BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ADDITIONAL BENCH, MANGALORE                        

Dated this the 28^th April 2017

PRESENT

   SRI VISHWESHWARA BHAT D     : HON’BLE PRESIDENT

   SRI T.C. RAJASHEKAR                 : HON’BLE MEMBER

ORDERS IN

C.C.No.491/2014

(Admitted on 16.12.2014)

Mr. Jayarama Achar,

S/o Late Babu Achar,

Age 58 years, Hindu, Adult,

R/at Girija Nilaya, 1^st main road,

Land links, Derebail, Konchady,

Mangalore.

                                         ….. COMPLAINANT

(Advocate for the Complainant: Sri DS)

VERSUS

1. Authorised Signatory/Branch Manager,

M/s. Bajaj Allianz insurance company,

G.E. Plaza, Airport Road,

Yerawada, Pune.

2. Authorised Signatory/Branch Manager,

M/s. Bajaj Allianz Insurance company,

Presidency Zone I, IInd floor,

Bendoorwell, Kankanady,

Mangalore

                                                             ….....OPPOSITE PARTIES

(Advocate for the Opposite Party No.1 and 2: Sri. AKK)

ORDER DELIVERED BY HON’BLE MEMBER

SRI T.C. RAJASHEKAR:

I. 1.The above complaint filed under Section 12 of the Consumer Protection Act 1986 alleging deficiency in service against the Opposite Party claiming, to refund the amount of Rs. 30,000/ along with interest accrued thereon at the rate of 12% per annum from 2009 onwards up to the final adjudication, a compensation of a sum of Rs.1,00,000/ towards the damages, a sum to the tune of Rs.5,000/ towards the cost of the proceedings.

2.   In support of the above complaint the complainant Mr. Jayarama Achar, filed affidavit evidence as CW1 and answered the interrogatories served on him.  On behalf of the opposite parties Mr. Pramod Alva, (RW1) Branch Manager, also filed affidavit evidence and answered the interrogatories served on him.

The brief facts of the case are as under:

We perused the complaint and the version of the parties. The dispute arose because of the opposite party not paid the amount on foreclosing the policy. The complainant alleges that he had obtained a life insurance policy from the opposite parties for an amount of Rs.3,00,000/ sum assured and paid three years regular premium of Rs 10,000/ per annum and could not pay the further premium. The opposite party fore closed the insurance policy and offered Rs.12,040/ only and not furnished with any details of the amount arrived at as per policy conditions and not provided any details of how the premium paid is invested in funds and reason for reduction in the sum paid against the promised growth in the fund. Hence alleges deficiency in service. The opposite party contended that the premium paid by the complainant is invested in share market in different funds and the risk of investment was made known to the complainant and also as per policy terms & conditions the amount arrived at and the same has been offered to the complainant, but the complainant refused to accept and hence there is no deficiency in service on their part. These are being the facts of dispute we are of the view to decide the following

POINTS FOR ADJUDICATION

We have examined the evidence led by the parties and considered the documents produced by the complainant. The admitted facts are, the issue of life insurance policy, the payment of premium for three years, and foreclosure for not paying premium after three years an offering an amount of  Rs. 12,040/. The opposite parties denied that, the settlement amount is not as per the terms & conditions of the policy and the deficiency in service on their part. On considering the admissions and the denies as above we are of the view the following points to be adjudicated in resolving this dispute.

1. Whether the complainant is the consumer under the consumer protection Act 1986?
2. Whether opposite parties prove that the amount offered is justified and as per terms of the insurance policy.
3. Whether the complainant is entitled for the relief prayed for?
4. What order?

We have examined meticulously the documents on record and carefully considered the evidence adduced. Taken note of the notes of arguments and heard the party counsels and answered the above points as under.

1. In the affirmative.
2. In the negative.
3. In the affirmative.
4. As per delivered order.

REASON

POINT NO.1: The complainant produced the insurance policy as Annexure 1 now marked as EX C 1. It shows the policy is issued in the name of the complainant herein and the premium paid receipt dated 16.02.2007 which established the purchasing of the insurance policy. It is not disputed by the opposite party and hence we answered the point no 1 in the affirmative.

POINT NO.2: The specific case of the complainant is he has purchased an insurance policy on his life by paying the premium of Rs. 10,000/ per annum for the policy period of 15 years. He had paid the premium for 3 years amounting to Rs.30,000/ and could not pay further premium. The opposite party foreclosed the insurance policy and has offered Rs.12,040/ as refund of fund value after terminating the policy. The specific complaint of the complainant is the opposite party not produced any details for the refund amount arrived at, the fund investment details with regard to the funds in which investment of the complainants premium is made and return yields of the investments, and charges deducted as per terms & conditions of the policy. The complainant alleges deficiency in service with regard to the calculation of the fund value returned and mismanagement in investing fund which resulted in negative growth of the fund. Hence it will be the opposite party burden to prove and justify the amount paid as the fund value of Rs. 12,040/ and hence the point No 2 taken for consideration.

2.    The opposite party not produced any documents with regard to the calculation arrived except in version wherein a little information about the foreclosed units and the NAV on the date 20.06.2014 the day of foreclosure and the fund value shown as Rs.12,039.84/. The annexure 5 is the communication from the opposite party for offering Rs. 12,040/ as fund value returned but does not contain any details with regard to how the invested amount of Rs.30,000/ educed to meagre  Rs. 12,040/ in 7 years term as the policy was issued in the year 2007. Only defence of the opposite parties are they have settled the amount as per terms & conditions of the insurance policy.

3.    Even though the non providing of the details itself is deficiency in service on the part of the opposite party we prompted our self to look into the policy documents meticulously and fund the following points.

1. The policy is stated to be unit linked endowment policy(the amount collected is invested in funds and converted in to units)
2. Being  a unit linked life insurance policy the policy holder/life assured has the option to allocate the premium paid by him between one or more of the funds for the purchase of the units thereof
3. The policy enables the policy holder to participate only in the investment of performance of the fund to the extent of allocated units and does not in any way confer any right whatsoever on the policy holder to otherwise share in the profits or surplus of the business of the company.(under policy description in page no 3)
4.  The policy premium is if paid for three years, the policy will be kept in force for full sum assured, and charges will be debited

till the amount reduces equal to one year annualized premium and the policy will be terminated and the fund value standing on the date of such termination will be paid to the insured.(non forfeiture clause in page no 6)

5.  The opposite party company keeps absolute discretion in selecting the funds and proportion to be invested and also to keep un invested cash or assets whether or not produces income. .(in page 9 under clause Investment of funds) 
6. All assets relating to the funds shall be and shall remain in the absolute beneficial ownership of the company and no trust will be created in respect of investments.(in page 9 under clause Investment of funds) 
7. It is stated that there is no guarantee of returns as the investment involves  market risk factor and no assurance that the objective of any the funds will be achieved.(in page 14 under clause the risk of investment)

4.   While going through the above points it is clear that the insurance policy terms & conditions are absolutely the opposite party oriented and against the social cause which suppose to be the aim of life insurance. It is true that the complainant had agreed to the terms and the agreement terms cannot be re written. But whether the agreement speaks in real terms is the question. It is a printed agreement which often dupes the consumers. 

5.     The fact No 2 above speaks about the option to the insured with regard to fund investment in funds but the fact No 5 and 6 urges the right of the insurer in investment of funds as absolute. In point no 7 the opposite party not ready to accountable for the loss or non achieving of the objects of the funds.

6.     In spite of keeping all these discrepancies aside, no where it is sated that the insured will not have right to know about the dealings of the funds with regard to premium paid. It is a right created by natural justice that one will have opportunity to know the cause of the loss or profit from his investment. It is revealed to the insured that  the amount collected through premium will be invested in funds of stock market and it is the opposite parties duty to show that the opposite party has used his reasonable knowledge in investment or taken the help of the experts in dealing with the insured money in the funds. The complainant main allegation is he has not been provided with the details of the amount of the fund arrived at.

7.    In our opinion the opposite party not provided the details which force us to presume the opposite party has no cogent system of calculation and method of accounting and the opposite party is taking advantage of the formal printed agreement and deciding arbitrarily and unilaterally the amount as fund value which is offered to the complainant. The opposite party produced certain authority of the Honourable Apex Court.

III(2005)CPJ 31(SC): Related to lapse of policy on non payment of premium. The instance case is not lapsed policy but it is foreclosed as per terms & conditions of the policy as per provision with regard to payment of premium for three years. Policy will not lapse but subsists till the fund value reaches certain amount.

(2006)5 SCC 258: The contractual obligation as the Honourable Apex Court held the agreement cannot be re written. Not applicable as the terms & conditions is not disputed.

8.    The question involved is whether the opposite party is justified paying only Rs.12,040/ for an investment of Rs.30,000/ for 7 years. It is the right of the insured to know how his premium is invested and performing. The opposite party should show the fairness in its dealings and while dealing with the insured money. The insurance is the social security measure and the insured will expect future security and expect some help in the future years.

9.    In our opinion the opposite party not provided any evidence or documents to show the amount arrived at is fair and justified as per natural justice as well as the terms & conditions of the policy, but the opposite party unilaterally, arbitrarily decided the amount of the fund value as such we find deficiency in service on the part of the opposite party and we answered the point no 2 in the negative.

POINT NO 3: As per above discussion the opposite party has not provided the complainant with details of fund investment and the details of calculation of the fund arrived, we see arbitrary and unilateral decisions and hold the opposite parties for deficiency in service. The complainant is entitled for the sum of  Rs.30,000/ being the premium paid amount. Even though the opposite party contends they have covered the life risk but not shown any appropriation of funds towards life risk covering and for investment. Hence the complainant is entitled for an amount of Rs.30,000/ with an interest at 9% per annum from the date of foreclosure till the date of payment. We see negligence on the part of the opposite party and also unfair trade practice in deciding the fund value based on NAV the complainant is entitled for an amount of  Rs. 15,000/ towards compensation and  Rs.6,000/ towards litigation expenses.

POINT NO 4: In the light of the above discussions and the adjudication of above points we deliver the following.

ORDER

The complaint is allowed. The opposite parties shall pay the complainant an amount of Rs. 30,000/ (Rupees thirty thousand only) with an interest of 9% per annum from the date of foreclosure till the date of payment and an amount of Rs.15,000/ (Rupees fifteen thousand only) towards compensation and an amount of Rs.6,000/ (Rupees six thousand only) towards litigation expenses within 30 days from the date of copy of this order received. 

Copy of this order as per statutory requirements, be forwarded to the parties free of cost and file shall be consigned to record room.

 (Page No.1 to 11 directly typed by Member, revised and pronounced in the open court on this the 28^th April 2017)

             MEMBER                                                PRESIDENT

    (T.C. RAJASHEKAR)                         (VISHWESHWARA BHAT D)

D.K. District Consumer Forum                 D.K. District Consumer Forum

 Additional Bench, Mangalore.                    Additional Bench, Mangalore.

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 : Mr. Jayarama Achar

Documents marked on behalf of the Complainant:

Ex.C1: Policy

Witnesses examined on behalf of the Opposite Parties:

RW1  Mr. Pramod Alva, Branch Manager

Documents marked on behalf of the Opposite Parties:

Nil

Dated: 28.4.2017                                     MEMBER