HDFC Bank — Discontinued policy without any valid reason

I have a term insurance policy 24560003 with HDFC, and it’s discontinued by the company due to non disclosure reason.
At the time of proposal i didn’t have any active term insurance and already informed everything to the agent. But company claims that i have term insurance from Max life. Which i already informed to agent as I applied term insurance to max life as well and got rejected by them due to medical reasons and agent not mentioned this information in policy document at the time of proposal.
I already paid 2 premium of the policy and i want to continue this policy as i dont have policy from other company and its wasting my two year.
If company do not want to continue this then want claim against company to reimburse both premium amount with my lost of two year and mentally i am disturb to they should pay penalty to me