State Consumer Disputes Redressal Commission
Biswanath Agarrwalla vs M/S. Max Life Insurance Co. Ltd. on 21 January, 2026
FA/116/2025 D.O.D: 21.01.2026
BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution: 07.02.2025
Date of hearing: 11.11.2025
Date of Decision: 21.01.2026
FIRST APPEAL NO.- 116/2025
IN THE MATTER OF
BISWANATH AGRRAWALLA,
217, BABAFARIDPURI,
WEST PATEL NAGAR,
NEW DELHI - 110008.
...Appellant in person
VERSUS
1. CHAIRMAN,
MAX LIFE INSURANCE CO. LTD.
MAX HOUSE, 1 DR. JHA MARG,
NEW DELHI - 110020.
2. CHIEF EXECUTIVE OFFICER,
MAX LIFE INSURANCE CO .LTD.
UGF, HIMALAYA HOUSE,
23, K.G. MARG, CONNAUGHT PLACE,
NEW DELHI - 110001.
(Through: Legal Knights, Law Firm)
...Respondents
DISMISSED PAGE 1 OF 10
FA/116/2025 D.O.D: 21.01.2026
BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE BIMLA KUMARI, MEMBER (FEMALE)
Present: Appellant in person (he himself is a practicing counsel) .
Ms. Anushka Dayal, Counsel for the Respondent No. 1 & 2 (Email
: [email protected]) appeared through VC
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL, PRESIDENT
JUDGMENT
1. The facts of the case as per the District Commission record are as under:
"1. The present complaint has been filed under section 35 of the Consumer Protection Act, 2019 (in short CP Act-2019) against Opposite Parties (in short OP's) alleging deficiency of services.
2. Briefly stated the facts of the case are that the complainant had taken a policy of unit linked insurance plan (ULIP) No.623172343 of Max Life Insurance Co. Ltd for insurance cover of Rs 2 lac on 29.6.2009 @ premium of Rs20.000/- payable on 7th July annually and the Complainant used to deposit Premium of Rs.20,000/- annually through Cheque at the office of Opposite Party No. 2.
3. It is stated that a premium of Rs.20,000/- was deposited by the complainant for 11 years totaling of Rs 2,20,000/- at the office of Opposite Party no.2 from 2009 to 2019.And on 22nd July, 2020, the complainant surrendered his original policy bond at the office of Opposite Party no. 2 & there after the Opposite Party transferred Rs.27,842.84 paise to the complainant's bank a/o as unit fund value where as Guaranteed Loyalty was not paid to the complainant.
4. It is stated that the Opposite Party through mail dated 3.3.2022 has refused to pay Guaranteed Loyalty although Ist premium for Rs.20,000/- paid by complainant on 7th July, 2009 was reserved specifically by Opposite Party towards payment of guaranteed Loyalty to the complainant.
It is submitted that the Complainant through mail dated 1.9.2022 informed that non-payment of Guaranteed Loyalty to the complainant is illegal & the complainant has no alternative but to approach District Consumer Forum for recover of his 1st Premium DISMISSED PAGE 2 OF 10 FA/116/2025 D.O.D: 21.01.2026 BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER for Rs.20,000/-reserved by the Opposite Party towards payment of Guaranteed Loyalty. And the Opposite Party through mail dated 1.9.2022 further informed that Guaranteed Loyalty Addition is not payable.
6. The Complainant submits that when the policy was taken, the Company's name was Max New York Life Insurance Co. Ltd& it's name was changed from time to time.
7. The Complainant states that the first premium for Rs.20,000/-was paid on 7th July, 20009 to the Company & Premium receipt was issued to the complainant where in it has been mentioned that "The first year annual premium will be used to provide Guaranteed Loyalty Additions and will not be allocated to the Investment funds".
The Complainant submits that Rs 20,000/- is his money& it is not Opposite Party's money.
8. The Complainant further submits that the complainant has paid total premium of Rs.2,20,000/- for 11 years to the Opposite Party company and in return the complainant has received Rs. 1,79,094- 16 paise as partial withdrawal&Rs.27,842-84 paise as surrender value totaling of Rs 2,06,937/-from the Opposite Party company.
9. It is stated that Non- Payment of Guaranteed Loyalty Addition by the Opposite Party is illegal, contrary to law, arbitrary, Unfair & deficiency in service by Opposite Party.
10. It is prayed that to direct the OP Addition Guaranteed Loyalty for Rs.20,000/- be paid by Opposite Party along with interest@10%per annum from 7th July, 2009 till date totaling of Rs.65,000/-to the Complainant against Ist premium for Rs.20,000/- kept reserved by Opposite Party towards payment of Guaranteed Loyalty. And to directed to pay Rs.60,000/-towards mental agony& harassment, & Rs.25,000/- towards cost of petition."
2. The District Commission after taking into consideration the material available on record passed the judgment dated 20.12.2024, whereby it held as under:
"...24. It is not in dispute that the complainant purchased a Unit Linked Insurance Plan (ULIP) policy (No. 623172343) from Max Life Insurance Co. Ltd. on 29.6.2009 for an insurance cover of DISMISSED PAGE 3 OF 10 FA/116/2025 D.O.D: 21.01.2026 BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER ₹2,00,000, paying an annual premium of 220,000 via cheque for 11 years, totaling 22,20,000/-.
25. The complainant surrendered the policy on 22.7.2020, and the insurer transferred 227,842.84 as the unit fund value but did not pay the Guaranteed Loyalty Addition (GLA). The complainant alleges that the first premium of 20,000 was specifically reserved for GLA, as mentioned in the premium receipt. Despite this, the insurer refused to pay GLA, citing policy terms, as per their communication dated 3.8.2022 and 1.9.2022.
26. The complainant received 1,79,094.16 as partial withdrawals and ₹27,842.84 as the surrender value, totaling 22,06,937-less than the premiums paid.
27. The complainant asserts that the insurer's non-payment of GLA constitutes unfair trade practices, deficiency in service, and arbitrariness.
28. The question arises whether the OP/ company has fulfilled its entire and absolute liability and already paid and discharged.
29. During the policy tenure, the complainant submitted multiple partial surrender requests. The details are as follows:
o Request dated 10.08.2015: An amount of Rs. 106,996.20/- was credited to the complainant's account via NEFT on 14.08.2015. This was communicated to the complainant through a letter dated 17.08.2015.
o Request dated 26.08.2016: An amount of Rs. 18,630.61/-was credited to the complainant's account via NEFT on 29.08.2016. This was communicated via a letter dated 30.08.2016.
o Requests dated 11.07.2017, 16.07.2018, and 18.09.2019:
Rs. 21,255.10/-credited on 14.07.2017.
Rs. 17,395.65/- credited on 18.07.2018.
Rs. 14,836.30/- credited on 20.09.2019.
DISMISSED PAGE 4 OF 10 FA/116/2025 D.O.D: 21.01.2026
BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER
30. The payments were processed promptly and communicated to the complainant. The complainant submitted a surrender request dated 22.07.2020, seeking to close the policy. The request was duly acknowledged, and Rs. 27,842,84/- was credited to the complainant's account via NEFT on 22.07.2020. This was communicated via a letter dated 23.07.2020. As per the policy terms, the surrender value payable is calculated as:
Fund Value on Surrender Date (Number of Units x Unit Price).
Calculation: (973.903 x 28.58892) -Rs. 27,842.84/-.
31. The complainant later approached the OP through a communication dated 01.07.2021, seeking payment of the Guaranteed Loyalty Additions along with the surrender value. The OP responded on 19.07.2021, clarifying that the surrender value was paid strictly as per the terms of the policy, and the complainant was not eligible for Guaranteed Loyalty Additions due to the policy's surrender prior to maturity. As per Policy Terms and Conditions:
Clause 3.3 of the policy terms states:
o Guaranteed Loyalty Additions are payable only upon the occurrence of insured events such as policy maturity or the death of the life assured.
o The complainant's surrender of the policy does not qualify as an insured event under the policy.
32. The counsel for the OP argued that the policy is a legal contract between the policyholder and insurance company and the parties to the said contract are bound by its terms and conditions. That the terms of the policy are in the nature of a contract and their interpretation has to be made in accordance with the strict construction of the contract. Thus, the words in an insurance contract must be given paramount importance and interpreted as expressed without any addition, deletion or substitution.
33. The counsel for the OP have relied upon the Judgment passed by Hon'ble Supreme Court to a recent judgment of the Hon'ble Apex Court in the case of Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. [(2010) 10 SCC 567]. The same has been clearly stated in the case of Reliance Life Insurance Co.
DISMISSED PAGE 5 OF 10 FA/116/2025 D.O.D: 21.01.2026
BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER Ltd Vs Madhavacharya (Revision petition no: 211 of 2009), wherein it was held by the National Commission that "Since the insurance between the insurer and the insured is a contract between the parties, the terms of the agreement including applicability of the provision and also its exclusion had to be strictly construed to determine the extent of the liability of the insurer" In United India Insurance Co. Ltd. vs. Harchand Rai Chandan Lal(2004) 8 SCC 644 held that "the policyholder's claim must align with the terms of the policy. Courts cannot award rellef contrary to the explicit provisions of the contract."
34. We have considered the facts stated in the complaint, the averments made in the written statement, the documentary evidence on record, the arguments advanced by the learned Advocate for the Opposite Party (OP), and the legal precedents cited. Based on the above and the calculations discussed earlier, we conclude that the OP/company has fulfilled its complete and absolute liability under the policy. The payment has been made and discharged in accordance with Clause 3.3 of the policy terms and conditions, which states: On the occurrence of an insured event, if all due premiums have been paid and the policy is in full force, the policyholder will be entitled to Guaranteed Loyalty Additions as follows:
110% of ATP for 11 years, 150% of ATP for 15 years, 200% of ATP for 20 years.
As per Clause 3.3, guaranteed loyalty additions are payable only upon the occurrence of an insured event, which, as per the policy schedule, is defined as either the maturity of the policy or the death of the life assured. In the present case, neither of these events has occurred. Therefore, the complainant is not entitled to benefits under this clause.
Accordingly, the Complaint is dismissed"
3. The Appellant has preferred the present appeal against the aforesaid order on the grounds that the District Commission has failed to properly appreciate the facts and material on record and passed the impugned DISMISSED PAGE 6 OF 10 FA/116/2025 D.O.D: 21.01.2026 BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER order without due application of mind. The counsel for the Appellant submitted that the District Commission failed to appreciate that the Appellant had regularly paid the annual premium of Rs.20,000/- to the Respondents for 11 years i.e., total premium of Rs.2,20,000/- and surrendered the policy only due to compelling circumstances. However, the Appellant received Rs.2,06,937/- causing loss of Rs.13,063/-. He further contended that the District Commission erred in holding that the Respondents Insurance Company has fulfilled its complete and absolute liability despite the fact that the Respondents failed to refund the first premium amount of Rs.20,000/-, which was specifically reserved towards Guaranteed Loyalty Addition as reflected in the first premium receipt.
4. The counsel for the Appellant contended that the District Commission also failed to consider that there is no provision under the insurance rules or policy terms permitting the Respondents to withhold the first premium amount after surrender of the policy. As a result, the District Commission in the said impugned order overlooks the arbitrariness and deficiency in service on the part of the Respondents. Pressing the aforesaid contentions, the Appellant prays that the impugned order be set aside.
5. The Respondent no.2 has filed the reply to the present appeal and denied all the contentions of the Appellant. Moreover, he submitted that there is no error in the impugned order as the entire material available on record was properly scrutinized before passing the said order. The counsel for the Respondent no.2 further submitted that the actions of Respondent No. 2 were strictly in accordance with the terms and conditions of the policy. Moreover, the Appellant voluntarily surrendered the policy before maturity and Guaranteed Loyalty Addition is payable only upon the occurrence of an insured event, namely on maturity of the policy or on the death of the life assured and not in case of surrender as per the policy terms.
DISMISSED PAGE 7 OF 10 FA/116/2025 D.O.D: 21.01.2026
BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER
6. During the course of the proceedings, the counsel for Respondent No. 1 submitted that the reply to the appeal filed by Respondent No. 2 vide Diary No. 6791 dated 10.06.2025 may be considered for Respondent no.1.
7. The Appellant has filed written arguments and reiterated the contentions made in the appeal.
8. The Respondents have also filed their written arguments.
9. We have perused the material available on record.
10. The only question that falls for our consideration is whether the District Commission erred in holding that there was no deficiency in service on the part of the Respondents in rejecting the claim of Guaranteed Loyalty Addition in terms of the policy.
11. On perusal of the record, it is not disputed that the Appellant purchased a Unit Linked Insurance Plan from the Respondents on 29.06.2009 for a policy term of 20 years, with the maturity scheduled in the year 2029. The Appellant regularly paid the annual premiums of Rs.20,000/- for a period of 11 years and the Appellant availed partial surrender withdrawals in accordance with the terms and conditions of the said policy during the subsistence of the policy.
12. Thereafter, the Appellant voluntarily surrendered the policy on 22.07.2020, prior to its maturity. The Respondents paid the an amount of Rs.27,842/- on the unit fund value per the policy terms and condition. Subsequently, the Appellant vide communication dated 01.07.2021 applied for payment of Guaranteed Loyalty Addition; however, the same was rejected by the Respondents in terms of the policy conditions and the same was duly intimated to the Appellant on 19.07.2021.
13. The Respondents submitted that he is entitled for refund of the first premium amount of Rs.20,000/- reserved towards Guaranteed Loyalty Addition as reflected in the first premium receipt.
DISMISSED PAGE 8 OF 10 FA/116/2025 D.O.D: 21.01.2026
BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER
14. Here, we deem it appropriate to refer 3.3 term and condition of the said policy:
"3.3 Guaranteed Loyalty Additions On the happening of insured event, if all due premiums have been paid and policy is in full force, you will be paid benefit in the nature of Guaranteed Loyalty Additions equal to;
Where Policy term chosen is:
11 years: 110% of ATP.
15 years: 150% of ATP 20 years: 200% of ATP"
15. It is clear from the above clause that Guaranteed Loyalty Addition becomes payable only upon the occurrence of an insured event i.e., either on maturity of the policy or on the death of the life assured. However, in the present case, the Appellant surrendered the policy prior to maturity and no insured event occurred.
16. Furthermore, the submission of the Appellant regarding the first premium amount of Rs.20,000/- being reserved towards Guaranteed Loyalty Addition as mentioned in the first premium receipt, cannot be accepted as the said amount does not become separately refundable merely because it was reserved for Guaranteed Loyalty Addition. Moreover, it is clear from record that the payment of Guaranteed Loyalty Addition is strictly governed by the policy terms and is payable only on maturity of the policy or on the death of the life assured. Since the Appellant surrendered the policy prior to maturity and no insured event occurred; therefore, the claim for Guaranteed Loyalty Addition was rightly rejected in terms of the policy conditions.
17. More so, the District Commission has rightly relied upon the settled legal position that an insurance policy is a contract between the parties and its terms must be strictly construed as held by the Hon'ble Supreme Court in DISMISSED PAGE 9 OF 10 FA/116/2025 D.O.D: 21.01.2026 BISWANATH AGRRAWALLA VS. CHAIRMAN, MAX LIFE INSURANCE CO. LTD. AND ANOTHER Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd., (2010) 10 SCC 567 and United India Insurance Co. Ltd. v. Harchand Rai Chandan Lal, (2004) 8 SCC 644.
18. As a result, we are in agreement with the findings of the District Commission that the Respondents have acted strictly in accordance with the terms and conditions of the policy and duly discharged their complete and absolute liability under the policy. Accordingly, we fail to find any deficiency in service on the part of the Respondents.
19. In light of the aforesaid discussion, we find no reason to interfere with the order dated 20.12.2024 passed by the District Consumer Disputes Redressal Commission- VI, New-Delhi District, M-Block First Floor, Vikas Bhawan, I.P. Estate, New Delhi- 110002.
20. Consequently, the present Appeal stands dismissed with no order as to costs.
21. Application(s) pending, if any, stand disposed of in terms of the aforesaid judgment.
22. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
23. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (BIMLA KUMARI) MEMBER (FEMALE) Pronounced On:
21.01.2026 LR-ZA DISMISSED PAGE 10 OF 10