Date of Filing :  06/01/2017

Order No.  13  dt.  22/02/2018

       The case of the complainant in brief is that the complainant purchased a policy no.U157227121 from o.p. on 25.9.09. At the time of purchasing the policy the agent of o.p. explained the complainant that if the paid the premium of Rs.20,000/- for 3 policy years then the complainant could get back the amount of Rs.79,867.50. But the complainant paid the annual premium for 4 policy years. Subsequently she changed the mode of payment of premium monthly and o.p. deducted the monthly premium from the complainant’s bank account regularly through ECS upto March, 2014. The complainant came to learn that after March, 2014 o.p. stopped to deduct the premium amount from her bank account. The complainant thereafter lodged a complaint to grievance cell of o.p. regarding non deduction of monthly premium from the complainant’s bank account. The complainant was informed that after due examination for their end they found that due to inadvertent error the policy has been auto surrendered on 31.3.14 for which debit was not made from the account of the complainant towards the monthly premium of the policy. The complainant was also further informed that they are in the process to reinstate the policy and regularizing the said policy within 15 working days. But after the lapse of 15 days no reply was received. Subsequently the complainant was informed that they conducted due examination from their end and observed that due to high mortality charges the policy got auto surrender as the surrender value was less than one annual premium. In view of the said fact o.p. informed that they are not in a position to activate the policy with premium which has been paid earlier. On the basis of the said fact the complainant alleged that there was deficiency in service on the part of o.p. and for that reason the complainant filed this case praying for direction upon the o.p. for refund of the entire premium amount of Rs.91,646/- as well as compensation of Rs.20,000/- and litigation cost of Rs.5000/-.

            The o.p. contested this case by filing w/v and denied all the material allegations of the complaint. It was stated that after having detailed discussions and going through various benefits of the policy the complainant chose to avail the Tata AIA Life Invest Assure Flexi Policy and paid the annual premium of Rs.20,000/- towards the initial premium and the policy was issued accordingly. The policy document was dispatched to o.p. on 27.12.09 and it was received by the complainant. The complainant did not raise any objection within the free look period and as such, it was presumed that the contract of insurance which the o.p. had with the complainant was legally concluded. The complainant since the inception of the policy was paying the annual premium until Sept. 2011 when o.p. received a request from the complainant to change the mode of payment from annual to monthly and thereby requested the o.p. to activate ECS facility for making payment under the policy. The complainant herself informed to o.p. asking for stopping the recovery of monthly payment from the ECS facility to which o.p. reverted back and issued a letter dt.10.7.12 to the complainant that the ECS facility has been stopped as per her request, (annex – OP 3 series). Thereafter on non receipt of the premium amount of Rs.20,000/- for the 4^th year and non fulfillment of the conditions for levying premium holiday on the policy the aforesaid was auto surrendered. The complainant thereafter sent a lawyer’s letter which was replied by o.p. It was further alleged by o.p. that after payment of at least 3 complete years of regular premiums, if the policy holder fails to pay the regular premium thereafter as due the policy will be maintained in force on premium holiday automatically without paying the regular premium. The policy was a unit linked policy and in case of surrender policy holder will be entitled to get the surrender value is payable which is usually expressed as fund value less the surrender charge. As per clause 4 of annex-1 it has been defined that “fund value at any point of time represents the value of units at that point of time i.e. the number of unit multiplied by the price of the units”. Therefore, the surrender value by o.p. has been calculated as per the guidelines issued by IRDA. In view of the facts and circumstances as stated above, the complainant will be entitled to get the surrender value which was offered by o.p. As such, o.p. stated that there was no deficiency in service or unfair trade practice on the part of o.p. for which the case is to be dismissed.

            On the basis of the pleadings of parties the following points are to be decided:

1. Whether the complainant had the policy with o.p.?
2. Whether the complainant failed to pay the premium?
3. Whether o.p. wanted to pay the surrender value of the premium paid?
4. Whether there was any deficiency in service on the part of o.ps.?
5. Whether the complainant will be entitled to get the relief as prayed for?

Decision with reasons:

            All the points are taken up together for the sake of brevity and avoidance of repetition of facts.

            Ld. lawyer for the complainant argued that the complainant purchased a policy no.U157227121 from o.p. on 25.9.09. At the time of purchasing the policy the agent of o.p. explained the complainant that if the paid the premium of Rs.20,000/- for 3 policy years then the complainant could get back the amount of Rs.79,867.50. But the complainant paid the annual premium for 4 policy years. Subsequently she changed the mode of payment of premium monthly and o.p. deducted the monthly premium from the complainant’s bank account regularly through ECS upto March, 2014. The complainant came to learn that after March, 2014 o.p. stopped to deduct the premium amount from her bank account. The complainant thereafter lodged a complaint to grievance cell of o.p. regarding non deduction of monthly premium from the complainant’s bank account. The complainant was informed that after due examination for their end they found that due to inadvertent error the policy has been auto surrendered on 31.3.14 for which debit was not made from the account of the complainant towards the monthly premium of the policy. The complainant was also further informed that they are in the process to reinstate the policy and regularizing the said policy within 15 working days. But after the lapse of 15 days no reply was received. Subsequently the complainant was informed that they conducted due examination from their end and observed that due to high mortality charges the policy got auto surrender as the surrender value was less than one annual premium. In view of the said fact o.p. informed that they are not in a position to activate the policy with premium which has been paid earlier. On the basis of the said fact the complainant alleged that there was deficiency in service on the part of o.p. and for that reason the complainant filed this case praying for direction upon the o.p. for refund of the entire premium amount of Rs.91,646/- as well as other reliefs.

            Ld. lawyer for the o.p. argued that after having detailed discussions and going through various benefits of the policy the complainant chose to avail the Tata AIA Life Invest Assure Flexi Policy and paid the annual premium of Rs.20,000/- towards the initial premium and the policy was issued accordingly. The policy document was dispatched to o.p. on 27.12.09 and it was received by the complainant. The complainant did not raise any objection within the free look period and as such, it was presumed that the contract of insurance which the o.p. had with the complainant was legally concluded. The complainant since the inception of the policy was paying the annual premium until Sept. 2011 when o.p. received a request from the complainant to change the mode of payment from annual to monthly and thereby requested the o.p. to activate ECS facility for making payment under the policy. The complainant herself informed to o.p. asking for stopping the recovery of monthly payment from the ECS facility to which o.p. reverted back and issued a letter dt.10.7.12 to the complainant that the ECS facility has been stopped as per her request, (annex – OP 3 series). Thereafter on non receipt of the premium amount of Rs.20,000/- for the 4^th year and non fulfillment of the conditions for levying premium holiday on the policy the aforesaid was auto surrendered. The complainant thereafter sent a lawyer’s letter which was replied by o.p. It was further alleged by o.p. that after payment of at least 3 complete years of regular premiums, if the policy holder fails to pay the regular premium thereafter as due the policy will be maintained in force on premium holiday automatically without paying the regular premium. The policy was a unit linked policy and in case of surrender policy holder will be entitled to get the surrender value is payable which is usually expressed as fund value less the surrender charge. As per clause 4 of annex-1 it has been defined that “fund value at any point of time represents the value of units at that point of time i.e. the number of unit multiplied by the price of the units”. Therefore, the surrender value by o.p. has been calculated as per the guidelines issued by IRDA. In view of the facts and circumstances as stated above, the complainant will be entitled to get the surrender value which was offered by o.p. As such, o.p. stated that there was no deficiency in service or unfair trade practice on the part of o.p. for which the case is to be dismissed.

            Considering the submissions of the respective parties it is an admitted fact that the complainant had the policy with o.p. and it undisputed fact that the complainant paid premium annually for 3 successive years and thereafter she opted ECS facility by deducting the premium amount from her bank account and the mode of payment was changed from yearly to monthly. Thereafter the complainant asked the o.p. not to collect the premium from the bank account of the complainant and she did not pay the amount directly to o.p. towards the premium of the said policy. In view of such fact the policy automatically was shown as surrendered. Since the policy was unit linked policy thereafter as per calculation o.p. wanted to pay the amount, but the complainant refused to accept the same. It is relevant to mention here that the complainant failed to exercise her option for cancellation of the policy within the free look period in spite of receiving the policy bond along with the policy kit showing the terms and conditions of the policy and the benefit can be availed of by the policy holder. In the said rules and regulations of the policy it was clearly mentioned that the policy was unit linked and the complainant knowing fully well regarding the benefits of the said policy accepted the policy and went on paying the premium, but subsequently she had her own fault discontinued the policy premium for which the policy itself was surrendered automatically. The complainant has not been able to give any evidence regarding allegation of forgery, fraud and misrepresentation. On the basis of the said fact we hold that there was no deficiency in service or unfair trade practice on the part of o.p. and the case filed by the complainant has got no merit and accordingly, the complainant will not be able to get any relief as prayed for. Thus all the points are disposed of accordingly.

            Hence, ordered,

            That the CC No. 9/2017 is dismissed on contest without cost against the o.p.