DISTRICT CONSUMER DISPUTES REDRESSAL FORUM  PALAKKAD

Dated this the 14^th day of June 2018

Present   : Smt.Shiny.P.R. President

              : Smt.Suma.K.P. Member                                Date of filing:  18/01/2017

              : Sri.V.P.Anantha Narayanan, Member

(C.C.No.15/2017)

Mrs.Mandakath Balakrishnan Usha (Unnikrishnan),

W/o V.Krishnan,

15/722,

Keerthy,

Kunnathurmedu.                                                                -        Complainant

(By Adv.Stanley James)

 V/s

1.  The Manager,

      Axis Bank,                                                                 -        Opposite parties

      City Centre,

      English Church Road,

      Palakkad – 678 014.

     (By Adv.Ullas Sudhakaran)

2.  The Manager,

      Max Life Insurance Company Ltd,

      Operation Centre,

      Plot No.90A, Sector 18,

      Udyog Vihar,

      Gurgaon (Haryana) 122 015.

                                                          O R D E R

By Smt.Suma.K.P. Member

          The case of the complainant is that he is a policy holder, bearing No.876939794 “of Max Life Insurance Company” run by the opposite party number 2.The 1^st opposite party was the introducing middle man with whom the complainant has been maintaining an account and thereby a close dealing with them.Therefore, such personal relations induced the complainant for taking a policy from the 2^nd opposite party.  The 1^st opposite party had undertaken the responsibility for timely remittance of ensuing premiums as and when needed or transferring the required amount from the account of the complainant which is already held with.  Furthermore the 1^st opposite party being as Liaison agent, adviser and also attorney of the said insurance company, generated more trust and belief in the mind of the complainant which may also be an additional factor in joining hands with the 2^nd opposite party.  The complainant alleges that he had paid two premiums amounting Rs.4,46,400/-.  The 1^st opposite party failed to make the payment of the third premium and also didn’t inform the complainant about the opportunity to revive the policy within 6 months.  The 2^nd opposite party has terminated the policy for alleged non-payment of premium.  The complainant alleges that the non-payment had occurred due to the deficiency in service of the 1^st opposite party and the failure on the part of both the opposite parties in intimating the opportunity to revive the policy within 6 months.  Due to the deficiency in service of the opposite party’s the complainant has lost the benefits accruing from the policy and also the premium amount paid by the complainant.  Hence, the complainant had approached before the Forum for the redressal of his grievance. 

Notice was issued to the opposite parties for appearance.

1^st opposite party entered appearance and filed version contending the following.  They admits the fact that the complainant had availed the policy issued by the 2^nd opposite party.  They submits that the policy copy with condition was issued to the complainant which contains all whereabouts of the 2^nd opposite party, which a policy holder is expected to know.  1^st opposite party also admits that the complainant’s account is being maintained by them but denies the claim that they had undertaken the responsibility for timely remittance of ensuing premiums as and when needed by transferring the required amount from the account of the complainant.  The responsibility to pay premium as and when it falls due is exclusively on the complainant.  The complainant at the time of availing the policy issued by the 2^nd opposite party had given an ECS mandate form under which complainant had granted authority to the 2^nd opposite party for electronic clearance of premium amounts from the complainant’s account as and when it falls due and hence it is the duty and responsibility of the complainant to maintain sufficient balance in the account to pay off the premium amount as and when it falls due.  The 1^st opposite party is only the corporate agent of the 2^nd opposite party.  The complainants claim that she had paid premium twice totaling Rs.4,46,400/- is not correct.  She had paid premium amount only once and that amount was electronically cleared from her account on 25.01.2013.  The amount so debited from the complainant’s account was adjusted towards the 1^st premium and service tax of Rs.2,30,097/-.  The 2^nd premium amount could not be debited from the complainant’s account as there was no sufficient funds in the complainant’s account when the electronic clearing as authorized by the complainant was attempted by the 2^nd opposite party on 4 different dates.  The 1^st opposite party has no legal authority or right to debit amount from the complainant’s account and to utilize the said amount for payment of premium towards the policy availed by the complainant unless such an authorization in writing is given by the complainant to the 1^st opposite party and admittedly no such written authorization was given by the complainant to the 1^st opposite party.  Out of failure of each attempted ECS clearing, the complainant was informed by the 1^st opposite party about the same through SMS alert as well as over phone and requested to maintain adequate balance for enabling the clearing and inspite of being aware of the same, complainant failed to maintain adequate balance in her account and failed to effect payment of premium either within the due date or within the grace period of 6 months and hence the same has resulted in the policy issued to the complainant getting lapsed due to the default.  Complainant was provided with information’s regarding the due dates for payment of premium as well as about the grace period available at the time of availing Ext.B3 policy.  In addition to that a “welcome call” was made by the 2^nd opposite party to the complainant after availing the policy.  The complainant was provided with all necessary information with regard to the product availed by her, terms and conditions regarding the payment of premium and due dates and grace period and she was provided with amble opportunity for clearing her doubts regarding the policy availed by her.  The 1^st opposite party is an unnecessary party in the above complaint and the above complaint is bad for misjoinder of party.  There is no deficiency of service or unlawful trade practice on the part of 1^st opposite party and the complainant is not entitled to any of the reliefs prayed for in the complaint against the 1^st opposite party. 

2^nd opposite party also filed their version stating the following. 

They contended that the complainant had suppressed many vital facts about the fact of this case.  They also admitted the complainant had availed the above policy and at the time of availing the policy from them, the complainant had opted ECS method of payment and had given the sign ECS mandate form by which the complainant had authorised the 2^nd opposite party for Electronic Clearance of premium amount from the complainant’s account maintained by 1^st opposite party.  The complainant had paid the 1^st premium amount through DD and thereafter failed to pay the premium in time.  The ECS transaction for the 2^nd premium had sent on draw date.16.01.2014 for premium amount of Rs.2,26,648.44/- to the complainant’s account via BJ reference number 100532921 has been dishonored due to insufficient balance in the account maintained by the complainant with 1^st opposite party.  The fact of bounce in the ECS transaction request was informed to the complainant vide letter dated.20.01.2014 and requested the complainant to arrange sufficient balance before 01.02.2014, since the 2^nd opposite party is sending the transaction again on 01.02.2014.  But, the re-debit ECS transaction for the complainant’s policy send on draw date.03.02.2014 for Rs.2,26,648.44/- to the complainant’s account via BJ reference number 10138296 has been again dishonored due to insufficient balance.  The above said fact was informed to the complainant vide letter dated.05.02.2014 and requested the complainant to deposit the premium amount through any of the available options to avoid late payment charges.  It was also informed that the non receipt of timely premium may result lapsation of policy which results in loss of all the benefits of the policy.  Again on 18.06.2014 a letter was issued to the complainant that the re-debit ECS transaction for the policy had sent on draw date.16.06.2014 which has also been dishonored due to insufficient balance.  The complainant was also informed that the ECS transaction will be again sent on 01.07.2014.  But the complainant never arrange sufficient amount to honor the ECS reference in her account.  It is an undisputed fact that the complainant is duty bound to arrange the sufficient amount in her bank account for ECS transaction for the payment of policy premium amount in time and the complainant failed to do so.  Hence the policy has breached the revival period and the policy is lapse.  It is submitted that the failure of complainant to maintain adequate balance in her account resulted the bounce of Electronic Clearance initiated by this opposite party thereby lapsing of the policy.  In such occasion the policy holder is not entitled to get the amount paid as premium or get the policy reinitiated.  Being a defaulter of premium amount the complainant has no locus standi before this Forum to claim the amount paid as premium or get the policy reinstated.  Hence the complaint is liable to be dismissed.  It was also further submitted that there has been no dispute under Consumer Protection Act between the complainant and the 2^nd opposite party as the complainant has failed to establish deficiency in service on the part of 2^nd opposite party.  The relief claimed by the complainant against the 2^nd opposite party are wholly unreasonable and unsustainable in law and the 2^nd opposite party not liable to pay any amount or compensation to the complainant and the complaint is liable to be dismissed. 

Complainant and opposite parties filed their respective chief affidavits.  Exts.A1 to A8 was marked from the part of complainant.  Exts.B1 to B5 was marked from the side of opposite parties.  Opposite party 2 filed application to call for the documents from the complainant and 1^st opposite party also another application seeking permission to cross examine the complainant. 

1^st opposite party filed affidavit stating that the documents called for are not traceable.  Complainant produced the document, called for by the 2^nd opposite party.  Complainant also filed application as IA 333/17 seeking permission to cross examine Assistant Legal Manager of opposite party 2.  Complainant was cross examined as PW1.  2^nd opposite party also file application as IA 19/18 seeking permission to cross examine 1^st opposite party.  2^nd opposite party filed fresh affidavit.  The 1^st opposite party was cross examined by complainant as DW1.  Since opposite party 1 was not available for further cross examination complainant was directed to file interrogatories to the opposite party 1.  Interrogatories was filed to opposite party 1 and the opposite party 1 was filed answers for the same.  Opposite party 2 was not available for cross examination.  Evidence was closed and the matter was heard.  At the time of hearing opposite party 1 filed additional documents which was the account statement of the complainant to prove that there was no sufficient balance in the account maintained by the complainant at the relevant period.  The said document was marked as Ext.B1 (a). 

The following issues that arise for consideration are.

1. Whether there is any deficiency of service from the part of opposite parties?
2. If so, what are the relief and cost?

Issues No.1 & 2

          Heard the parties.  The main grievance of the complainant is against the 2^nd opposite party.  According to the complainant she had remitted premium payable for the policy availed by her for two consecutive years and that the default in payment of 3^rd premium onwards is due to omission on the part of 1^st opposite party to transfer the required amount from her account towards the premium and that there was no communication from the opposite parties to pay the premiums and that was the reason why the policy had lapsed and she had suffered monetary loss. 

          We have perused the documents as well as affidavits filed by the parties.  The complainant is relying on Exts.A1 & A2 to prove the payments.  Ext.A1 is the annual credit summary issued by the 2^nd opposite party to the complainant.  In Ext.A1 the total premium paid is shown as Rs.4,46,400/-.  It was also further stated that “on this mile stone, we would like to inform you that an interest of 100 has been applied to the premium paid by you and you have been credited Rs.1,20,000/- to be paid in the period from 16-Jan-2014 to 16-Jan-2025”.  Admittedly the mode of payment of premium as opted by the complainant is ECS as proved by Ext.B4.  The ECS mandate form was given by the complainant to the 2^nd opposite party.  According to the 1^st opposite party they have no legal authority or right to debit amount from the complainant’s account and to utilize the said amount for payment of premium unless such an authorization in writing is given by the complainant to the 1^st opposite party.  They had also contended that the premiums could not be debited from the complainant’s account even as per ECS mandate as there was no sufficient funds in the complainant’s account when the ECS directions were received on 01.01.2014, 06.02.2014, 18.03.2014 and finally on 16.06.2014 and the same is proved by Ext.B1 (a) statement, statement account pertaining to complainant’s SB account maintained by the 1^st opposite party.  As per Ext.B1 statement of accounts it can be seen that the 2^nd premium amount is not debited from the complainant’s account.

The complainant had filed a petition to cross examine the authorised signatory of opposite party 2 as IA 333/17 but the authorised representative of the 2^nd opposite party did not turn up for cross examination.  Hence an adverse inference can be drawn against opposite party 2 for the non appearance for cross examination.  Ext.A1 is an undated document issued by 2^nd opposite party.  In Ext.A6 the 2^nd reference is about the communication from 2^nd opposite party to remit the premium due on 16.01.2015 which is the 3^rd premium.  The 3^rd reference in Ext.A6 is with regard to Ext.A1.  On reading with the statement in the chief affidavit filed by the authorised person of 2^nd opposite party it is stated in para 10 that the ECS for 2^nd & 3^rd premium got bounced.  The definite case of 2^nd opposite party is that the complainant had not paid the 2^nd premium and the policy stands lapsed for nonpayment of the 2^nd premium.  The complainant alleges that if the 2^nd premium was not paid the policy would have lapsed in the month of July 2014 and the policy cannot be reinstated.  If that be the case then 2^nd opposite party should not have sent the ECS for the 3^rd premium which is a question which remain unanswered by 2^nd opposite party.  According to the complainant sending ECS for the 3^rd premium itself is an amble proof and an admission from 2^nd opposite party that they have received two premiums.  Ext.A2 is the insurance premium receipt dated.16.06.2014 issued by 2^nd opposite party to the complainant.  Opposite party 2 also collected Rs.250/- as reinstatement interest. 

From the above documents it is obvious that the opposite party 2 has categorically admitted that they are in receipt of two premiums which amounts to Rs.4,46,400/-.  However, Ext.A2 insurance premium receipt was issued on 16^th June 2014.  Again on 26^th June 2014 opposite party 2 sent Ext.A4 to the complainant stating that the insurance policy is lapsed due to the nonpayment of premium which is incorrect for the reason that in any case the policy will not lapse before 5^th July 2014.  Ext.A6 is the letter by the complainant to opposite party 1 directing the opposite party 1 to remit the premium amount to be paid on 16.01.2015 together with Rs.250/- as reinstatement interest.  The opposite party 1 had admitted the receipt of the Ext.A6 letter by the answers for the interrogatories filed by the complainant but, in the counter filed by opposite party 1 in IA 304/17 opposite party 1 had stated that the said document sought to be produced could not be traced out in the file of the 1^st opposite party and hence not in a position to produce the same.  Complainant alleges that though opposite party 1 had received the letter on 19^th September 2015, no action was taken and no communication of insufficient fund was intimated to the complainant by opposite party 1.  Ext.A2 was issued by opposite party 2 on 16^th June 2014 and on 18^th June Ext.B5 was issued and on 25^th June Ext.A4 was issued within a span of 10 days opposite party 2 is having three different stands and later the 2^nd opposite party had sent a reminder of the 3^rd premium to be paid on 16.01.2015.  Complainant submits that if the policy is already lapse/or treated as discontinued as per Ext.A4 why should she pay the 3^rd premium.  From the above stated facts it has to be inferred that the 2^nd opposite party are not maintaining any proper account and is functioning perfunctorily.    The complainant alleges that opposite party 1 has neither transferred the premium amount nor intimated the complainant about the insufficiency of funds if any.  Opposite party 1 contends that complainant though claimed that she had provided standing instructions to the 1^st opposite party to pay the premium amount to the 2^nd opposite party it is false and not proved by the complainant.  As per Ext.A4 it can be seen that the direction was in fact given to 2^nd opposite party.  They also contended that after failure of each attempted ECS clearing the complainant was informed by the 1^st opposite party about the same through SMS alert as well as over phone and requested to maintain adequate balance for enabling the clearing and inspite of being aware of the same, complainant failed to maintain adequate balance in her account and failed to effect payment of premium either within the due date or within the grace period of 6 months and hence resulted for the lapse of the policy. 

Next issue in this case if whether the complainant is entitled to receive back the premium paid together with interest.  Since IRDA regulation directs the insurance companies to refund the premium collected in the discontinued policy with interest any terms as stipulations in the contract against the IRDA regulations are void. 

Considering the above facts the above complaint is allowed, and we direct the 2^nd opposite party to refund an amount of Rs.4,46,400/- (Rupees four lakh forty six thousand four hundred only) together with interest @ of 4% accruing thereof from 25.06.2014 till the date of realization and also to pay an amount of Rs.5,000/- (Rupees five thousand only) as compensation for the loss, damage, injury and mental agony caused to the complainant due to the deficiency of service and unfair trade practice on  the part of the 2^nd opposite party.  The 1^st opposite party is exonerated from the liability.  There is no order as to cost. 

The aforesaid amount shall be paid within one month from the date of receipt of this order; failing which the complainant is entitled to realize 9% interest p.a from the opposite party on the total amount due to him from the date of this order till realization.

          Pronounced in the open court on this the 14^th day of June 2018.

          Sd/-

                   Shiny.P.R

                   President 

                         Sd/-       

                   Suma.K.P

                    Member

           Sd/-

    V.P.Anantha Narayanan

                   Member

Appendix

Exhibits marked on the side of complainant

Ext.A1          -  Annual Credit Summary issued by Max Life Insurance to the complainant

Ext.A2          -  Original Insurance Premium Receipt issued by Max Life Insurance to the

             complainant

Ext.A3          -  copy of letter sent by the complainant to Axis Bank

Ext.A4          -  Copy of letter sent by Max Life Insurance to the complainant

             dated.25.01.14

Ext.A5          -  Copy of e mail letter dated.20.10.15

Ext.A6          -  Copy of registered letter dated.14.09.2015

Ext.A7          -  Postal Acknowledgement

Ext.A8          -  Policy document issued by Max Life Insurance to the complainant

Exhibits marked on the side of Opposite parties

Ext.B1 -  Statement of account

Ext.B2 -  Proposal form

Ext.B3 -  Copy of Annexure D of Max Life Insurance Company

Ext.B4 -  Annexure E of Max Life Insurance Company dated.05.02.2014

Ext.B5 -  Annexure F of Max Life Insurance Company dated.18.06.2014

Witness examined on the side of complainant

PW1   -  Usha

Witness examined on the side of opposite parties

DW1   -  Santhosh.P.G

Cost