Tripura

StateCommission

A/8/2021

Smt. Manju Das - Complainant(s)

Versus

The Chairman, TATA AIA life Insurance Company Ltd. - Opp.Party(s)

Mr. Amrit Lal Saha, Mr. Joydeep Paul, Mr. Kajal Nandi

28 May 2021

ORDER

Tripura State Consumer Disputes Redressal Commission, Agartala.

 

 

Case No.A.8.2021

 

 

 

1. Smt. Manju Das,

W/o Late Nitai Das,

Resident of Jagatpur, Abhoynagar,

P.S. East Agartala,

District - West Tripura, Pin: 799005.

… … … … Appellant/Complainant.

Vs

 

1. The Chairman,

TATA AIA Life Insurance Company Ltd.

14^th Floor, Tower-A, Peninsula Business Park,

Senapati Bapat Marg,

Lower Parel, Mumbai-400013.

2. The Managing Director,

TATA AIA Life Insurance Company Ltd.,

Delphi-B Wing, 2nd floor, Orchard,

Avenue, Hiranandani Business Park,

Powai, Mumbai-400076.

3. The Branch Manager, 

TATA AIA Life Insurance Company Ltd.

1st floor, 1 Mantribari Road, 

Agartala. Pin-799001.

                                                          … … … … Respondent/Opposite Parties

 

 

Present

 

Hon’ble Mr. Justice U.B. Saha

President,

State Commission

 

Dr. Chhanda Bhattacharyya

Member,

State Commission

 

Mr. Kamalendu Bikash Das

Member,

State Commission

 

 

For the Appellant:                                      Mr. Amrit Lal Saha, Adv.

For the Opposite Parties:                         Mr. Sampad Choudhury, Adv.

Date of Hearing:                                         10.05.2021.

Date of Delivery of Judgment:                 28.05.2021.

J U D G M E N T

 

U.B. Saha, J,

 This appeal is directed against the judgment dated 05.02.2021 passed by the learned District Commission (hereinafter referred to as District Commission), West Tripura, Agartala in Case No.C.C.52 of 2019 whereby and whereunder the learned District Commission dismissed the complaint petition filed by the complainant, the appellant herein, being devoid of merit.

2. Heard Mr. Amrit Lal Saha, Ld. Counsel appearing on behalf of the appellant (hereinafter referred to as complainant) as well as Mr. Sampad Choudhury, Ld. Counsel appearing on behalf of the respondents (hereinafter referred to as opposite party no.1, 2 and 3 or opposite parties/Insurance Company).
3. The material averments in the complaint case are as follows:

The complainant, Smt. Manju Das, the appellant herein, filed a complaint petition

Finding no other alternative, the complainant filed the complaint petition before the learned District Commission for refund of the premium deposited by her to the Insurance Company along with interest, compensation and litigation cost, totaling Rs.2,00,000/- only.

4. The learned District Commission after receipt of the complaint petition issued notices upon the opposite parties for their appearance.
5. The opposite parties appeared and submitted their written statements. In their written statements it is stated that there is no cause of action for filing the complaint. It is also stated that as per terms and conditions of the Policy, the complainant is not entitled to get any refund as sought for. The opposite party-Insurance Company further stated that the complainant sent a legal notice which was accordingly replied intimating the complainant through her Counsel that the policy was issued as per terms and conditions and in the said policy contract it was specifically mentioned that in case the policy holder is not satisfied with the policy contract he/she should return the same within the Free-Look Period. It is also mentioned that the opposite parties did not receive any free look cancellation from the complainant. The opposite parties-Insurance Company also mentioned that the provisions as expressed in the terms of the policy are in accordance with the IRDA regulations. According to the Insurance Company, the complainant failed to pay renewal premium after receiving the notice. Thereafter, the opposite parties also sent a notice to the complainant in regard to the lapse of the policy. It is the further case of the opposite parties-Insurance Company that the complainant also failed to elect an option available under non-forfeiture provisions. Thereafter, all policy benefit stands forfeited within 90 days after the due date of the premium in default. Further the complainant neither surrendered nor restored her policy nor submitted any letter to that effect. It is again stated in the written statement that the complainant failed to make out a prima-facie case against the opposite parties and hence, the complainant is not a ‘consumer’ as defined under Consumer Protection Act, 1986.
6. The complainant examined herself as P.W.1 and also cross-examined by the opposite parties. She submitted her examination-in-chief by way of affidavit and also submitted seven documents comprising 16 sheets under a Firisti dated 25.07.2019. Those are, namely, copy of letter from Managing Director, copy of Policy Information Page, copy of First Premium Receipt, copy of Renewal Premium, Copy of Advocate Notice dated 21.05.2019 by speed post, copy of Track Consignment Report and copy of Aadhar Card which were marked as Exhibit-1 series.
7. On the other hand, the opposite parties examined one witness, namely, Sri Sujoy Kumar Saha, Branch Operation-In-Charge, TATA AIA Life Insurance Company Ltd. who was also cross-examined by the complainant side. The said witness has produced three documents comprising 19 sheets. The documents viz. Application Form, Renewal Premium Notice dated 03.10.2017, Automatic Premium Loan (APL) dated 01.12.2017 and 01.12.2018 which were marked as Exhibit-A series.
8. The learned District Commission after hearing the parties and considering the evidence on record passed the impugned judgment.
9. Being aggrieved by the impugned judgment, the complainant has preferred the instant appeal.
10. Mr. A.L. Saha, Ld. Counsel while urging for setting aside the impugned judgment would contend that the learned District Commission did not take note of the Section 113 of the Insurance Act 1938 wherein it is stated that,

“113. (1) A policy of life insurance under which the whole of the benefits become payable either on the occurrence, or at a fixed interval or fixed intervals after the occurrence, of a contingency which is bound to happen, shall, if all premiums have been paid for at least three consecutive years in the case of a policy issued by an insurer, or five years in the case of a policy issued by a provident society defined in Part III, acquire a guaranteed surrender value, to which shall be added the surrender value of any subsisting bonus already attached to the policy, and every such policy issued by insurer shall show the guaranteed surrender value of the policy at the close of each year after the second year of its currency or at the close of each period of three years throughout the currency of the policy:

Provided that the requirements of this sub-section as to the addition of the surrender value of the bonus attaching to a policy at surrender shall be deemed to have been complied with where the method of calculation of the guaranteed surrender value of the policy makes provisions for the surrender value of the bonus attaching to the policy:

Provided further that the requirements of this sub-section as to the showing of the guaranteed surrender value on a policy shall be deemed to have been complied with where the insurer shows on the policy the guaranteed surrender value of the policy by means of a formula accepted in this behalf by the Authority as satisfying the said requirements:

Provided further that the provisions of this sub-section as to the showing of the guaranteed surrender value on a policy shall not take effect until after the expiry of six months from such date as the Authority may, by notification in the Official Gazette appointed in this behalf.

2. Notwithstanding any contract to the contrary, a policy which has acquired a surrender value shall not lapse by reason of the non-payment of further premiums but shall be kept alive to the extent of the paid-up sum insured, and the paid-up sum insured shall for the proposes of this sub-section include in full all subsisting reversionary bonuses that have already attached to the policy, and shall, where the policy is one on which the maximum number of annual premiums payable is fixed and the premiums are of uniform amount, be before the inclusion of such bonuses not less than the amount bearing to the total sum insured  by the policy exclusive of bonuses the same proportion as the total period for which premiums have already been paid bears to the maximum period for which premiums were originally payable.
3. A policy kept alive to the extent of the paid-up sum insured under sub section (2) shall not be entitled by virtue of that sub-section to participate in any profits declared distributable after the conversion of the policy into a paid-up policy.
4. Sub-section (2) and sub-section (3) shall not apply - 

1. where the paid-up sum insured by a policy being a policy issued by an insurer, is less than one hundred rupees inclusive of any attached bonus or takes the form of an annuity of less than twenty-five rupees, or where the paid-up sum insured by a policy, being a policy issued by a provident society as defined in Part III, is less than fifty rupees inclusive of any attached bonus or take the form of an annuity of less than twenty-five rupees, or
2. where the parties after the default has occurred in the payment of the premium agree in writing to some other arrangement, or
3. to policies in which the surrender value is automatically applied under the terms of the contract to maintaining the policy in force after its lapse through non-payment of premium.”

According to him, by virtue of Section 113, the appellant-complainant acquired her right to get the amount as surrender value. He has also taken us to the provisions of Section 2 sub Section 46 of Consumer Protection Act, 2019. He has finally contended that admittedly, the appellant-complainant paid five consecutive premiums amounting to Rs.98,934/- and she has raised her grievance for getting the surrender value on 10.01.2017.

11. Mr. Choudhury, Ld. Counsel appearing for the respondent-opposite party, Insurance Company while supporting the impugned judgment would contend that the learned District Commission did not commit any error while passing the impugned judgment. The learned District Commission in its judgment specifically mentioned that admittedly the complainant did not lodge any grievance during the Free-Look Period and for the first time she sent grievance letter to the opposite party which was received by the opposite party on 10.01.2017 i.e. after a lapse of 5 years from the date of issuance of Insurance Policy. He has further submitted that admittedly after making 5 annual premium, the complainant failed to pay the renewal premium and for which as per terms and conditions of the policy, the opposite party sent renewal premium notice to the complainant on 03.10.2017 and 01.10.2018 to pay the outstanding premium. As the complainant failed to pay the renewal premium, accordingly, the opposite party sent two APL (notice of activation of automatic premium) dated 01.12.2017 and 01.12.2018 to the complainant informing that the policy moved to reduced paid up option. As per terms and conditions of the contract of Insurance, if the policy holder fails to pay the premium within the grace period, then the policy holder required to elect an option from non-forfeiture provisions available in policy contract, but the complainant also failed to elect an option available under non-forfeiture provisions and as a result, the same moved to ‘Automatic Premium Loan’ and all Policy benefits stands forfeited. He has further submitted that Section 2 of sub Section 46 of the Consumer Protection Act, 2019 i.e. to unfair contract is in no way applicable in the instant case, as the complainant in her complaint petition did not say anything regarding the unfair contract. He has also taken us to the Insurance Regulatory and Development Authority of India Policy Regulation 2017 particularly, Regulation 10 of ‘Free Look Cancellation of Life Insurance Policies’ which reads as under:-

10. Free Look Cancellation of Life Insurance Policies:

1. (i)         The insurer shall inform clearly by the letter forwarding the policy to the policyholder that he has a free look period of 15 days from the date of receipt of the policy document and period of 30 days in case of electronic policies and policies obtained through distance mode, to review the terms and conditions of the policy and where the policyholder disagrees to any of those terms or conditions, he has the option to return the policy to the insurer for cancellation, stating the reasons for his objection, then he shall be entitled to a refund of the premium paid subject only to a deduction of a proportionate risk premium for the period of cover and the expenses incurred by the insurer on medical examination of the proposer and stamp duty charges.

2. In respect of a linked insurance product, in addition to the deductions under sub-regulation (i) above, the insurer shall also be entitled to repurchase the units at the price of the units on the date of cancellation.
3. A request received by insurer for free look cancellation of the policy shall be processed and premium refunded within 15 days of receipt of the request, as stated at sub clause (i), (ii) above.

According to him, the respondent-opposite party, Insurance Company informed the complainant-Policy holder regarding the free look period, but the complainant did not reply to the same either to renew the terms and conditions of the policy. Thus, she accepted the terms and conditions of the Policy. He has also relied upon the decision of the Hon’ble Apex Court in M/s. Grasim Industries Ltd. & Anr. Vs M/s. Agarwal Steel (2010) 1 SCC 83, wherein the Hon’ble Apex Court held that “In our opinion, when a person signs a document, there is a presumption, unless there is proof of force or fraud, that he has read the document properly and understood it and only then he has affixed his signatures thereon, otherwise no signature on a document can ever be accepted. In particular, businessmen, being careful people (since their money is involved) would have ordinarily read and understood a document before signing it. Hence the presumption would be even stronger in their case. There is no allegation of force or fraud in this case. Hence it is difficult to accept the contention of the respondent while admitting that the document Ex.D-8 bears his signatures that it was signed under some mistake. We cannot agree with the view of the High Court on this question. On this ground alone, we allow this appeal, set aside the impugned judgment of the High Court and remand the matter to the High Court for expeditious disposal in accordance with law.”

Referring the aforesaid decision, he submits that when there is no allegation in the complaint petition regarding the unfair contract, the same cannot be taken up in appellate stage beyond the plea in the complaint petition. He has also relied upon a decision of Hon’ble Apex Court in Polymat India P. Ltd. & Anr. Vs. National Insurance Company & Ors. 2005 SC 286 to show that “In interpreting documents relating to a contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves.” He finally submits that the respondent-Insurance Company has complied with the dictum of the legislature in the provisions of Section 113 of the Insurance Act, 1938.

12. We have considered the submissions of the Ld. Counsel appearing for the parties as well as the evidence on record. We have also gone through the judgment relied upon by the Ld. Counsel for the respondent-opposite parties in M/s. Grasim Industries Ltd. & Anr (supra) as well as the Polymat India P. Ltd. & Anr (supra). It is the admitted position that the complainant deposited only 5 yearly premiums and thereafter, she did not deposit any premium for continuing her policy. The opposite parties-Insurance Company as per terms of the policy sent renewal premium notice on 03.10.2017 and 01.10.2018 to the complainant to pay the outstanding premium, but the complainant was silent. Then the complainant asked for refund of the premium by way of filing a petition and finally, filed the complaint petition almost 5 years from the date of issuing of renewal premium notice and not only that, the grievance letter sent by the complainant which was received by the opposite parties on 10.01.2017 is also after a lapse of more than 5 years from the issuance of insurance policy.
13. We have also considered the submission of Mr. Saha, Ld. Counsel for the appellant-complainant. It appears from the requirements of Section 113 of                sub-Section (1) as also mentioned in the terms and conditions of the policy; Insurance Policy document is nothing but an outcome of a contract. In interpreting documents relating to a contract of insurance policy, the duty of the court is to interpret the words in which the contract is expressed by the parties, because it is not for the court to make a new contract, however reasonable, if the parties have not made it themselves. Both the insurer and insured are guided by the terms and contract of the policy as well as the other statutory provisions. In the instant case, the Insurance Company admittedly, sent notice after notice to the complainant like renewal premium notice dated 03.10.2017 and 01.10.2018 and Automatic Premium Loan (APL) dated 01.12.2017 and 01.12.2018, but fact remains that the complainant was in total silence and consequent thereto, the policy was automatically lapsed. It is also evident from the record that the complainant-insured did not raise any of her grievances or surrender the policy during the Free Look Period in terms of the policy.
14. In view of the above, we are of the considered opinion that the learned District Commission did not commit any wrong while passing the impugned judgment.

In the result, the appeal is dismissed being devoid of merits. No order as to costs.

Send down the records to the learned District Commission, West Tripura, Agartala.