DISTRICT CONSUMER DISPUTES REDRESSAL FORUM (CENTRAL)

ISBT KASHMERE GATE DELHI

CC/266/2016

Sh. Yad Ram Nigam

S/o Late Sh. Garib Nigam

R/o M-19, Near Mother Dairy

Malka Ganj

Bharti Axa Life Insurance Co. Ltd.

E-1, 6^th Floor, Videocon Tower,

Jhandewalan Branch

SMC Insurance Broking Pvt. Ltd.

Parsavnath Metro Mall,

Near Pratap Nagar Metro Station,

Pratap Nagar,

Coram:       Ms. Rekha Rani, President

                   Ms. Manju Bala Sharma, Member

                   Dr. R.C. Meena, Member

ORDER

Ms. Rekha Rani, President

1. Instant complaint was filed by Sh. Yad Ram (in short the complainant) under Section 12 of the Consumer Protection Act 1986 as amended up to date against Bharti Axa Life Insurance Co. Ltd. (in short OP1) and SMC Insurance Broking Pvt. Ltd. (in short OP2) inter-alia pleading therein that in 2013 he was having certain dispute with M/s Reliance Life Insurance Company in respect of 4 policies of Rs. 50,000/- each.  In 2013, one Shailender Bhandari claiming to be general manager of IRDA offered his help to solve the problems of the complainant with Reliance Life Insurance Company.  He won the confidence of the complainant and introduced him to Prachi Sharma who misled the complainant.  Prachi Sharma lured the complainant to take certain policies of OP1 by stating that only one time premium had to be paid and the amount paid by the complainant would be returned along with bonus and interest by March 2014. 

When complainant received the policy documents he immediately contacted Prachi Sharma and Shailender Bhandari who reassured him that the amount will be paid by the end of March 2014.When complainant did not receive the money within the stipulated period, he wrote letters to OP for cancellation of the policies.

He also lodged a complaint with Insurance Ombudsman.His complaint was dismissed by Insurance Ombudsman vide order dated 13.02.2015.Complainant has prayed for direction to OP to pay to the complainant Rs. 6,68,000/- along with interest @ 18% per annum from the date of deposit till realization, Rs. 2,00,000/- as compensation for causing mental agony and Rs. 25,000/- as litigation expenses.

2. During the pendency of the matter, OP2 was impleaded pursuant to application under Order 1 Rule 10(2) CPC.
3. Both OPs appeared and contested claim vide separate replies.
4. OP1 contested the claim vide its reply pleading therein that neither Shailender Bhandari nor Prachi Sharma are its employees.  They are stated to be agents of OP2.  It is stated that OP1 is not liable for any misleading statement made by them to the complainant.  It is stated that OP2 is a separate legal entity duly licensed by IRDA who advise their customers on their insurance needs and thereafter arrange insurance policies from any insurance company and as per customer’s choice.  It is stated that Insurance Company does not have any administrative control over insurance brokers like OP2 and that all insurance brokers are governed by the provisions of IRDA (insurance brokers) Regulations 2002.  It is pleaded that IRDA also entertain applications against insurance brokers.  It is submitted that at the time of filling the proposal form, the agent acts as the agent of the insured and not of the insurance company and therefore an agent cannot be assumed to have authority from the insurer to write answers and details in the proposal form on behalf of the insured.  It is also stated that OP did not authorize any of its agents to make any false promises to any of its customers which is in variation to its product features and that it cannot be held liable for any act of such agents because such an act was outside the scope of agent’s authority.

It is further submitted that OP on receipt of the proposal form, benefit illustration and supporting documents issued the subject policies to the complainant.  The complainant had signed the documents containing the premium rates for the subject policies and made the declaration that he had read and understood the contents of the documents of the policies and accepted the same.  Further it is stated that the complainant had also signed the application form on the declaration and authorisation para where it is stated that he understood the nature and contents of the questions asked in the proposal form.  He had also signed benefit illustration where name of the respective plans along with their details like term, charges etc. of the policies were clearly mentioned.  It is further stated that as per terms and conditions of the policies, if the policies is not found suitable, the policies holder can get the policies cancelled by returning the policies and policy documents within 15 days of freelook period from the date of receipt of the policies.  It is stated that complainant requested for cancellation of the said policies beyond the statutory period of 15 days from the date of receipt of subject policies and therefore the complainant is not entitled to the claim.  It is also stated that complainant failed to pay the premiums of subject policies on due time.  Consequently, as per terms of the subject policies, the policies lapsed and no relief is payable under the lapsed policies.  On the basis of duly filled in proposal forms by the complainant referred by OP2 subject policies were issued by OP1 with the following features:

It is further stated that the complainant had opted for yearly/annual premium which is clearly indicated in the proposal forms.  The complainant also signed benefit illustrations and features after having understood the terms and conditions of the policies.  He was therefore aware of the terms and conditions with the features of the said policies, benefit illustration, key features etc.

5. OP2 namely SMC Brokers Pvt. Ltd. also contested the claim vide separate reply.  It is therein pleaded that the complainant is not a consumer under Section 2(1)(d) of the Consumer Protection Act nor any deficiency in service is there on the part of OP2.  It is alleged that complainant purchased the said policies from OP1 as an investment under which he was entitled to receive certain returns each year as per terms and conditions of the policies which makes it clear that primary purpose for entering into the disputed transaction was for investment which is a commercial investment.

It is also stated that OP2 is a licensed insurance broker and while sourcing each and every policies for the complainant, a pre-determined, transparent and standard procedure was followed in accordance with the prevalent market practice and Insurance Development and Regulatory Authority guidelines and its regulations.  It is also stated that subject policies were taken in the year 2013-2014 by the complainant from OP1.  It is stated that representative of OP2 visited the complainant and explained him the terms and conditions of the subject policies and it is only after obtaining satisfactory consent of the complainant towards information provided about the policies, complainant filled in and signed the proposal form for obtaining the policies.  It is also stated that Pre Log-in Verification Call (PLVC) was made confirming complainant’s willingness to purchase the subject policies and to verify that he understood the rights and obligations of the said policies. It is stated that in the PLVC it was clarified and confirmed from the complainant that he had signed the application form, customer declaration form, benefit illustration and other key features of the subject policies. It is also stated that complainant was informed that he would not be entitled to any extra benefits like credit card, O.D., free loan, etc.  He was also cautioned that in case of any promise for additional benefits like bonus or loan, he could disclose the same in the said call and further that he could cancel the said policies, if not found satisfactory, within a period of 15 days of signing the policies bond. It is further stated that after issuance of the policies, a welcome call was made. A final welcome call was given to the complainant by OP2 again confirming about details and the policies papers were dispatched. The complainant was advised to read the policies bonds and check application form filled in and signed by him to ensure that all the details filled in were same to which he had agreed.  It is denied that any false representation or any false promise was ever made by OP2. It is denied that complainant was assured of any interest or bonus or about term of the policies or amount to be paid.

6. Parties adduced evidence by way of affidavits. We have heard Sh. R.K. Mishra, counsel for complainant, Sh. Sarthak Bali, counsel for OP1 and Sh. Harvardhan Pathak, counsel for OP2.
7. It is not in dispute that the policies could be cancelled within a Freelook Period of 15 days.  Complainant has not placed anything on record that he approached OP for cancellation of policies within 15 days of the receipt of the policies documents.  Learned counsel for OP has relied on judgment of the National Commission in Shrikant Murlidhar Apte Vs. Life Insurance Corporation of India, Revision Petition No. 634 of 2012 dated 03.05.2013 in support of its contention that once 15 days of cooling off period is over, policies becomes binding on both the parties.  It is submitted that since complainant did not raise any objection during the Freelook Period of 15 days from the date of receipt of policies documents, it means that he agreed to the terms and conditions of the policies.  There is substance in said submissions.
8. OP1 in Para 9 (on merits) of its written statement has pleaded that complainant vide his letter dated 25/03/2014 for the first time alleged fraud and sought cancellation of policies which was beyond the period of 15 days of freelook period.

Complainant has not disputed the same in corresponding Para 9 of his rejoinder that he had requested for cancellation of the subject policies beyond the period of 15 days of issuance of the policies. He has not written any date when he received the subject policies and when requested for cancellation but he has not disputed case of the OP that he requested for cancellation of the policies for the first time on 25.03.2014.

9. Complainant has not disputed that he duly signed the proposal/application form. He did not dispute that he received the policies documents. He did not dispute that a verification call was made. In his letter to Head-Customer Services of OP1 dated 20/04/2014 which is placed on Page 162 of the case file, he stated that

“As far as verification call is concerned, I have acted/answered as per instructions of these people (Mr. S. Bhandari & Ms. P. Sharma).  There people gave me many types of offers like release of my payment of Rs. 2,00,000/- + Rs. 1,75,000/- = Rs.3,75,000/- with existing policies in the month of March 2014.  They also assured to give an appointment to my son in IRDA.”

10. OP2 has placed on record the Pre Log-in Verification Call conversation on record which it had with the complainant. It is verified in the call that subject policies was fresh policies and complainant was not entitled to any facility like free credit card, limit enhancement, one time investment, 0% cancellation charges, bonus before time, free gifts, free vouchers promotional offers, gift items, cash or extra benefits. Complainant has not denied Pre Log-in Verification Call which OP had with him.  However he said he answered that on instructions of Prachi Sharma and Shailender Bhandari which cannot be believed as complainant is not illiterate. He is a retired government servant.
11. Insurance Ombudsman vide it’s order dated 13.02.2015 under Rule 16 of the Redressal of Public Grievances Rules, 1998, rejected the complaint of the complainant against OP1 relating to fraud, seeking cancellation of the said policies by observing that the complainant did not approach OP within freelook period for cancellation of the subject policies.
12. Complainant in his letter addressed to Insurance Ombudsman dated 08.10.2015 placed at Page 183 of the case file requested for review of the order pleading therein that OP induced him by offering a job to his son through its agents Prachi Sharma and Shailender Bhandari. There is no allegation in the complaint that OP2 had given an assurance to the complainant that his son would be offered a job by OP1. Complainant himself is a retired government servant. It is strange that he believed such false promises allegedly made by Prachi Sharma and Shailender Bhandari on behalf of OP1.
13. In Para 13 Page 13 of its written statement, OP1 submitted that complainant paid only first premium in the 6 subject policies and due to non-payment of premium of the 6 policies, the policies lapsed and no amount is refundable or repayable as per clause 6 of the Insurance Agreement which is as under:

“Surrender Value: Provided that the Premiums have beenpaid for at least first three Policy years, the Policies acquires a minimum guaranteed Surrender Value which isequal to 30% of all the Premiums paid excluding the premiums paid for the Policies in the first Policy year andall extra premium (if any). The Company may allowsurrender values at such other rates not less than theGuaranteed Surrender Values specified above. These rates will be declared by the Company from time to time.”

Complainant has not denied the same in corresponding Para 13 of his rejoinder. He has not denied that he paid only the first premium in the subject policies. It is not denied that he signed the policies documents. He is a retired government servant so it is presumed that he read the documents before signing them. It is difficult to believe that he could be lured by promises of an offer of a job for his son or any offer beyond the terms of the subject policies.It cannot be believed that he gave answers on the Pre Log-in Verification Call as per instructions of Prachi Sharma and Shailender Bhandari.

14. Policies could acquire Guaranteed Surrender Value, only if the premiums had been paid for at least 3 consecutive years, by the life assured.  As stated above, since only one premium was paid and, later on, the complainant did not pay any premium, the policies did not acquire Guaranteed Surrender Value.  The policies, therefore, lapsed and did not acquire Guaranteed Surrender Value.
15. Complainant did not approach OP1 within the freelook period for cancellation of the subject policies. He has no document to substantiate his allegations of misrepresentation or fraudulent inducement against OPs. Having failed to approach OP1 for cancellation of subject policies within freelook period and having paid only first premiums of the subject policies and due to non payment of further premiums on due time for the said policies, complainant is not entitled to the relief prayed for.
16. The complainant is dismissed.   Copy of this order be sent to the parties as statutorily required. File be consigned to record room.

Announced this           day of                       2019.