DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA (PUNJAB)

CC No. 599 of 19-12-2011

Decided on : 01-08-2012

Harminder Singh, aged about 51 years S/o Jarnail Singh, R/o Attari Patti, VPO Chak Bakhtu, District Bathinda.

.... Complainant

Versus

1. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd., HUB Office : 501, 3^rd Floor, Elite Arcade, The Mall Road, Ludhiana through its Branch Head/Incharge.

2. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd., Head Office : Centrum Plaza, 5^th Floor, Tower-B, Sector 53, Golf Course Road, Gurgaon 122 002, Haryana, India, through its Managing Director/Chairman.

3. Oriental Bank of Commerce, Branch Office, Bhucho Mandi, District Bathinda, through its Branch Manager/Incharge

   ...... Opposite parties

Complaint under Section 12 of the Consumer Protection

Act, 1986.

QUORUM

Smt. Vikramjit Kaur Soni, President

Sh. Amarjeet Paul, Member

Smt. Sukhwinder Kaur, Member

For the Complainant : Sh. Ish Kumar, counsel for the complainant

For the Opposite parties : Sh. J.D. Nayyar, counsel for opposite party Nos. 1 & 2.

Sh. Rajneesh Rampal, counsel for opposite party No. 3.

O R D E R

VIKRAMJIT KAUR SONI, PRESIDENT

1. The instant complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 as amended upto date (here-in-after referred to as 'Act'). Briefly stated the case of the complainant is that he and his wife Karamjeet Kaur have their joint saving bank account No. 02765111001107 with opposite party No. 3. During the course of operation of aforesaid account, in the month of May/June, 2010, the officials of opposite party No. 3 allured the complainant to purchase ULIP policy of opposite party Nos. 1 & 2 and in case of purchase of Life Insurance policy for a sum of Rs. 1.25 Lacs, the complainant has to pay one time premium of Rs. 25,000/- in lump-sum at once and he shall be allotted units of Canara HSBC Life Insurance Co. and the amount of Rs. 25,000/- shall be invested in equity/mutual funds/other saving scheme as per plan. The units allotted to the complainant shall be known as Growth Fund under plan 'Canara HSBC Oriental Bank of Commerce Life Stay Smart Plan'. The officials of opposite party No. 3 conveyed to the complainant that it is the option of the complainant either to remain investor in the said plan without depositing any further premium or to get the refund of his aforesaid amount alongwith expected income at any time after the completion of one year. The complainant agreed to purchase the aforesaid policy and the officials of opposite party No. 3 obtained his signatures on various blank papers and blank printed forms, without explaining the contents thereof. After about 2 months, opposite party No. 3 handed over first premium receipt to the complainant. No policy or terms and conditions have been explained or supplied to the complainant by the opposite parties. The complainant alleged that he has deposited the amount of Rs. 25,000/- under the bonafide impression that he has to deposit Rs. 25,000/- at once only and he can withdraw this amount alongwith expected income at any time after the completion of one year. On receipt of first premium receipt, the complainant came to know that next due date for the deposit of premium is 14-7-2011. The complainant approached opposite party No. 3 and the officials of opposite party No. 3 conveyed to him that he has the right to get the policy cancelled and the due date mentioned on receipt is for those persons who are interested to deposit more amounts for further period. The complainant can get the policy cancelled during free look period i.e within 15 days from the date of receipt of policy. On completion of one year, when the complainant approached opposite parties one by one and opted to get the refund, they started pressurizing him to deposit further premium failing which, the entire amount of first premium of complainant shall be forfeited as the policy shall be lapsed. The complainant alleged that he has been running pillar to post to get his amount back, but to no effect. Hence, the complainant has filed the present complaint seeking directions to the opposite parties to make the refund of Rs. 25,000/- alongwith its expected return/interest alongwith interest besides compensation and cost.

2. The opposite party Nos. 1 & 2 filed their joint written statement and pleaded that complainant submitted a proposal for Canara HSBC Oriental Bank of Commerce Life Stay Smart Plan with them vide Proposal No. 2000200119 dated 16-06-2010 and accordingly, they issued policy in his favour on 14-07-2010 with premium payment term of five years with annual premium of Rs. 25,000/-. The initial premium of Rs. 25,000/- was paid by the complainant vide cheque No. 081964 dated 28-10-2010. As per the policy, the complainant is required to pay the premium annually for at least five years from the policy commencement date. The complainant signed the proposal alongwith declaration which includes the statement that 'The plan details and riders have been explained to me/us and I/we have opted for the same after understanding the same.' The opposite party Nos. 1 & 2 denied that complainant was ever promised that premium paid by him shall be invested in Equity/mutual funds/other savings scheme as per plan. It has been pleaded that at the time of sale of policy, the complainant was properly explained about the features and term and conditions of the insurance plan. The opposite party Nos. 1 & 2 denied that after two months the First Premium Receipt was handed over to the complainant and policy pack or terms and conditions have not been sent to the complainant so far. The policy pack was dispatched to the complainant on 17^th July, 2010 through Speed Post vide AWB No. EH035238419IN to the complainant.

3. The opposite party No. 3 filed its separate written statement and pleaded that complainant was never allured by opposite party No. 3 to obtain any such insurance policy rather he voluntarily purchased the said policy with his free will. They denied that the opposite party No. 3 obtained the signatures of the complainant on any blank papers or it was assured by it that a sum of Rs. 25,000/- is required to be deposited by the complainant only once. The opposite party No. 3 has pleaded that it has nothing to do with getting the amount of premium deposited from complainant or to refund the same rather the same is related to the opposite party Nos. 1 & 2 and can only be replied by them.

4. Parties have led their evidence in support of their respective pleadings.

5. Arguments heard. Record alongwith written submissions submitted by the parties perused.

6. The submission of the complainant is that the official of opposite party No. 3 allured him to purchase ULIP policy of opposite party Nos. 1 & 2 and in case of purchase of Life Insurance policy for a sum of Rs. 1.25 Lacs, he has to pay one time premium of Rs. 25,000/- in lump-sum at once and he shall be allotted units of Canara HSBC Life Insurance Co. and the amount of Rs. 25,000/- shall be invested in equity/mutual funds/other saving scheme as per plan. Accordingly, he purchased the said policy. He submitted that it was also conveyed to him at the time of selling the policy that it shall depend upon the will of the complainant either to remain investor in the aforesaid plan without depositing any further premium or to get the refund of his said amount alongwith expected income at any time, after the completion of one year, but on receipt of first premium receipt, the complainant came to know that next due date for the deposit of premium is 14-7-2011. On completion of one year, when the complainant approached opposite parties and requested them to get refund of the amount, they started pressurizing him to deposit further premium failing which, the entire amount of first premium of complainant shall be forfeited and the policy shall be lapsed.

7. On the other hand, the submission of the opposite parties is that the complainant submitted a proposal for Canara HSBC Oriental Bank of Commerce Life Stay Smart Plan with them vide Proposal No. 2000200119 dated 16-06-2010 and accordingly, they issued policy in his favour on 14-07-2010 with premium payment term of five years with annual premium of Rs. 25,000/-. As per policy, the complainant is required to pay the premium annually for at least five years from the policy commencement date. The learned counsel for the opposite parties further submitted that the policy pack was dispatched to the complainant on 17^th July, 2010 through Speed Post vide AWB No. EH035238419IN to the complainant which contains terms and conditions.

8. The complainant has purchased Insurance Policy Canara HSBC Oriental Bank of Commerce Life Stay Smart Plan. He paid premium of Rs. 25,000/- vide Ex. C-2. The opposite parties have pleaded that the said policy alongwith terms and conditions has been sent to the complainant on 17^th July, 2010 through Speed Post vide AWB No. EH035238419IN, but no evidence to this effect has been placed on file. The opposite parties have placed on file a copy of policy in question as Ex. R-4 and its terms and conditions Ex. R-7. As per Ex. R-4 Plan is 'Life/Individual/Non Par/ULIP/Whole Life ; the policy commencement date is 14-07-2010; due date of last premium 14-07-2019; Maturity date 14-07-2059. A perusal Ex. R-7 reveals that it has not been signed by either of the party. The Insurance is a contract which is binding on all the parties between whom this contract has been signed. But, in the present case neither terms and conditions have been signed by the complainant nor the same were supplied to him. The complainant was informed at the time of issuance of policy that in case he does not want to continue with this policy, the amount deposited alongwith its expected return would be refunded to him. Under such impression, he purchased the said policy. As discussed above, when no terms and conditions were supplied to the complainant, the complainant is not bound by such terms and conditions. The opposite parties have pleaded that the complainant has submitted proposal form and on its basis policy was issued to him. A perusal of proposal form Ex. R-9 reveals that the said proposal has been filled in computer and thereafter got signed from the complainant after putting tick mark at the place where his signatures were required. It seems that this computer generated document has been got signed from the complainant in routine, by disclosing the terms as stated by the complainant in his complaint as a layman he does not understand the technicalities of the Insurance policies. The opposite parties cannot garb the hard earned money of the consumer on such pleas. The complainant is not bound by the terms and conditions which were never supplied to the complainant. In these circumstances, the complainant is entitled as per Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP products and treatment of lapsed policies) Regulation, 2010, which is reproduced hereunder :-

“10....... The proceeds of the lapsed policies shall invariably be refunded to the policyholder after the expiry of the revival period or at any time after completion of 3 years term as and when demanded by the policyholder. In case there is no demand from the policyholder for refund, insurance company shall refund the amount on its own by means of a cheque/demand draft to be delivered to the insured/nominee at his last known address. However, Insurer may deduct charges on account of pre-closure and lapsation which should, in any case, not exceed the charges stated in regulation 8 above.

Regulation No. 8 i.e. Surrender Charges of Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies)Regulations, 2010, is reproduced hereunder :-

“It is observed that insurers apply different surrender charges while paying the surrender value to the Insured. After due consideration of various practices, the Authority orders that the surrender charges (as percentage of fund value ) shall not exceed the limits specified below :-

 

Year Policy period

Less than 10 years More than 10 years

------------- ----------------------- -----------------------

Ist year 12.50% 15%

2^nd year 10.00% 12.50%

3^rd year 7.50% 10%

4^th year 5.00% 7.50%

5^th year 2.50% 5%

6^th year Nil 2.50%

7^th year & onward Nil Nil

3. In view of what has been discussed above, this complaint is accepted with Rs. 2,000/- as cost against opposite party Nos. 1 & 2 and dismissed qua opposite party No. 3. The opposite party Nos. 1 & 2 are directed to cancel the Insurance policy No. 0016367518 of the complainant and refund the amount of premium to him, after deducting 12.50% amount from the deposited premium as the policy period is more than 10 years and one year period has already elapsed and second year started from the issuance of the policy.

The compliance of this order be made within 45 days from the date of receipt of copy of this order failing which the aforesaid fund value amount would yield interest @ 9% P.A. from the date of institution of this complaint i.e. 19-12-2011 till realization.

A copy of this order be sent to the parties concerned free of cost and file be consigned for record.

Pronounced

01-08-2012 (Vikramjit Kaur Soni)

President

(Amarjeet Paul)

Member

(Sukhwinder Kaur )

Member