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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
D.K. Jain, President, Vinay Kumar, Member
Unit Trust of India & Ors. —Petitioners
versus
The Consumer Rights Society (Regd.) & Anr. —Respondents
Revision Petition No.356 of 2007
(From the Order dated 16.11.2006 in Appeal No. A-325/2003 of Delhi State Consumer Disputes Redressal Commission.)
Decided on 27.1.2015
Counsel for the Parties:
For the Petitioners:Mr. Dharam Dev, Advocate
For the Respondents: Nemo.
IMPORTANT POINT
If a subscriber fails to pay renewal contribution within time, he ceases to participate in plan.
Headnote:Consumer Protection Act, 1986—Sections 15, 17, 19 and 21—Investment—Unit Linked Insurance Plan—Cancellation of policy—State Commission allowed Complaint with direction to UTI to revive policy and in addition pay a sum of Rs.25,000/- as compensation—Even though there was some lapse on part of UTI in not returning dishonoured cheque to Complainant which in ordinary course of banking business should have been returned to drawer of cheque, Complainant was also not altogether free from blame or negligence—If a subscriber fails to pay renewal contribution within time, he ceases to participate in plan but membership can be revived within one year from date of default in payment of renewal contribution subject to certain specific conditions—Premium due on 10.01.1991 in arrears, non-revival of lapsed policy by UTI cannot be construed as deficiency in rendering service on its part as alleged in complaint entitling complainant to receive full benefits under plan in question—Direction by State Commission to UTI to revive policy set aside—However, direction regarding payment of compensation maintained.
Held: According to the said information, if a subscriber fails to pay renewal contribution within time, he ceases to participate in the plan but the membership can be revived within one year from the date of default in payment of renewal contribution, subject to certain specific conditions. No other provision regarding revival of a lapsed policy had been brought to our notice. In our view, in light of the afore-extracted information furnished to the subscribers to the ULIPs, acceptance of further premium after 10.01.1991 would not automatically revive the lapsed policy, as the complainant, admittedly, did not take any steps to have it revived within one year of the default in payment of renewal contribution, even after the receipt of notice for payment of premium due on 10.01.1992, by which time, in all probability, the period of one year had not expired. The premium notice for the year 1991-92, placed on record, clearly shows premium due on 10.01.1991 in arrears. Under these circumstances, non-revival of the lapsed policy by UTI, cannot be construed as deficiency in rendering service on its part, as alleged in the complaint, entitling the complainant to receive full benefits under the plan in question.
We are also of the view that even though there was some lapse on the part of UTI in not returning the dishonoured cheque to the Complainant, which in the ordinary course of banking business should have been returned to the drawer of the cheque, the Complainant was also not altogether free from blame or negligence. It bears repetition that when he received notice for payment of premium due on 10.01.1992, arrears for the previous year were also reflected in it. This premium notice should have alerted the Complainant because as per his claim he had already paid the premium due on 10.01.1991. The Complainant neither bothered to make enquiry from UTI in this regard nor did he care to check from his bank the status of the cheque issued by him in favour of UTI, inasmuch as whether or not the cheque amount had been debited to his account. Depending on the said information from his own Bank, he could have taken up the matter with UTI and taken necessary steps in this regard. Admittedly, nothing of that sort was done by the Complainant. On the contrary, ignoring the arrears, he quietly deposited a sum of Rs.2,600/- against the demand of Rs.5,200/-.
In our opinion, therefore, Complainant’s silence, omission and failure to act on receipt of premium notice for the premium due on 10.01.1992, reflecting the premium due to be paid on or before 10.01.1991 as arrears, is sufficient to reject his prayer for revival of the lapsed policy and release of full benefits payable under a live policy. It must follow as a necessary corollary that on facts at hand, no deficiency in service can be attributed to the UTI in cancelling the policy and in denying the Complainant full benefits there-under. Nonetheless, in view of UTI’s failure to inform the Complainant about dishonour of the cheque received by it towards premium and not returning the same to him with Bank’s memo, does constitute deficiency in service on its part, causing mental agony to the Complainant, for which he deserves to be compensated.
For the aforegoing reasons, we partly allow the Revision Petition and set aside the direction by the State Commission to the UTI to revive the policy. However, direction regarding payment of compensation is maintained. The Revision Petition stands disposed of, with no order as to costs. (Paras 9 to 12)
Result: Revision Petition Partly allowed.
D.K. Jain, J. President—A short question falling for consideration in the present Revision Petition, preferred by Unit Trust of India (“UTI” for short) and its functionaries, is whether or not the Complainant, one Dr. Sanjeev Gupta, was entitled to claim full benefits under a Unit Linked Insurance Plan (“ULIP” for short).
2. In the year 1988, the Complainant subscribed to ULIP with a maturity period of 15 years. The annual premium was Rs.2600/-. In April 1999, he received a letter, dated 07.04.1999, from the Petitioners intimating to him cancellation of his policy for the reason that the cheque deposited by him towards the annual premium for the year 1991-92 had been dishonoured. According to the Complainant, he was neither informed about the dishonour of the said cheque nor cancellation of the policy till he received the said letter in April 1999. He was also not aware, whether the cheque had been presented for collection to the Bank or not and if presented, whether it was within the validity period. By April 1999, he had deposited all 11 instalments, which were due till the year 1999 and were duly accepted by UTI.
3. Alleging gross deficiency in service on the part of UTI in cancelling the policy in the year 1999 on account of dishonour of cheque in the year 1991, a complaint was filed on behalf of the Complainant by a Consumer Rights Society, inter-alia, praying for revival of the policy and award of compensation/damages of Rs.50,000/- for mental torture and harassment.
4. The Petitioners did not appear before the District Forum despite service of notice and were accordingly proceeded against ex-parte. However, in their written submissions, filed before the State Commission, it was stated that the Complainant was himself negligent in not depositing the annual premium due on 10.01.1991; on termination of policy the amount deposited by the Complainant along with interest totaling Rs.28,925.62 was refunded to him by means of two cheques dated 29.4.1999 and 21.5.1999, which were received, accepted and encashed by him and therefore, no cause of action survived for filing the complaint. It was also pleaded that the Complainant had himself admitted that the cheque, issued by him towards the premium, got dishonoured “inadvertently” and thus, the question of deficiency in service on the part of UTI did not arise. Accepting the stand of UTI, the District Forum dismissed the complaint, inter-alia, observing that it was the responsibility of the person clearing dues through a cheque, to ensure that the cheque proceeds were realized and for any penal action, following dishonour of cheque, UTI could not be blamed.
5. On appeal by the Complainant, the order of the District Forum has been reversed by the State Commission, observing as follows:-
“Until and unless the consumer receives information immediately or within reasonable period after the payment of the instalment by way of cheque from the service provider about the non-encashment of the cheque amount, the consumer always presumes that the cheque was duly honoured. In the instant case even the bank did not inform about the dishonoured cheque though it was the duty of the respondent to inform the appellant about cheque having been dishonoured resulting in the non payment of the third installment. Said lapse on the part of the respondent is grossest kind of deficiency in service which in terms of Section 2(1)(g) of the Consumer Protection Act 1986 means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.”
6. The State Commission has come to the conclusion that having accepted installments for 11 years, UTI could not cancel the policy on the premise that yearly premium and instalment due on 10.01.1991 was not paid. Accordingly, the Sta
