COMPLAINT FILED: 26.06.2009 <br /> DISPOSED ON: 03.11.2010<br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)<br /> <br /> 3RD NOVEMBER 2010<br /> <br /> PRESENT:- SRI. B.S.REDDY PRESIDENT <br /> SMT. M. YASHODHAMMA MEMBER <br /> SRI.A.MUNIYAPPA MEMBER <br /> <br /> COMPLAINT NO.1499/2009<br /> <br /> <br /> COMPLAINANT <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> Mohammed Ibrahim,<br /> No.124, 6th Cross,<br /> Vidyaranya Nagar,<br /> Magadi Road Tolgate,<br /> Bangalore – 560 023.<br /> <br /> In Person<br /> <br /> <br /> V/s.<br /> <br /> <br /> OPPOSITE PARTIES 1. Pollad,<br /> Birla Sun Life Insurance <br /> Company Ltd.,<br /> 6th Floor, Vaman Centre,<br /> Makhwana Road,<br /> Off: Andheri Kurla Road,<br /> Near Moral Naka, <br /> Andheri East,<br /> Mumbai – 400 059.<br /> <br /> 2. Branch Head,<br /> Birla Sun Life Insurance <br /> Company Ltd.,<br /> No.14, H.M. Geneva House,<br /> Cunningham Road,<br /> Bangalore – 560 052.<br /> <br /> Advocate: Sri N.S.SatishChandra<br /> <br /> <br /> O R D E R<br /> <br /> SRI. B.S.REDDY, PRESIDENT<br /> <br /> The complainant filed this complaint seeking direction against Opposite Parties (herein after called as OPs) to pay guaranteed maturity benefit amount of Rs.2,20,500/- plus guaranteed maturity option – 100% along with 1st two installments of Rs.1,800/- as compensation for canceling his life insurance policy without any fault of him, on the allegations of deficiency in service on the part of OPs.<br /> <br /> 2. In the complaint it is stated that the complainant being holder of Birla Sun Life Insurance Policy ID No.001880568 had remitted an amount of Rs.1,800/- through SBM cheque dated 16.07.2008 towards first two monthly installments. For further monthly premiums of Rs.900/- which was supposed to be paid through ECS for which he had submitted all the required documents along with his signature. The benefits of the policy are guaranteed maturity benefit – Rs.2,20,500/-, plus guaranteed maturity option – 100%, Basic sum assured – Rs.1,30,095/- and enhanced sum assured – Rs.2,00,000/-. The complainant received a receipt stating that he had made a payment of Rs.18,000/-, but actually he had paid only Rs.1,800/- which is a grave mistake of OP company. The ECS submitted by OP was not cleared; on enquiry the bank informed that “they have not received any ECS” in respect of complainant’s account. The complainant an enquiry with OP came to know that they were sending the ECS for a wrong account number. However the complainant issued a cheque for Rs.2,701/- on 10.11.2008 towards payment of September, October and November – 2008 installments along with ECS papers for payment of further monthly premiums and the cheque was cleared on 13.11.2008. On 26th November when the complainant went through his policy details on internet he was surprised to see these words “Currently you do not have any policy in force”. Immediately he contacted his advisor and customer care people they also repeated that his policy was not inforce. When he asked them they said that the cheuqe for Rs.18,000/- is dishonoured (actually he has issued cheque for Rs.1,800/- and that cheque was cleared by the bank on 28.07.2008). When further insisted about the correct reason then they said that “since you have not paid the premium”. The complainant explained the reason for non-payment i.e. the mistake of the OP in sending the ECS to wrong savings bank account number, then they said sorry. Inspite of making prompt payments of monthly premiums when the policy “is not inforce” the complainant did not want to continue further he contacted customer care people in the month of November – 2008 and requested to refund the amount of Rs.4,501/- along with interest. Finally he contacted the team coach Mr. Santosh he said that he needs sometime to rectify the faults and said he would get back after 7 days, but he never called. On 15th December 2008 the complainant contacted Mr. Santosh and he said that the policy has been activated. Once again the complainant requested to refund an amount of Rs.4,501/- with interest. They said if complainant cancel the policy, whatever money he has paid would be forfeited. The complainant submitted that his request cannot be considered as for ‘cancellation’ as policy is not in force. The mistake of OP made him to suffer a lot of agony. He once again requested to refund Rs.4,501/- as he do not want to continue the policy. The customer care executives assured that there won’t to be any such problem in future and requested to continue the policy for which the complainant obliged and paid the premium of Rs.900/- regularly through ECS till May – 2009. He has paid an amount of Rs.9,903/- in all towards his premiums. On 4th May when the complainant browsed through his account in internet he was once again shocked to see that “currently you do not have any policy inforce”. Immediately he contacted customer care people and they started to repeat the same old story that his 1st two months installments itself is not realized from his bank. Whereas his bank has cleared the 1st two installments of Rs.1,800/- on 29.07.2008. While he was pursuing the matter with customer care people, all of a sudden on 13.06.2009 without sighting any reasons OPs have sent a cheque of only Rs.8,103/- (though as on today complainant has paid an amount of Rs.9,903/-) stating that “payout reason” Post registration of cancellation. The complainant approached one Mr. Vishwanath, Development Officer and explained briefly about his problem and submitted the bank pass book copy for being paid the regular monthly premiums. He said he will solve the problem within two days and till today he has not called him. The pain and suffering and mental agony the complainant has undergone due to the irresponsible and negligent act of the OPs, irreparable damage caused towards mental peace, health and his precious time. The complainant would like to know on what grounds his policy was cancelled even after regular payment of installments, without any fault of him, without stating any reasons. OPs have refunded only Rs.8,103=34 though he has remitted Rs.9,903/-. The complainant has suffered mental agony and harassment for the last 12 months. Hence the complaint seeking necessary reliefs as stated above. <br /> <br /> 3. On appearance, OPs filed version contending that the complaint is not maintainable, there is no cause of action and there is no deficiency in service, as such complaint is liable to be dismissed. It is admitted that the complainant had obtained a policy called “Dream Plan” from OP. The benefits of the policy were guaranteed maturity benefit of Rs.2,20,500/-, guaranteed maturity option of 100%. The basic sum assured was Rs.1,30,095/- and enhanced sum of Rs.2,00,000/-. The complainant paid initial premium of Rs.1,800/- and undertook to pay the monthly premium of Rs.900=39. In the authorization to pay monthly insurance premiums through ECS, the complainant had furnished his account No.”54001176578”. OP sent the ECS authorization form for collection of premium amount from the bank of the complainant. The complainant’s bank dishonoured the request for ECS for the reasons “Non-Existent A/c” for the account bearing No.54001176578. Since the ECS extraction was refused by the bank of the complainant, the policy issued went into lapsed condition. The complainant issued cheque for Rs.2,701/- towards the premium for the month of September, October and November – 2008.After receipt of the said sum OP reinstated the policy and the same was intimated to the complainant. However due to a system error in the month of May – 2009 the OPs received an intimation that the cheque given towards initial premium is dishonoured which resulted in automatic lapsation of the policy and refund of the premium of Rs.8,103/-. After realization of the error caused, immediately the complainant was informed about the same and a letter dated 24.06.2009 was sent to the complainant requesting to deposit the remaining amount to reinstate the policy. The complainant was informed that if he intends to reinstate the policy he can do so by paying an amount of Rs.9004=68 towards the outstanding dues along with certificate of insurability. The complainant did not respond to any of the correspondents made by OPs. The complainant had received a sum of Rs.8,103/- towards the repayment of premiums without any objections and therefore estopped from contending otherwise and filing the complaint. The complainant has received a sum of Rs.8,103/- without any protest and without reserving his liberty. Therefore the complainant cannot allege any deficiency in service against OPs. <br /> <br /> OPs also denied the parawise complaint allegations which are not specifically admitted it is submitted that the system errors cannot be claimed as very grave, the complainant was very much aware that the policy had been reinstated immediately on receipt of Rs.2,701/-. It is admitted that the complainant had paid in all a sum of Rs.9,903/- towards the premium. OPs have already refunded a sum of Rs.8,103/- and the complainant has received the same without any protest and without reserving any liberty. OPs have sent cheque for Rs.8,103/- after deducting the necessary charges. The allegations that the complainant had suffered pain mental agony is false. OPs are not liable to pay any amount. Hence it is prayed to dismiss the complaint with exemplary costs. <br /> <br /> 4. In order to substantiate the complaint averments, the complainant filed affidavit evidence. The authorized Officer of OP filed affidavit evidence in support of the defence version. <br /> <br /> 5. The complainant filed affidavit to treat affidavit evidence as his arguments. Arguments on both sides heard. Points for consideration are: <br /> <br /> Point No.1:- Whether the complainant has proved <br /> the deficiency in service on the part of <br /> the OP?<br /> <br /> Point No.2:- Whether the complainant is entitled<br /> for the reliefs now claimed?<br /> <br /> Point No.3:- To what Order?<br /> <br /> 5. We record our findings on the above points are:<br /> <br /> Point No.1:- Affirmative. <br /> Point No.2:- Affirmative in part. <br /> Point No.3:- As per final Order.<br /> <br /> R E A S O N S<br /> <br /> 6. At the out set it is not at dispute that the complainant had taken the Birla Sunlife Insurance Policy called “Dream Plan” bearing No.001880568 from OP on monthly premium payable at Rs.900=39. The complainant paid two initial monthly premium of Rs.1,800/- for the month of July and August – 2008 and the policy was issued in his favour. The complainant submitted an authorization to pay monthly insurance premiums through electronic clearing service (ECS). OP sent the ECS authorization form for collection of the premium amount from the bank of the complainant, but however the bank dishonoured the request for ECS, for the reasons “non existent A/C” for the account bearing No.5001176578. Since the ECS request was refused by the bank of the complainant, the policy issued in favour of the complainant went into lapsed condition. The complainant was informed regarding the refusal of ECS from his banker. The complainant submitted another mandate form for ECS and he also issued a cheque for Rs.2,701/- towards the premiums for the month of September, October and November – 2008. The reason for not accepting the ECS by the banker of the complainant was the account number mentioned in the request for ECS was account No.54001176578 where as the account number furnished by the complainant in ECS was 5400116518. Thus it becomes clear that because of not furnishing the correct account number, the complainant’s bank has not honoured ECS.<br /> <br /> 7. It is contended by the complainant that in fact the account number mentioned in his ECS authorization form he has clearly mentioned the account number, with two last digits 18; there was no reason for the OPs to read the digit 1 as 7. It is clearly the incompetence and irresponsible act of the OPs in sending the ECS request to a wrong account number which resulted in dishonour and the policy being lapsed. We perused annexure – 1 copy of ECS form, the account number with last two digits mentioned is 18, but the stroke of digit 5 has joined digit 1 as a result digit 1 appears as digit 7. It appears on account of the same OP while submitting ECS request, the account number was mentioned with last two digits as 78 instead of 18. It is only a bonafide mistake; the same cannot be considered as irresponsible act or incompetence of OPs. <br /> <br /> 8. After the complainant was informed about the dishonour of request of ECS from his banker, he has submitted fresh ECS request authorization form and further a cheque for Rs.2,701/- was issued towards monthly premiums due for the months of September, October and November – 2008 on 10.11.2008, the said cheque was cleared on 13.11.2008. On 26.11.2008 when the complainant went through his policy details on internet he was surprised to see that currently he did not have any policy inforce. The complainant inspite of making prompt payments of monthly premiums, the policy was not revived. Hence he requested to refund the amount paid towards the premiums along with interest. Thus it becomes clear that even after the complainant has paid the monthly premiums, the policy was not immediately revived. There was no reason for OPs in not reinstating the policy even after payment of the premiums due. <br /> <br /> 9. The learned counsel for the OPs contended that though the complainant has issued the cheque for Rs.2,701/- on 10.11.2008 towards monthly premiums for the month of September, October and November – 2008 and the same was cleared on 13.11.2008, but there was some delay in updating the policy and reinstating the same. It is contended that due to systems error, the policy was not shown as reinstated as on 26.11.2008 when the complainant went through his policy details on the internet. However that cannot be considered as sufficient ground for the complainant to claim compensation on the allegation of deficiency in service. <br /> <br /> In our view as per Annexure – 2 the policy details of the complainant was shown, as currently the complainant do not have any policy in force on 26.11.2008. Despite the fact that the complainant has paid the amount towards monthly premiums for three months for the months of September, October and November – 2008 and the cheque was cleared on 13.11.2008. There was no reason for the OPs in not reinstating the policy within a reasonable time. On account of OPs not reinstating the policy, the complainant requested to refund the amount paid towards the premiums with interest. As per that request if OPs have refunded the amount, the complainant could not have made any grievances against the OPs. Subsequently OPs regularly collected monthly premiums by sending ECS to the bank of the complainant upto the month of May – 2009. Thus OPs collected the monthly premiums of the policy for 11 months i.e., from July – 2008 to May – 2009. Despite the fact of collecting regular premiums the policy was cancelled by OPs and a cheque for Rs.8,103/- dated 08.06.2009 was sent to the complainant. Without any request from the complainant, for cancellation of the policy, the policy was cancelled by OPs. Subsequently after realizing their mistake OPs have addressed letter dated 24.06.2009 as per Annexure – 7 stating that the policy ceased to be inforce due to system issue, they have erroneously refunded an amount of Rs.8,103=34 vide cheque No.020819 on 09.06.2009. To enable them to reinstate the policy, the complainant was requested to make the payment of an amount of Rs.9,004=68 towards the outstanding due as per the enclosed reinstatement quotation along with certificate of insurability at the earliest. The complainant was requested to resend the cheque with pending dues within 30 days on receipt of the same OPs shall do the needful. <br /> <br /> 10. The complainant submitted that the letter dated 24.06.2009 was received by him on 27.06.2009 on the next day of filing this complaint as such he has not responded for the said letter of OPs. Further it is contended that OPs for the month of September – 2009 again submitted ECS and collected amount of Rs.900=39 during the pendancy of the complaint and when the complainant questioned the same that amount was also refunded to him. <br /> <br /> 11. The complainant has produced the premium paid certificates marked as Annexure 3 to 4. OPs contention that lapse of policy on 28.10.2008 was due to system error, the same cannot be considered as grave mistake cannot be accepted. We are unable to accept the defence that the policy was lapsed on 28.10.2008, for the reason other the online statement as on 21.01.2009 marked as Annexure – 5 reveals that the premium amount is invested in units and the units are shown at 133.301, unit fund value is shown at Rs.3,244=43. In case if the policy was lapsed on 28.10.2008 there was no reason for investing the premiums collected in units and in allotting the units as per Annexure – 5. For every lapse on the part of the OPs, in dealing with the policy of the complainant, the only defence set out is on account of system errors as submitted by the learned counsel for OPs. We are unable to accept such a defence for the reason that the systems does not work on their own, it is operators who handle them. Therefore it is not justifiable to blame the system. It is a clear case of gross negligence on the part of the officials of OPs in operating the accounts through the system maintained which led OPs to refund the amount of Rs.8,103/- stating that the policy has been lapsed, for no fault of the complainant. Such a grave mistake and gross negligence on the part of OPs is nothing short of deficiency in service on the part of the OPs. <br /> <br /> 12. The learned counsel for the OPs relied on the principles led down in (2008) 5 SCC 400 National Insurance Company Limited V/s Sehtia Shoes and (1999) 6 SCC 400 United India Insurance V/s Ajmer Singh Cotton & General Mills and Others in support of his contention that the cheque for Rs.8,103/- sent by OPs towards refund of the amount collected as monthly premiums was got encashed by the complainant without any protest. When the complainant has accepted the amount, now he cannot claim any deficiency in service on the part of the OPs. In our view the principles laid down in the above two rulings are not applicable to facts of the case. The complainant has not issued any discharge voucher for having accepted the amount in full and final settlement of the policy. Further from the affidavit evidence it becomes clear that after receiving the cheque, the complainant has met the development officer Mr. Vishwanath on 15.06.2009 and enquired as to why the amount has been refunded, though the complainant has remitted total amount of Rs.9,903/- as on May – 2009. The said development officer after verifying computers gave the statement showing that “reason as cheque dishonour” and another column “cheque realization is shown as 28.05.2009”. When the complainant furnished the details regarding the amounts remitted the officer assured to solve the problem within two days, but he has not contacted the complainant Even the complainant after receipt of the letter dated 24.06.2009 met the officials of the OPs by name Mr. Srinivas Rao, PRO and Ms. Sampitha and discussed with them. PRO during the meeting has handed over the copy of the statement as per Annexure – 12. Therefore it cannot be said that the complainant without any protest accepted cheque, so as to hold that he cannot come up with such a complaint alleging deficiency in service against OPs. Under these circumstances we are of the view that the complainant proved deficiency in service on the part of the OPs. <br /> <br /> 13. The complainant is claiming the maturity benefit of the policy amounting to Rs.2,20,500/- along with refund of first two installments amount of rs.1,800/- as compensation for cancelling his policy without any fault on his part. The complainant contended that though he has remitted monthly premiums regularly upto May – 2009 without any fault on his part; OPs cancelled the policy and refunded the part of the premium amount collected. If anything had happened to his life during this period what would have been the fait of nominee, as such he is entitled for the maturity benefit amount of the policy. In our view the complainant is not justified in claiming the maturity benefit amount of the policy only on account of the deficiency in service on the part of the OPs. Even now OPs are ready to revive the policy if the complainant remits all the premiums due, but the complainant stated that he is not willing to continue the policy. Taking into consideration of all the facts and circumstances, it would meet ends of justice by awarding compensation of Rs.50,000/- towards mental agony and harassment suffered by the complainant. Accordingly we proceed to pass the following: <br /> <br /> O R D E R<br /> <br /> The complaint filed by the complainant is allowed in part. Ops are directed to pay an amount of Rs.50,000/- as compensation to the complainant with litigation cost of Rs.3,000/- within four weeks from the date of this order. <br /> <br /> Send copy of this order to both the parties free of costs. <br /> <br /> (Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 3rd day of November 2010.) <br /> <br /> <br /> PRESIDENT<br /> <br /> MEMBER MEMBER <br /> <br /> Snm:<br /> <br /> <br />