     Sd/-

                                                Appendix

Documents for the petitioner:

Ext. A1: Original Policy document

Ext. A2:      Copy of Lawyers notice

Ext. A3:       Original postal receipt

Ext. A4:      Copy of letter Dtd:  30/10/2014

Ext. A5:      Copy of statement of account

Documents for the opposite parties

            Ext. B1:          Copy of proposal form and policy documents

Ext. B2:          Copy of notice Dtd: 12/07/12, 09/08/12, 15/08/12 and

                        22/09/12  (4 Nos.)

Ext. B3:          Copy of letter Dtd: 08/08/14.

By Order,

Senior Superintendent