BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Sukhwinder Singh r/o H.No.270, Sector 21-A, Chandigarh.

…..Complainant

                   V E R S U S

1.   The Manager, Aviva Life Insurance Company India P.Ltd., SCO No.180-182, Madhya Marg, Sector 9-C, Chandigarh.

2.   Aviva Life Insurance Company India P.Ltd., 2nd floor, Parkashdeep Building 7, Tolstoy Marg, New Delhi.

3.   Aviva Life Insurance Company India P.Ltd. Aviva Tower, Sector Road, Opp. Golf Course, DLF, Phase V, Sector 43, Gurgaon.

                        ……Opposite Parties

CORAM:    SH.P.D.GOEL                          PRESIDENT

           SH.RAJINDER SINGH GILL               MEMBER

Argued by:    Sh.Heman Aggarwal, Counsel for the complainant.

                Sh.Sandeep Suri, Counsel for OPs

PER P.D.GOEL,PRESIDENT

          Briefly stated, the facts of the case are that the complainant took the insurance policy bearing No.LSP1746771 from the OPs for the sum assured of Rs.2,50,000/- and paid the yearly premium of Rs.50,000/- with the assurance that in case he deposits the premium for 3 years then, he will get the sum assured. 

          It has been further stated that due to certain domestic problems, the complainant made a representation on 10.11.2008 with a request to reduce the premium from Rs.50,000/- to Rs.15,000/-. The request of the complainant was accepted by the OPs and annual premium was fixed at Rs.15,000/- per year. The complainant deposited Rs.15,000/- in November, 2008 and another Rs.15,000/- in November, 2009 and as such, he deposited the total amount of Rs.80,000/- with the OPs.

          It has been further alleged that he was shocked to receive the letter dated 24.8.2011 from the OPs, whereby, the policy was auto foreclosed. The surrender value of the policy is less than the first year’s premium. He received cheque of Rs.50,000/- as a refund. The complainant sent a legal notice dated 26.9.2011 to the OPs but to no avail. Hence, this complaint.

2]        OPs No.1 to 3 filed the joint reply, wherein, it has been pleaded that the terms of the policy are binding on the parties and the complainant was well aware about the terms and conditions of the policy. He paid the last premium on 14.11.2009 and on account of failure of the next premiums, the policy was auto foreclosed.

          It has been further pleaded that the policy schedule and key feature documents were also issued to the complainant, which clearly explain the charges applicable on the policy. There is a specific clause with regard to “Right to Reconsider”, so, the complainant had the option to review and seek refund of the premium, if he disagreed with the terms and conditions of the policy within 15 days of the receipt of the policy document. The policy issued to the complainant was market linked, so dependent on the market fluctuations. It has been further pleaded that if surrender value falls below first year premium, then the policy automatically forecloses. The complainant failed to pay the premiums inspite of regular reminders. Denying all the material allegations of the complainant and pleading that there has been no deficiency in service on their part and prayer for dismissal of the complaint has been made.  

3]        Parties led evidence in support of their contentions.

4]        We have heard the learned Counsel for the parties and have also perused the record. 

5]        Admittedly the complainant purchased one insurance policy bearing NO.LSP1746771 (Ann.C-1) from OP Insurance Company and deposited premiums of Rs.50,000/- for first year, Rs.15,000/- each for second & third year i.e. total Rs.80,000/-.

6]        The allegation of the complainant is that the OPs at their own vide letter dated 24.8.2011 (Ann.C-5) intimated him that his policy has been Auto-foreclosed as the surrender value of the policy was less than first year’s premium. They also sent a cheque of Rs.50,000/- against his total deposit of Rs.80,000/-.

7]        The ld.Counsel for the OPs contended that the complainant paid the last premium on 14.11.2009. That on account of his failure to pay next premiums, the surrender value of the policy fell below first year’s premium, thus the policy was auto-foreclosed, as per its terms & conditions.  He also contended that if the terms & conditions of the policy was not acceptable to the complainant, he could avail his Right to Reconsider within 15 days of receipt of the policy.  It was lastly argued that the policy issued to the complainant was market linked, so dependent on market fluctuations.

8]        Now the point for consideration is whether the policy in question could be auto-foreclosed. The answer to this is in the affirmative

9]       The complainant himself has placed on record the policy document containing terms & conditions as well as copy of the proposal form. A close scrutiny of the policy document at Pages No.9 & 10, makes it clear that under Clause 2(c)(iii)(c)(2), it has been clearly mentioned that “We will continue to levy charges as specified in the Schedule until the Surrender Value falls below an amount equivalent to one year’s Regular Premium (as at the Commencement Date), after which the Policy will automatically terminate and You will be paid the Surrender Value per Article 5).  Thus, the OPs were fully entitled to auto-foreclose the policy of the complainant, as its surrender value fell below one year’s regular premium. The proposal form at Pages No.21 to 26 of the Policy Document contained the signatures of the complainant at Page No.26. Therefore, the complainant was well aware about the terms & conditions of the policy.  

10]      As a result of the above discussion, we are of the opinion that there is no merit in the complaint.  The same is dismissed accordingly.  Parties are left to bear their own costs.

         Certified copies of this order be sent to the parties free of charge.  The file be consigned.