Andhra Pradesh

East Godwari-II at Rajahmundry

CC/40/2013

Pamchamgam Venkata Rangacharyulu - Complainant(s)

Versus

The HDFC Standard Life Insurance Company Limited, Rajahmundry - Opp.Party(s)

A.Venkateswara Rao

14 Sep 2015

ORDER

                                                                                    Date of filing:    28.12.2013

                                                                                                Date of Order:  14.09.2015

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                              Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

                           Monday, the 14^th day of September, 2015

 

C.C.No.40 /2013

Between:-

 

Pamchamgam Venkata Rangacharyulu,

D.No.32-1-13, Akulavari Sandu, Purohit,

Aged 50 years, Khaida Kotla Street,

Rajahmundry, E.G. Dt.                                                                   …  Complainant

 

                        And

 

1)  The HDFC Standard Life Insurance Company Ltd.,

     Represented by its Branch Manager, A.V. Apparao

     Road Branch, First Floor (Front portion),

     D.No.74-12-6, A.V. Apparao Road, Ramalayam Junction,

     Rajahmundry – 533103.

 

2)  The HDFC Standard Life Insurance Company Ltd.,

      Corporate Office, Trade Star, 2^nd Floor, ‘A’ Wing,

      Junction of Kondivita and M.V. Road, Andheri Kurla Road,

      Andheri (East), Mumbai – 400 059.

 

3)  The HDFC Standard Life Insurance Company Limited,

      Registered Office, Ramon House, H.T. Parekh Marg,

      169, Backbay Reclamation, Mumbai – 400020.

 

4)  Rallapalli V.S.S.S. Srinivas, Agent of the HDFC Standard

     Life Insurance Company Limited, A.V. Apparao Road Branch,

     First Floor (Front portion), D.No.74-12-6, A.V. Apparao Road,

     Ramalayam Junction, Rajahmundry – 533103.                                   …  Opposite parties

 

 

            This case coming on 01.09.2015 for final hearing before this Forum in the presence of Sri Appana Venkateswara Rao, Advocate for the complainant and Sri Barla Srinivasa Rao, Advocate for the opposite parties 1 to 3 and the opposite party No.4 having been set exparte, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Sri A. Madhusudana Rao, Member] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the opposite parties jointly and severally to pay the value of the policy amount of Rs.99,999/- with interest at 12% p.a. from the date of deposit till payment; pay Rs.1,00,000/- towards damages for mental agony; pay Rs.1,500/- towards fees and charges of legal notice and pay Rs.15,000/- towards costs.

2.         The case of the complainant is that he is the policyholder of the policy bearing No.13655007 issued by the opposite parties, date of commencement of policy is 5.5.2010 and original annual premium paid is Rs.99,999/-, term is 10 years.  The complainant states that he took the said policy by being attracted by the one of the agent i.e. 4^th opposite party who booked the policy and simply believed the representations of the said agent and the officers accompanied along with him by then who stated to be branch manager and other officers of the 1^st opposite party, then appeared and they took the signatures of the complainant on blank printed forms and stated that the complainant would get higher benefits out of it and believing the said representation, the complainant simply signed and paid the amount under policy to the opposite parties and later issued the policy.  The complainant states that he has deposited Rs.99,999/-  as lump sum amount to HDFC Standard Life Insurance based on the explanation of the agent and other officers stated that eh complainant would get back his amount of Rs.99,999/- with some returns after 3 years. Subsequently, the complainant came to know about the fraud and malafidies on the part of the officers, addressed a letter dt.9.7.2013 for which the opposite party gave reply dt.19.7.2013 with all untrue and untenable allegations denying the genuine claim of the complainant. The complainant states that as per the policy, the complainant can get back the policy amount along with accrued benefits along with interest after three years from the date of policy along with damages for mental agony.  The complainant got issued notice to the opposite parties on 8.10.2013 and the 1^st and 3^rd opposite parties received the notices and the notice addressed to 2^nd and 4^th opposite parties returned un-served and no reply so far. Hence, the complaint.

3.         The opposite parties 1 to 3 filed their written version and denied the allegations made by the complainant. The opposite parties submits that the policy was issued to the complainant on the basis of his application for insurance May 2010 for the purchase policy namely HDFC SL Pension Champion Policy. The policy was issued on the basis of a duly signed proposal form submitted by the complainant and the opposite parties issued the policy dt.6.5.2010 which clearly reflects the installment premium as Rs.99,999/- and the final premium to be paid on as 5.5.2019 and the term as 10 years and the frequency of premium is mentioned as “Annual from the date of commencement” and the complainant is well aware of these clauses in the opening page of the policy since May, 2010 and all the information is readily available on the face of the policy and also proposal form signed by the complainant. The insurance subject matter of solicitation and the agents solicits the insurance policies from the proposed customers after briefing the terms and conditions of the policy and only after being convinced and satisfied with the terms of the policy explained through the agent and relevant sales literature the complainant submitted a duly accepted proposal form for issuance of the policy and therefore in the proposal form, the complainant had “declared” under Sec. –E (Declarations) that he read the understood the terms and conditions of the insurance policy opted. The clause “Option to Return contained I in the policy which gives the policyholder the option to return the policy to the opposite parties stating the reasons thereof within 15 days of the receipt of the policy in case he is not agreeable to any of the provisions mentioned in the policy and the details in the proposal form which the complainant had failed to opt for. The terms/mode of payment of the premium and other terms and conditions of the policy had been clearly mentioned in the policy which had been opted by the complainant vide proposal form submitted by him. The terms and conditions and other details of the policy has been explained to the complainant by agents and the complainant is graduate and he understood the details of the policy documents and accepted and took the policy after paying premium. The complainant had failed to make the payment after May 2010 and also had failed to revive the policy as provided under clause 5(ii) (b) of the policy and policy became ‘lapsed terminated’ due to non-payment of premium by the complainant and the premium paid by the complainant towards first term appropriated towards charges as provided under the schedule of charges of the policy. The complainant is not entitled to refund of the premium along with interest and compensation since the complainant had defaulted the payment of the subsequently premiums and policy became lapsed one and terminated status. It is also stated that the insurance between the insurer and the insured is a contract between the parties, the terms of the Agreement including the applicability of the provisions and also its exclusion had to be strictly construed to determine the extent of the liability of the insurer. Hence, there is no deficiency of service on the part of the opposite parties and the complaint is liable to be dismissed with costs.

4.         The proof affidavit filed on behalf of the complainant and Exs.A1 to A5 have been marked on behalf of him. The proof affidavit filed on behalf of the opposite parties 1 to 3 and Exs.B1 to B3 have been marked on behalf of them.

5.         Heard the counsel of complainant and the opposite parties 1 to 3.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

         

         

7.  POINT Nos.1 & 2:  As per the available record, the complainant herein obtained “Unit Linked Pension Policy” vide No.13655007 from the opposite parties 1 to 3 HDFC Insurance company through the 4^th opposite party agent and the said policy was commenced from 5.5.2010 and paid an amount of Rs.99,999/- towards premium and the term of the said policy is 10 years as per Ex.A1 = B2 on submission of Ex.B1 proposal form dt.3.5.2010. As per Ex.A1 = B2 policy issued to the complainant, the opposite parties insurance company allotted 5,184.64853 units @ 16.1695800 as unit price on 6.5.2010 and a total value of the said plan on 6.5.2010 is at Rs.87,921.27ps.  The complainant alleged that the opposite parties at the time of obtaining policy explained that the complainant will get his amount of Rs.99,999/- with some returns after the period of 3 years time from the date of commencement of the policy. The complainant further alleged that he addressed a letter dt.9.7.2013 for refund of the premium amount of Rs.99,999/- with 18% interest and the opposite parties replied on 19.7.2013 with all untrue and untenable allegations and denied the genuine claim of the complainant.

            After that, the complainant got issued legal notice dt.8.10.2013 under Ex.A2 to all the opposite parties as per the receipts and the 1^st & 3^rd opposite parties received the same vide Ex.A3 acknowledgements and the notices addressed to the 2^nd & 4^th opposite parties were returned un-served vide Exs.A4 & A5 and there is no reply from the 1^st & 3^rd opposite parties. The complainant further stated that as per the policy condition, he can surrender the policy and the opposite parties insurance company has to refund the amount with accrued amounts and interest. Whereas the opposite parties contended that as per the terms and conditions of the policy, the utilized fund value will be paid as a death benefit in case the death occurs prior to the date of maturity of the policy and further option to return contained I in the policy which gives the policyholder, the option to return the policy stating the reasons thereof within 15 days of the receipt of the policy in case of the policyholder not agreeable to the provisions mentioned in the policy and further alleged that the complainant failed to make premiums after May, 2010 and also failed to revive the policy as provided under clause 5 (ii) (b) of the policy and the policy became lapsed terminated due to non-payment of premium. The opposite parties further contended that the principal of privity has been applied to the insurance policies affected for the benefit of the third parties.

            But, we observed that as per the policy definition under (4) premiums clause (ii) if any premium remains unpaid 15 days after the due date, the policy will be automatically surrendered or become paid up as prescribed in provision 5.  It is further  observed that as per clause 5 (ii) Premium unpaid in the first 3 years of the Policy: sub clause (a) clearly states that if any Premium remains unpaid as described in Provision 4 during the first 3 years of the Policy, the Policy will lapse and be automatically surrendered. A Surrender charge as specified in the Schedule of Charges will be deducted by cancellation of units. On automatic surrender due to a lapse, all benefits other than those described under provision 5(ii)(c) will be cancelled, Policy servicing will cease, all units will be de-allocated and will cease to be invested in the Unit Linked Funds. We also observed that, the value of the units less Surrender Charges will be held by us as described in Provision 5(ii)(c) which reads as “if a policy automatically surrendered due to a lapse is not revived the units fund value at the date of lapse less the surrender charge as specified in the schedule of charges would be paid to the policyholder at the end of 2 years from the date of lapse or at the end of 3 years from inception whichever is later.

            So, in the present case, the complainant for whatever might be the reasons could not continue the premium payment after first premium payment of Rs.99,999/- on 3.5.2010. But, it is alleged that the complainant addressed a letter on 9.7.2013 to the insurance company for refund of amount with interest and other benefits and received reply dt.19.7.2013 with untrue and untenable allegations denying genuine claim. Even after the receipt of legal notice dt.8.10.2013 under Ex.A2, the 1^st & 3^rd opposite parties failed to respond the claim of the complainant and the complainant was forced to approach this Forum for his genuine claim.

            With the discussion held supra, we are in the considered opinion that the complainant is entitled for refund of units value amount under his name from the opposite parties 1 to 3 insurance company under clause 5(ii) (c) of the terms and conditions of the policy with accrued benefits on the date of lapse i.e. after 5.5.2011 after deduction of policy surrender charges as the complainant failed to further premium amounts and the policy became automatically surrendered due to lapse. Further, the complainant is entitled for interest as the amount was held in the custody and control of the opposite parties insurance company even after 5.5.2013 without payment.                    

           

8.   POINT No.3:  In the result, the complaint is allowed, directing the opposite parties 1 to 3 to refund the valued amount of units on 5.5.2011 held in the name of the complainant with accrued benefits on the units invested up to the above date i.e. 5.5.2011 after deduction of policy surrender charges and further direct the opposite parties 1 to 3 to pay interest @ 9% p.a. on the total amount payable to the complainant on 5.5.2011 from the date of this complaint i.e. 28.12.2013 till realization. We further direct the opposite parties 1 to 3 insurance company to pay Rs.2,000/- towards the costs of the complaint to the complainant.  Time for compliance is two months from the date of this order.   

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the        

14^th  day of September, 2015.

    

                 Sd/-xx                                                                                        Sd/-xx

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                                                                     FOR OPPOSITE PARTIES: None.

 

DOCUMENTS MARKED

FOR COMPLAINANT:

 

Ex.A1    Policy issued by the opposite parties.

Ex.A2    Legal notice dt.8.10.2013 with original postal receipts.

Ex.A3    Served acks due from the 1^st and 3^rd opposite parties.

Ex.A4    Returned cover from the 2^nd opposite party.

Ex.A5    Returned cover from the 4^th opposite party. 

 

FOR OPPOSITE PARTIES 1 TO 3:-

 

Ex.B1    Proposal form along with the illustration.

Ex.B2    Policy.

Ex.B3    Reply notice dt.21.11.2013.

 

 

 

               Sd/-xx                                                                                            Sd/-xx

              MEMBER                                                                              PRESIDENT(FAC)