BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM ::

KADAPA Y.S.R DISTRICT

PRESENT SRI V.C. GUNNAIAH, B.Com., M.L., PRESIDENT

    SMT. K. SIREESHA, B.L., LADY MEMBER                                     

Friday, 1^st January 2016

CONSUMER COMPLAINT No.  47/ 2015

Suresh Babu Narayana, S/o Subramanyam,

aged 60 years, Residing at Flat No. 307,

Keerthi Residency, Cooperative Colony,

Kadapa City and district.                                                              ….. Complainant.  

Vs.    

1. PNB Metlife India Insurance Co. Ltd.,

    (formerly known as Met Life India Insurance Co. Ltd., ),

    Rep. by its Director, Reg. office at No. 5,

    Brigade Sesh Mahal, Vani Vilas Road, Basavanagudi,

    Bengalure – 560004.

2. PNB Metlife India Insurance Co. Ltd.,

    (formerly known as Met Life India Insurance Co. Ltd., ),

    Rep. by its Branch Manager, Branch Office, Kadapa,

    Near Kotireddy Statue Circle, Kadapa city and district.                …..  Respondents.

This complaint coming for final hearing on 29-12-2015 in the presence of Sri                  K. Guru Murthy, Advocate for complainant and Sri C.K. Bramhaiah, Advocate for respondents and  upon perusing the material papers on record, the Forum made the following:-

O R D E R

(Per V.C. Gunnaiah, President),

1.                The complainant filed this complaint under section 12 of Consumer Protection Act 1986 (for short herein after called as C.P. Act) praying this forum to direct the respondents to pay ₹ 1,60,000/- with interest at 24% p.a. by way of surrender value of the policy to the complainant or direct the respondents to continue policy, to pay ₹ 10,000/- towards compensation and grant costs of the complaint. 

2.                The averments of the complaint in brevity are that the respondents are doing business in Life Insurance policy field having branches throughout India and having Head Office at Bangalore, the branch office of 1^st respondents is at Kadapa.   The Complainant was a bank employee. The agent of 1^st respondent approached the complainant in July 2010 and canvassed about the insurance business and believing the words and promises, the complainant took a policy bearing No. 20412997 – Met Smart Life with annual premium of ₹ 40,000/-  for a term of 44 years.   The nominee under the policy is shown S. Siraj Begum.  The respondents have to pay ₹ 20,00,000/- to the complainant on account of death of complainant prior to the date of maturity.  The complainant paid four installments at ₹ 40,000/- p.a. totaling ₹ 1,60,000/-  so far.  There is option to surrender the policy after three years. As three years period is completed the complainant is eligible for surrendering the policy as per the policy terms and conditions. The complainant intends to surrender the policy and tried to surrender the same.  But nobody is at the services of the complainant. The complainant contacted the 1^st respondent toll-free No. 18004256969 and came to know that the policy was foreclosed.   Then the complainant issued legal notice on 2-2-2015 demanding to pay                         ₹ 1,60,000/- or to continue his policy.   The 1^st respondent having received the notice gave reply on 25-2-2015 with false allegations and calculations. The 1^st respondent has to do business as per guidelines of Insurance Regulatory Development Authority of India.  The foreclosed was done unilaterally and without knowledge of the complainant / insured.  As per section 3 of the policy the respondents are entitled to deduct only 6% of the premium towards allocation charges up to 1 to 5 years.  Thus the respondents cannot show the surrender value as zero.  Therefore, the complainant is entitled for refund of his premium of ₹ 1,60,000/- by way of surrender value along with interest as his policy cannot be foreclosed by 1^st respondent.   The act of the respondents is illegal, unilateral and fraudulent one that too for issuing of 44 years policy.   Thus the respondents are guilty in deficiency of service.  Hence, the complaint for the above reliefs. 

3.                Opposite parties 1 & 2 filed common written statement denying the deficiency of service on the part of the respondents and guilty of issuing policy for               44 years and premium of ₹ 40,000/- per year to the complainant and also denied their liability to pay ₹ 1,60,000/- as claimed by the complainant with interest.  But it is admitted that the complainant obtained policy No. 20412997 – Met Smart Life with annual premium of ₹ 40,000/- policy with terms of 44 years and the policy was issued on 16-9-2010 and remitted four premiums at ₹ 40,000/- each totaling ₹ 1,60,000/-. 

4.                It is further contended that the complainant had remitted the premium in respect of above said policy only till 2013 and thereafter neglected to pay the premiums.  The complainant did not reinstate the policy, even within grace period of one month as per terms and conditions of the policy inspite of requests and reminders.  Hence, the said policy lapsed and premiums discontinued status since 31-8-2014 due to nonpayment of premiums.  Since the surrender value become less than one annualized premium the said policy automatically foreclosed as per the terms and conditions of the said policy under section 3.2, 3.2.1, 3.2.2 and 3.3.4 of the policy conditions.  The complainant had singed agreeing to the terms and conditions in respect of the said policy.  Therefore, the opposite parties have not reinstate the policy or to refund the complainant’s premium.  The complaint filed by the complainant is devoid of any truth and merits and other allegations are all false.   Hence, the complaint is liable to be dismissed with costs. 

5.                On the basis of the above pleadings the following points are settled for determination. 

1. Whether there is deficiency of service on the part of the respondents as pleaded by the complainant?
2. Whether the complainant is entitled for refund of his premium from the respondents as claimed?
3. To what relief?

6.                No oral evidence has been let in by the parties.  But on behalf of the complainant Exs. A1 to A5 documents and on behalf of the respondents Exs. B1 to B5 documents are marked.     

7.                Heard arguments on both sides and perused the material available on record.  

8.                Point Nos. 1 & 2. Learned counsel for complainant submits that as per policy Ex. A1 the complainant is entitled to surrender the policy and get the surrender value after deducting 6% but the respondents foreclosed the policy by 28-8-2013 as per Ex. B4 averments and not received the premium subsequent to 2013.  Therefore, there is deficiency of service on the part of the respondents and the complainant is entitled for return of surrender value of ₹ 1,60,000/- with interest. 

9.                Per contra learned counsel for opposite parties contended that the complainant defaulted in payment of premium, so his policy was foreclosed by                    30-9-2014 as he paid premium up to 31-8-2013 only and his surrender value is less than annualized premium.  Hence, he is not entitled for the claim and the claim is false and the complaint is liable to be dismissed.     

10.              There is no dispute between the parties that the complainant took policy bearing No. 20412997 – Met Smart life with the respondents company and the policy was issued on 6-9-2010 and the respondents collected ₹ 40,000/- as annual premium and subsequently the complainant paid premiums till 31-8-2013.  According to the respondents since the complainant committed default in payment premium from                 31-8-2014 his policy was foreclosed. But the same appears to be not correct.  A perusal of Ex. B4 filed by the respondents goes to show as the surrender value becomes less than one annualized premium the policy was foreclosed as per policy terms and conditions on 28-8-2013. The above document further shows the policy was in premium discontinues status w.e.f 31-8-2014 due to non-receipt of premium since August 2014.  If the premium was not paid on or before 31-8-2014 there would be a grace period of 30 days to the complainant to pay the premium in the year 2014 i.e. on or before 3-9-2014.  But the respondents have not waited till 30-9-2014 but foreclosed the policy on 28-8-2013 itself as seen from Ex. B4.  Therefore, the complainant who paid four premiums from 16-9-2010 to 31-8-2013 is entitled for surrender of his policy as per terms and conditions of the policy as he paid premiums for more than three years and the complainant is entitled for surrender value, after deducting charges for maintaining policy.   As seen from Ex. B5 filed by the respondents the surrender value of the policy of the complainant appears to be zero, which is unimaginable. If the surrender value of the policy of complainant is reduced to zero it is nothing but unfair trade practice by the respondents in respect of the complainant policy.  If the respondents do not want to continue the policy of complainant they have to pay the surrender value deducting their usual charges for maintenance of the policy account.   Though the complainant prayed for reinstate and continue the policy, but in view of the logger heads and ill feelings between the complainant and respondents it would not be proper to continue the policy and it would be better to both parties once for all settle the matter by paying the surrender value of the premium to the complainant by respondents.  Thus we see there is deficiency of service on the part of the respondents in doing business of insurance policy of complainant and in paying the surrender value of the premium and thus the complainant is entitled for return of premium paid by him after deducting charges at 12% p.a. on the premium paid by him though not at 6%.  Accordingly, points 1 & 2 are answered in favour of complainant. 

11.              Point No. 3.  In the result, the complaint is allowed, directing the respondents to pay ₹ 1,42,800/- (Rupees one lakh forty two thousand eighty hundred only) to the complainant towards premium amounts paid by him                     i.e. (₹ 1,60,000/-  12% as charges = ₹ 1,42,800/-) within 45 days from the date of receipt of this order, failing which the complainant is entitled interest at 12% p.a. till realization. The respondents shall also pay ₹ 2,000/- towards costs of the complaint to the complainant.

          Dictated to the Stenographer, typed my dictation by Stenographer, corrected and pronounced by us in the open forum, this the 1^st January 2016

MEMBER                                                                                           PRESIDENT

APPENDIX OF EVIDENCE

Witnesses examined.

For Complainant:         NIL                                             For Respondents :     NIL

Exhibits marked for Complainant 

Ex. A1                   Attested copy of Insurance policy copy.

Ex. A2                   Attested copy of the schedule of policy terms and conditions.

Ex. A3                   Office copy of the legal notice dt. 2-2-2015 along with postal receipt.

Ex. A4                   Acknowledgement card.

Ex. A5                   Reply notice dt. 25-5-2015.

Exhibits marked on behalf of the Respondents   

Ex. B1                   P/c of application form.

Ex. B2                   P/c of applicant declaration dt. 31-8-2010 i.e. Met life India insurance

                   Co. Pvt. Ltd.,

Ex. B3                   P/c of letter addressed from complainant to respondents dt. 1-12-2014.

Ex. B4                   P/c of letter addressed from PNB met Life Insurance Co. Ltd., Bangalore

                   to complainant dt. 3-12-2014.

Ex. B5                   P/c of statement of account of policy No. 204122997 belongs to Suresh

                   Babu Narayana.

MEMBER                                                                                        PRESIDENT

Copy to 

1. Sri K. Guru Muathy, Advocate for complainant
2. Sri C.K. Bramhaiah, Advocate for respondents.

B V P