CONSUMER DISPUTES REDRESSAL FORUM (EAST)

GOVT. OF NCT OF DELHI

CONVIENIENT SHOPPING CENTRE, SAINI ENCLAVE: DELHI-92

CC No.688 /2014:

In the matter of:

Sh. T.Vijayan

R/o. F – 53, Sector – 56,

Noida – 201 301 (UP)

Complainant

Vs

1. The Manager Axis Bank

    Swasthiya Vihar Branch,

    New Delhi – 110 092

2. Regional Manager

    Metlife India Insurance Co. Ltd.

    I^st Floor, Himalaya House,

    23, Kasturba Gandhi Marg,

    New Delhi – 110 001

   Respondents

ORDER

Ms. Poonam Malhotra, Member :

            This brief conspectus of facts of the present complaint is that lured by the assurance of high returns of Respondent No.I, the complainant subscribed to an insurance policy of Respondent No.II by making a payment of Rs.25,000/- through cheque and signed some blank documents.  Vide Letter dated 04/02/2007 the Respondent No.II acknowledged the receipt of Rs.25,000/- and vide letter dated 26/02/2008 it issued a Policy bearing No.1200800488352 to the complainant containing its Terms & Conditions.  It is alleged that at the time of selling the policy the Respondent No.I had assured to the complainant that he has to make the payment of premium of first three years and he will be entitled to withdraw the deposited amount alongwith returns and Clause 15 of the Policy Conditions corroborated with the said assurance.   It is further alleged that the complainant paid regular premiums of Rs.25,000/- each for the first three years on 04/12/2007, 27/02/2009 and 23/02/2010.  Vide Letter dated 22/02/2011 delivered by the complainant at the Noida Office of Respondent No.II, the complainant informed Respondent No.II of his intention to claim the surrender value.  It is alleged that in the year 2013 the complainant started getting telephonic calls from Respondent No.II informing about the special concession being offered to its existing customers by converting the amount deposited by way of premium into a Fixed Deposit with an assured interest rate of 10% p.a. and he was asked to hand over the original policy documents alongwith the Discharge Voucher to it.  In reply to this offer the complainant asked the Respondent No.II to send their offer in writing to him but no such offer was received in writing from them.  Apprehensive complainant approached the Noida Office of Respondent No.II where he met one Mr. Vikas Tyagi (Mobile No.9873956550) who after checking the records confirmed that Rs.75,000/- had been received by them and he told that their Bangalore Office has auto-closed the account of the complainant and surrender value of Rs.44,220/- was payable to him as against Rs.75,000/- paid by him.  He also advised the complainant to submit the policy documents, a cancelled cheque as proof of bank account, residential proof, discharge voucher, etc. so that  the refund of Rs.44,220/- can be processed.  It is alleged that there is no provision of auto – cancellation of insurance policy under the Contract of Insurance and Clause 21 of the Terms & Conditions of the policy do not apply to his case.  The complainant has prayed for the refund of Rs.75,000/- with interest @ 18%, compensation of Rs.1,00,000/-  and Rs.15,000/-  as cost of litigation.

In response to the notices issued, both the respondents put up appearance.  No Written Statement filed by Respondent No.II despite opportunity provided and case proceeded exparte against it.  In the written Statement filed by Respondent No.I it has has denied all the allegations and has prayed for the dismissal of the present complaint.  They have pleaded that they have acted as a facilitator/referral agent between insurer and insured as such there is no privity of contract between the complainant and Respondent No.I.

Evidence by way of affidavit filed by the complainant and Respondent No.I in support of their respective cases.    

            Heard and perused the record.

            Before going into the merits of this complaint, it is significant to mention here that a duty is cast upon the Court /Forum to look into the aspect of limitation irrespective of the fact that limitation has not been set up as a defence.  Inspite of the fact that the respondent appeared in the present complaint it did not contest it.  In the present case, the complainant had moved an application dated 22/02/2011 informing the Respondent No.II of his intention to claim the surrender value.  As such the cause of action arose to the complainant on 22/02/2011 and it remained subsisting thereafter as neither the Respondent No.II has paid to the complainant the the amount due to him as surrender value nor it has refused him.  As such the cause of action is continuous and subsisting till date and the complaint is not barred by limitation.

In so far as the Respondent No. I is concerned there are no allegations in the entire complaint regarding any deficiency or unfair trade practice on their part.  Nor there is any evidence on record to show that they are in any way actively involved in any unfair trade practice.  As such the complaint as against the Respondent No. I is devoid of any merit.

It is an admitted fact that the complainant subscribed to the Whole Life Unit Linked Insurance Policy of Respondent No.II bearing No.1200800488352 to the complainant containing its Terms & Conditions and paid regular annual premiums of Rs.25,000/- every year for the first three years.  Thus, in all he paid Rs.75,000/- towards the premium in the first three years.  The complainant was covered under the said policy for 42 years i.e., till 29/03/2049.  Since the policy in question was a unit linked insurance policy, the Respondent No.II was under an obligation to intimate the complainant and keep him updated about the funds/schemes in which his money was invested by them and the profits earned from time to time, but the same has not been done in the case in hand. It is pertinent to mention here that this has become a practice with the private insurance companies to entrap the simple innocent citizens on the pretext of providing insurance cover to them and thereafter fleecing them and usurping their hard earned money by recklessly investing their money in funds that do not fetch desired returns as assured to the persons seeking insurance cover at the time of selling the policy to them.  It is not out of place to mention here that hiring of advisors by these insurance companies who are incompetent, inept, having insufficient knowledge and expertise to study and handle the day-to-day fluctuations in the capital market minutely for taking major decisions with regard to the investments to be made using the money of insured persons such as the complainant in the present case in cases where policy is a unit linked policy as their decision affects these insured persons whose money is put to stake by them.  The insurance companies on the advice of these incompetent advisors often make investments by even ignoring the market rating of the funds in which they are advised to make investments and the insured persons are not made aware about these investments so made.   Eventual loss in the hands of the insurance companies is ultimately passed on to the insured persons whose money has been invested in those funds by the insurance companies. This is nothing but sheer negligence and deficiency in service on the part of insurance companies. 

Also, the Respondent No.II was under an obligation to intimate the formalities to be completed by him for the payment of the surrender value as on 22/02/2011 to him.   Not informing the complainant about the formalities to be completed for release of the amount after receiving a requisition for claiming the surrender value and withholding the amount due to the complainant is out-and-out a case of malpractice thriving in the insurance sector where they continue to use the money of the consumers to earn profits despite receiving a request for the surrender of the policy.  These malpractices need to be taken care of by IRDA and other competent authorities and Government of India.  It is a need of the hour that IRDA should formulate guidelines to regulate the functioning of the insurance companies to preclude the malpractices prevalent in the insurance sector.

The Ld. Cl. for the complainant further argued that he has an apprehension that the respondent may not manipulate the record and thereby provide the wrong information regarding the Fund Value as on 22/02/2011 by restricting the fund value on surrender to Rs.44,220/-  solely to corroborate with its offer of refund of Fund Value of Rs.44,220/- as conveyed by Sh.Vikas Tyagi or to quote a figure even below Rs.44,220/-.  

Also the allegations made by the complainant qua Respondent No.II and affirmed by him in his affidavit on oath are taken to be true and there is no reason for us to disbelieve them.

            Taking into consideration the observations and discussion made supra, we hold the Respondent No.II guilty of unfair trade practice and the present complaint.  We direct the Respondent No.II to provide on oath by way of an affidavit the complete details/month-wise Fund Value of the policy, the amount invested and profit earned, investment pattern followed, etc.  upto 22/02/2011, the date on which he moved an application intimating the Respondent No.II of his intention to surrender the policy and claim the surrender value and refund to the complainant the amount as per the surrender value as on 22/02/2011 with interest @ 10 % p.a. thereon reckoning from 22/02/2011 till it is finally paid to the complainant within 45 days from the date of this order.

            Since the complainant has been harassed and traumatised we, further, award compensation of Rs.25,000/- to the complainant on account of harassment, mental pain and agony.  We, further, award Rs.5,000/- to the complainant as the cost of litigation.  If the amount of compensation and cost is not paid within 45 days from the date of this order the complainant shall be entitled to get interest @ 10% p.a. on the amount of compensation and cost also till it is finally paid to the complainant.          

Copy of the order to be sent to all the parties as per rules.