It Is Settled Law That Terms of The Insurance Policy Shall Governed the Contract Between the Parties: Karnataka State Consumer Disputes Redressal Commission
The contract’s conditions must be strictly followed and given natural meaning. Once a policy has been specifically excluded, it cannot be reinstated under any situation. However, the Complainant was found to have not followed the definition provided. This was observed in the matter of MD &amp; CEO ING Vysya Life Insurance Co Ltd v. G.H Govindappa, [ A/641/2017], before Hon’ble Mr. Ravishankar (Presiding Member) and Hon’ble Mrs. Smt. Sunita Channabasappa Bagewadi (Member).  The brief facts of the case are as follows, the Complainant bought two insurance policies from the Opposite Party, after which the insurance company sent the original policy bond and a booklet containing the terms and conditions. Soon after, the complainant contacted the OP but did not receive a satisfactory response. In 2014, the complainant asked for a refund, which the company did not repay, therefore, the complainant sent a legal notice to the company saying he did not want to continue with the policies he bought. The Company did not respond to him. It was contended by the OP that the complaint is unmaintainable and deserved to be dismissed. The OP brought it to the notice of the Commission that, the complainant had given his declaration that he understood the terms of the policy and paid the premium amounts. As per Regulation 6(2) of the IRDAI, the policy holder can cancel the policy mentioning the reasons within 15 days from the day the policy is received, this is called the “free look period”. However, the complainant never approached the company within the said period, bur approached the OP after one and half years. On April 21, 2014, the complainant issued a letter stating that he was unable to pay additional premiums due to crop failure in 2013-14 that caused his financial hardship. The Opposite Party dismissed the complainant’s request on June 12, 2014, in accordance with the policy terms and conditions. The District Commission had allowed the Complaint even though the complainant failed to pay the renewal premiums that were due in 2013, causing the policies to lapse. Furthermore, the opposing party sent frequent reminders via SMS/letters, but the complainant still failed to redo the policies. After referring the District Commission’s decision, and the relevant documents presented by both parties, the State Commission came to the following conclusion: “It is settled law that terms of the policy shall governed the contract between the parties. They have not abided by the definition given therein. Hence, the terms of the contract have to be strictly read and natural meaning be given to it. Once there is specific exclusion of the policy, the same cannot be permitted under any circumstances. Hence, in our opinion, the complainant violated the terms and conditions as per the policy bonds in both policies. Hence, the Opposite Party was fully justified in cancelled the both policies. Moreover, as per the terms and conditions of the policies, the complainant has opportunity to cancel the policy, but, the complainant has not cancelled the policies within free look period of 15 days and the complainant has not renewed the policies during 2013 even after the course of period and reminders made by the Opposite Party also. Hence, for the reasons stated above, the order passed by the District Commission cannot be sustained in same as hereby set aside.”
KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION BASAVA BHAVAN BANGALORE First Appeal No. A 641 2017 Date of Filing : 13 Mar 2017 Arisen out of Order Dated 10 02 2017 in Case No. CC 514 2015 of District Bangalore 2nd 1. MD & CEO ING Vysya Life Insurance Co Ltd ING Vysya House 5th Floor No.2 M.G.Road Bangalore 560 001. Presently known as Exide Life Insurance Co Ltd.3rd Floor JP Techno Park No.3 1 Millers Road Bengaluru 560 001 1. G.H. Govindappa S o late Hanumanthappa No.4 1772 C o Thikkiah Jonna Veeriah Colony KLD Main Road Ananthapur HON BLE MR. Ravishankar PRESIDING MEMBER HON BLE MRS. Smt.Sunita Channabasappa Bagewadi MEMBER Dated : 05 Oct 2021 Final Order Judgement BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION BANGALORE DATED THIS THE 5 DAY OF OCTOBER 2021 MR. RAVISHANKAR : JUDICIAL MEMBER MRS. SUNITA CHANNABASAPPA BAGEWADI : MEMBER APPEAL NO. 641 2017 MD & CEO 1 ING Vysya Life Insurance Company Ltd. ING Vysya House 5 Floor No.22 M.G. Road Bangalore 01 PRESENTLY KNOWN AS Excide Life Insurance Company Ltd. Known as ING Vysya Life Insurance Company Ltd Floor JP Techno Park No.3 1 Millers Road Bengaluru 560 001 By Sri V. Raman Sri G.H. Govindappa S o Late Hanumanthappa No.4 1772 C o Thikkiah K.L.D. Main Road ANANTHAPUR515 001 Jonna Veeriah Colony MRS. SUNITA CHANNABASAPPA BAGEWADI MEMBER 2 The appellant Opposite Party has preferred this appeal being aggrieved by the Order Additional District Consumer dt.10.02.2017 passed in CC.No.514 2015 on the file of 2 Disputes Redressal Commission Bangalore The facts leading to the appeal are as hereunder It is the case of the complainant that he had purchased two insurance policies on the assurance of Opposite Party company agent vide policy bearing No.025112951 for a sum of Rs.50 000 and another policy bearing No.02584060 for Rs.2 10 000 . The complainant has paid the said amount by way of cheque drawn ING Vysya Bank Ltd. Ramachandrapuram Branch Ananthapur Town. After making payment the Opposite Party insurance company sent original policy bond along with booklet of terms and conditions after purchasing the said terms and conditions let through complainant well wishers the complainant got shock and surprise. Subsequently the complainant contacted the agent of the Opposite Party and the Manager but they had not replied satisfaction of the complainant after thatof protection of policy holders interest. Regulation 2002 issued by the IRDAI the policy holder proposer is at liberty to review the terms and condition of the policy and has the option to cancel the policy by stating the reasons for his her objection within 15 days of receipt of policy bond i.e. “free look period”. In such a case the company shall refund the premium received for this policy after deducting the proportionate risk the premium for the period of risk cover and expenses incurred by the Opposite Party company on account of medical examination and on stamp duty charges the said facts were clearly intimated in the welcome letters which were issued to the complainant along with the policy schedule and terms and conditions. However the complainant had never approached the Opposite Party within free look period. Hence it is presumed that the complainant is duly satisfied with the policies terms and conditions which were issued to him and complainant is estoppels from challenging the terms and conditions beyond free look period. Further the complainant not paid renewal premium which were due on 2013 because of which policies stand lapsed and respectively. The Opposite Party 3 has sent repeated reminder by way of SMS letters but still complainant failed to reinstall the policy and all such effort of gone in vein The complainant approached the Opposite Party in the month of June 2014 i.e. after one and half years of issuance of policies with an allegation that Opposite Party mis sold the policy as single premium policies. In the complainant letter dt.21.04.2014 he could not able to pay further premium to the policy due to crop failure in the year 2013 2014 and he is financial crunch for this reason the Opposite Party receipt of such complaint duly ascertained the facts and after considering the material document on place rightly rejected the request for such cancellation of the policy vide letter dt.12.06.2014 again the complainant approached the Opposite Party with letter dt.24.06.2014 asking Opposite Party company to refund the premiums which was also duly regretted by the Opposite Party after speaking to them stating same is not permissible as per the policy terms and conditions After trial the District Commission allowed the complaint and directed the Opposite Party to refund Rs.2 95 000 to the complainant with interest at 8% p.a. from the date of payment till realization along with costs Notice was issued to legal heirs of respondent through paper publication in a English daily newspaper “Deccan “Chronicle” and Telugu newspaper “Andhra Prabha” Ananthapur Edition but none of them appeared before this Commission. Perused the appeal memo Order passed by the District Commission and materials on record it is an admitted fact that the complainant has obtained two policies from the Opposite Party company bearing No.025112951 by name ING Secured Income Insurance Regular for the period of 10 years on 21.08.2012 premium is Rs.48 501 p.a. and another policy is ING Star Life Insurance Policy bearing No.02584060 on 21.12.2012 for 12 years and the premium is Rs.2 52 205 p.a. It is also an admitted fact that after making payment of the first premium of both policies the Opposite Party issued a policy bond along with booklets of terms and conditions. In the present case the main allegation of the complainant is that after issuing the legal notice and after several requests for demanding to repay the amount of the two policies as the complainant has no interest to continue the abovesaid policies there is no response from the Opposite Party side. The Opposite Party in his objection in lower court contended that as per regulation 6of protection to policy holders the interest. Regulation 2002 issued by the IRDAI the policy holder proposer is at liberty to review the terms and conditions of the policy and has the option to cancel the policy by stating the reasons within 15 days of receipt of policy bond i.e. free look period. The complainant has not made such i.e. the complainant has not cancelled the policies means he has accepted the terms and conditions of the policy bond. In such case the company shall refund the premium received for the policy after deducting the property risk the premium for the period of risk cover and expenses incurred by the Opposite Party company on account of medical examination and on stamp duty charges. However the complainant had never approached the Opposite Party within free look period. Further the complainant has not paid renewal premium which were due on 2013 because of which such policies stands lapsed. Moreover the Opposite Party has sent repeated reminders by way of SMS letters but sill the complainant failed to reinstall the policies and after lapse of 1 ½ year. The complainant issued a letter on 21.04.2014 that he could not able to pay further premium to the policies due to crop failure in the year 2013 14 and his financial crunch for this reason. Hence after considering the material documents on place the Opposite Party rejected the request of the complainant on 12.06.2014 as per the policy terms and conditions 4 Perused the appeal memo and materials on record. We agree that as per the policy bond clause 4.4.2 of the Policy No.02512951 and clause 4.4.2 of policy No.02584060. In the present case in the first policy the complainant has not paid 3 full years of premium and in second policy the complainant is entitled for surrender value of the policy immediately on the date of surrender or at the end of three policy years whichever is later. It means the complainant is eligible for surrender value of policy No.2 only after the end of three policy years i.e. after 20.12.2015. It is settled law that terms of the policy shall governed the contract between the parties. They have not abide by the definition given therein. Hence the terms of the contract has to be strictly read and natural meaning be given to it. Once there is specific exclusion of the policy the same cannot be permitted under any circumstances. Hence in our opinion the complainant violated the terms and conditions as per the policy bonds in both policies. Hence the Opposite Party was fully justified in cancelled the both policies. Moreover as per the terms and conditions of the policies the complainant has opportunity to cancel the policy but the complainant has not cancelled the policies within free look period of 15 days and the complainant has not renewed the policies during 2013 even after the course of period and reminders made by the Opposite Party also. Hence for the reasons stated above the order passed by the District Commission cannot be sustained in same as hereby set aside. Hence the following The appeal is allowed. Consequently the complaint is dismissed The amount in deposit shall be refunded to the appellant Forward free copies to both parties Sd Sd MEMBER JUDICIAL MEMBER HON BLE MR. Ravishankar HON BLE MRS. Smt.Sunita Channabasappa Bagewadi 5 