BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.
Dated this the 30th day of November 2011
Filed on : 05/10/2009
Present :
Shri. A Rajesh, President.
Shri. Paul Gomez, Member.
Smt. C.K. Lekhamma, Member
C.C. No. 520/09 and 521/2009
Between
C.C. No. 520/09
Gigi Abraham, :Complainant
W/o. Kuruvila Abraham, (By Adv. Santhosh Mathew,
House No. 37/1585C, Ninan & Mahew, SI, 2nd Floor,
Next CSI Church, 42/1686, ‘Empire Buildings’
Bose Nagar, Kadavanthra, High Court East End, Kochi-18)
Ernakulam-682 020.
And
1. Aviva Life Insurance :Opposite parties
Company India Ltd. (1sto.pBy Adv. Madhu N Nambuthiripad,
Aviva tower, Sector road, M/s. Menon & Pai, I.S. Press road,
Opp. Golf Course, Ernakulam, Kochi-682 018)
DLF Phase V Sector 43,
Gurgaon 122 003,
Haryana Rep. by its
Managing Director.
2. T.K. Sivadas, Manager, (2nd o.p.by Adv. Biju Meenattoor
HDFC bank, M/s. Sanjai & Parvathi, ‘Neeti’,
(Formerly Bank of Punjab now CC43/375K, Paul Abrao Road,
merged with HDFC bank) Ernakulam North, Kochi-682 018)
Wellington Island.
3. Insurance Regulatory and
Development Authority, (3rd O.P. absent)
3rd Floor, Parisrama Bhavan,
Basher Bagh, Hyderabad,
Andhra Pradesh, Rep. by its Chairman.
C.C. No. 521/09
Between
Kuruvila Abraham, : Complainant
House No. 37/1585C, Next C.S.I, (By Adv. Santhosh Mathew,
Church, Bose Nagar, Kadavanthra, Ninan & Mathew, SI 2nd Floor,
Ernakulam-682 020. 42/1686, Empire building,
High Court East End, Kochi-18)
And
1. Aviva Life Insurance :Opposite parties
Company India Ltd. (1sto.pBy Adv. Madhu N Nambuthiripad,
Aviva tower, Sector road, M/s. Menon & Pai, I.S. Press road,
Opp. Golf Course, Ernakulam, Kochi-682 018)
DLF Phase V Sector 43,
Gurgaon 122 003,
Haryana Rep. by its
Managing Director.
2. T.K. Sivadas, Manager, (2nd o.p.by Adv. Biju Meenattoor
HDFC bank, M/s. Sanjai & Parvathi, ‘Neeti’,
(Formerly Bank of Punjab now CC43/375K, Paul Abrao Road,
merged with HDFC bank) Ernakulam North, Kochi-682 018)
Wellington Island.
3. Insurance Regulatory and
Development Authority, (3rd O.P. absent)
3rd Floor, Parisrama Bhavan,
Basher Bagh, Hyderabad,
Andhra Pradesh,
Rep. by its Chairman.
O R D E R
A Rajesh, President.
During the proceedings in this Forum the complainants filed I.A. No. 585/2010 seeking joint trial of the above case. Since the opposite parties are the same and the matter involved in these complaints are the same we allowed the application, disposing off these complaints by this common order.
2. The case of the complainant in CC No. 520/2009 is as follows:
At the instance of the 2nd opposite party the complainant availed herself of a unit linked Insurance Policy of the 1st opposite party. The complainant was informed that if Rs. 61,000/- were paid only in the first and second year, a life coverage of 14 lakhs for a period of 10 years could be assured. Assured by the sales manager of the 1st opposite party and the 2nd opposite party the complainant signed the policy proposal form and issued a cheque of Rs. 61,000/- dated 21-06-2006. When the policy was received the complainant could not understand the illustration of the policy benefit chart. It was so complex ambiguous and incomplete. Since the complainant raised objection during fro look period the 1st opposite party issued another policy but there was no policy benefit chart. The complainant did not pay the 3rd instalment since no premium was mandatorly payable from the 3rd year onwards. On 13-08-2008 the 1st opposite party issued a letter to the complainant informing 2 options either “policy holder can reinstate the policy within 24 months from the last unpaid premium” or “the policy holder can’t reinstate the policy. However monthly administration charges (reduced to 60%) and regular management charges will be levied and all other charges as specified in Article 15 will be terminated”. IRDA has decided to have their products re-examined by a committee of actuaries. So the complainant is before us seeking direction against the opposite parties to grant life insurance coverage of 12.81 lakhs for a term of 10 years and all the insurance benefit as promised by the 1st opposite party to be received at the end of the 10th year without paying any further premium together with compensation of Rs. 2 lakhs and costs of the proceedings.
3. In CC No. 521/2009 as well the complainant has raised the very same contentions allegations against the opposite parties except for a difference in the coverage amount which is claimed to be 14 lakhs which is not controverted by the opposite parties.
4.The defense of the first opposite party.
At the time of issuance of the policies, the complainants were provided with the Standard Terms & conditions of the policy along with the policy document. These documents clearly mentioned the term of the policy, the various applicable charges and the standard terms and conditions of the policy. The subject policy is a Unit Linked Product (ULIP) and a ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs. The husband of complainant herein has filed another complaint bearing no. 520/2009, against opposite party No. 1 on frivolous grounds. Complainant has on the same lines have crafted false grounds to file the present complaint. The intentions of the complainant are spelt out from the same to avoid payment of premium due. The sum assured was given Rs. 14,03,000 but when the customer requested for change in date of birth the cover level was provided for the age of 51 years and sum assured accordingly reduced to 12,81,000/- and the consent for the same was also given by the complainant vide letter dated 24-08-2006.The complainant till date has paid Rs. 1,22,000/- towards the premium of the subject policy. The complainant can reinstate the subject policy within two years from the date of lapsation by paying outstanding premium towards the policy and also has option to get it surrender after reinstating it as per terms & conditions of the policy. It is submitted that a mere reading of Article 7 of the Standard Terms and conditions that the non-payment of premium towards the policy for prescribed period rendered the policy in paid up mode. The complainant had herself and at her own option opted for the subject product and on the basis the proposal form filled the subject policy and was issued to her.
5. The version of the 2nd opposite party
The averment that the 2nd opposite party informed the complainant’s husband that Bank of Punjab was the promoter of M/s. Aviva Life Insurance Co. and advised the complainant to invest in Unit Link Insurance policy is denied. The 2nd opposite party did not ever advise the complainant’s husband about any investments much less unit linked insurance policy of the 1st opposite party. The averment that the 2nd opposite party along with Mr. Firoz Sadik Sait went and met the complainant at her office is denied. It is submitted that in the year 2006, the 2nd opposite party was in the grade of Assistant Manager, Operation General Banking with the Centurion Bank of Punjab and was in charge of General Banking, cash transaction entry verification, DD’s, FD’s Forex transaction etc. This opposite party was not responsible for the sales or marketing activities of the Bank. The bank had dedicated sales personnel for the same. The requirements of the complainant or the details of the policy, if any, offered to the complainant is not in the knowledge of this opposite party.
6. Despite service of notice from this Forum the 3rd opposite party did not respond to for their own reasons. The complainant in CC No. 521/2009 was examined as PW1, Exts. A1 to A10 were marked on his side. The 2nd opposite party was examined as DW1. Neither oral nor documentary evidence was adduced by the 1st opposite party. Heard the counsel for the contesting parties.
7. The points that arose for consideration are as follows.
i. Whether 1st opposite party is liable to issue insurance coverage of 12.81 lakhs and 14 lakhs respectively to the complainants for a term of 10 years and all the investment benefits as undertaken by the 1st opposite party at the end of 10th year without paying any further premium.
ii. Whether the complainants are entitled to get compensation of Rs. 2 lakhs each from the opposite parties.
iii. Costs of the proceedings.
8. The complainant in CC.521/2009 was examined as PW1 PW1 deposed that while going through the terms and conditions of the party they are ambiguous inherently possible, the same has not been controverted by the 1st opposite party. In General Assurance society Ltd Vs. Chandumul Jain & Anr (1996) 3 SCR 500 while interpreting the insurance policy the Hon’ble Appex Court has held that “documents like the proposal, cover note and the policy are commercial documents and to interpret them commercial documents and to interpret them commercial habits and practice cannot altogether be ignored and that the contract is likely to be construed ‘contra proferentem’ that is against the company in case of ambiguity or doubt”. The aforesaid judgment is relied upon in the case of United India Insurance Co. Ltd. Vs. Pushpalya Printeers 1 (2004) CPJ 22 (SC) =(2004) 3 SCC 694 wherein the Hon’ble Court held that “where the words of a document are ambiguous, they shall be constrained against the party who prepared the document” . We fully follow the above judgments.
9. The learned counsel for the complainant canvassed our attention towards the anomalies that crept in the nomen clatures in Ext. A1 policy. We are not to delve into the matters in depth unnecessarily since prima-facie the complainants in the above cases have remitted 2 years insurance premiums with the 1st opposite party, which has squarely met the demands of the opposite party and that without demur. At present 2 options are before the complainants are is to continue with the present policy or to discontinue the same. Since the complainant has expressed his displeasure or unwillingness to proceed with the impugned policy the remaining option is to opt out. At this juncture it is worthwhile to note the provisions in Insurance Regulatory and Development Authority. (Treatment of Discontinued Linked Insurance Parties) Regulations 2010; dated 01-07-2010 does not apply in this case since no retrospective effect is contemplated for the same.
10. Having been blind to the tall offers of the 1st opposite party it seems that the complainants herein each had evidently remitted the insurance premiums for 2 years @ Rs. 61,000/- each per year whereas it has to be noted that they did not apply their minds fully to the contract it is a primary dictum of law that the buyer has to beware which is classically been put as ‘caveat emptor’ which every buyer or consumer is supposed to know because of another dictum of law that ‘ignorance of law’ is no excuse which is put as another exalted ‘ignorantia juris non excusat’. Though the above Regulation has no retrospective effect it does substantiate the Rule of law which on account of natural justice the complainants have a relief.
11. We allow the complaints to the extend that the complainants are entitled to get refund of the premium amounts from the 1st opposite party together with interest @ 12% p.a. from each payment till realization. It would not be out of place for this Forum to observe that an enterprise like the 1st opposite party should not go to entice consumers so unnecessarily. Matters having been well settled for aforesaid reasons we order no costs or compensation.
Pronounced in the open Forum on this the 30th day of November 2011
Sd/- A Rajesh, President.
Sd/- Paul Gomez, Member
Sd/- C.K. Lekhamma, Member.
Forwarded/By Order,
Senior Superintendent.
