D.o.F:24/11/2011
D.o.O:20/6/2011
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC.NO. 244/10
Dated this, the 20th day of June 2011
PRESENT:
SRI.K.T.SIDHIQ : PRESIDENT
SMT.P.RAMADEVI : MEMBER
SMT.BEENA.K.G : MEMBER
1. Prakash Kumar Ramapurath,
S/o Late Balakrishnan,
Ramapurath, Parappa PO,
Edathode 671533, Kasaragod. : Complainants
2. Susmitha , W/o Prakash Kumar
Payalam House, Parappa PO,
Edathode 671533, Kasaragod.
(Adv.B.Raveendran,Kasaragod)
1.Branch Manager,Bajaj Alliance Life Insurance Co.Ltd,
Payyanoor Branch, Payyanur,
2.The Branch Manager,
Bajaj Alliance Life Insurance Co.Ltd, : Opposite parties
Kanhangad Branch, Opp.Vyapari Bhavan Building,
Bandichal Building
(Ad.P.V.Jayaraj,Hosdurg)
ORDER
SRI.K.T.SIDHIQ : PRESIDENT
Complainant No.1 is a policy holder of the Bajaj Allianz Life insurance co. Ltd. The 2nd complainant is the nominee under the policy insured by Bajaj Allianz Life insurance co. Ltd, company. 2nd opposite party is the local branch of Bajaj Allianz Life insurance co. Ltd,. As part of the business promotion, the agent of the opposite parties approached the Ist complainant and collected the premium of ` 1.00,000/- and issued the policy No.00249157951 dt.12/9/06. The total premium payable for selected mode was ` 1.00,000/-and the sum assured was rupees 5 lakhs and the date of its maturity was 12/9/2016 . The agent did not inform the Ist complainant with regard to the lapse of the policy in case of non payment if any premium for subsequent period. According to him the premium paid was a single time premium and he was under the bonafide belief that he will be getting ` 5 lakhs on maturity of the policy or on risk. But to the surprise of the Ist complainant he received a D/D for ` 11553/- dt.9/810 drawn of Axis Bank Pune. According to him, there was no intimation for renewing the policy or any notice regarding the cancellation of the policy. Due to the negligent act of the Ist opposite party the complainant sustained heavy loss . According to the complainant in case of any laches party who has suffered the loss must be reasonably compensated with one lakh which was with the Ist opposite party for 5 years. The complaint is also quite unaware of the business transactions of opposite parties. The complainant suffered mental agony and loss on account of the deficiency in service of the opposite parties. Therefore the complainant claiming refund of ` 1 lakh with interest and compensation of ` 15,000 and cost of ` 3000/-. According to the complainant, the opposite parties should have deducted only ` 1411/- from the premium he deposited from the total amount of the claim. Therefore the complaint.
2. According to 2nd Opposite party the complaint is not maintainable and the policy number provided by the complainant is not a correct policy number. According to them they are functioning under the provisions of insurance act and by abiding all concerned acts. The conduct of the insured and opposite parties is governed by a policy document. The terms and conditions in the policy document are binding on the insured and opposite parties. The complainant has not alleged his grievances before the grievance redressal committee under their company or with the insurance Ombudsman. The complaint is also not referred to an arbitrator . The complainant has not exhausted his remedies. Hence the complaint is not maintainable. The complaint is barred by limitation and it is bad for non joinder of necessary parties also. The complainants are not entitled for the relief claimed.
After filing the version the complainant amended the complaint and the correct policy number is provided. Thereafter opposite party filed additional version. According to them the policy issued to the complainant is a unit linked endowment type with product name Bajaj Alliance new unit gain plus in which the major part of the premium is invested in the market. The guaranteed amount payable on the death of the assured is termed as sum assured in the policy. The cost of insurance for the sum assured shall be deducted from the units held by a policy holder on a monthly basis . A policy holder is entitled to get the benefit under the policy only on complying the conditions detailed in the policy document. As per the proposal form signed by the complainant and the policy document, the complainant is liable to pay regular premium of ` 1,00,000/- per annum. The grace period of one month for the payment of premium is available under the plan. If any regular premium is not paid within the days of grace in the first three years then the policy shall lapse and benefits shall be payable. The policy holder will get an opportunity to revive the policy within 2 years from the date of first unpaid premium and if he does not revive during this period the contract shall de terminated and surrender value if any shall be paid at the end of 3rd year or at the end of the revival period of 2 years whichever is later. If any regular premium remains unpaid during the days of grace after 3full years premium have been paid, the policy will be kept in force by cancellation of unit at the prevailing net asset value to meet the insurance charges. The policy will be kept in force till the value of the units accumulated in the policy holders account does not become equal to an annual premium. When the fund value reaches an amount equal to one premium it will be paid to the policy holder and the contract shall be terminated. The complaint is not entitled to for any relief. Hence the complaint is to be dismissed as not maintainable.
3. 2nd complainant filed affidavit in lieu of examination -in- chief. Exts.A1 marked. On the side of opposite party the manager of Bajaj Allianz Kanhangad branch filed affidavit and Exts.B1 to B4 marked. Both sides heard and documents perused.
4. Now the points arises for consideration are
1. Whether the complaint is maintainable?
2. Whether the complaint is barred by limitation?
3. whether there is any deficiency in service on the side of the opposite parties
4. Whether the complaint is bad for non-joinder of necessary parties?
5. if so what order as to relief and cost?
6. Point No.1: The contention of the opposite parties is that the complainant has not approached the grievance redressal committee under the opposite party or the Insurance Ombudsman for the redressal of his grievance and without exhausting those remedies the complainant approached this Forum and therefore the complaint is not maintainable. Another defense put forward by the opposite parties is that a policy contain an arbitration clause and as per that the complainants ought to have sought the dispute to be decided by an arbitrator and therefore the complaint is not maintainable. We are unable to accept both these contentions. The Honble National Consumer Disputes Redressal Commission in the case of KAMALESHWARI PRASAD SINGH VS NATIONAL INSURANCE CO.LTD reported in I (2005)CPJ 107(NC) has held that even if a dispute is adjudicated before the Insurance Ombudsman even then the complainant can approach Consumer Forum seeking relief since the Ombudsman is not discharging judicial or quasi judicial functions and their role is altogether different. If that be so the proceedings before the Ombudsman is not mandatory one and it is not necessary that the complainant should exhaust his remedy before the Ombudsman. It is equally applicable to grievance Redressal Committee also.
As against the arbitration clause contained in the policy the law is well settled. The Hon’ble Supreme Court in the case of SKYPAK COURIERS VS TATA CHEMICALS LTD reported in 2000(S) SCC 294 has held that “ even if there exist an arbitration clause is an agreement and a complaint is made by the consumer, in relation to certain deficiency in service, the existence of an arbitration clause will not be a bar to the entertainment of the complaint by the Redressal agency constituted under the Consumer Protection Act since the remedy provided under the Act is in addition to the provisions of any other law for the time being in force”.
Relying on the dictum law down in the above case the Hon’ble National Commission in the case of S.Kumar.com Ltd (Now S Kumar online Ltd) Vs Amarendra Rajguru reported in 2008 CTJ 982 (CP) (NCDRC) has held that arbitration could not be said to be a bar to entertain the complaint by the Consumer Fora Constituted under the Act.
This being the situation the issues 1&2 are found against the opposite parties and we hold that complaint is maintainable before the Forum .
7. Point No.2: Another contention of opposite party is that the complaint is barred by limitation. It is also not sustainable since the maturity of the policy is in 2016. That apart he has received the D/D for ` 11553/- towards the settlement of policy amount only on 9/8/10. So the cause of action starts from 9/8/10. Therefore the complaint is filed well within the time stipulated for filing the complaint and hence it is not barred by limitation.
8. Point No.3: The learned counsel for opposite parties Sri.K.V Jayaraj submitted that the complaint is bad for non joinder of the agent who canvassed the complainant. He further submitted that in case of fraud or inducement by the agent then the agent alone is liable and the Insurer have absolutely no liability. To substantiate his contention he produced a proforma of Agency License Docket and invited our attention to condition No.11.
Condition No.11- No employer –Employee relation
There shall be no employer-employee relationship between the parties herein and you shall not be entitled to any payments whatsoever other than the commission for the proposals secured for the company’.
But we are not inclined to accept the above contention. The above condition only indicates that the agent is not entitled for any service benefits from the company since he is not an employee of the company. The agent and master relationship is some thing different than the employer and employee relationship. When an agent canvasses a business for the company, he step in to the shoe of the company and whatever acts or deeds he done in that capacity is akin to that is done by the company itself. Therefore the agent is not necessarily be a party when the Master company itself is in the party array
9. Point No.4: In this case the specific plea of the complainants is that they proposed for the policy relying on the words of the Ist opposite party and their insurance agent that the policy holder will not loose any amount if he remits rupees one lakh as single term premium for the proposed policy and he will get ` 5,00,000/- on the date of maturity that is after 10 years. PW1 during cross examination has deposed that nobody explained them about the terms and conditions of policy at the time of proposing for the insurance. PW1, the 2nd complainant conceded that she had not read the policy and they are entitled to get refund only as per the terms and conditions of policy. In re-examination she further deposed that one of the agent and one officer from Ist opposite party approached them and told that if they pay ` 1,00,000/- as a single term premium they will get ` 5,00,000/- after 10 years as maturity amount and at the time of paying the premium by way of cheque the agent and opposite party have not explained the terms and conditions of policy and she came to know that the policy is lapsed only when she received a cheque for an amount of ` 11553/- from opposite party. In further cross examination PW1 has deposed that the total premium payable for selected mode is `1,00,000/- as evidenced in the policy is stated in the complaint and by that what she meant that she has to remit only ` 1,00,000/- towards the premium.
10. As against the evidence of PW1, on the side of opposite parties Ist opposite party examined as DW1 and Exts B1 to B4 marked. Ext.B1 is the proposal form submitted by the complainant and Ext.B2 is the policy document and Ext.B3 is a request submitted by complainant to opposite party for changing his home address and Ext.B4 is the Addendum For Unit Linked Insurance Plan. DW1 deposed that they have no document to show that they have issued notice to the complainant regarding the lapse of policy in the event of non-payment of premium. According to him they usually obtain the signature of the proposer in the proposal form and accept the money from him and duly sent to the head office of the company and in this policy the policy holder has to pay1,00,000/- each for 10 years and the sum assured is ` 5 lakhs. In Ext.A1 proposal form page No.3 deals with the initial unit statements which does not say that the policy holder has to pay ` 1 lakh each for 5 years. In Ext.A1 along with the copy of the proposal form there is a schedule dealing with the benefit illustration of unit gain plus in which it is shown that a person of 41 years age remits ` 1,00,000/- as premium the total charges deductable will be ` 1411/-and that does not mean that if the policy is lapsed the company will retain only ` 1411/- and the balance will be paid to the policy holder. The policy holder was not misrepresented that if the policy holder pays 1,00,000/- then he will get ` 5,00,000/- after 10 years. DW1 during cross examination has denied the suggestion that they have obtained the signature of the proposer in the blank proposal form and they filled the proposal form according to their choice. He further stated that one Janardhanan K.V was the insurance agent.
11. Now the crucial question that poses before us is that why did the complainant file this complaint if he joined in the insurance scheme if he was fully aware about the terms and conditions of the policy and the payment of annual premium of ` 1,00,000/- continuously for 10 years for the sum assured ` 5,00,000/- . That remains unexplained by the opposite parties. So the case of the complainant that the insurance agent and Ist opposite party seduced him to join the policy by offering wild and tantalizing proposal that the policy holder will get ` 5,00,000/- on 10th year in the event of paying a single term premium of ` 1,00,000/- is appears to be true.
12. Another important point to be noted here that the agent who alleged to be seduced the complainant did not brought before us. When an allegation of seduction is made by the complainant it was the bounden duty of the opposite parties to examine the agent to prove the contrary , especially when the proposal contains a declaration by the agent(insurance consultant) that he has explained the nature of questions contained in the proposal form to the applicant and he has also explained the features and benefits of the plan and riders to the applicant and he also confirm that he has not induced or coerced and that the applicant/life to be insured have responded in their free volition. This declaration itself is a pointer to the fact that there may be inducement and coercion by agents to join in the insurance schemes and the said declaration is printed in order to avoid such complaints
13 After the entry of private insurance companies in the insurance sector they are doing aggressive business. Earlier it was service oriented. But now a days it is purely business motivated as they are hell bent upon selling what they call ‘products’. As part of their aggressive business drive they offer bonanza gala galore to their agents and who in turn grab the prospective policy holders by their throat by making tall promises. In most cases insurance policies contain numerous terms and conditions that normally are not disclosed to the insured. No insurance agent would explain terms and conditions those appear to be adverse to the interest of the policy holder. The agent of the insurance company turns out to be a most vital factor. It is he who undertakes the insurance business on behalf of the insurer. He should make it a point to explain each and every condition or clause of the policy to the prospective policy holders which are printed in ‘small print’ of which ordinary persons would not be in a position to read between the lines.
14. From the evidence let in by the parties and also considering the facts and circumstances of the case we are of the opinion that at the time of canvassing the complainants what is transpired between the agent, Ist opposite party and the complainants as narrated by the complainant is true. Therefore the act of opposite parties amounts to deficiency in service. The contention that the complainant ought to have surrendered the policy within free look period of 15 days is also have no legs to stand since the proposal itself was obtained by inducement. A proposal which itself has no legal sanctity make the whole contract voidable at the option of the complainant irrespective of the limited days of free look period and therefore the complainants are not bound by the terms and conditions of policy..
15. Point No.5: As argued by the counsel for opposite parties though the opposite parties are liable to refund only ` 11553/- even then they cannot absolve themselves from their liability to pay compensation for their deficiency in the service rendered through their agent to complainants.
The claim of the complainant is ` 148589/- with interest and costs. We are of the opinion that the complainants are liable to get the refund of ` 1,00,000/- with interest and costs.
In the result complaint is allowed and opposite parties are jointly and severally directed to refund ` 1,00,000/-( Rupees one lakh only) with interest @9% per annum from the date of deposit i.e 12/9/2006 to till repayment together with a cost of ` 3000/-. Time for compliance is limited to 30 days from the date of receipt of copy of the order failing which the rate of interest will be 12% for ` 1,00,000/- from the date of complaint till payment
Exts:
A1-Proposal form
B1- Proposal form
B2-Policy document
B3-request submitted by complainant 1 to Ist OP
B4-Adde3ndum for unit linked insurance plan
PW1-Susmitha Prakash-complainant No.1
DW1- Sandeep P.R-witness of OP.2
Sd/ Sd/ Sd/
MEMBER MEMBER PRESIDENT
eva /Forwarded by Order/
SENIOR SUERINTENDENT
