Order-24.
Date-27/03/2018.
Shri Anupam Bhattacharyya, President.
The instant complaint has been filed by the complainant u/s.12 of the C.P. Act, 1986 praying for direction upon the OP Insurance Company to pay the principal amount of the policy of Rs.8,33,000/- along with Banking interest and compensation of Rs.1,50,000/- for unfair trade practice.
The complainant’s case, in brief, is that the complainant agreed to purchase one single premium pension plan being convinced by OP2, the agent of OP1 along with his assurance to get pension after one year from the starting of the policy. Accordingly he purchased 5 policies which were issued on 17-12-2015, 28-12-2015, 29-12-2015 and two policies on 29-01-2016. After receipt of those policies the complainant requested the OP by letter dated 02-04-2016 for cancellation of policies which were duly received by them. The OP2 has filed false statement about the financial condition of the complainant and also supplied ITR policy form and signature which were forged one. The OP further issued a letter to the complainant that cancellation is to be made by writing a letter for cancellation of the policy within 15 days from the date of receipt of the policy, if policy holder disagrees with any of the terms and condition. Due to such inaction and unfair trade practice on the part of the OP, the complainant lodged a complaint to the Insurance Ombudsman who rejected the claim of the complainant due to non-submission of cancellation letter within 15 days from the date of receipt of policy. It is a clear case of unfair trade practice by misleading the consumer. Thereafter, the complainant was compelled to file the instant case. Hence, the instant complaint case.
The written version filed by the OP1 Insurance Company, in brief, is that the complainant has failed to demonstrate any deficiency in service on the part of the OP. The complainant after receiving the policy document did not raise any objection against the policy during the freelook period. The Insurance Company does not have any administrative control over the insurance agent who is an independent entity. This OP is not responsible for the act of the agent. Prior to issuing the policy the OP1 gave opportunity to the complainant as per PIVC (Pre Issuance Verification Call) to confirm and satisfy as to the policy. After conducting PIVC the OP1 issued the policy to the complainant. After understanding the key features of the policy the complainant signed and submitted the proposal form for insurance. All documents signed by the complainant were accepted and after issuance of the policy the complainant has not raised any objection which clearly established that there was no forgery as alleged. No unfair trade practice ever took place in the transaction between the parties. The premium of the policy being not continued for 3 years, as per rule the surrender value will be Nil and, as such, the entire amount paid will be forfeited and for that complainant is not entitled to get any relief. The OP has prayed for dismissal of the complaint. Hence, the instant written version.
Considering the pleadings of both sides the following points have been raised.
Points for Decision
- Whether the case is maintainable in its present form and law?
- Whether there is any cause of action to file the case?
- Whether the case is barred by limitation?
- Whether the complainant is entitled to get the relief as prayed for?
- What other relief/reliefs the complainant is entitled to get?
Decision with Reasons
Point Nos.1 to 5 .
All the points are taken up together for the brevity of discussion and convenience.
The instant complaint is for refunding of policy amount of Rs.8,33,000/- along with Banking interest and compensation of Rs.1,50,000/-.
Complainant’s main case is that the complainant was convinced to purchase five Insurance policies with the misrepresentation and false assurance of the OP2 agent of the OP1 Insurance Company and false statement of OP2 as to financial condition of the complainant in the ITR Policy form and signatures obtained were forged one. After receiving this policy the complainant sent a letter to OP for cancellation of the policy but OP further issued a letter stating that if policy holder disagree with any terms and condition may write a letter for cancellation of the policy within 15 days from the date of receipt of the policy. Due to such inaction and unfair trade practice on the part of the OP the complainant lodged a complaint to the Insurance Ombudsman which was rejected due to non-submission of cancellation letter within 15 days from the date of receipt of the policy. It is a clear case of unfair trade practice and misspelling and misrepresentation.
On the other hand, OP’s case is that the complainant did not raise any objection towards the policy during Freelook Period and the premium of the policy being not continued for 3 years, as per rule the surrender value will be Nil and, as such, the entire amount paid will be forfeited and for that complainant is not entitled to get any relief.
To prove the case both the parties have adduced evidence on affidavits and relevant documents.
In this regard the Ld. Lawyer for the complainant has advanced argument relating to the question of sending letter for cancellation of the policy within the freelook period that there is no such particular provision in the C.P. Act.
Regarding the rule to that effect he has advanced argument that the act will prevail and in the act there is no mandatory provision for submission of letter for cancellation of policy within the freelook period. He has further advanced argument that rule cannot over-write the Act.
Regarding, further case of the OP as to forfeiture of the entire amount paid by the insurer being the premium not continued for 3 years the Ld. Lawyer for the complainant has advanced argument referring a reported decision of National Commission that for lapse of policy for non-payment premium the premium amount already paid, cannot be forfeited.
On the other hand, the Ld. Lawyer for the OP has advanced argument relating to the that the complainant’s allegation as to forged document in the financial statement in the ITR of the complainant that the question of financial fraud or in other words allegation of forged documents of the ITR form cannot be raised at this stage as the policy was issued after compliance of the Pre-issuance Verification Call prior to issuing the policy.
The Ld. Lawyer for the OP has also advanced argument that Autopsy Mandate Form was signed by the complainant and this shows that the complainant was aware about the payment of premium or in other words this is not one time investment. He has further argued that this is also compensation fund.
Admittedly, the complainant policy holder is a retired school teacher and it is also admitted that the total first premium paid in respect of five policies is Rs.8,33,000/- and it is also clear that all these 5 policies are for 12 years and the premium to be paid for 12 years.
In this case, the Ld. Lawyer for the OP Insurance Company has referred reported decisions in support of their case in case of LIC vs. Sibaprasad Das reported in IV (2008) CPJ 156 (NC) wherein it has been held that if after the policy lapsed under no terms and condition of the policy or law, could any Fora direct for refund any form for the simple reason that the risk stood cover for the period for which the premium have been paid.
He has referred another reported decision in case of Srikant MuralidharApte vs. LIC in revision petition No.634 of 2012 the National Commission decided on 02-05-2013 that once 15 days killing of period over policy documents become binding on both the parties and the contains therein should also binding on both of them.
In this case the Ld. Lawyer for the complainant has advanced argument referring the decision of Hon’ble State Commission in First Appeal No.A/117/2015 regarding mis-selling of policy on the basis of single premium and has also referred reported decision in 2014 (1) CPR 153 (NC) wherein it has been held that only paid-up value is payable in case of lapsed policy.
Irrespective of the aforesaid reported decision referred by the Ld. Lawyer for the OP regarding not availing freelook period and question of raising objection before issuing the policy during the stage of pre issuance verification call i.e. PIVC we find that in this case the main allegation of the complainant is misselling and misrepresentation where the policy holder complainant was convinced by the OP2 agent of OP1 for getting pension after one year and the same was misrepresented for single premium and the question of payment of premium in total Rs.8,33,000/- every year by a retired teacher is quite impossible irrespective of question of income as shown in the income tax return.
That being so, we can safely conclude that in this particular case question of forfeiture of the entire premium already paid being not continued the payment of premium for 3 years cannot be considered in this particular case as it is a pure case of misrepresentation and mis-selling and, as such, we have no other alternative but to conclude that the complainant is entitled to get back return the entire amount of Rs.8,33,000/- along with interest at the rate of7 percent p.a. and litigation cost of Rs.2,000/-.
According to settled principle, if interest be allowed, the complainant is not entitled to get any compensation.
Hence,
Ordered
That the instant case No.129 of 2017 be and the same is allowed in part on contest.
OPs are directed to return the complainant Rs.8,33,000/- along with interest at the rate of7 percent p.a. from the date of filing of this case till realization along with litigation cost of Rs.2,000/-.
OPs are directed to comply the order within 30 days from the date of this order failing which the OPs are to pay fine of Rs.100/- for per day delay and the amount so accumulated should be deposited to this Forum.
Failure to comply with the order will entitle the complainant to put the order into execution under appropriate provision of the C.P. Act.
