Sham Sunder, President:
1. This appeal is directed against the order dated 15.2.2012, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant).
2. The facts, in brief, are that, the complainant purchased a Life Insurance Policy bearing No. 0033020546 dated 11.12.2006 (Annexure C-1) from the Opposite Party. He paid a sum of Rs. 10,000, as first premium,vide cheque No. 317936 dated 11.12.2006. Subsequently, due to unavoidable circumstances, the complainant could not continue the said policy. It was stated that as per Section 5(b) of the Agreement (Annexure C-2), the Opposite Party was supposed to pay amount equivalent to the value of accumulated units towards the first premium, paid by the complainant. However, no such amount was paid to him. The complainant made a requestvide letter dated 16.3.2010 (Annexure C-3), to the Opposite Party, for payment of the amount, which became payable, after the completion of three years. However, the Opposite Party, refused to pay any amountvide its letter dated 8.4.2010 (Annexure C-4) . It was further stated that the aforesaid acts of the Opposite Party, for non-payment of the amount, according to Section 5(b) of the Agreement, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed.
3. The Opposite Party, in its written version, admitted that the complainant, purchased the policy, referred to above. It was stated that the policy lapsed, due to non-payment of the subsequent premium, after the first year, and as such, the complainant had no right to make any sort of claim from the Opposite Party. It was denied that any request for revival of the said policy, during the grace period of 30 days, was made by the complainant. It was further stated that the complainant could not claim relief under Section 5(b) of the Agreement, as the said Section was applicable only to those policy holders, who paid regular premium, for the first three years. It was further stated that since the complainant had paid the first premium only, and, thereafter, failed to pay the subsequent premiums, the policy had lapsed and the amount paid by him, stood forfeited, as per the terms and conditions of the policy. It was further stated, that neither there was any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
4. The Parties led evidence, in support of their case.
5. After hearing the Counsel for the parties, and on going through the evidence and record of the case, the District Forum dismissed the complaint, as stated above, in the opening para of the instant order.
6. Feeling aggrieved, the instant appeal has been filed by the appellant/complainant.
7. We have heard the Counsel for the appellant/complainant, and have gone through the evidence and record of the case carefully.
8. The Counsel for the appellant, by relying upon Annexure C-2, the policy document, submitted that the accumulated unit was a unit, allocated in respect of regular premium payable after the first policy year, and payment of top-up premium any time, during the policy term. He further submitted that the capital unit was a unit allocated in respect of regular premium, payable during the first policy year. He further submitted that, even if, the complainant had not paid the subsequent premiums, after the payment of first premium, he was entitled to the benefits of accumulated units of the policy. He further submitted that the District Forum was wrong, in coming to the conclusion, that, as per the terms and conditions of the policy, since the subsequent premiums were not paid by the complainant, after the payment of first premium, even during the grace period, and neither the policy was got revived within 2 years, from the due date of first unpaid regular premium, the same stood lapsed and the amount stood forfeited. He further submitted that the order of the District Forum, being illegal and invalid, is liable to set aside.
9. After giving our thoughtful consideration to the contentions advanced by the Counsel for the appellant, and the evidence, on record, we are of the considered opinion that the appeal is liable to be dismissed at the preliminary stage, for the reasons, to be recorded hereinafter. It is settled principle of law that the parties are bound by the terms and conditions of the policy document which were accepted by them, with eyes wide open. Admittedly, in the instant case, the policy aforesaid, was purchased by the complainant. There is also, no dispute, about the factum that only the premium for the first year was paid by the complainant and, thereafter, on account of some unavoidable circumstances, he could not pay the subsequent premiums, within the grace period of 30 days. Even, he did not make an application for the revival of the policy, after the same had lapsed within a period of 2 years, from the due date of first unpaid regular premium. Section 5(b) of the policy document, Annexure C-2, reads as under:
â(5) Non-payment of Regular Premium and Forfeiture.
(a)Â xxxxx
(b)Â If the unpaid Regular Premium was due during the first three Policy years, and the Policy-holder has failed to make the payment before the expiry of the aforesaid grace period;
(i)Â The Policy shall immediately lapse along with all insurance covers.
(ii)Â The Policy-holder may revive the Policy within a revival period of two years from the due date of first unpaid Regular Premium subject always to Section 5(d) below, failing which the contract shall be terminated and 100% of the value of Accumulation Units in respect of Regular Premiums as on date of lapse, and the Top Up Premium Fund Value, if any shall be paid at the end of the third Policy Year or at the expiry of the revival period, whichever is later.
(iii)Â If policy is lapsed and the death of the Life Assured happens, the existing Fund Value would be paid and the policy will terminate immediately.â
10. From a plain reading of Section 5(b) (ii), of the afore-extracted section, it is evident, that the policy holder could revive the policy within 2 years, from the due date of first unpaid regular premium, subject to the provisions of Section 5(d) of the policy. It is further evident, from the afore-extracted Section, that in case the policy-holder fails to revive the policy, within the stipulated period, the contract shall terminate. In that event, the policy-holder, shall be entitled to 100% of the value of accumulation units, in respect of regular premiums, as on the date of lapse, and the top-out premium fund value, if any, shall be paid at the end of the third policy year or at the expiry of the revival period, whichever was later. The meaning of accumulation unit, as defined in the policy document Annexure C-2, is the unit allocated in respect of regular premium payable after the first policy year. In the instant case, as stated above, the complainant had not paid any premium, after the first policy year. Under these circumstances, there was no accumulated unit, payable under Section 5(b) of the policy document. According to Section 5(b), extracted above, the policy terminated, after the lapse of due date of the payment of second premium, as the said policy was not continued by the complainant. Section 37(f), of Annexure C-2, which is extracted below deals with the surrender charge:
â(f) Surrender Chargeâ
Surrender Charge is applied on Capital Units only and recovered by the redemption of Capital Units. Surrender charge is given [1-(1/1.05)âN] multiplied by the value of Capital Units as at the date of surrender, where âN is the lower of the Policy Term and 20 years less the elapsed policy duration in years and any fraction thereof.
If at least three full years Regular Premiums have not been paid the Surrender Charges will be 100% of the value of the Capital Units.â
11. The combined reading of the afore extracted Sections of the document Annexure C-2, clearly reveals that since the complainant, as stated above, had failed to pay the subsequent premiums, after the payment of first premium, even within the grace period of 30 days, and also failed to get the policy revived within 2 years, from the due date of first unpaid regular premium, according to Section 5(b) (i), the policy immediately lapsed, along with all insurance covers, and he was not entitled to any benefit. The District Forum, was thus right in properly interpreting, the various Sections of the policy document Annexure C-2, and coming to the conclusion, that since the policy lapsed, the complainant was not entitled to any surrender value and the amount of first premium, paid by him stood forfeited. The order of the District Forum, being legal and valid, is liable to be upheld.
12. No other point, was urged, by the Counsel for the appellant.
13. In view of the above discussion, it is held that the order passed by the District Forum, being based, on the correct appreciation of evidence and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.
14. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, at the preliminary stage, with no order as to costs. The order of the District Forum is upheld.
15. Certified Copies of this order be sent to the parties, free of charge.
16. The file be consigned to Record Room, after completion.
Appeal dismissed.