IMPORTANT POINT
Foreclosure of insurance policy must be preceded by proper notice.

JUDGMENT

AVM J. Rajendra, AVSM VSM (Retd.), Member—The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short “the Act”) against the Opposite Party seeking to direct the OP:—

“(a) The Termination /Foreclosure of the said Policy viz: Met Smart Plus Policy No.00309845 be declared as wrongful, illegal and action of the opposite party for termination and foreclosure of the said policy is liable to be set aside by this Hon’ble Commission;

(b) The Opposite Party be directed to forthwith revive /reinstate the Met Smart Plus Policy no.00309845 of Complainant with effect from the date from which the same was Foreclosed/Terminated on the same terms and conditions when the said Policy availed by the Complainant;

(c) The OP be directed to pay to the Complainant compensation of Rs.20 lacs for the undue hardship, mental torture and loss caused to the Complainant due to foreclosure and illegal termination of the policy by the OP;

(d) The opposite Party be directed as under the Policy when re-instated, it should be placed in the multiplier mode from the day it was placed in the surrendered status, provide it a total fund value prevailing on that date which was Rs.14,91,000-00, and from there on treat the policy, and its fund value as per the terms and conditions of the policy as applicable up to the date of the re-instatement You may not apply charges such as Mortality charges which are unfair or punitive in nature as you had sought to do earlier to our Policy.

(e) In the alternative to prayer clauses (b) (c) and (d), the OP be directed to pay to the Complainant for the Policy No.00309845, a sum of Rs.64,91,000/-towards compensation as more particularly set out in the Particulars of Claims annexed hereto as Annexure-AC;

(f) The Opposite Party be directed to pay interest @ 18% per annum from the date of filing of this Complaint till payment thereof on the claims awarded,

(g) The cost of litigation for filing the present complaint of Rs.3.00 lakhs may also be awarded,

2. The matters pertain to allegation of wrongful termination and foreclosure of two Unit Linked Insurance Policies of the complainant. Since the main facts and contentions are substantially similar in both the Cases, except for the details of the policies, claims etc, both cases are being disposed of by this common order. For convenience CC No.49 of 2014 is considered as the lead case.

3. Brief facts of the case, as per the complainant, are that he availed a Unit Linked Insurance Policy from MetLife India Insurance Company Pvt. Ltd. (Opposite Party OP) for a sum assured of .1 crore, having duly paid a total premium of .30 lakhs over the years 2007, 2008, and 2009 as per the policy terms. No further premium was paid thereafter. Upon checking the policy status on OP website on 09.04.2012, he was shocked to discover that they were foreclosed in March 2012, without any prior notice or opportunity of being heard. He immediately approached the OP Bandra Branch for clarification and was informed that the policy could be revived upon payment of .2.5 lakhs. Relying on this assurance, he issued a cheque dated 04.05.2012 for .2.5 lakhs, which was encashed by OP, yet no policy reinstatement took place.

Thereafter, OP insisted on a medical report, which he submitted after undergoing a check-up at OP recommended facility. Despite a satisfactory medical report, the policy was not revived. Between 31.05.2012 and 06.06.2012, OP issued multiple letters proposing reinstatement terms, including increased mortality charges, which he accepted under protest vide letter dated 01.08.2012. However, the OP failed to act upon the acceptance and, instead, issued a fresh proposal on 07.08.2012 demanding Rs.10 lakhs and Rs.7.5 lakhs respectively towards the reinstatement of two policies, which was completely inconsistent with earlier communications. He rejected this new demand and reiterated his willingness to accept increased mortality charges under protes