Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi

Complaint Case No.285 /18.12.2017

Mr. Vaibhav Agarwal

Permanent r/o: H. No.3/166D, Samad Road, Nav Colony, Aligarh, Uttar Pradesh-202001

Currently at: Flat No. 236, Bharat Vandna Apartment,

Pocket 01, Sector-19, Dwarka, Delhi-110075                                         …Complainant

Versus

OP1- Bharti AXA Life Insurance Company Ltd. Regd. Office At:

Unit 601 & 602, 6^th Floor, Raheja Titanium,

Off Western Express Highway, Goregaon (E), Mumbai Maharashtra-400063

Through its Director/MD/Vice President/Authorised Representative/Authorised Signatory .

Also at: Bharti AXA Life Insurance Company Ltd. Branch Office at: 6^th Floor, E-1, Videocon Tower, Jhandewalan, Delhi-110055

OP2- Mr. Dheeraj Jog Agent/Insurance Advisor of

Bharti AXA Life Insurance Company Ltd. Branch Office at: 6^th Floor, E-1, Videocon Tower, Jhandewalan, Delhi-110055

OP3- Mr. Sajan Verma Agent/Insurance Advisor of

Bharti AXA Life Insurance Company Ltd. Branch Office at: 6^th Floor, E-1, Videocon Tower,

Jhandewalan, Delhi-110055                                                                      ...Opposite Party

Date of filing:            18.12.2017

Coram:                                                                       Date of Order:             08.05.2024

Shri Inder Jeet Singh, President

Ms Rashmi Bansal, Member -Female

ORDER

Inder Jeet Singh , President

1. (Introduction to case of parties) –The complainant/Insured has grievances of misrepresentation, deficiency of services and of unfair trade practice against the OPs that he had insurance policy plan known by name Aspire Life from the year 2007 having maturity date of December 2022. In July 2016 during the currency of insurance policy, the OP2 and OP3 came to complainant and represented that the said policy is of Ulip Plan and it has very poor market value and there will be no benefits but the approved amount in that policy may be utilized for new policy of OP1 on same premium amount of existing policy and on such assurances, promises and plan explained; the complainant bought two policies of OP1 - one policy in his own name and another policy in the name of his wife- since the annual premium was same amount as it was in the previous policy. But subsequently every things came into light was entirely different, which was never disclosed by the OPs vis-à-vis it was contrary to the oral assurance, promises and explanations made. That is why the complaint was filed after serving legal notice.
2. The complaint is opposed by the OP1/Insurer that neither there is any cause of action for the complaint nor there was any deficiency of services, unfair trade practice or misrepresentation by the OP1 and the complaint is abuse of process of law as the complainant failed to take appropriate steps within free look period of 15 days to withdraw or get cancelled the policy. The two policies was issued on the basis of proposal forms and complainant is bound by covenant of policy strictly.

1.3 The OP2 and the OP3, who are agents of the OP1, failed to put their appearance despite service of notice on complaint, thus both of them were proceeded ex-parte vide order dated 14.05.2018.

1. (Case of complainant) –The complainant opted insurance policy plan Aspire Life Being having no. 5000432749 (hereinafter referred as 'subject policy') in the year 2007 from OP1 and complainant paid his hard earned amount for his future benefits and security. The complainant was paying annual premium of Rs. 20,000/- regularly till 2016.
2. In July 2016, OP1’s agents the OP2 and OP3 contacted the complainant and also visited him at Dwarka, they apprised the complainant that subject policy is a Ulip Plan, it has very poor market value and the policy is under losses, there will be no benefits to continue in the subject policy. The OP2 and the OP3 persuaded the complainant to buy two new policies of

OP1 involving same annual premium amount of Rs.20,000/- for both policy and the fund value of subject policy will be transferred as a premium into new policies; the complainant will not be required to pay premium for new policies.

Under these persuasions and assurances, the complainant opted for two new policies as told by the OP2 and the OP3, in his own name and in the name of his wife Mrs. Veena Aggarwal, since complainant need not to pay any single penny in terms of first new policies as the fund value of the subject policy have to be adjusted in accordance to it, and in case further units if any left after adjustment of first premium, all that units will be invested in new policies as bonus units vis-à-vis the premium for both the new policies will be Rs.20,000/- (i.e. Rs. 10,000/- for each policy), which was in the previous policy.

1. The OP1 issued to the complainant new policies under the plan namely Bharti Axa Monthly Advantage Being no. 5014670078 and 5014670128 (hereinafter referred as 'new policies' or 'two new policies') and when the policies were delivered to the complainant, it was showing annual premium of Rs. 1,14,999.64 for each policy, instead of annual premium of Rs. 10,000/- in each policy as told by the OPs; these new policies were having entirely different premium amount contrary to the amount told by the OP2 and OP3. Immediately the complainant contracted the OP2 and the OP3 and discussed the situation besides asking them to rectify the same. The OPs told that the premium amount mentioned is without adjustment and discounts, which are mentioned in the policy note. Since it will only for 'special customers', the premium is Rs.10,000/- for each policy, for which complainant would be getting notification in May 2017 for the discounted and adjusted premium for Rs. 10,000/- annually for each policy.

However, on 30.05.2017 the complainant shocked when a notification came on his mobile no. 9971187691, requisiting to pay Rs. 1,10,000/- for each policy, which is contrary to the premium amount of Rs. 10,000/- annually as told by the OP2 & the OP3. When complainant contacted the OP3 and also wrote email to OP2 to confirm the premium amount and adjustment as promised by them, then OP2 never replied email and OP3 was not taking up the calls. The OP1 also contacted repeatedly to customer care centre but there was no satisfactory reply about the fraud played by the OP2 and the OP3 but in connivance

of OP1 to make illegal gains and breach of trust. The complainant also wrote email to the Grievances Cell of OP1 but there was no help.

2.4 The OPs made false offers to the complainant about adjustment of entire fund value of the subject policy to the new policies as bonus units and premium besides the premium of new policies are of Rs. 1,14,999.64 each policy, which ought to be Rs. 20,000/- for both policies as assured and told by the OP2 & the OP3. The complainant is under depression because of the circumstances and mischief done by the OPs, due to which the complainant suffered mental agony, he has been taking treatment and he is on medication. The complainant was constraint to send legal notice dated 08.09.2017 while asking the OPs to pay the entire value of fund of subject policy with interest at the rate of 24%pa besides compensation of Rs. 5 lakh. However, the notice has not been adhered by the OPs. That is why the complaint for reimbursement the total value of subject policy with interest of 24%pa, compensation of Rs. 5 lakh with interest at the rate of 24%pa, legal expenses and other damages costs, relief, etc.

2.5. The complaint is accompanied with copies of – subject policy, new policies, intimation letter dated 05.07.2017 , emails, legal notice reply dated 16.09.2017 to the notice.

3.1 (Case of OP1)- On 02.04.2018 the OP1 put its appearance through Shri Gautam Kumar, Advocate. The OP1 is being represented by its authorized officer, who is having requisite authority and permission to file the reply for and on behalf of OP1. The OP1 also filed its written statement dated 27.03.2018, under the signature of Ms Swapnil Malvi, Associate Manager - Legal and vakalatnama filed is also authored by Ms Swapnil Malvi in favour of Advocates for OP1. Moreover, the written statement has been split it into various heads - viz. preliminary submissions, preliminary objections, facts of the case and paragraph-wise reply, besides reference of decided cases/case law. Precisely, the complaint is opposed that neither there is any cause of action nor deficiency of services by the OP1 but the complaint is abuse of process of law as the complainant failed to exercise option of withdrawal/cancellation of policy within free look period of 15 days from the date of receipt of policy document, which were delivered to him.

3.2.  The complaint is vague, false and without any cause of action against the OP1 and it is filed to injure the goodwill and reputation of OP1. The complaint does not demonstrate

any deficiency of services against OP1 nor it attributes any fault imperfection, short-coming or inadequacy in the quality, nature and manner of performance.

The OP1 had issued subject policy to the complainant in the year 2007 on yearly premium of Rs. 20,000/-, which complainant paid till 2016 and then he surrendered the policy. He requested to transfer the surrendered value of Rs. 2,32,677.91p equally to two new policies as the initial premium. The policy documents bearing no. 501-4670078 and 501-4670128 were sent to the complainant, which were received by him on 22.08.2016. The complainant was having an option to approach the OP1 in case of any discrepancy in the policy terms or the amount of premium payable under the policy. The complainant failed to approach OP1 within the free look period of 15 days regarding grievances related to terms and conditions of policy or the amount of premium payable under the new policies. There is no deficiency of services. The OP1 had complied the clauses of IRDA Regulations 2002 by sending the policy documents along-with copy of proposal form to the complainant for appropriate review/cancel of policy within the freelook period. However, the complainant failed to follow it.

Moreover, the complainant was informed that in case he is not satisfied, then he can withdraw/cancel the policy under free look period of 15 days from the date of receipt of policy document. Since the complainant failed to raise any objection towards the policy during free look period, therefore, the complainant had agreed to the policy and its terms & conditions, which was also held in Mohan Lal Benal Vs. ICICI Prudential Life Insurance Co. Ltd. R.P. No. 2870/2012 decided on 16.10.2012; Harish Kumar Chadha Vs. Bajaj Allianz Life Insurance Co. Ltd. decided on 07.10.2013 in Revision Petition No. 3271 of 2013 and Shrikant Murlidhar Apte Vs. Life Insurance Corporation of India, Revision Petition No. 634 of 2012, decided on 02.05.2013.

The complainant submitted the e-proposal forms no. E1701415 and E1701389 on 25.07.2016 alongwith the customer declaration form for two new policies. The complainant duly informed of surrender value of Rs. 2,32,677.91p accrued under subject policy will be transferred equally of Rs. 1,13,336.97p each towards initial premium of two new policies. There was no request for cancellation of new policies on behalf of complainant, therefore, the policies continued as per its terms and conditions. Moreover, there is pre-insurance

verification call of new policies, the complainant had confirmed to continuity for the policies, therefore, there is no cause of action against the OPs. The OP1 denies all other allegations of the complaint.

1. The complainant is a well educated person and is expected to have read and understood the terms and conditions of the policy. The policy was issued on the basis of proposal form and the same is binding, the insurer is under no obligation to issue the policy on oral promises as alleged by the complainant. The OP1 refers Kishor Chandrakant Rathod Vs. The Managing Director, ICICI Prudential Life Insurance Co. Ltd. & Another (NC dod 21.05.2014 in RP 3390/ 2013); and Shrikant Murlidhar Apte Vs. Life Insurance Corporation of India, (NC dod 02.05.2013 in Revision Petition No. 634/ 2012). The OP1 is not a party to communication, if any, between the complainant and the said agents nor the OP told the complainant about annual premium of Rs.10,000/- for each policy. It is settled law that a principal can be held vicariously liable for the acts of agent, only when such act was within the scope of the agent's authority (while referring Sitaram Vs Santanu Prasad AIR 1966 SC 1697). Whereas OP1 had not authorized any of its agents to offer any such false promise or benefits to its customer which are variance at product, therefore, acts of agents (without admitting them) are beyond their authority..
2. Since the OP1 has acted upon the proposal forms furnished by the complainant and the new policies were issued vis-à-vis the subject policy was surrendered and its fund were utilized as premium for the new policies issued that too at the request of complainant. The circumstances do not spell out any unfair trade practice or deficiency of services or misrepresentation or cheating, as alleged, against OP1. The complaint is liable to be dismissed.
3. The written statement is accompanied with copies of – proposal form of subject policy, terms and conditions of subject policy, surrender requests of the policy, proposal form and terms and conditions of new two policies, proof of delivery of policy to the complainant, emails dated 17.07.2017 , 22.08.2017 and 16.09.2017.

4. (Replication of complainant) – The complaint filed his detailed replication, it is reply to written statement being corresponding to each heading of the written statement, the complainant denies all allegations of OP1. The complainant reaffirms the complaint as

correct. The complainant vehemently opposed the written statement that there is no authority or resolution in favour of Ms. Swapnil Malvi, who had signed the reply and for want of such authority or Board resolution, the written statement is not valid and competent to be read. The reply is by an unauthorized person, having no locus to sign, verify and file the same, therefore, the reply and defence deserve rejection outrightly. It cannot be read. The written statement is to be discarded.

1. (Evidence)- Complainant Shri Vaibhav Aggarwal led his exclusive evidence, it is on the lines of complaint supplemented with all the documents filed with the complaint.
2. The OP1 led evidence by filing detailed affidavit of Ms. Swapnil Malvi, Associate Manager (Legal), her affidavit is on the lines of written statement with documents filed.
3. The others OPs namely the OP2 and the OP3 are ex-parte.
4. (Final hearing)- The complainant and the OP1 have filed their respective written arguments in detail, which are blend of pleading and evidence with case law. The rival contentions need not to be reproduced herein, however, the same will be appreciated while dealing with the issues involved.
5. Moreover, the parties were given opportunity to make oral submissions, the complainant did not avail this opportunity for want of non-appearance on his behalf at the stage of final hearing but Shri Gautam Kumar, Advocate for OP1 made oral submissions. The OP1 further fortified its case with the following additional case law-

1. Ravneet Singh Bagga v. KLM Royal Dutch Airlines (2000) 1 SCC 66) held that deficiency of services cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance, which is required to be performed in pursuance of a contract or other.

2. Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. [(2010) 10 SCC 567, Reliance Life Insurance Co. Ltd. Vs. Madhavacharya (RP 211 of 2009), Export Credit Guarantee Corporation of India Ltd. Vs. Garg Sons Internation [2013 (1) SCALE 410; General Assurance Society Limited Vs. Chandumull Jain & Anr (1966) 3 SCR 500; United India Insurance Co. Vs. Harchand Rai Chandan Lal I 2003 CPJ 393 and Vikram Greentech (I) Ltd and anr Vs New India Assurance Co Ltd II 2009 CJ 34- Insurance policy is contract of insurance, the parties are bound by terms and conditions of the policy and no deviation from the same is permissible.

7.1 (Findings)- The contentions of the complainant and of the OP1 are considered, analyzed and assessed by keeping in view the material available, the statutory provisions of the law and case law presented.

7.2. By taking into account stock of all material, the following conclusions are drawn: -

1. It is matter of record that on 14.05.2018 Shri Gautam Kumar, Advocate had appeared and filed vakalatnama for and on behalf of OP1. Written statement was also filed on behalf of OP1.

However, the vakalatnama is in favour of Shri Gautam Kumar and other Advocates, it is executed and signed by Ms. Swapnil Malvi, who had also authored the written statement. Ms. Swapnil Malvi is Associate Manager - Legal of OP1. There is no Board Resolution or other authority or power of attorney or so on in her favour to establish that she was having authority and permission to sign, verify and present the pleading. Although, she makes such declaration in preliminary submission in para-2 of the written statement as well as supporting affidavit of 27.03.2018.

2. The OP1 is a legal entity, being company incorporated and registered u/s 3 of Insurance Act 1938. Order XXIX of CPC is regarding suits by or against the corporations, it could be the Secretary or any Director or other Principal Officer who is able to depose to the facts of the case. Whereas, Ms. Swapnil Malvi does not fulfill this requirement nor there is any document that Associate Manager-Legal is covered under the provisions of XXIX CPC, which applies pari-materia to the complaints under the Consumer Protection Act 1986.

3. The conclusions (i) & (ii) above clearly manifest that OP1 could not establish that the written statement filed was by competent person or she was authorized by Board Resolution or otherwise to sign, verify and present the written statement. Therefore, the written statement filed is not competent nor valid for want of appropriate authority. It cannot be read.
4. Similarly, the evidence can be on the lines of pleadings, however, in view of clause-(iii) above, when there is no competent written statement, the evidence, which is also by Ms. Swapnil Malvi cannot be read as evidence of OP1.
5. However, there are undisputed facts that complainant was issued the subject policy in the year 2007 and subsequently in the year 2016 two more policies were issued and the fund of subject policy was utilized in respect of premium of two new policies. It is also undisputed fact that the OP2 and the OP3 are agents of OP1, however, the OP2 and the OP3 chosen not to appear or contest the complaint, that is why they remained ex-parte throughout. In addition, the complainant has proved legal notice served to OPs, however, it was not replied by any of them to counter the serious allegations.

6. The consumer dispute had arisen that complainant was persuaded and assured by OP2 and OP3 on behalf of OP1 that there are other beneficial insurance product involving equal

annual premium amount, which was premium amount of subject policy, the complainant may opt for new two insurance policies of similar premium, since the market value of the subject policy is having poor condition. On the other side, OP1’s case is that whatever is not authorized to an agent, their acts (without admitting them) would not make the principal/OP1 liable.

There is documentary record and its speaks of circumstances of contemporary period. The record is of letters, proposal form, etc. In the paper book of OP1 (Annexure R3/page no.53), there is authorization letter for policy surrender and fresh policy application, this letter is bearing seal of OP1 that it was received on 26.07.2016 at 02:05 pm. At page no. 54 there is also surrender/withdrawal form dated 26.07.2016 mentioning welcome kit and personal reason for surrender of subject policy. There is indemnity bond dated 25.07.2016 for issue of duplicate policy. Moreover, there are e-proposal forms of 25.07.2016.

By reading the sequence of documents with date and time, the trail emerged is that firstly there is proposal forms for new policies, then indemnity bond for issue of induplicate subject policy and then authority letter for surrender of subject policy and for furnishing the formalities for new policies. This clearly reflects that the OP2 and the OP3 had approached the complainant to give up the subject policy because of poor market fund value and to go for new policies, that is why the proposal form for new policy are prior to the date of formal request for surrender of subject policy. Had the complainant actual personal reasons to surrender the policy and to have funds, would he to and opt two new policies involving diverting of funds?. The complainant was constraint that subject policy was having poor fund market value and he was drive towards two new policies. This aspect has been proved by the complainant against the OPs.

7. There are e-proposal form and complainant came to know about the declaration delivered to him at subsequent time. The OP1 cannot shield itself and to escape from accountability just for the reason that the OP2 and OP3 were not authorized to indulge in such activities and if they had been so, the OP1 would not be liable. Whereas, the complainant had sent legal notice to the OP1, OP2 & OP3 prior to initiating the action in the form of present complaint but there was no reply by the OPs. When the legal notice contains serious allegations, the OPs were supposed to reply the allegations but it failed. Further, when allegations against the OP2 and OP3 were surfaced to the knowledge of OP1, there is no whisper by OP1 about any inquiry, investigation or action in the matter. Was it not required on the part of OP1? The circumstances are silent and it infers that OP1 had intentionally kept mum to the situation.

8. The complainant had also established that when notification of premium was received, immediately he had contacted the OPs by mode of telephone call and email to protest the premium amount of Rs. 1,10,000/- per policy instead of Rs. 10,000/- per annum, but he was told that the premium amount is Rs 10,000/- annually and complainant will get the notification in May 2017 since discount and adjusted premium will be notified subsequently. These allegations remained unchallenged for want of any defence of OP1 but complainant proved it against the OPs.

9. The OP2 and OP3 being agents of OP1 sold the two new policies on the premise that the value of previous subject policy would be utilized in premium of the new policies as well as the total annual premium of Rs. 20,000/- will remain the same alike the premium amount of Rs. 20,000/- of subject policy, but factually the complainant received notification of annual premium of Rs. 1,10,000/-, which was contrary to the assurances given by the OPs. It is unfair trade practice.
10. The complainant has proved that immediately on receipt of notification, he had protested the premium amount being asked as Rs. 1,10,000/- in place of Rs. 10,000/- in each policy, since he was advised by the OP2 & OP3 that the notification would be received, but the notification was contrary to the promise made. The complainant has proved email record of such protest to the policy issued.
11. The OP1 cannot derive any benefit that the period of 15 days of free look tenure was not exercised by the complainant since the other record are also to be read in this context appropriately that the policy was sold under the premise that there will be equal premium amount of Rs. 20,000/- for two policies as well as the fund of the subject policy will be utilized as premium for new policies. There is withdrawal form (page no. 54-55 of paper book of OP), it is of 25.07.2016 mentioning two new policy number issued to the complainant. And this policy number are mentioned under the payment option. The sub- clauses (viii),(ix) and (x) above would also not give any benefit of free look period of 15 days to the OPs since insurance contract was entered on premise of assurances, promise and clarifications that premium amount of Rs.;10,000/- will be notified in May 2017, which was in fact premium reminder.

12. The OP2 and the OP3 are agents of OP1 but they are impleaded in their personal capacity vis-à-vis the OP1 (being principal of its agents/OP2 & OP3) is vicariously liable for the acts and deeds performed by the OP2 and the OP3 inclusive for acts of persuasions and assurances given by the OP2 & the OP3 for and on behalf of OP1, then complainant had purchased the two policies. To say, the OP1 is liable for the acts and deeds for its agents OP2 & OP3 but the OP2 and the OP3 are not personally liable.

13. The evidence of complainant against the OP2 and OP3 remained unchallenged and un- rebutted for want of appearance and counter plea or evidence, it proves all allegations against the OP2 and OP3. Although, the complainant has not prove medical record of depression or medication.

7.3. In view of the above conclusions, it stand established by the material on record that complainant was having subject policy from the year 2007 and he was paying the premium regularly till 2016, when in the month of July 2016 he was approached and visited by OP1’s agents/the OP2 and the OP3 with new product/policies that the same would be beneficial for

the complainant to take two new policies in place of previous single subject policy and the funds of subject policy will be utilized for premium for two new policies, besides the total annual premium amount of two new policies would be equal to the premium amount of Rs. 20,000/- of subject old policy. However, it proved otherwise. Therefore, the complainant is at-least deserves refund of the surrender value of Rs. 2,32,667.91p under the subject policy vis-à-vis the other two new policies will not remain operated.

8.1 Thus the complainant is held entitled to receive the surrender amount of Rs. 2,32,677.91p- from the OP1 under the subject policy no. 5000432749.

8.2. The complainant has sought interest at the rate of 24% pa, however, it has not been substantiated as how interest at this rate will be payable by OP1 vis a vis the complainant was deprived of his money and its use because of its diversion into other policies, this entitles the complainant for interest on amount Rs. 2,32,677.91p-. Therefore, simple interest at the rate of 7% pa is allowed in his favour and against OP1, which justify for both ends, interest will be computed from the date of complaint till realization of amount. 8.3. The complainant claims compensation/damages of Rs.5 lakhs for causing physical & mental agony and other harassment. The circumstances of case are manifest and clear of suffering harassment, agony, deficiency of services at the end of OPs.. It entitles the complainant for compensation. However, the compensation ought to be reasonable & commensurate to situations. Thus, compensation of Rs.20,000/- is determined in favour of complainant and against the OP1.

8.4. The complainant also seeks legal expenses/cost, he also deserves so, therefore, costs of Rs.10,000/- is quantified and is also allowed in favour of complainant against OP1.

1. Accordingly, the complaint is allowed in favour of complainant and against the OP1 to pay a sum of Rs. 2,32,677.91p- along-with simple interest of 7% p.a. from date of complaint till realization of amount, compensation of Rs.20,000/- & costs of Rs.10,000/-. This amount will be payable within 45 days from the date of this order, failing to pay the amount within this time, then interest rate will 9%pa [ in place of the rate of 7% pa]. The OP1 may also deposit the amount in the form of valid instrument in the name of complainant in the Registry of this Commission.