Punjab

Ludhiana

CC/15/171

Shally Mittal - Complainant(s)

Versus

Birla Sunlife Ins.Co.Ltd - Opp.Party(s)

Retesh Mohindru Adv.

30 Apr 2015

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

                                                          C.C. No.598 of 19.07.2012

                                                          RB No.171 of 18.03.2015

                                                          Date of decision: 30.04.2015 

1. Shally Mittal w/o Manoj Gupta D/o Sharan Kumar Gupta, through attorney Sharan Gupta s/o Devi Chand Gupta/ r/o House no.21, FF, HIG Flats, Rajguru Nagar, Ludhiana.

2. Sharan Gupta s/o Devi Chand Gupta, R/o House no.21, FF, HIG Flats, Rajguru Nagar, Ludhiana.

                                                                             … Complainant

                                                Versus

Birla Sunlife Insurance Company Ltd., through its concerned officer, SCO, 124, Ground Floor, Feroze Gandhi Market, Ludhiana.

Alternative Address : One India Bulls Centre, Tower-1, 15^th and 16^th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphin Stone Road, Mumbai -400013.

                                                                             … 0pposite Party

 

COMPLAINT UNDER SECTION 12 OF THE

CONSUMER PROTECTION ACT, 1986.

Quorum:    Sh.R.L.Ahuja, President.

                   Ms.Babita, Member.

                  

Present:       Sh.Ritesh Mohindra, Adv, for the complainants.

                   Sh.Ajay Chawla, Adv. for Op.

 

ORDER

R.L.AHUJA, PRESIDENT.

  

 

1.                Earlier, a complaint bearing No.598 dated 19.07.2012 was filed by the complainant before this Fora, which was decided vide order dated 29.01.2013 of this Forum and against the said order, an Appeal No.307 of 2013 was filed by the complainant before the Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh, which was accepted by the Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh vide order dated 05.02.2015 and order dated 29.01.2013 passed by this Forum has been set-aside and the complaint has been remanded back to this Fora for deciding the complaint on merits. Pursuant to which, the present complaint has been re-registered.

2.                Brief facts of the complaint are that complainant no.1 is the policy holder of life Insurance policy bearing no.005067031 dated 27.08.11 of the OP, whereas the complainant no. 2 is shown as nominee of the policy. Complainant no.2 is 71 years old retired person from Haryana Viduyat Prasaran Nigam Ltd. (HVPNL) and is having income only from pension to the tune of approximately Rs.4,00,000/- yearly. Complainant no.2 was having insurance policy in Metlife. On 06.08.11 complainant no.2 received a call from Suresh Jain, MBA Investment from his mobile no.098733-29147, 09873035375 and he pointed out some drawbacks in the policy. He offered the complainant no.2 that he can cancel the existing plan and can help the complainant no.2 in getting back amount of Rs.2,09,410.13 with the help of his senior Mr.Daksh Mehta. The said Suresh Jain also gave fake cancellation code and approval number. Then the said Suresh Jain said to the complainant no.2 that Government is launching an IPO of Coal India Advantage Fund and he can get allotment of the said fund @ Rs.6.27 for the complainant no.2. He further said that the said fund will reach to Rs.21/- within two months and the difference of the rate will be paid to complainant no.2 in the month of October, 2011. Suresh Jain further told that in order to get allotment, complainant no.2 will have to invest in some Life Insurance Companies as these Insurance Companies will further invest in the IPO of coal India Advantage Fund. It was also contended by him that all the investments made by complainant no.2 will be one time investments. With all the allurements, complainant no.2 agreed to purchase the said policies, as a result Suresh Jain managed to get 17 cheques amounting to Rs.12,47,312/- from time to time and sell 17 life insurance policies from different insurance companies, in the name of daughters namely Renu Gupta and Shally Mittal. The complainant no.2 was the policy holder of 15 policies out of the abovesaid 17 policies and in two policies Prem Gupta s/o complainant no.2 was the policy holder. The detail of all the 17 policies is given below:-

	Name of Company/Investment Plan	Policy Number
1.	Future Generali Saral Anand	00862001
2.	Future Generali Saral Anand	00869666
3.	Future Generali Saral Anand	00860495
4.	Tata AIG Mahalife Gold	C676034866
5.	Tata AIG Mahalife Gold	C676093137
6.	Kotak Assured Income Plan	02353862
7.	Kotak Assured Income Plan	02363088
8.	Kotak Assured Income Plan	02412922
9.	Kotak Assured Income Plan	02414705
10	Reliance LIC Multiplier Plan	19228421
11	Reliance LIC Multiplier Plan	19267005
12	AEGON Religare Money Back Plan	110813213111
13	AEGON Religare Money Back Plan	110913234439
14.	AEGON Religare Money Back Plan	111113305481
15.	Birla Sunlife	005067031
16.	Birla Sunlife	005078615
17.	Bajaj Alliance	0230782073

 

The said Suresh Jain also advised the complainant no.2 to answer the inquiry from the different insurance companies as per his advised so as to get smooth investment in the insurance companies. Thereafter, for some time, the said Suresh Jain remained in touch with complainant no.2 and after that stopped attending his calls and stopped picking up phones. This behaviour of said Suresh Jain raised doubt in the mind of the complainant no.2 and the complainant no.2 started probing the matter. On probing complainant came to know that the insurance policies done by Suresh Jain are not one time investment, rather complainant no.2 will have to pay premium for all the policies to the tune of approximately Rs.12,00,000/- every year. All the policies were done by one broker company namely ‘Endeavour Insurance Broking Ltd.’ The broker has received upto 50% to 60% commission from the total premium paid by the complainant no.2 in the different insurance policies Ltd. All the different policies are for the tenure of 10 to 20 years and the 17 policies were done within the period of four months only. The policy in question is in the name of complainant no.1 i.e. daughter of complainant no.2. Complainant no.2 is 71 years old and has retired from Govt. Job (HVPNL) and is drawing pension upto Rs.4 lac annually. Complainant no.2 is unable to pay premium of approx.Rs.12 lac annually. All the policies have been done by the Endeavour insurance Broking Ltd. by using unfair trade practice and by giving false representation and by misleading and misstating facts to the complainant no.2 in connivance with some officials of OP company. Complainant no.2 being 71 years old may not survive for the next 20 years to pay the premium of policies which is otherwise impossible for him to pay by taking into account his present income. The OP company has kept a blind eye on this aspect also. The broker had contacted complainant no.2 by adopting unfair trade practice by sending fake person with fake telephone number and managed to sell policies by misleading and misstating representation. The name of the broker only came to the knowledge of complainant no.2, after going through the policies. The OP company is liable for the each act and conduct of his broker. The OP company has also failed to comply with the norms of IRDA. Despite serving a legal notice dated 12.7.2012 upon the OP, Op failed to give any reply and to return the amount within the stipulated period. Such act and conduct of OP is claimed to be deficiency in service on the part of the OP by the complainants. Hence, by filing the present complaint, the complainants have prayed that OP be directed to pay back the premium paid by the complainants amounting to Rs.76,000/- alongwith interest @ 24 p.a., besides Rs.11,000/- as litigation expenses and Rs.1 lakh as compensation to the complainants.

3.                Upon notice of the complaint, Op was duly served and appeared through Sh.Ajay Chawla, Advocate and filed the written reply, in which, it has been submitted in the preliminary objections that the complaint under the reply is not maintainable and is liable to be dismissed as the complainant has attempted to misguide and mislead this Hon’ble Forum and as such, the complaint is liable to be dismissed on this ground alone. No cause of action has arisen in favour of the complainant and against the answering OP to file the present complaint. The complainant does not qualify the ingredients of a valid complaint as envisaged in section 2 (d) of the Consumer Protection Act, 1986. The present complaint is not maintainable in the present form as no compliance under section 12 (1)(c) of the Consumer Protection Act. The present complaint is bad for non-joinder of necessary parties i.e. Endeavour Insurance Broking Pvt. Ltd. and Suresh Jain (The broker & the financial consultant who sold the policy). Since, from the bare perusal of the complaint, the entire set of allegations have been leveled against the broker and the financial consultant, therefore the allegations leveled by the complainant are true or not cannot be adjudicated unless and until Endeavour Insurance Broking Pvt. Ltd. and Suresh Jain were made as a OP in the present complaint. Complainants have miserably failed to implead them as necessary OP, therefore the present complaint should be dismissed on this ground alone being not maintainable against the answering OP, because there is no deficiency in service on the part of the OP. Further averred that the ‘Life Assured’ (herein after referred to as LA) i.e. Renu Gupta had submitted to the answering OP, a proposal/application no.A44656180 dated 09.08.11 for the purchase of BSLI Bachat Moneyback Plan, the proposal was accepted on the standard rates based on the information provided by the LA and consequently, a policy was issued bearing no.005067031 dated 27.08.11 which commenced on even date. The present complaint is an after-thought and has only been filed with the ulterior motive to harass and humiliate the answering OP. Further averred that before acceptance of the proposal by the answering OP the contents of the proposal/application, illustrations and the addendum forms were read and explained to the LA in the language best known to them i.e. English Language. On the basis of the information furnished in the application/proposal form, the proposal was processed by the answering OP and thereafter, the said policy was issued to the Life Assured. However, it is most respectfully submitted that before acceptance of the proposal by the answering OP, adequate information with regard to the product, nature and its significance was given to the Life Assured. In view of the above submissions, the present complaint deserves to be dismissed because; it is not only motivated but has been made to blackmail the answering OP with an ulterior motive. Further, it is submitted that as per the guidelines of IRDA, the authority regulating the affairs of answering OP, the LA was given detailed description about the features of the said Plan including the premium amount to be paid, all the charges that would be levied on the same and was also apprised with its terms and conditions before signing of the said application. It was only after being completely aware as regards to the features of the Plan and terms of the Plan including the premium amount to be paid annually towards the said Plan and after having understood and agreed to the terms and condition attached therewith, that the Life Assured applied and signed the said Application forms on her free will and consent; The complainant has not come to the Forum with clean hands as the policy documents delivered to the Life Assured/complainant provided her a period of 15 days within which, she could have returned the policy to the answering OP by stating the reason thereof. The act and conduct of the complainant in not returning/surrendering the policy within the given time signified her acceptance of the terms and conditions mentioned in the said policy documents. Hence the present complaint deserves to be dismissed with special costs. The complainant has filed the present complaint before this Forum, when the policy has already been lapsed and the complainant has already taken all the benefits of the policy for the period for which, she had paid the premium. When once, she had given the premium, she has no legal right to claim the refund and damages. Hence, the present complaint deserves to be dismissed. Further, the complainant was well aware about the terms and conditions of the policy and had no grievance against the answering OP qua the said policies which is evident from the fact that the complainant admits the factum of receipt of policy documents and moreover, specially says in Para no.5 of the complaint that “The name of the broker only came to the knowledge of the complainant no.2 after going through the policies”. It is pertinent to mention here that if the complainant invested in a single premium policy/one time investment, when the complainant received the policy documents and found to be a longer paying annual premium policy, then the complainants could have immediately exercised the option of refund within “15 days free look-in period” and would have got her insurance policies cancelled or modified accordingly. Moreover, the complainant never lodged any complaint of mis-selling with answering OP and the answering OP for the first time only received the summons from this Forum. The present complaint is false, frivolous and vexatious besides being devoid of any merits and has been filed with a view to malign the credential and repudiation of the OP with dishonest intentions to the detriment of the OP and to the illegal advantage to the complainant. On merits, denying any deficiency in service and all other allegations of the complaint being wrong and incorrect, answering OP made prayer for dismissal of the complaint with costs.

4                 Both the parties adduced their evidence in the form of affidavits and documents.

5.                We have heard the learned counsel for both the parties.

6.                Learned counsel for the complainants has filed the written arguments, in which, he has submitted that the complainant is a small time investor in shares and securities and invested in shares and securities for the purpose of savings and the complainants have invested all their life’s savings with the Ops. Arguments of the Ops will not have any bearing on the present complaint because in the present matter, the matter was initially decided by the Consumer Forum and the same was referred to Civil Courts. Thereafter, the complainant had filed an appeal against the said order of this Hon’ble Forum, wherein, the matter was remanded back with the directions to that the same be heard and disposed off on merits. Hence, the allegations of fraud leveled in the complaint have no bearing on the facts of the present case. All the insurance policies were taken by the complainants through one Endeavour Insurance Broking Ltd. The complainant Sharan Gupta is a retired employee from the Haryana Government. At the time of taking the policies, it was represented to the complainant that in all the policies only one time investment is required to be made and accordingly, the complainant took 17 different policies totaling in all to Rs.12,47,312/- in the name of various family members. When the complainant became suspicious about the acts of the investment advisor when he stopped taking their calls, he was astonished to find out that the premium is required to be paid annually amounting to Rs.12 lakh and the advisor had already been paid his commission amounting to 50% on the said policies and the policies were for a tenure of 10 to 12 years. However, the complainant who was already 71 years at the time of taking the policies and was only living on a pension of 4 lakh per annum could not have even applied for a policy for a tenure of 10 to 20 years as he may not live that long. Moreover, the complainant did not have any source of income to pay the said amount of Rs.12 lakh per annum. Hence, this case is a clear case of mis-selling and unfair trade practice on the part of the Ops. The guideline of IRDA is applicable to all the insurance companies and hence, the complaint of the complainants is liable to be allowed with the relief as prayed by the complainants.

7.                On the other hand, learned counsel for the OP has filed the written arguments, in which, he has reiterated all the contents of the written reply filed by the OP and further, it has been submitted that from the bare perusal of the complaint and documents annexed herewith, it is quite evident that the policy was purchased by the complainants with the clear motive of investment and earning huge profits and for multiplying the invested amount as is evident from the perusal of para no.3 of the complaint i.e.(the said fund will reach @21/- within two months and the difference in rate would be paid to the complainant), therefore, the Consumer Forum has no jurisdiction to decide the present complaint. The complainant has filed the present complaint before this Hon’ble Forum when the policy has already been lapsed and the complainant has already taken all the benefits of the policy for the period, for which, the complainant had paid the premium. When once the complainant has utilized the policy, for which, the complainant had given the premium, the complainant has no legal right to claim the refund and damages. Further, when once the policy of insurance has already been lapsed due to non-payment of the premium for the subsequent year within the stipulated period, hence, the complainant is no more consumer within the meaning of the Consumer Protection Act. Moreover, the complainant has admitted the factum of payment of premium and issuance of policy, therefore, the complainant is no stretch of imagination can ask for the refund of the premium after the lapse of the policy and after enjoying the insurance cover other than the surrender value accrued under the policy.

8.                We have gone through the written arguments filed by learned counsel for both the parties and have also gone through the record on the file very carefully.

9.                Perusal of the record reveals that it is an undisputed fact between the parties that the complainant no.1 had purchased a policy No.005067031 dated 27.8.2011 of the OP and the complainant no.2 has been shown as proposer/nominee of the policy. As per the allegations of the complainant that the complainant no.2 was having insurance policy in Metlife and on the assurance of the broker namely Sh.Suresh Jain, who managed to get 17 cheques amounting to Rs.12,47,312/- from time to time and sell 17 life insurance policies of the different insurance companies, in the name of daughters namely Renu Gupta and Shally Mittal. The complainant no.2 was the policy holder of 15 policies out of the abovesaid 17 policies and in two policies Prem Gupta w/o complainant no.2 was the policy holder and the details of all the 17 policies as given in the para no.3 of the complaint and further, the premium paid by the complainant shall be one time premium. But later on, complainant no.2 came to know that he has to pay the premium by every year. Further, there are allegations that the complainant no.2 is unable to pay the approximately Rs.12 lakh as premium towards the purchase of the 17 policies. Though, he is being a retired Government employee and getting pension upto Rs.4 lakh annually. Further, there are allegations that the complainant had served a legal notice dated 12.7.2012 through registered A.D. through his counsel Sh.Rajnesh Mahajan, Advocate which was duly received but the OP did not give any reply nor did return the amount within the stipulated period. By filing this complaint, the complainants have claimed the refund of the amount of premium paid by them to the tune of Rs.79,167/- alongwith interest @24% p.a. alongwith litigation costs of Rs.11,000/- and compensation of Rs.1 lakh.

10.              The bone of contention between the parties is qua the free look period of 15 days. As per the contention of the learned counsel for the complainants that the policies were issued by the broker after representing the facts to the complainants that they will have to invest only for one time premium. Though, after receiving the policy, complainants came to know that they have to pay the premium by every year and the policy was a long term policy and the complainants made prayer for the refund of the amount. On the other hand, there is specific contention of the learned counsel for the OP that it is a proved fact on record that the policy was issued on the basis of the proposal form which was submitted and signed by the complainants and the complainants are qualified persons and they have must gone through the contents of the proposal form and after admitting the same to be correct, had issued the cheques on account of the premium and thereafter, the policy in question was received by the complainants well in time but the complainants did not exercise their option to get the policy cancelled within the free look period of 15 days from the receipt of the policy in question. The complainants did not pay the future premiums, as a result of which, the policy was lapsed. The complainants did not come forwarded to get the policy revived and to pay the premiums which were issued against the policy. Now, the complainants cannot claim the refund of the premium as the complainants have already enjoyed the benefits of the coverage of the life risk. Furthermore, it has also been contended that basically, the complainants are not the consumers as they have invested the money to gain profit which is a commercial transaction and relied upon judgments referred in the written reply.

11.              The first question which needs consideration before this Forum is whether the complainants are consumers or not?

12.              Since, it is proved fact on record that the complainants had purchased the policy on the basis of the proposal form which was submitted by the complainants under their signatures and premium was paid by Sh.Sharan Gupta complainant no.2 who is the father of the complainant no.1 by way of cheques and it is apparently clear from the policy that the policy was not only purchased to earn profit. Rather, the life risk of the policy holder was also covered and there is no denial to this fact on the part of the OP. So, once it is proved on record that the policies are composite policy and not only for the purpose to earn the profit, then in that situation, the policy holder is deemed to be a consumer under the provision of Consumer Protection Act, 1986.

13.              The second question which needs consideration is whether the complainants had availed the free look period of 15 days to get the policy cancelled in order to get the refund of the premium paid by them?

14.              It is proved fact on record that the policy in question were issued to the complainants after receiving the premium by the OP on the basis of the proposal form which was submitted by the complainant no.1 under her signatures to the OP and it is a proved fact on record that the policy was issued well within the stipulated time and the same was delivered to the complainants and there is no denial on the part of the complainants that they did not receive the policy well in time. Rather, it is the contention of the learned counsel for the complainants that after receiving the policy and thereafter, receiving the letter for the payment of next premium, complainants came to know that premium is to be paid by the complainants by every year. Thereafter, the complainants moved to get refund of the premium amount by serving a legal notice upon the OP through their counsel, meaning thereby that the complainants did not come forwarded to exercise their option to cancel the policy within the free look period. It is also a proved fact on record that the complainants did not pay the next premium and thereafter, as a result of which, the policy was lapsed and the complainant did not further approach the OP to get the policy revived or to make the premium for the future period. It is a well settled principle of law that premium of the complainants cannot be forfeited in toto. The complainants can approach the OP in order to surrender the policies and get the surrender value of the policy as per the terms and conditions of the policy, which the complainants had purchased from the OP.

15.              In the light of our above discussions, we hereby partly allow this complaint and direct the complainants to make a request by filing an application for surrender of the impugned policy with the Op within 15 days from the date of receipt of copy of this order and thereafter, Op is directed to consider the application and to revive the policy and to pay the fund value/surrender value of the impugned policy to the complainant within 30 days from the date of receipt of application as per the terms and conditions of the policy in accordance with law, failing which, OP shall be liable to pay interest @9% p.a. from the date of request of surrender of the policy till its realization. Further, OP is directed to pay litigation costs to the tune of Rs.2000/-(Two thousand only) to the complainants. Keeping in view the facts and circumstances of the present case, no order as to compensation is passed. Compliance of order qua litigation costs be made within 30 days from the date of receipt of copy of this order which be made available to the parties free of cost and thereafter the file be consigned to the record room.

 

(Babita)                                             (R.L.Ahuja)  

Member                                           President

 Announced in open Forum

on 30.04.2015

Gurpreet Sharma