| Final Order / Judgement | DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, BATHINDA C.C. No. 223 of 27-08-2018 Decided on : 22-04-2022 Dharampal Singh Sekhon, S/o Late Sh. Manga Singh Sekhon, R/o H. No. 692, Phase -1, Model Town, Bathinda. ........Complainant
Versus ICICI Prudential Life Insurance Co. Ltd., through its Managing Director & Chief Executive Officer having its office at ICICI Pru Life Towers 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025 (Maharashtra). ICICI Prudential Life Insurance Co. Ltd., through its Branch Manager having its branch office at Ist Floor, Crown Plaza, Building No. 2047/2-1, Mall Road, Bathinda 151 001 (Punjab). .......Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986 QUORUM Sh. Kanwar Sandeep Singh, President Sh. Shivdev Singh, Member Smt. Paramjeet Kaur, Member Present For the complainant : Sh. M.S. Sidhu, Advocate. For opposite parties : Sh. N K Batta, Advocate. ORDER Kanwar Sandeep Singh, President The complainant Dharampal Singh Sekhon (here-in-after referred to as complainant) has filed this complaint U/s 12 of Consumer Protection Act, 1986 (Now C.P. Act, 2019, here-in after referred to as 'Act') before this Forum (Now Commission) before this Commission against ICICI Prudential Life Insurance Co. Ltd., & another (here-in-after referred to as opposite parties). Briefly stated the case of the complainant is that based on the representations and warranties of the representative of the opposite parties, the complainant was lured to invest in the said "Life Stage Pension" Plan Insurance policy of the opposite parties at Bathinda, on 14.02.2008 and after having received the insurance premium of Rs. 1,00,000/- from the complainant, the opposite parties issued Insurance policy bearing No. 07801389 on 17.02.2008. The said Insurance policy was issued in the name of the complainant. The Policy Certificate issued by the opposite parties amongst other terms and conditions contains the following details: i) Name of the Life insured: Dharampal Singh Sekhon. ii) Address: 692, Model Town, Bathinda, Punjab. iii) Date of Birth : 08.01.1953 iv) Age : 55 years v) Policy No 07801389 vi) Policy Term : 10 years vii) Date of Commencement of Policy : 14.02.2008 viii) Cover Cessation Date : 14.02.2018 Benefit : Life Stage Pension x) Premium Paid : Rs. 1,00,000/- xi) Periodicity of Payment of Premium : Yearly It is alleged that at the time of issuance of the Policy, the complainant was informed that as per terms and conditions of the policy, the complainant was to make a payment of at least full three years premium for the continuance of the policy and accordingly, complainant paid the premium of Rs. 1,00,000/- every year for the first three years till 2010 i.e in 2008, 2009 and 2010. It was also informed to complainant that he shall have option to surrender the said policy after payment of surrender charges at any point of time which shall depend upon the number of completed policy years. The Brochure and policy document contained the Surrender values as a percentage of the Fund Value as mentioned below :-
Sr.No. | Time Period | Percentage of Fund Value | 1 | Less than one year | 0.00% | 2 | One year but less than two years | 25.00% | 3 | Two years but less than 3 years | 40.00% | 4 | 3 years | 92.00% | 5 | 4 years | 94.00% | 6 | 5 years | 96.00% | 7 | 6 years | 98.00% | 8 | 7-9 years | 99.00% | 9 | 10 year onwards | 100.00% |
The complainant alleged that, as detailed above if the complainant does not surrender the said policy for a period of ten years, the complainant shall be entitled to receive 100% amount payable on maturity, as per its Fund Value on the date of maturity. The Cover Cessation Date as per the policy document was 14.02.2018. It is further alleged that the complainant with an intention to receive the amount payable to him upon the date of cessation i.e. 14.02.2018, visited the branch office of the opposite parties at Bathinda on 16.02.2018. The complainant also alleged that in addition to the policy in the name of the complainant, a similar policy was also issued in the name of complainant's wife in February, 2008. Though the officials of the opposite party at Bathinda, had accepted the surrender request of the policy in the name of wife of complainant on 16.02.2018, but the opposite parties refused to accept the request for surrender made by the complainant of his policy No. 07801389 and it was informed to complainant by the officials of opposite parties that the request for surrender made by the complainant cannot be accepted as he has approached the branch officials after the cover cessation date i.e. 14.02.2018 and pursuant to the cover cessation, the amount has vested in the name of the opposite parties as per statutory guidelines. The complainant requested the branch officials to accept his request of surrender as he was in dire need of money as the marriage of his son was fixed for 19.02.2018. The complainant further alleged that Fund value as on 16.02.2018 of his policy was Rs. 5,71,000/- approximately. The officials of the opposite parties at Bathinda Branch did not pay any heed to the requests of the complainant and asked him to write to the senior officials of the opposite parties at Mumbai. Thereafter complainant sent e-mail on 22.02.2018 requesting for the surrender of the policy No. 07801389. The opposite parties did not reply to the said e-mail, so complainant sent another e-mail dated 09.03.2018 to Mr. Sandeep Bakshi (MD and CEO) and explained the entire story and requested to accept the surrender of the policy. The opposite parties vide email dated 16.03.2018 informed the complainant that the company had sent Annuity Quotation to the complainant on 19.09.2017 via Blue Dart Courier Airway Bill No. 34430271212 and said document stands delivered as per the records of the company and that the policy cannot be surrendered post vesting. It is also alleged that thereafter, the complainant sent a legal notice dated 12.04.2018 to the opposite parties and in the reply of legal notice, the opposite parties have reiterated that the complainant has no right to surrender the policy after 10 years and avail 100% surrender value and the surrender value was applicable only in case the policy is surrendered before the date of maturity. The opposite party have misinterpreted the terms and conditions of the policy document to their benefit in order to deny the fund value upon maturity i.e. Rs. 5,71,000/- as on 16.02.2018 to complainant with a dishonest intention to defraud and misappropriate amount legally payable to the complainant as per the policy document. The complainant further alleged that he had the option to surrender the said policy even after a period of 10 years after the date of issuance of the policy and was entitled to 100% of the fund value upon the completion of the period of 10 years. No intimation was sent to the complainant that the entire amount will not be payable upon completion of the policy period. The complainant has not received any Annuity Quotation. In the absence of any such notice intimating the terms upon the date of maturity of the said policy, the opposite parties cannot on its own change the terms and conditions of the said policy and deny the amount payable to complainant upon maturity of the said policy. Despite having no knowledge, the complainant on his own approached the branch officials on 16.02.2018 i.e. immediately upon completion of a period of 10 years i.e. on 14.02.2018. The policy document and the brochure does not contain any condition as informed to the complainant by the opposite parties that on post vesting, the entire amount cannot be paid to the Policy holder. It is nowhere mentioned that the cover cessation date shall amount to vesting of the amount in the opposite parties. A bare perusal of the policy document provides for the surrender terms at any point of time and the corresponding values in percentage of the fund value payable to the policy holder at the time of surrender. Thus, the action of the opposite parties is wrong, illegal, unlawful, arbitrary and bad in law. It is also alleged that the said policy did not have a life insurance cover and was a pure accumulation plan wherein even upon death of the assured, the spouse would receive the fund value either as lump sum. The benefits would be paid to the nominee in lump sum only if the nominee is not the spouse. If the amount can be paid to the spouse or any other nominee in lump sum, it is beyond understanding that the policy holder cannot be entitled to the sum in full. The policy cannot be interpreted to give a nominee better benefits than the policy holder himself. It is further alleged that the complainant was informed that the entire fund value can be given only if he invests in some insurance plan with opposite parties and hands over a cheque of at least Rs. 1,50,000/- in advance so as to get the entire fund value. The complainant is a senior citizen. The scheme of things should not debar a senior citizen to surrender a policy at any stage and reap the benefits of his investments at any stage even in the fag end of his life. The complainant alleged that the opposite parties have caused great mental, physical and financial loss to the complainant. On this backdrop of facts, the complainant has prayed for directions to the opposite parties to pay 100% fund value of his policy in question and also pay to him compensation to the tune of Rs. 3,50,000/- which includes compensation on account of harassment, punitive damages, for not accepting his surrender request and it also includes litigation expenses. Upon notice, the opposite parties appeared through counsel and contested the complaint by filing joint written reply raising preliminary objections that the complaint is false, frivolous and vexatious and is gross misuse of process of law. That this Commission has no jurisdiction to hear and dispose off the present matter. That the complainant has not come to this Commission with clean hands. That the complainant has concealed and supressed material and relevant facts of the case. That the complaint lacks of any material facts and it has been filed merely to harass and gain undue advantage and unjustified money from the opposite parties. That there is no cause of action to proceed against the opposite parties. That the complainant has availed a pension policy, Life Stage Pension Plan bearing policy No. 07801389 at his own free will and consented after understanding the terms and conditions of the said policy in question. That the complainant with full knowledge filled in his details in the proposal form and signed the same after understanding the terms & conditions of the said policy. It has been pleaded that this Commission has no jurisdiction to entertain the present complaint as investment made under Unit Linked Policy is a speculative gain and speculative investment matter does not come under the 'Act'. The subject policy in question is a Unit Linked Policy and the investment risk in the investment portfolio is borne by the policy holder as clearly mentioned in the key feature documents of the Policy Terms and Conditions. That there is no deficiency of services or unfair trade practice on the part of the opposite parties. In the present case, the opposite parties sent the Annuity Quotation Letter dated 20.08.2017 vide Blue Dart bearing AWB No. 34430271212 on 22.09.2017, informing the complainant subject policy shall vest by 14.02.2018 and the complainant was provided with the various annuity options available to him. As per the policy terms and conditions, the complainant had an option either to surrender the policy before the policy becomes vested or chose an annuity option which was available under the policy. However, despite receipt of the Annuity Quotation, the complainant neither approached the opposite parties for surrender of the policy nor opted for the annuity option sent to him. Accordingly, subject policy vested attaining maturity on 14.02.2018 as per the policy terms. It was expressly mentioned in the Annuity Quotation that after the vesting, maturity can be availed only in the form of pension. However, the complainant still has an option to chose the desired annuity option as communicated by the opposite parties. All the actions taken by the opposite parties are strictly in accordance to the terms and conditions of the policy. It has also been pleaded that the policy is a legal contract between policy holder and the insurance company and parties to it are bound by its terms and conditions. That if a person signs any document it is presumed that he/she has signed the same after reading it and understanding it properly and thus, it cannot be believed that the complainant did not go through the terms and conditions of the said policies Contract. It has been further pleaded that as per Clause 3.1 of the Policy terms and conditions, the fund value under the policy shall be payable to the policy holder on vesting of the policy only in the form of annuity options. In the present case, as mentioned above the Annuity Quotation letter dated 20.08.2017 was duly sent to the complainant. As per the policy terms and conditions, once the policy attains maturity, the same cannot be surrendered as the policy fund is transferred to annuity fund. As the complainant has not chosen any of the annuity option quoted by the opposite parties, as such the opposite parties are unable to release the annuity amount to the complainant. The complainant still has an option to chose an annuity option, so that the opposite parties can start paying the annuity amount to the complainant. The said terms of the policy are in the nature of a contract and their interpretation has to be made in accordance with the strict construction of the contract. Thereafter opposite parties have pleaded brief facts of the case that on the information provided by the complainant in the proposal form, the policy in question, as detailed below, was issued to the complainant :- Product/Product Code | Lifestage Pension | Policy No. | 7801389 | Application No. | PP12607294 | Policyholder/Life Assured | Dharampal Singh Sekhon | Proposal received date | 14/02/08 | RCD | 14/02/08 | Policy Insurance Date | 17/02/08 | Premium Frequency | Annual | Premium Installment (mentioned in app form & LA both) | Rs. 1,00,000/- | Total premiums paid | Rs. 3,00,000/- | Paid to Date | 14/02/11 | Risk Cessation Date | 14/02/18 | Premium Cessation Date | 14/02/18 | Contract Status & Premium Status | Non Annuitised | Fund Value | Rs. 5,71,993/- 14/02/2018 | | |
It has been pleaded that complainant after receipt of the said policy documents did not approach the opposite parties with any discrepancies regarding benefits payable or any other policy terms and conditions, neither did he approach the opposite parties for cancellation of the policy during the Free Look Period thereby implying that he had agreed to all the terms and conditions of the policy. Since the complainant failed to approach the opposite parties within the freelook period, the terms and conditions of the said policy are now binding and the complainant has waived off his right to seek cancellation of the subject policy. Therefore, at this stage the complainant cannot be permitted to come forward and seek fund value under the policy except for choosing annuity options. The complainant is bound by the policy contract and has given-up/relinquish/waived his rights by not exercising the freelook provision. The Complainant being an educated individual, post graduate, and a Doctor by profession had ample opportunity to go through and understand the terms and conditions of the said policy including the premium paying term, frequency, surrender and foreclosure etc. The opposite parties also sent several SMS reminders after the policy being issued on mobile number registered with the opposite parties as "9888279182". The complainant was well informed and updated about his policy features and therefore all his allegations levelled against the opposite parties arc false, frivolous, concocted and is merely an afterthought in order to gain unlawful and illegal money form the opposite parties. It has also been pleaded that later the opposite parties sent an Annuity Quotation Letter dated 20.08.2017 on 22.09.2017 to complainant through Blue Dart AWB No. 34430271212 which was duly received by the complainant on 24.09.2017 explaining various annuity options available to him. However, despite the receipt of the Annuity Quotation the complainant neither approached the opposite parties for surrender of the policy nor opted any of the annuity options sent to the complainant. Accordingly, the policy vested attaining maturity on 14.02.2018 and is in Non Annuitized Stage as on date. The opposite parties have further pleaded that the complainant was thus again explained that he could surrender the policy as per clause 4 of the terms and conditions of the policy in question before vesting, wherein, the surrender charges were also mentioned. The Clause 4 of terms and conditions of the said policy was detailed as under :- “ 4. Surrender : The policy acquires a surrender value after payment of full premium for the first policy year. However, the surrender value would be payable only after completion of three policy years or whenever the policy is surrendered thereafter. The surrender value payable is the Fund Value after deducting the following surrender charges :- No. of completed policy years | Surrender charges as a % of fund value | 3 years | 8.00% | 4 years | 6.00% | 5 years | 4.00% | 6 years | 2.00% | 7 to 9 years | 1.00% | 10 years and above | 0.00% |
It has been further pleaded that in the said Annuity Quotation Letter, it was also mentioned that post the policy vesting, the complainant will be eligible to either use complete i.e. 100% of the fund value/maturity amount to receive pension; or withdraw 33.33% i.e. one third of the fund amount or the maturity amount as lumpsum and could use the balance amount to get pension. It has been further pleaded that the complainant has only paid total premiums of an amount of Rs. 3,00,000/- from 14/02/2008 till 14/02/2010 against the subject policy and has not made any payment of the premiums under the subject policy after 14.02.2010. Even though, the complainant was informed that surrender of the subject policy is not possible after maturity/vesting of the policy, the complainant neither surrendered the policy, nor chose and communicated any of the following annuity options due to which the policy got vested i.e. the accumulated amount/fund value under the policy was made available to receive pension. That on 14.02.2018, the policy got vested and the complainant was eligible to receive annuity based on the following annuity options :- Life annuity without return of purchase amount; Life Annuity with return of purchase amount; Life annuity guaranteed for 5 or 10 or 15 years and life thereafter without return of purchase amount; Joint life last survivor without return of purchase amount; Joint life last survivor with return of purchase amount. The complainant had failed to select option Quotation from the Annuity Quotation Letter and in the absence of any choice, the said premium of the policy stays with the opposite parties in non annuitized status. The opposite parties have also pleaded that complainant has approached the opposite parties for the first time raising grievances on 22.02.2018 and again on 12.03,2018 after maturity date of the subject policy, which was duly replied vide letter dated 16.03.2018 clearly explaining that the surrender option could only be exercised during term of the subject policy i,c. before the maturity date of the subject policy. Thus, the request of the complainant was declined by the opposite parties. It has been further pleaded that the complainant can still submit the annuity quotation form and choose the desired annuity available under the policy. The opposite parties are willing to pay periodic annuities to the complainant from the available annuity options as per the policy terms and conditions. At this stage the complainant is not entitled for the maturity amount as the same cannot be allowed as per the policy terms and conditions. The opposite parties have also pleaded that the total premium paid by the complainant is Rs. 3,00,000/- and the amount of Rs. 5,71,993/- is maturity amount which shall be duly paid to the complainant in the form of annuity according to the desire option availed by him. After controverting all other averments of the complainant, the opposite parties prayed for dismissal of complaint. In support of his complaint, the complainant has tendered into evidence his affidavit dated 24-8-2018 (Ex. C-1), photocopy of policy (Ex. C-2), photocopy of letter (Ex. C-3), photocopy of acknowledgement slip (Ex. C-4), photocopy of letters (Ex. C-5 & Ex. C-6), photocopy of legal notice (Ex.C-7), photocopy of postal receipts (Ex. C-8 to Ex. C-10), photocopy of letter (Ex. C-11) and photocopy of marriage card (Ex. C-12). In order to rebut the evidence of complainant, the opposite parties tendered into evidence photocopy of policy (Ex. OP-1/1), photocopy of policy document (Ex. OP-1/2), photocopy of notice (Ex. OP-1/3), photocopy of policy document (Ex. OP-1/4), photocopy of notification (Ex. OP-1/5) and photocopy of circular (Ex. OP-1/6). The learned counsel for the parties reiterated their stand as taken in their respective pleadings. These are undisputed facts between the parties that complainant purchased LifeStage Pension Policy bearing No. 07801389 of the opposite parties. Policy Issuance date 17-2-2008 and Risk and Premium Ceassation date 14-02-2018. The complainant paid total premium of Rs. 3,00,000/- and as per terms and conditions of the policy, the Fund Value of policy is Rs. 5,71,993.93 on 14-02-2018. The submission of learned counsel for the complainant is that opposite parties have not paid fund value to complainant despite his repeated requests. The Risk and Premium Ceassation date was 14-02-2018 and complainant approached opposite party No. 2 on 16-2-2018 and made surrender request. The complainant has not received any offer/letter, if any, sent by opposite parties in connection with Annuity Quotation. Moreover, complainant has not chosen any offer regarding annuity. The complainant surrendered the policy and as per terms and conditions of the policy, he is entitled to 100% Fund Value. On the other hand, the learned counsel for the opposite parties is that as per policy terms and conditions, the fund value under the policy shall be payable to the policy holder on vesting of the policy only in the form of annuity options. In the present case, as mentioned above the Annuity Quotation letter dated 20.08.2017 was duly sent to the complainant. As per the policy terms and conditions, once the policy attains maturity, the same cannot be surrendered as the policy fund is transferred to annuity fund. Since the complainant has not chosen any of the annuity option quoted by the opposite parties, the annuity amount cannot be released to the complainant. The complainant still has an option to chose an annuity option, so that the opposite parties can start paying the annuity amount to the complainant. In support of his submissions, learned counsel for the opposite parties has cited : (i) AIR 1966 SC 1644 case titled General Assurance Society Ltd., Vs. Chandumull Jain and another (ii) SCC – 2010 (10) 567 case titled Suraj Mal Ram Niwas Oil Mills Private Limited Vs. United India Insurance Co. Ltd., and another (iii) 2010 NCDRC 55 case titled Reliance Life Insurance Co. Ltd., Vs. Madhavacharya (Revision petition No. 211 of 2009) (iv) SCC 2012 ( 747) (NCDRC) case titled Mohan Lal Benal Vs.ICICI Prudential Life Insurance (v) SCC 2013 (399) (NCDRC) case titled Ram Lal Aggarwalla Vs. Bajaj Allianz Life Insurance (vi) SCC 2013 (450) (NCDRC) case titled Shrikant Murlidhar Vs. Life Insurance Corporation of India (vii) SCC 2014 (686) (NCDRC) case titled Export Credit Guarantee Corporation Vs. Garg Sons International (viii) SCC 2014 (204) (NCDRC) case titled Kishore Chandrakant Rathod Vs. The Managing Director, IDICI Prudential Life Insurance Co. Ltd., We have heard learned counsel for the parties, gone through the record and case law cited by learned counsel for the opposite parties. In the case in hand, admittedly the date of ceassation of policy in question of complainant was 14-2-2018 and fund value of the policy is 5,71,993.93. A perusal of file reveals that complainant visited the office of opposite party No. 2 on 16-2-2018 and made a surrender request as is evident from receipt issued by the office of opposite party No. 2 under stamp and signature (Ex.C-4). The plea of the opposite parties is that Annuity Quotation Letter dated 20-08-2017 was sent to the complainant on 22-9-2017 through Blue Dart AWB No. 34430271212 explaining various annuity options which was received by complainant on 24-9-2017 but despite receipt of Annuity Quotation, the complainant neither approached the opposite party for surrender of policy nor opted any of the annuity options sent to the complainant. In para No. 5 of written reply on brief facts, the opposite parties have themself reproduced Clause 4 of terms and conditions of the policy which reads as under :-
“ 4. Surrender : The policy acquires a surrender value after payment of full premium for the first policy year. However, the surrender value would be payable only after completion of three policy years or whenever the policy is surrendered thereafter. The surrender value payable is the Fund Value after deducting the following surrender charges :-
No. of completed policy years | Surrender charges as a % of fund value | 3 years | 8.00% | 4 years | 6.00% | 5 years | 4.00% | 6 years | 2.00% | 7 to 9 years | 1.00% | 10 years and above | 0.00% |
The opposite parties have not placed on file any document to prove that Annuity Quotation letter was sent to complainant and he received the same. If for the sake of arguments, this version of complainant is believed that Annunity Quotation Letter was delivered to complainant, then also when no option was filed by complainant, how the opposite parties decided that complainant is not entitled to maturity amount/fund value especially when no such terms and conditions placed on file by the opposite parties in this regard. Rather, clause 4 of policy terms and conditions, detailed and discussed by the opposite parties, itself reveals that surrender value would be payable only after completion of three policy years or whenever the policy is surrendered thereafter meaning thereby that complainant is entitled to 100% fund value as he surrendered the policy on 16-2-2018 i.e. after 10 years and as per Clause 4 of terms and conditions mentioned above, if number of completed policy years are 10 years and above, then surrender charges would be 0% of fund value. The opposite parties have failed to produce on file any terms and conditions to show that policy could only be surrendered before vesting whereas clause 4, as detailed above, clearly depicts that surrender value would be payable only after completion of three policy years or whenever the policy is surrendered thereafter and there is nothing mentioned regarding before vesting or that the policy cannot be surrendered post vesting. With utmost regard and humility to the authorities cited by the learned counsel for the opposite parties, they are distinguishable on facts. Thus, keeping in view the facts, circumstances and the evidence placed on file by the parties, this Commission is of the considered opinion that there is deficiency in service on the part of the opposite parties in not paying the fund value to the complainant and withholding the same without any solid reason. In the result, this complaint is partly allowed with Rs. 10,000/- as cost and compensation. The opposite parties are directed to pay fund value of policy in question, to complainant with interest @9% p.a. w.e.f. 16-02-2018 (date of surrender of policy) till payment. The compliance of this order be made by the opposite parties jointly and severally within 45 days from the date of receipt of copy of this order. The complaint could not be decided within the statutory period due to covid pandemic and heavy pendency of cases. Copy of order be sent to the parties concerned free of cost and file be consigned to the record. Announced : 22-4-2022 (Kanwar Sandeep Singh) President (Shivdev Singh) Member (Paramjeet Kaur) Member
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