Karnataka

Bangalore 4th Additional

CC/15/1146

Smt.Lakshmi Neelakanta - Complainant(s)

Versus

The Managing Director, TATA AIG Life Insurance Company Ltd - Opp.Party(s)

Sri. S. Dorai Babu,

02 Nov 2017

ORDER

Complaint filed on: 17.06.2015

                                                      Disposed on: 02.11.2017

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

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

CC.No.1146/2015

DATED THIS THE 02^nd NOVEMBER OF 2017

PRESENT

SRI.H.Y.VASANTHKUMAR, PRESIDENT

SRI.D.SURESH, MEMBER

SMT.N.R.ROOPA, MEMBER

Complainant/s: -                           

Smt.Lakshmi Neelakanta

W/o A.S.Neelakanta,

aged about 61 years,

R/at Old.no.43, New no.20,

7^th cross, Swimming pool Extension, Malleshwaram, Benglauru-03.

By Adv.Sri.S.Dorai Babu   

V/s

Opposite party/s:-    

1. The Managing Director

Tata AIG Life Insurance Company ltd., (Regn. no.110), Delphi –B wing, 2^nd floor, Orchard Avenue,

Hiranandnai Business park, Powai, Mumbai-400076.

2. The Manager

Tata AIG Life Insurance Company Ltd., (Regn. no.110),

Unit no.003, 004,

Ground floor, First floor,

near Standard Chartered Bank, Richmond road,

Shanthala nagar,

Ashok nagar,

Bengaluru-25

By Advocates

M/s.Ravi Law Associates  

ORDER

Under section 14 of consumer protection Act. 1986.

SRI.H.Y.VASANTHKUMAR, PRESIDENT 

            The Complainant has been alleging the deficiency in service in not refunding her completely paid three years premium amount of Rs.55,800/- and has sought direction against the Opposite parties for refund of balance of Rs.38,586/- with 24% interest and compensation of Rs.50,000/-.

          2. The case of the Complainant in brief is that she became the holder of “TATA AIG Life Maha Life Gold insurance policy” of the Opposite parties for yearly premium amount of Rs.18,600/- and after the policy was issued on 03.10.11 with a maturity date 29.09.2025, she paid three annual total premium amount of Rs.55,800/-. She waited for three years to complete minimum surrender value guaranteed by the Opposite parties and accordingly applied for surrender value. She received only Rs.17,214.36 on 20.11.14 through NEFT. She sent legal notice dtd.02.01.15 and it was not responded by the Opposite parties. The Opposite parties are liable for breach of contract and hence she filed this complaint.   

          3. The Opposite parties have denied the allegations made against them, contending that as per the terms & conditions of the policy, the validity amount of 30% of three years premium amount was refunded and the said calculation cannot be considered as breach of contract. The policy dtd.29.09.11 valid up to 2054 was considered for guaranteed minimum surrender value as defined in the basic definitions and calculated and transferred the said mount. There is no provision for refund of entire premium amount when it was prematurely surrendered as known to the Complainant also. The complaint is liable to be dismissed. 

          4. The Complainant and the legal representative of the Opposite party filed their affidavit evidences relying on Ex-A1 to A4 and Ex-B1 to B5 documents respectively. Written arguments were filed by both side. Opposite parties have relied on the decision of the Hon’ble National Commission. Arguments were heard.

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

1. Whether the Complainant establishes that refund of 30% of amount out of three years paid premium, amounts to deficiency in service by the Opposite    parties ?
2. To what order the parties are entitled ?

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

1) Negative

2) As per final order – for the following      

REASONS

          7. Consumer Dispute No.1: The undisputed facts reveal that the Complainant became the holder of the “TATA AIG Life Maha Life Gold insurance policy” of the Opposite parties supported by Ex-B1, B2 & B3 policy schedule, basic definitions – application, which are marked by the Complainant as one document Ex-A1. In the covering letter of Ex-A1 dtd.03.10.11, it was shown that she was given with the cancellation right and getting refund of the premium amount option if exercised within 15 days from the date of the receipt of the said document. She accepted the policy and paid 3 annual instalments of Rs.18,600/- every year, towards face amount of Rs.2,02,000/- having the maturity date of 29.09.2054.

8. Among other terms & conditions under the head basic definitions in Ex-A1/B2, the guaranteed surrender value defined as:

Value refers to the minimum guaranteed amount of Cash Value of the policy, provided that the premiums of the policy have been paid for at least three consecutive years. The guaranteed surrender value, when allowable under the policy, is equal to the percent as shown in the policy information page, of the total amount of the premiums of the basic policy paid excluding the premiums for the first policy year and all extra premiums of the basic policy.

9. The referred policy information page disclose (shown at page 27) the particulars of age of the insured, paid premium, life coverage, annual cash dividend etc., and at the last column the maturity value is shown. During the first 3 years the policy gets no maturity value in the said illustrative table. The said illustration table shows the payment of Rs.18,600/- when the 4^th instalment becomes re-payable and surrender value for Rs.17,204/- is shown for the person aged 60 years.

10. Such calculation has to be made by the Complainant to show how the calculation made by the Opposite parties in accordance with the said terms & conditions and illustration table becomes breach of contract. The said maturity value of the last column goes on increasing at the final stage. It shows the refund amount always becomes very less at the initial stage and goes on increasing when comes nearer to maturity value.

11. The Complainant submitted two letters Ex-A4 dtd.19.10.14, Ex-A3 dtd.12.11.14 seeking the refund amount after payment of 3 premiums. The Opposite parties through Ex-B4/auto surrender letter dtd.13.01.14, informed the Complainant about the amount for which she becomes entitled with the following information also:

As per policy contract, you can choose one of the below options. Please send us a written communication within 45 days from the receipt of this letter to avail the same.

1. Reinstate your policy and restore all policy benefits.
2. Avail benefit of continued coverage till the date mentioned above basis your existing cash value.
3. Surrender of policy. Upon surrender you shall be paid the cash value as mentioned above. (please follow the surrender process)

Please contact your advisor or call on our below mentioned helpline numbers or e-mail at

If we do not receive any communication from you, it shall be assumed that you have selected option 2 mentioned above.

12. It appears that the Complainant has not chosen to enquire further to know about the method of calculation of surrender values of the policies within the stipulated period, so as to review her decision. On the other hand she got issued the legal notice dtd.02.01.15 informing the alleged correctness of her way of thinking in calculating amount to be refunded, contending that the surrender value under the policies are also arrive equally to the paid amount. The said contention has no base in the terms & conditions of the schedule policy and also as shown in the illustration table furnished to her.

13. The Opposite parties have relied on the decisions of Hon’ble National Commission dtd.28.04.14 in RP.2822/2013, wherein it is held that the insurance company was right in applying 30% of total amount, while computing the surrender value of the insurance policy. In that case the insurance policy obtained in 1993 was not continued from 2002 onwards.

14. The same relied on decision, very much applicable to this case and thereby the Complainant gets no right to expect the full value of 3 paid premium as the surrender value of the policy. Accordingly the Consumer Dispute no.1 is answered in the negative.

          15. Consumer Dispute No.2: In view of finding of the Consumer Dispute No.1, the Complainant deserves to get the following:

ORDER

          The CC.No.1146/2015 filed by the Complainant is hereby dismissed. No order as to costs.

          Supply free copy of this order to both the parties. 

          (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the Open Forum on 2^nd November of 2017).

Copies of Documents marked on behalf of Complainant/s:

Copies of Documents marked on behalf of Opposite party/s