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Max Life Insurance Company Limited, & Others v/s Kanta wife of Jagmal

    First Appeal No. 464 of 2015

    Decided On, 08 February 2016

    At, Haryana State Consumer Disputes Redressal Commission Panchkula

    By, MEMBER

    For the Appearing Parties: Rajneesh Malhotra, Pratibha Yadav, Rajbir Singh Arya, Advocates.

Judgment Text

B.M. Bedi, Judicial Member

1. Max Life Insurance Company Limited/Opposite Parties No.1 to 3, have filed the present appeal against the order dated February 10, 2015, passed by District Consumer Disputes Redressal Forum, Sonipat (for short ‘the District Forum’) in Complaint No.472 of 2012.

2. Undisputed facts of the present case are that Kanta-Complainant/respondent (herein after referred to as ‘the insured’), purchased Max Life Insurance policy, Annexure-2, under plan ‘Max Amsure Secure Returns Builder’ on 13.10.2008, vide Proposal Form Annexure A-3. The sum assured was Rs.5.00 lacs and the period of insurance was 15 years. The annual premium was Rs.50,000/-. The insured paid premium payable on 13.10.2008, 23.11.2009 and 19.10.2010. Thus, in all she paid Rs.1,50,000/-. The insured did not pay the 4thinstalment of premium which was due in October, 2011 and thereafter surrendered the policy. The Max Life Insurance/opposite parties, paid a sum of Rs.63,910.71 through cheque.

3. The insured, thereafter, opting to continue by rejoining the policy, was not permitted. By filing complaint before the District Forum, the insured/complainant prayed that she be permitted to rejoin the policy or to return the remaining premium amount of Rs.86,090/- alongwith interest and compensation.

4. The opposite parties/appellants, in their reply stated that as per the terms and conditions of the insurance policy, in case of surrender of the policy after the third policy anniversary, the insured was eligible to receive Fund Value of the units prevailing on the date and accordingly after deducting the surrender charges as per the policy, the insured was paid Rs.63,910/-. It was prayed that the complaint be dismissed.

5. On appraisal of the pleadings and evidence led by the parties, the District Forum accepted complaint directing the opposite parties No.1 to 3/appellants, to pay Rs.86090/- to the complainant alongwith interest @ 9% per annum from 10.02.2012, that is, the date when cheque was sent to the complainant, till its realization; Rs.2,000/- for harassment etc. and Rs.2,000/- litigation expenses.6. The question for consideration is whether the insured/complainant is entitled to the remaining amount of premium or not?

7. The insurance policy placed on the appeal file is Annexure-B. The relevant terms and conditions are extracted herein below:-

'1. Definition and Interpretation.

1.1 In the policy document, the words and phrases listed below shall be deemed to have the meanings attributed to them wherever they appear in the policy document unless the context otherwise requires:

a) xxx

b) xxx

c) xxx

d) xxx

e) 'Fund Value' means the total number of Units held in your Unit Account multiplied by the Unit Price.

'4. Surrender

4.1 xxx

4.2 The Guaranteed Surrender Value payable on surrender of the policy, which We shall endeavor to pay within 10 days of Our receipt of Your request, will be equal to the Fund Value prevailing on the date which immediately follows the date of Our receipt of Your request less a surrender charge levied as per the Schedule.'

8. The policy was purchased on 13.10.2008. The insured surrendered the policy after paying three annual premiums. Surrender request is Annexure-C. What is payable on surrender, has been defined in Clause 4.2, a perusal of which shows that the Guaranteed Surrender Value payable on surrender of the policy will be equal to Fund Value prevailing on the date on which immediately follows the date of receipt of request less a surrender charge levied as per the Schedule. Fund Value has been detailed in Clause 1(e), which means the total number of Units held in your Unit Account of the policy holder multiplied by the Unit Price.

9. The insured was holding 2436.83443 units and the net asset value of the units was 29.14104 and multiplying the same, the total Fund Value is worked out to Rs.71011.8896. The surrender charges have been given in the policy as 10% of the Fund Value and thus after deducting Rs.7101/-, the opposite parties paid Rs.63,910/-, which the insured/complainant accepted without any protest on 27.01.2012 (Annexure-D). The insured is only trying to seek refund of the balance premium paid. Once the insured has surrendered the policy and received the surrender value as per agreement, she cannot seek refund of premium as she was provided life cover during this period.

10. Hon’ble National Commission inLife Insurance Corporation of India versus Anil P. Tadkalkar, I(1996) CPJ 159 (NC)held as under:-

4. Moreover, we have not been able to understand how the Complainant can claim refund of all the premia paid by him during the period of the policies remained alive and the LIC had covered the risk. If during this period the Complainant had died (an event which did not occur) the insurer i.e. LIC would have had to pay the full amount due under the policies even though only some fraction of the premia would have been realised by that time by the insurer. Hence on cancelling the policies the Complainant is only entitled to the surrender values of the two policies. It is immaterial what circumstances prompted him to cancel the policies.'

11. The facts of the instant case are attracted to Anil P. Tadkalkar’s case (Supra). Once the insured has surrendered the policy during her life, she is only e

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ntitled to the Fund Value as per terms and conditions of the policy and not to the entire amount of premium paid by her. The District Forum fell in error in allowing the complaint and as such the impugned order cannot sustain. 12. In view of the above, the appeal is accepted, the impugned order is set aside and the complaint is dismissed. 13. The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants/opposite parties against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.