PER MR.B.S.WASEKAR, HON’BLE PRESIDENT

1)              The present complaint has been filed by the complainant under section 12 of the Consumer Protection Act, 1986. According to the complainant, she took insurance policy from the opponent in the year-2007 when she availed the home loan from Centurion Bank of Punjab.  She signed blank application form.  She was told that she would get life insurance for Rs.15.30 Lakhs for fifteen years and she would get profit and return would be minimum of Rs.15.30 Lakhs at the end of the term.  She was told to pay premium of Rs.2,04,000/- per year for three years, and thereafter, it would be optional to pay premium.  Accordingly, she paid premium for three years i.e. 2007, 2008 and 2009 total Rs.6.12 Lakhs. The policy document was not received by her. She got communication about the growth fund value of Rs.3,62,637/- in the year 2008 and Rs.6,32,799/- in the year-2010.  The complainant was trying to contact the opponent to get the position of her investment for eight months ending July-2012.  She was told that her policy has been ‘Auto Foreclosed’.  The complainant got the cheque for refund amount of Rs.3,97,638/- on 18^th August, 2012.  She received Rs.2.15 Lakhs less than the principal amount.  The complainant lodged complaint with the opponent’s Director on 3^rd September, 2012, then to Grievance Redressal Officer on 30^th November, 2012 and the Insurance Ombudsman on 8^th January, 2013.  There was no response. 

2)                 The opponent has not given the policy document to the complainant and auto foreclosed the policy and thereby cheated her.  Therefore, the complainant has filed this complaint for refund of Rs.8,98,949/- with interest at the rate of 18% per annum.  She has also claimed damages of Rs.2 Lakhs for mental harassment and cost of litigation of Rs.50,000/-.

3)                 The opponent appeared and filed written statement.  It is submitted that the claim is barred by limitation.  The complainant has not cancelled the policy within the free look of fifteen days.  The policy is unit linked which is for ‘commercial purpose’, therefore, the complainant is not the ‘consumer’. The complainant has made allegations of fraud and cheating which can not be decided before this Forum in summary proceeding.  The complainant has duly signed the proposal form.  All the details information was given to the complainant and thereafter the policy was issued.  Welcome Letter was issued to the complainant along with the policy giving free look of period of fifteen days.  The complaint is filed after seven years.  The complainant has paid premium for three years and thereafter failed to pay the premium therefore the policy was foreclosed and the balance amount of Rs.3,97,638/- was paid to the complainant by cheque dated 3^rd August, 2012 which was encashed by the complainant on 22^nd August, 2012.  Therefore, the complainant is not entitled for any relief as prayed.

4)                 After hearing both the parties and after going through the record, following points arise for our consideration.

POINTS

REASONS

5) As to Point No.1 & 2 :- It is not disputed that the policy was issued in favour of the complainant and she paid premium for three years i.e. for 2007, 2008 and 2009 total Rs.6.12 Lakhs. It is also not disputed that the policy was auto foreclosed and the amount of Rs.3,97,638/- was refunded to the complainant.  The said amount was encashed by the complainant.  It is alleged by the complainant that she was cheated by the opponent.  It is submitted by the learned advocate for the opponent that Welcome Letter was issued to the complainant along with the policy document and free look period for fifteen days was given to the complainant with liberty to cancel the policy.  Admittedly, the said right was not exercised by the complainant to cancel the policy.  According to the complainant, policy document was not received by her. It is not disputed that the policy was issued in the year-2007 and the complainant paid premium continuously for three years i.e for 2007, 2008 and 2009 total amount of Rs.6.12 Lakhs.  As the complainant paid premium for three years, it can not be believed that she has not received the policy document.  The ordinary prudent man will not pay premium for three years without receiving the policy document and knowing the contents of the policy document.  Therefore, the submission of the complainant that he did not receive the policy document can not be accepted.  It was necessary for the complainant to know the terms and conditions of the policy before paying the premium amount.  The complainant is making allegations after seven years from the issuance of policy.  The learned advocate for the opponent has submitted that the complainant is not entitled to make such allegations after seven years.  For this purpose she has placed reliance on the judgment of Hon’ble National Commission in Revision Petition No.3390 of 2013, in the case of Kishor Chandrakant Rathod –Versus- The Managing Director, ICICI Prudential Life Insurance Company Limited, decided on 21^st May, 2014. In para 8 of the judgment, the Hon’ble National Commission has held as under :

Para 8: It must be borne in mind that the petitioner is an educated person.  He was supposed to read each and every terms and conditions of the policies.  There are no oral rules and conditions of the policy.  One has to act in accordance with the frame work of the policy.  The complainant is not a gullible person who could have been taken up garden path.  It appears that he did not act prudently.  He used the ink but not his brain.  It is well settled that man may tell lies but the documents cannot.  Everywhere he has mentioned that he was informed by a Bank official.  The name of that Bank official did not see the light of the day.  His story does not just stack up.  No deficiency can be attributed to the respondent.  They have acted in accordance with the Law on the other hand the complainant swallowed the bait.

In the instant complaint before us also, the complainant is educated.  She has submitted the proposal form duly signed by her. She has also paid premium for thee years total amounting to Rs.6.12 Lakhs.  It was expected from her to read the proposal form and policy documents but she failed to do so. The opponent has also placed reliance on the judgment of Hon’ble National Commission in Revision Petition No.634 of 2012, in the case of Shrikant Murlidhar Apte –Versus- Life Insurance Corporation of India, decided on 2^nd May, 2013.  In view of this judgment, it is necessary to cancel the policy within free look period of fifteen days. The complainant has failed to exercise her right therefore she is not entitled for the refund of the entire amount. 

6)                 In the complaint, the complainant had made allegations of fraud.  It is submitted by the learned advocate for the opponent that the proceeding before this Forum is summary proceeding.  The allegations of fraud requires detailed investigation and evidence which can not be done in summary proceedings before this Forum. At this juncture, we would like to upon judgment of Hon’ble Supreme Court in Civil Appeal No.4091 of 2006, in the case of Oriental Insurance Company Limited –Versus- Munimahesh Patel, decided on 12^th September, 2006.  In para 6 and 7, the Hon’ble Supreme Court has held as under :

Para 6 :The Commission noted that the specific stand of the  appellant was that there was mis-declaration in the proposal  form and the false claim that the respondent's wife was a  teacher which as now appears is not the correct position.  It also accepted that she was really not a teacher. Proceedings before the Commission are essentially summary in nature and adjudication of issues which involve disputed factual questions should not be adjudicated. It is to be noted that Commission accepted that insured was not a teacher.  Complainant raised dispute about genuineness of the documents (i.e. proposal forms) produced by the appellant. The Commission having accepted that there was wrong declaration of the nature of occupation of the person insured, should not have granted the relief in the manner done. 

Para 7 : The nature of the proceedings before the Commission as noted above, are essentially in summary nature. The factual position was required to be established by documents. Commission was required to examine whether in view of the disputed facts it would exercise the jurisdiction. The State Commission was right in its view that the complex factual position requires that the matter should be examined by an appropriate Court of Law and not by the Commission.

In the instant complaint before us also, there are allegations of fraud.  In order to adjudicate the allegations of fraud, recording of detailed evidence is necessary which is not permitted in summary proceeding before this Forum. The complainant is at liberty to approach the appropriate court for deciding the allegations of fraud.  Moreover, the complainant has made allegations seven years after the issuance of policy and that too after payment of three premiums total Rs.6.12 Lakhs.

7)                 According to the complainant she paid premium of Rs.6.12 Lakhs but the opponent refunded only amount of Rs.3,97,638/- which is less than the principal amount by Rs.2.15 Lakhs.  It is submitted by the learned advocate for the opponent that the policy was auto foreclosed and the surrender value of the policy was paid to the complainant. It is further submitted by the learned advocate for the opponent that the complainant is entitled for only surrender value and not the entire premium amount.  For this purpose, she has placed reliance on the of judgment Hon’ble National Commission in Revision Petition No.663 of 1994 in the case of Life Insurance Corporation of India –Versus- Anil P.Tadkalkar, decided on 8^th November, 1995. In para 4 of the judgment, the Hon’ble National Commission has held as under.

Moreover, we have not been able to understand how the complainant can claim refund of all the premia paid by him during the period of the policies remained alive and the LIC had covered the risk.  If during this period the complainant had died (an event which did not occur) the insurer i.e. LIC would have had to pay the full amount due under the policies even though only some fraction of the premia would have been realized by that time by the insurer.  Hence on canceling the policies the complainant is only entitled to the surrender values of the two policies.  It is immaterial what circumstances prompted him to cancel the policies. 

In the instant complaint before us also, the complainant has enjoyed coverage for this period therefore the complainant is not entitled for the entire premium amount.           

8)                 Thus, there is no deficiency in service on the part of the opponent. In view of the abovesaid law laid down by the Hon’ble National Commission and the Hon’ble Supreme Court, the complainant is not entitled for the relief as prayed.  Hence, we proceed to pass the following order.

ORDER

1. Complaint stands dismissed.
2. Parties are left to bear their own costs.
3. Inform the parties accordingly.

Pronounced on 22^nd September, 2015