DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

Complaint Case No. 276/16

In the matter of:

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

Ravindra Shankar Nagar, Member

Order passed by Ms. Sonica Mehrotra, Member

ORDER

1. The case of the complainant succinctly narrated in the present complaint is that he had received a call from an executive of OP2, company which deals in life insurance on 02.03.2014 who told him that OP2 is providing loan on the basis of insurance policy if taken from OP2. Relying on the representation made by the OP2 executive, the complainant who at that time was in dire need of home loan for a flat purchased by him in Mandola Vihar, near Tronica City, Loni, Ghaziabad, Uttar Pradesh under the scheme of Uttar Pradesh Avas Vikas Parishad (UPAVP), agreed to purchase two life insurance policies from OP1 though without any requirement thereof. Thus the complainant as per the direction of OP2 purchased two BSLI Vision Life Secure insurance polices      no. 006437336 & 006448725 from OP1, only for the purpose of getting the loan of Rs. 15,00,000/- from OP2 who told to the complainant that for getting the loan sanctioned from OP2, purchasing the policies from OP1 is an essential requirement and only then, would he be eligible for getting the loan. Further complainant submitted that both the polices are high premium policies and the complainant has paid Rs. 67,900/- (approx) each towards annual premium for both policy i.e. Rs. 1,35,805/- (approx) in total. However, even after issuance of the above said policies commencing from 15.03.2014 and 26.03.2014, despite complainant contacting officials of OP2 several times for process of loan, officials of OP2 kept delaying the sanction of loan on verbal assurances. After however, nine months when OP2 failed to sanction the loan, the complainant vide letter dated 06.01.2015 to OP2 demanded cancellation of policies and refund of the premium paid to the tune of Rs. 1,35,805/-. However, instead of refunding the premium amount, the officials of OP2 threatened the complainant that since he had reported the matter to OP1, neither his loan would be sanctioned nor his policies would be cancelled. Thereafter there were series of e-mail correspondences between complainant and OP1 in February- March 2015 and June 2015 in which the complainant had expressed his grievance of having been duped by executive of OP2 into taking insurance policies on inducement/misrepresentation of being provided home loan which never got disbursed or sanctioned even, thereby requesting for cancellation of polices and refund of premium to which e-mails OP1 responded to but did not resolve the problem of the complainant. The complainant has alleged criminal conspiracy, cheating, fraud and misrepresentation against OP2 causing him mental pain, agony and economic loss. The complainant has further stated that he had submitted audio recording of telephonic conversation between himself and officials of OP2 to top officials of OP2 for necessary action by OP2 but to no avail. The complainant has further submitted that he had to face embarrassment of issuance of notice by UPAVP for not making the payment of the allotted flat (No. B-36/01, Ground Floor) with warning to cancel the allotment if the payment is not deposited within 15 days of its receipts. The complainant stated that he had to undergo mental agony and he has every apprehensions that the allotment of the Flat may be cancelled due to the deceptive acts of OPs. The complainant has further stated that due to the lackadaisical attitude of OPs, complainant was constrained to serve a legal notice dated 12.07.2015 on the OPs demanding the OPs to cancel the insurance policies Number 006437336 & 006448725 and refund the policy premium to him and to take action against the defaulting officers / advisors of OPs. However, OPs replied to the legal notice vide delayed response letter dated 21.09.2015 and evaded the actual concern of the complainant. Therefore the complainant, alleging deficiency of service and unfair trade practice on the part of OPs vide the present complaint has prayed for issuance of directions against the OPs to pay a sum of Rs. 9,46,800/- towards deficient services and damage to the reputation to the complainant alongwith cost of complaint.

The complainant has attached copy of first premium receipt of polices bearing no. 006448725 and 006437336, copy of CD of telephonic conversation, copy of letter dated 06.01.2015 by complainant to OPs duly received demanding cancellation of policy to refund premium, copy of e-mails dated 5^thFebruary 2015, 20^th and 23^rd March 2015, 14^th and 21^st June 2015 exchanged between complainant and OPs, copy of demand notice dated 25.06.2015 from UPAVP to complainant for balance payment of flat, copy of legal notice dated 12.07.2015 by the complainant to the OPs alongwith postal receipts and track reports and copy of reply dated 21.09.2015 by OPs to complainant.

2. Notices were issued to the OPs on 17.10.2016 and were duly served on all the OPs, OP1 and OP2 entered appearance on 07.11.2016 and filed its written statement on 05.12.2016. OP3 failed to appear despite service effected on 21.10.2016 and was therefore proceeded ex-parte vide order dated 05.12.2016.  

In the joint written statement filed by OP1 and OP2, the OPs took the preliminary objection that the complainant has not approached the Forum with clean hands and has suppressed true and correct facts from this Forum and has made averments inconsistent with the actual events and thus factually deviated from true facts disentitling him to relief and placed reliance upon judgment of Amrik Singh Vs Ms United India Insurance Co. Ltd 1993 (2) CPR 203 and the judgment of Orissa SCDRC in the case of Paramananda Tripathy Vs Bank of Baroda (3) 1992 CPJ 231. OPs raised primary objections that in accordance with Regulation 6 (2) of IRDA (Protection of Policy Holder’s Interests) Regulations, 2002, the complainant was duly informed that in case he is not satisfied with the features or the terms and conditions of the policy, he can withdraw/cancel the policy under the “Free Look Period” provisions, i.e. within 15 days from the date of receipt of policy document. The OPs submitted that the complainant retained the policy document and did not raise any objection towards the policy during the said “Free Look Period” with any grievance regarding policy terms and conditions thereby agreeing to the same in satisfaction. The OPs relied upon the judgment of Hon’ble NCDRC in Mohan Lal Benal Vs ICICI Prudential Life Insurance Co. Ltd. and Harish Kumar Chaddha Vs Bajaj Alianz Life Insurance Co. Ltd in which the Hon’ble NCDRC clearly held that if the insured/complainant is not satisfied with the policy taken, he should avail the option of returning the same within 15 days of its receipts i.e. within the “Free Look Period”. The said proposition has also been clearly laid down in the judgment of Shrikant Murlidhar Apte Vs LIC in Revision Petition No. 634/2012 decided by Hon’ble National Commission on 02.05.2013. The OPs contended that the subject policies are currently in the lapsed mode and the Hon’ble National Commission has observed in the judgment of LIC Vs Siba Prasad Dash IV (2008) CPJ 156 (NC) in para 5 thereof that “The Premium is given by an insured to cover the risk for a given period, and the insurance covers risk, for the period for which, and the premium has been paid. It is not the case of the complainant that the risk was not covered for the period for which the premium was given. If after the policy lapsed, under no provision of terms of policy or law, could any Fora direct for refund of any premium for the simple reason, as already stated, that the risk stood covered for the period for which premium had been paid.” Therefore, OPs prayed for dismissal of the present complaint on this ground as well. The OPs further placed reliance upon catena of judgments in support of its contention and defence that an insurance policy is to be construed strictly as per the terms and condition of the policy documents and no deviation from the same is permissible as held by Hon’ble Supreme Court in Export Credit Guarantee Corporation of India Ltd vs Garg Sons International 2013 (I) SCALE 4 (10), Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs United India Insurance Co. Ltd (2010) 10 SCC 567, General Assurance Society Ltd Vs Chandumull Jain & Anr. (1996) 3 SCR 500, United India Insurance Co. Ltd Vs Harchand Rai Chandan Lal I (2003) CPJ 393 & Vikram Greentech (I) Ltd. & Anr. Vs New India Assurance Co. Ltd II (2009) CPJ 34 and Hon’ble National Commission in Reliance Life Insurance Co. Ltd Vs Madhavacharya in Revision Petition No. 211 of 2009. The OPs further contended that since the present complaint involves allegation of cheating, fraud, false representation and criminal conspiracy, the same cannot be adjudicated under summary proceedings provided under Consumer Protection Act as held by Hon’ble Apex Court in Oriental Insurance Co. Ltd Vs Muni Mahesh Patel 2006 (2) CPC 668 (SC) and the Hon’ble National Commission in various judgments relied upon by the OPs. The OPs placed reliance upon the judgment of the Hon’ble Supreme Court in the case of Ravneet Singh Bagga Vs K L M Royal Dutch Airlines (2000) I SCC 66 in which the Hon’ble Supreme Court laid down the test of deficiency of service by stating that the burden of proof of deficiency of service in upon the person alleging it whereas in the present case the complainant has failed to make out any cause of action on the grounds of deficiency of service against the OPs. The OPs narrated the factual matrix as per their version to the effect that the complainant and his wife had applied for two insurance policies vide Application / Proposal No. A49548091 and A49509425 dated 11.03.2014 and 18.03.2014 as detailed hereunder:

The OPs has also averred that the complainant had availed the ECS facility by authorizing the answering OPs to automatically debit his account for payment of premiums under the subject insurance policies by duly filling the application form and ticking on ECS activation therein. The OPs also took the defence that the complainant and his wife had filled the joint declaration form wherein the complainant was explicitly apprised that apart from the policy benefit explained by OPs sales representative, there is NO other benefit attached with this policy example NO loan or Overdraft Facility from any bank. The OPs further took the defence that it had adhered with the provision of Section 6 (2) of IRDA (Protection of Policy Holder’s Interest) Regulation 2002 that every policy document sent by the insurance company is accompanied by forwarding letter which clearly mentioned that in case a policy holder / proposer is not satisfied with the features/terms and conditions of the policy, then the policy holder / proposer can withdraw / return the policy within 15 days of receipt of the policy document under the “Free Look Period” provision. However, despite the said option the complainant did not approach the OPs within the Free Look Period which is apparently deemed admission on the part of complainant of acceptance of terms and conditions of the policy. The OPs also urged that the complainant had authorized the OPs to auto debit the premiums to the tune ofRs. 67,903/- each towards the two policies taken by the complainant through ECS but the same was declined by the complainant’s bank HDFC for reason of stop payment at the time of renewal thereof and the said fact of declined payment was apprised to the complainant vide letter dated 03.04.2015 and 12.05.2015 asking the complainant to pay the subsequent payments due on 15.02.2015 and 26.02.2015. Instead, the complainant served a legal notice dated 12.07.2015 alleging fraud, cheating and criminal conspiracy on the OPs demanding refund of the entire premium to which the OPs replied vide letter dated 21.09.2015 explicitly averring that the policies was issued after making the complainant understand its terms and conditions evident from the fact of the complainant signing joint declaration form thereby clearly stating that he had understood the terms and conditions as mentioned in the policy and that there was no bonus or any other benefit other than that mentioned in the policy contract. The OPs alleged that the complainant has filed the present complaint without application of mind and the said policies were put to lapse due to his own fault, negligence and non performance of contractual obligation and therefore the present complaint merits dismissal. The OPs further took the defence that it is carrying on Life Insurance Business and is not into banking business to extend any loan facility to the complainant and that the complainant has failed to produce a single documentary evidence showing that such allege loan was promised to be offered by OPs. With respect to the telephonic conversation by way of CD filed by the complainant, the OPs denied that any such recorded conversation was held between the complainant with the representative of OPs or any loan was promised in such conversation. The OPs further defended themselves as not being responsible for act of the complainant in failure to make payment to UPAVP. Lastly, the OPs urged that it was categorically conveyed to the complainant that the policy was running into lapsed status due to default in payment and therefore the complainant is estopped from claiming discrepancy in the policy which cannot be cancelled at such a belated stage after the expire of Free Look Period and prayed for dismissal of the present complaint under Section 26 of CPA. The OPs have attached copies of Proposal Forms, ECS Forms, Joint Declaration Forms, Copy of Policies & Terms of Conditions and illustration documents and ECS dishonor letters dated 03.04.2016 and 12.05.2016.

3. Rejoinder to the written statement of OPs was filed by the complainant in rebuttal to the defence taken by the OPs wherein the complainant reiterated his grievance by controverting/contra indicating the objections taken by the OPs to the complaint.
4. Evidence by way of affidavit was filed by the complainant reemphasizing the grievance in the complaint in the light of documents exhibited from exhibit CW1/12 to CW12/12 which were the documents filed with the complaint.
5. Evidence by way of affidavit were filed by OP1 and OP2 exhibiting the proposal form, ECS form, joint declaration form, policy terms and condition, copies of letters dated 03.04.2015 and 12.05.2015 and reply to legal notice dated 21.09.2015 in support of its defence as already taken in the written statement.
6. The complainant moved an application on 11.05.2017 for filing additional evidence by way of transcripts of audio recording in the form of hard copy version of the soft copy (CD) already placed on record with complaint alongwith transcripts of telephonic conversation held between the complainant and executives of OPs in Hindi Vernacular language. The reply was filed by OP1 and OP2 thereto on 05.12.2017 in which the OPs took the preliminary objection to the maintainability of the application on the ground that the transcripts of audio recordings of telephonic conversation is not admissible until and unless accompanied by certificate under Section 65B of Indian Evidence Act, 1872 which clearly states that any information contained in electronic record which is printed in a paper, stored, recorded or copied in optical or magnetic media produced by a computer shall be deemed to be a document on satisfying the conditions in sub clause 2 (a) to 2 (d) mentioned in this Section for admissibility in any proceedings and sub clause (4) i.e. a certificate of doing any of the following things in sub clause (a), (b) and (c). The OPs placed reliance upon the landmark judgment of Hon’ble Supreme Court in Anvar P.V. Vs P.K. Basheer and Ors (2014) 10 SCC 473 wherein the Hon’ble Apex Court held that admissibility of secondary evidence of electronic record depends upon satisfaction of conditions prescribed under Section 65B of Evidence Act, 1872 and therefore producing copy of statement has to be mandatorily accompanied by a certificate as specified in Section 65-B(4) of Evidence Act. The OPs therefore prayed for dismissal of the application on the grounds that the same was not accompanied with certificate under Section 65- B(4) of Evidence Act.
7. Written arguments were filed by the complainant and OP1 and OP2 reiterating their respective / rival contention / grievance alongwith judgments in support of their case/defence.
8. We have heard the rival contentions of both the parties and have thoroughly perused the documentary evidence placed on record alongwith judgments filed by both the parties on the basis reliance placed by them.

The fulcrum of dispute is the reason behind the issuance / taking of the policies which as per the complainant’s version were taken under the inducement / allurement of home loan promised by the OPs which he was in need of towards the flat purchased by him at UP Awas Vikas Parishad at the relevant time. However since the home loan in question never got sanctioned or disbursed to him, the complainant asked for cancellation of policy and refund of premium paid and to corroborate / substantiate the allegation of inducement / allurement by the OPs in to the complainant taken the polices, the complainant placed on record a CD of telephonic conversation held between him and executives of OPs assuring home loan.

Two key issues therefore have arisen in the present complaint for consideration/adjudication.

1. The first issue is whether the policies in question were sold by OPs to the complainant under the inducement / promise of sanction of home loan to the complainant and the determination of the same. In this regard the complainant placed on record the CD of telephonic conversation held between himself and executive of OPs as Annexure C-3 alongwith the complaint and thereafter moved an application after filing written arguments for placing additional evidence by way of written version of transcripts of audio recordings as hard copy to corroborate his allegation of inducement and misrepresentation by the OPs to coerce him into taking the policies in question on false promise of sanction of home loan and thereafter assuring cancellation of the same in the event of non disbursal / sanction of home loan. However, the OPs took objection to the maintainability of the application and admissibility of the transcripts on grounds of the same not being accompanied with the mandatory Section 65 B 4 certification placing reliance upon the judgment of Hon’ble Supreme Court in Anvar P.B Vs P.K. Basheer and Ors (2014) 10 SCC 473 which has settled the legal position on the admissibility of secondary evidence of electronic record. In view of the observations made by the Hon’ble Supreme Court that such a certificate MUST accompany the electronic record like computer, printout, CD, VCD, Pen drive Etc for their admissibility which was conspicuously missing in the present case in as much as the complainant failed to comply with the requirements of Section 65 B of Indian Evidence Act, on both occasions i.e. at the time of filing of the complaint when he had annexed the CD of telephonic conversation as well as at the time of filing the written version of telephonic transcript by way of application moved. Therefore, such conversation or contents of any such CD placed on record has no legal validity / admissibility / genuineness and therefore cannot be entertained. Even otherwise, the complainant had duly signed the policy Proposal Form and Joint Declaration Form in which it was clearly mentioned that the policy did not assure of any other benefit example loan etc therefore, the plea or ground for deficiency of service or inducement by OPs as alleged by the complainant is non maintainable and is therefore decided against the complainant.
2. The second issue arises whether the complainant was well within his rights to get the policies cancelled / premium refunded as asked for by him from the OPs in January 2015.            It is not in dispute that the BSLI Vision Life Secure PT20 policy bearing numbers 006437336 and 006448725 were issued to the complainant by OPs on 15.03.2015 and 26.03.2015 respectively on payment of premium of Rs. 67,902.14 and 67,903.07 respectively. The version of complainant for taking the policy was the assurance of sanction of home loan by the OPs given to him. However since the home loan in question never got sanctioned or disbursed to him, the complainant asked for cancellation of policy and refund of premium paid and to corroborate / substantiate the allegation of inducement / allurement by the OPs in to the complainant taken the polices, the complainant placed on record a CD of telephonic conversation held between him and executives of OPs assuring home loan and at an advance stage of proceedings, filed an application to place on record the hard copy of audio recordings to plead that the OPs had assured cancellation of polices in the event of failure of disbursal of home loan.

Per contra, the OPs have taking the defence that the policies were taken by the complainant being fully aware of the contents of proposal form and joint declaration form etc which had been duly read and signed by him and which clearly mentioned interalia that “apart from policy benefit explained by BSLI sales representative, there is NO other benefit attached with this policy example loan or overdraft facility from any bank”. The defence of OPs on the expect of Free Look placing reliance upon the judgments of Hon’ble NCDRC in LIC Vs Siba Prasad Dash IV (2008) CPJ 156 (NC) and Mohan Lal Benal Vs ICICI Prudential Life Insurance Co. in which the Hon’ble NCDRC had held that premium for the policy period covering the risk cannot be refunded for a lapsed policy under any provision of terms of policy or law and if the insured/complainant was not satisfied with the terms and conditions of the policy, he had an option to return the policy within 15 days of receipt i.e. within “Free Look Period”. We find force in the argument put forth / defence taken by the OPs on this ground on the basis of settled law and the factum that the complainant did enjoy the complete risk cover for one year from issuance of policies till their renewal without demur / protest and did not raise any objection for cancellation / revocation of the policy during that period and admittedly the objection was raised for the first time as per documentary evidence filed by the complainant in January 2015 for policies taken in March 2014 i.e. after 10 months. The Hon’ble National Commission in the judgment of Gurinder Kaur Vs HDFC Standard Life Insurance Co. Ltd in Revision Petition No. 4463/2014 had held that “be that as it may, the fact remains that the petitioner having failed to exercise her option within the stipulated free look period of 15 days, it cannot be held that there was any deficiency in service on the part of insurance company in declining to accede to the prayer for foreclosure of the policy. Thus, we do not find any material irregularity or illegality in the impugned order, warranting are interference in exercise of Revisional Jurisdiction. The revision petition is dismissed accordingly”.  The Hon’ble Delhi SCDRC in the recent judgment of Surender Kumar Vs SBI Life Insurance Co. Ltd I (2018) CPJ 2 B (CN) (Delhi) had held in similar facts of the case where the complainant waited for eleven months after receiving the policy documents complaining about its terms and conditions that since the complainant did not exercise his option to cancel his policy and return it within 15 days of its receipt under the “Free Look Facility”, he is not entitled to any relief. In the letter dated 21.09.2016 / reply to legal notice of complainant to the OPs, the OPs categorically mentioned that the complainant failed to pay the premium of the polices on the due date i.e. 15.02.2015 and 26.02.2015 and even after grace period of 30 days, no payment was received leading to lapsation of polices and no revival request was ever raised by the complainant in this regard. Further at the time of taking the polices, a welcome call was made to the complainant by OP’s executives wherein he had agreed to abide by the features of the policy. This issue is therefore also decided against the complainant in view of settled proposition of law and documentary evidence placed on record by both the parties.  

9. The Forum had after thoroughly scrutinizing the documentary evidence, put the parties to a specific query of e-mail dated 23.03.2015 written by Grievance Redressal Officer of OP1 and OP2 to the complainant which was filed as Annexure C-6 by the Complainant in the complaint wherein a reference to attachment of an e-mail dated 20.01.2015 has been made whereby the OPs had “communicated its decision” to the complainant. However, no such attachment e-mail was placed on record by either complainant or OPs. The complainant denied receipt of any such e-mail and the Forum had directed OP1 and OP2 to file the same on record but the OPs admittedly stated on record that they were not in possession of any such e-mail and were not even aware of contents thereof and therefore submitted that officially as per record, the communication between the OPs and the complainant regarding the lapsed policies was in April – May 2015 when the same were coming up for renewal but were lapsed due to stop payment instructions by the complainant to his banker for which reason the ECS of premiums could not go through. The Complainant is not entitled to the cash surrender benefit of the polices due to non-fulfillment of revival requirement as under the terms and conditions of premium provisions filed as Annexure R-5 with the written statement by OPs, the surrender benefit was payable only if the policy was in effect and after all due installments premium for at least three policy years were paid by the insured to request for surrender of policy and avail of its surrender benefit whereas the polices had lapsed after one year only. Therefore, after due appreciation of settled law and the factum of the complainant having signed the proposal form and the declaration form after understanding the contents, terms and conditions of the policy and despite being in receipt of the policy documents which clearly mentioned that the complainant had the option to return the policy to the OPs within the “Free Look Period” of 15 days under the provisions of IRDA from the date of its receipt for seeking refund of premium by way of cancellation, we are not inclined to grant relief to the complainant in this regard since the request for cancellation / refund of premium was made after 10 months of issuance of policies.  
10.   We are in agreement with the objection raised by the OPs that the  policy contract is binding on both the parties putting their signatures and no deviation from the terms and conditions thereof is permissible in view of the settled law by the Hon’ble Apex Court in Export Credit Guarantee Corporation India Vs Garg Sons International 2013 (1) Scale 410, Suraj Mal Ram Niwas Oil Mils Pvt Ltd Vs United India Insurance Co. Ltd (2010) 10 SCC 567 and United India Insurance Co. Ltd. Vs Harchand Rai Chandan Lal V (2004) SLT 876 in which the Hon’ble Supreme Court held that there must be strict compliance with the terms and conditions of an insurance policy vide which the rights and obligations are strictly governed and no exception or relaxation can be given on the ground of equity howsoever liberally we may construe the policy, but we cannot take liberalism to the extent of substituting unintended words. The judgments relied upon by the complainant are irrelevant to the contentions / grievance raised by the complainant and therefore not pertinent.  
11.  Having considered the instant case on the touch stone of the settled provisions of law of Indian Evidence Act 1872, and the strict adherence of policy terms and conditions and clear observations of the Hon’ble National Commission in judgments pertaining to             “Free Look Period”, we are of the considered opinion that the claim of the complainant must fail to the effect of alleging deficiency of service which it has failed to prove beyond reasonable doubt against the OPs given the onus of proving the same on him as per the settled law in the case of Ravneet Singh Bagga Vs K L M Royal Dutch Airlines (2000) 1 SCC 66 in which Hon’ble Supreme Court held that the burden of proving deficiency of service is upon the person alleging it. The rendering of deficient service has to be considered and decided on the basis of inefficiency, lack of due care, absence of bonafides, rashness, haste or omission, none of which ingredients is present or attributable in the present case against the OPs. We therefore, conclude that the present complaint is devoid of merits and is therefore dismissed accordingly, leaving the parties to bear their own costs.        
12.  Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
13.   File be consigned to record room.
14.   Announced on 13.08.2018