Insurer Cannot Impose Pension Plan If Not Opt For It At Maturity: NCDRC Holds Aditya Birla Sun Life Insurance Liable For Deficiency Of Service

Brief Facts of the Case

The complainant obtained a life retirement plan from the insurer, with a vesting age of 55 years and an annual premium of Rs.10,000 for 14 years. The policy was to mature with a maturity amount of Rs.2,54,000. The insurer informed the complainant about the policy maturity and options to avail of the maturity proceeds. The complainant wanted to cease the pension benefit and debarred her nominee husband from receiving the amount. She requested the insurer to delete the nominee's name and pay the matured amount. The complainant submitted the required documents, but the insurer did not transfer the matured amount to the complainant's account despite assurance, which amounted to a deficiency in service. The complainant visited the insurer's office multiple times for the matured amount with interest, but in vain. Hence, the complainant filed a complaint before the district forum, which allowed the complaint and directed the insurer to refund the maturity amount of Rs.2,54,000 to the complainant along with interest at the rate of 9% per annum and pay Rs.10,000 as compensation for mental agony. Aggrieved by the district forum's order, the insurer appealed to the State Commission of Haryana, but the appeal was dismissed. Consequently, the insurer filed a revision petition before the National Commission.

Contentions of the Insurer

The insurer contended that the policy was for a period of 14 years, and the last premium was to be paid by the complainant. As per the policy terms and conditions, the maturity amount could only be utilized as stipulated and not paid out entirely. The insurer informed the complainant about policy maturity and options to utilize the maturity proceeds, which included partial withdrawal, investing in annuities, or using it for a new policy premium. It was argued that the complainant wanted to cease the pension benefit and debarred her nominee husband from receiving the amount. She requested the insurer to delete the nominee's name and release the matured amount. However, the insurer stated that as per policy terms, the complainant could only receive 1/3rd of the matured amount, and the remaining 2/3rd had to be used as per the enunciated options.

Observations by the National Commission

The commission observed the insurer's argument, which stated that the complainant could only withdraw one-third of the matured amount and had to use the remaining two-thirds to purchase an annuity, was not well-founded. It pointed out that since the complainant did not choose the pension plan upon maturity, such a plan could not be imposed on her, and doing the same was a deficiency in service on the insurer's part. The commission observed that the insurer could not deny the complainant the monetary benefits of Rs.2,54,000 upon policy maturity simply because she did not act on the maturity date, according to the insurer's letter. The commission remarked that once the insurer received the maturity form and documents, it could not argue that the complainant failed to exercise her option, as the receipt of documents legally signified her choice to receive the full maturity amount. The commission found no reason to overturn the well-reasoned order of the State Commission, stating that the National Commission's revisional jurisdiction is very limited and cannot alter the concurrent findings of the lower fora based on evidence unless such findings are contrary to law, pleadings, evidence, or are wholly unreasonable.

The National Commission upheld the State Commission's order and dismissed the revision petition.

Case Title: Aditya Birla Sun Life Insurance Co. Ltd Vs. Ms. Anita Dahiya

Case Number: R.P. No. 2691/2023