Chandigarh

DF-I

CC/882/2017

Smt. Sabinder Kaur - Complainant(s)

Versus

Aviva Life Insurance Co. India Pvt. Ltd. - Opp.Party(s)

NP Sharma

07 Jun 2019

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

 

                               

Consumer Complaint No.	:	CC/882/2017
Date of Institution	:	27/12/2017
Date of Decision	:	07/06/2019

 

Smt. Sabinder Kaur daughter of Shri Prem Singh Gill, aged about 64 years, resident of House No.114, Sector 21-A, Chandigarh U.T. 160022.

… Complainant

V E R S U S

1.     Aviva Life Insurance Company India Private Limited, through its CEO & Managing Director, Shri Trevor Bull, Head Office : Aviva Tower, Sector Road, Opposite Golf Course, DLF Phase V, Sector 43, Gurgaon – 122003, Haryana.

2.     Aviva Life Insurance Company India Private Limited, through its Branch Manager, Branch office : Aviva Towers, SCO Nos.45-46-47, Sector 17-A, Chandigarh UT 160017.

… Opposite Parties

CORAM :	SHRI RATTAN SINGH THAKUR	PRESIDENT
	SHRI SURESH KUMAR SARDANA	MEMBER

                                                                     

ARGUED BY	:	Sh. Gaurav Bhardwaj, Counsel for complainant
	:	Sh. Tushar Arora, Counsel for OPs

Per Rattan Singh Thakur, President

1.         The complainant, now a senior citizen, on being counselled by agents of OPs for her investment in the life long unit linked policies was informed, on payment of fixed annual premium of Rs.25,000/- for a continuous period of over 34 years being a sum of Rs.8,50,000/-, she was assured of life cover, a large sum assured, various tax benefits and final returns which were touted to be in the range of Rs.30,00,000/- plus by the end of the policy lifecycle.  On being allured, the said policy was taken in the year 2006 from 2006-2039 and four annual premiums were deposited till 2009.  Thereafter on enhancement of premium, over and above Rs.25,000/- 5^th premium for the period 2010-11 was not paid.  Total premium amount deposited comes out to Rs.one lakh.  Various policy statements were received, But, the terms and conditions and option of the complainant on freelook period was not obtained thereby the complainant was misled.  It is the case, after lock in period, OPs vide their letter dated 29.4.2016 informed the complainant that they would be deducting Rs.2,834/-on account of various charges and the total fund of Rs.one lakh invested for life insurance deteriorated to a menial sum of Rs.49,399.59. The complainant had informed that she had never received the original policy documents from the OPs, therefore, these could not be returned.  It is also the case, ultimately on 9.6.2017 complainant received an amount of Rs.49,046/- from the OPs in her bank account and the remaining out of Rs.1,00,000/- was retained. As such, there has been deficiency in service. Hence, the present consumer complaint praying for refund of remaining amount of Rs.50,954/- and mandating the OPs for simple interest on the sum of Rs.1,00,000/- w.e.f. 28.5.2010 till 9.6.2017 @ 18%; simple interest @18% per annum on sum of Rs.50,954/- lump sum compensation of Rs.50,000/-, punitive damages  and cost of litigation quantified at Rs.21,000/-.
2.         OPs contested the consumer complaint and filed their joint written reply.  It is their claim, the policy was unit linked and the amount was invested in market linked funds which was invested in different market instruments including debt instruments and equity in varying proportions. It was further submitted, complainant herself admitted she had stopped the payment of annual premium and remained silent from last payment 30.4.2009 upto 20.8.2016.  It was not disclosed why she remained silent for six years, therefore, the complainant was well aware her policy was unit linked.  It is also the case, when the statements were sent, complainant continued to enjoy the benefits and when due to fluctuation in the market, price of units came down she is now raising the issue.  The complainant cannot now be permitted to raise the stand, terms and conditions were not supplied to her.  The value per the terms and conditions was paid.  Hence, there has been no deficiency in service or unfair trade practice on their part. On these lines, the cause is sought to be defended.
3.         Rejoinder was filed and averments made in the consumer complaint were reiterated.
4.         Parties led evidence by way of affidavits and documents.
5.         We have heard the learned counsel for the parties and gone through the record of the case. After perusal of record, our findings are as under:-
6.          Per pleadings of the parties, complainant happens to be a woman senior citizen and the policy obtained was allegedly life long unit linked policy as well as insurance and the sum assured was Rs.2,50,000/-. Hence, per pleadings of the parties, it cannot be construed that it was a pure investment as it also provided insurance cover.  The complainant’s case is, agents of the OPs at the time of sale of the policy had allured the assured life cover including tax benefits and the terms and conditions regarding subject to market risks were not explained to her. These are the pleadings supported by way of affidavit.
7.         Per pleadings, the case of the complainant is, she was not supplied the terms and conditions of the policy nor was provided with free look period because after going through its contents she could have asked for variation of the terms and conditions or say cancellation of the policy.  To these averments, OPs simply raised the plea of complainant remained mum for more than a decade or even upto when the last premium was paid, therefore, she could not raise such a plea.  The OPs in their written statement or evidence produced had not at all produced any document to say complainant’s option was taken in the freelook period.  In the event of non-mentioning of the details and non-production of the proof that option was taken, it could not be said complainant was aware of the terms and conditions of the policy provided.
8.         It is true that the matter was not agitated till the lock in period of 10 years was over.  May be so when the terms and conditions were not supplied and the option was not sought in the freelook period, there may not be chance with the complainant to know its contents till she surrendered the policy and asked for the refund.  The moment refund was given, she might have come to know of such terms and conditions.
9.         Our attention was drawn to the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002 and the relevant regulation 6(2) thereof is reproduced below:-

6. Matters to be stated in life insurance policy

xxx                   xxx           xxx

(2) While acting under regulation 6(1) in forwarding the policy to the insured, the insurer shall inform by the letter forwarding the policy that he has a period of 15 days from the date of receipt of the policy document to review the terms and conditions of the policy and where the insured disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection, when he shall be entitled to a refund of the premium paid, subject only to a deduction of a proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination of the proposer and stamp duty charges.”

 

10.         A bare perusal of the regulation reproduced hereinbefore shows, it is mandatory on the insurer to inform by letter forwarding the policy that he/she has a period of 15 days from the date of receipt of the policy documents to review its terms and conditions and in the event of disagreement had the option to return the policy stating the reasons for objection and to ask for refund.
11.         The regulation referred to above emphasizes the word ‘shall’ which is mandatory.  Now when there is flagrant violation of this regulation as the option was not taken from the complainant, prejudice is writ large which leads to the conclusion that the terms and conditions of the policy were one sided which do not at all binds the complainant.  The pleading of estoppel qua complainant remaining mum for a decade will not be applicable in the present scenario when there was violation of the mandatory regulation which has been referred supra.  It has the force of law.  In case title as Faqruddin Vs. Tajuddin, 2008 (9) SCR 377, the Hon’ble Apex Court held that jurisdictional fact would not attract the principle of estoppel as there can be no estoppel against the statute.  In such a scenario the rule of justice i.e. estoppel cannot be made applicable to the complainant because the terms and conditions were one sided as the option was not taken.
12.         After recording the aforesaid conclusion derived from the record and the pleading of the parties it is the own admitted case that till 30.4.2009, complainant had paid four premiums i.e. total amount of Rs.one lakh while on surrender amount of Rs.49,046/- only was disbursed to her and the remaining deposited amount of Rs.50,954/- has not been disbursed. It also appears to be inequitable that a person invests a sum of Rs.one lakh for more than 7-8 years and thereafter it is reduced to even less than 50% and moreover we have already referred that the one sided terms and conditions were not binding upon the complainant.  Our attention was also drawn to Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulation, 2010 and the relevant proviso to Rule 7 is reproduced below :-

                “Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied. 

                Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

13.         In the light of above discussion and conclusions arrived at, referred hereinbefore, the present consumer complaint succeeds and the same is accordingly partly allowed.  OPs are directed as under :-

1. To refund the balance amount of Rs.50,954/- to the complainant alongwith interest @ 9% per annum w.e.f. 9.6.2017 till realization;
2. To pay an amount of Rs.30,000/- to the complainant as compensation for causing mental agony and harassment to her;
3. to pay Rs.15,000/- to the complainant as costs of litigation.

14.         This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.
15.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-
07/06/2019	[Suresh Kumar Sardana]	[Rattan Singh Thakur]
hg	Member	President