BEFORE THE IV ADDITIONAL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027    

PRESENT:

SRI. VASANTHKUMAR.H.Y.                               PRESIDENT

SMT. ROOPA.N.R.                                               MEMBER

CC.No.1077/14, 1078/14, 1079/14, 1080/14, 1081/14, 1082/14, 1083/14, 1084/14

SRI. VASANTH KUMAR.H.Y,  PRESIDENT,

: COMMON ORDER :

(Under Section-14 of Consumer Protection Act-1986)

            Sri.M.Thimmegowda for himself and also being the father and grandfather of the remaining Complainants and also being their power of attorney holder of all of them, has been alleging the deficiency in service against the Opposite parties insurance company for not reviving their respective lapsed insurance policies and for not refunding the entire premium amount with interest accordingly has claimed for direction to comply the same with costs.

          2. The case of the Complainants of all the cases is that they obtained the flexi life insurance policy/flexi cash flow insurance policy during the beginning of the year 2007 paying the premium amounts starting from Rs.3,96,996.75 to Rs.15,19,250/-. The Opposite parties’ officials and agents who assured to collect the premium amount at their door steps failed to collect the premiums. Because of number of policies, huge amount of premium amount could not be paid by them in time and the policies became lapsed. Several requests made by them for revival of policies were turned down by the Opposite parties even by returning the demand drafts offered by them by giving untenable reasons in June 2008. Their request letters dated 16.05.2012 was replied on 29.06.2012 with a direction to contact grievances officer if they are not satisfied with their reply. The said act amounts to deficiency in service by the Opposite parties. Their legal notice dated 16.04.2013 was also replied by Opposite parties on 22.07.2013 and hence they were constrained to file these complaints.

3. The Opposite parties filed their common version, questioning the maintainability of these complaints on various grounds. They contend that the disputed policies being “Unit linked plans” meant for speculative gains do not fall under the purview of this act as observed in R.P. 658/2012 and FA 162/2010 of Hon’ble National Commission. The polices were issued in the beginning of the year 2007 with payment of quarterly premiums and the said premiums were discontinued from 2008 itself, despite issue of reminders, lapsed intimation and thereby the policies were terminated in 2008 itself. These cases filed 6 years thereafter are not maintainable as barred by time. The Consumer Forum has no jurisdiction to try this dispute about these matters which could be dealt by the Civil Court. Though the allegations were made against the agent of the Opposite parties/insurance company not impleaded him and hence these cases become bad for non-joinder of necessary parties. The Complainants availed free-look period for cancellation/review but continued without resistance and thereby they are estopped from raising any grievances relating to the policies or their terms & conditions. The Complaints are liable to be dismissed with costs u/s 26 of CP Act.

4. Sri.Thimmegowda for himself being power of attorney holder of remaining Complainants filed his affidavit evidences in all the cases relying on the respective insurance policies, request letter dated 16.05.2012, reply notice dated 29.06.2012, legal notice dated 16.04.2013 and the reply notice dated 22.07.2013. The official of the Opposite parties also has filed affidavit evidence, relying on respective applications, policy details, policy lapsed notice and letters of Sri. Thimmegowda dated 31.07.2014. Written arguments were filed by both the parties. Perused the records.

5. The common consumer disputes that arise for consideration are as follows;

1. Whether the complainants establish the deficiency in service against the Opposite parties in not reviving their respective policies flexi life line and flexi cash flow insurance policies and in not refunding the premium amount when they demanded ?

2. Whether the Complaints are barred by time ?

3. Whether the Complaints are not maintainable as contended by the Opposite parties ?

4. To what order or the parties are entitled?

6. Answers to the above consumer disputes are as under:

1. Negative
2. Affirmative
3. Affirmative
4. As per final order for the following

: R E A S O N S :        

7. Common Consumer Disputes No.1, 2 & 3: The Complainant in CC.No.1077/14 Sri.Thimmegowda is the father of Complainants in 4 cases (CC.1079/14, 1080/14, 1083/14, 1084/14), grandfather of Complainants in 2 cases (1081/14, 1082/14) and the GPA holder of Complainant in remaining case (CC.1078/14).   He is representing by virtue of power of attorney dated 29.07.2013 and also as guardian of minor grandsons. Sri.Thimmegowda negotiated/did correspondences with the Opposite parties on behalf of all of them.

8. The undisputed facts reveal that flexi life line insurance policies and flexi cash flow insurance policies were obtained in the respective names of all the complainants, from the Opposite party/ insurance company in the beginning of the year i.e. from February 2007 on various dates for various premium amounts starting from Rs.3,96,996.75 to Rs.15,19,250/-. From the year 2007 itself the quarterly premium amounts of respective policies were not paid to insurance company. The insurance company sent the reminders and letters of intimation about the lapsed policies and also intimated about the termination of the policies and about the refund of amounts within 2008 itself. The details of such policies, premium amount, lapsed dates and refunded amount are as here under:

9. The Complainants submitted their applications for insurance policies. Sri.Thimmegowda shown his annual income as Rs.1 crore p.a. in his applications. The copies of which are produced by the Opposite parties. The Complainants have put their signatures under the declaration columns, declaring that they know about the actual performance of the investment fund supporting policies which should be treated hypothetical only. Such declarations of all the policies show that the Complainants aware about the nature of their policies.

10. In 2007 itself all the Complainants were informed about the importance of free look period and to follow the conditions to exercise their right. Such intimation letter was sent in March 2007 itself. Non receipt of written request along with the entire policy contract and no claim intimation shows that all the Complainants continued the respective policies. The Opposite parties have also furnished reinstatement quotation in april 2008 informing that their policies ceased to be in force and that they can be reinstated subject to compliance of the requirements. The Opposite parties had showed requirements under the separate columns and tables extending time i.e. 26.05.2008. They had also furnished the toll free phone numbers and website particulars to contact for needful.

11. In the absence of any response relating to all the policies, the Opposite parties sent letter dated 29.06.2012 informing that those policies became lapse due to non-receipt of renewal premiums, though the notices were sent earlier about the same. In the said letter it is also mentioned by the Opposite parties that the policies of Thimmegowda have no surrender value. It is also mentioned that as per the post ULIP (Unit linked insurance plan) guidelines a policy can be reinstated within 2 years from the date of lapse and his policies have crossed 2 years of lapsation which made impossible for them to reinstate his policies. 15.06.2008 is the lapsed date of policies of Thimmgowda and thereby as per the guidelines and terms & conditions the policies of Thimmegowda stands null and void.

12. The Complainant Thimmegowda has produced the original policies, letters which show general provisions, policy values, life insurance coverage, investment option etc., along with the original renewal premium paid receipts issued by the Opposite parties in 2007 and also up to 01.05.2008. He has not produced such receipts subsequent to the period of June 2008. Thereby he has failed to establish that he has performed his contractual obligations before seeking the cancellation of the policies or revival of the policies. He has failed to establish, which of his acts empower him to seek the said alternative reliefs. Hence Complainant Thimmegowda has lost his right and in his CC.1077/14 failed to establish deficiency in service against the Opposite parties in dealing with his policies.

13. The Opposite parties have contended that all the complaints are barred by time and they have relied on their letters dated 25.07.2008 written to the Complainants informing about their failure to get the renewal of the policies which made them to terminate their policies within 2008-09 itself. The cause of action for the revival of the policies as per the letters in 2008 show that despite the option given by the Opposite parties, no action was taken to get the revival, within the next two years of the lapsation. The Complainants were advised to approach IRDA and no action was taken in this regard also. The possession of original bonds with the Complainants supports the Opposite parties that the Complainants did not comply the terms in seeking cancelation in accordance with the conditions of the policies. All the policy holders from the dates of their lapsed policies lost their right, resulting termination of their policies starting from 2009 till april 2011, as shown in the last two columns of the above table. Thereby the Complainants of all the cases lost their right to file these cases much earlier to 2014 and hence all these cases are barred by limitation.

14. In the furnished policies, the Complainants were informed that decisions of termination would be on four contingencies. The Opposite parties had also furnished the opportunities to the Complainants for getting of revival of their policies/cancelation of their policies. The Complainants who discontinued to pay the premiums from may 2008 did not realize about the options left open to exercise their best interest in accordance with terms & conditions of the policies. Non-compliance of the terms & conditions show their utter discard towards their contractual obligations.

15. The allegations of the Complainants that the Opposite parties and their insurance agents had assured to collect the premium amount at their door steps and further assured to refund the entire premium amount on surrender/lapse of policies remained as oral allegations. No cogent materials were placed by the Complainants, in support of the alleged assurance. The Opposite parties at every stage starting from receiving of the applications till the stage of termination wrote the letters and reminders including advices but the Complainants have not cared them.  Such being the attitude of the Complainants the acts of the Opposite parties in accordance with the terms & conditions and regulations cannot be considered as deficiency on their part. As observed in Airlines (2000) 1 SCC 66:

“The deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service.”

Because of the same reasons the contention that their requests were discarded by the Opposite parties on untenable grounds cannot be accepted. The Complainants who were informed about the termination of their policies and issuing of cheques of refunded amount within 2012 have no right to seek renewal of the policies or to seek any compensation as observed in the reported decision in “LIC of India & Ors. Vs. Siba Prasad Das & Ors” IV (2008) CPJ 156 (NC) :

If after that the policy lapsed, under no provision of terms of the policy or law, could any Fora Direct for refund of any premium for the simple reason, as already stated, that the risk stood covered for the period of which premium had been paid.

     16. The Complainants who discontinued their premiums from May 2008 got the information about the payments of the subsequent premium amounts, policies lapsed, termination of the lapsed policies and refund of the amount of respective policies and thereby they had opportunity to take proper steps from May 2008 itself but did the correspondence in 2012 only i.e. after lapse of limitation period of 2 years as per CP Act and thereby for the reasons discussed above the Complainants have failed to establish the Consumer Dispute No.1 and the Opposite parties have established the Consumer Dispute No.2 & 3. Accordingly Consumer Dispute No.1 answered in the negative and the Consumer Disputes No.2 & 3 are answered in the affirmative.

                  17. Consumer Disputes No.4: In view of the findings of the consumer disputes No.1, 2 & 3, the Complainants of all these cases are not entitled for the reliefs sought in their complaints and they deserve to get the following:

ORDER

The Complaints No. 1077/14, 1078/14, 1079/14, 1080/14, 1081/14, 1082/14, 1083/14, 1084/14 are hereby dismissed. No order as to costs.

Supply free copy of this order to both the parties. 

This order shall form part of record in CC.No.1077/2014 and the copies of the same shall be kept in the remaining complaint records.

(Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the Open Forum on 31st day of December 2016).

Documents produced on behalf of Complainants

Documents produced on behalf of OPs.