DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Mohinder Singh son of late Kartar Singh r/o H.No.3629, Sector 23-D, Chandigarh.

                                      ---Complainant.

Versus

1.                 Kotak Mahindra Old Mutual Life Insurance Ltd., Kotak Infiniti, 5^th Floor, Zone-2, Bldg.No.21, Infinity Park, Opp. Western Express Highway, Gen. A.K. Vaidya Marg, Malad (E), Mumbai-400097 (India) through Chief Manager, Kotak Mahindra Old Mutual Life Insurance Limited, 2^nd Floor, SCO No.141/142, Sector 9-C, Chandigarh

2.                 Rajiv Kumar, Agent (Agent ID 1107538) c/o Kotak Mahindra Old Mutual Life Insurance Limited, 2^nd Floor, SCO No.141/142, Sector 9-C, Chandigarh.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SMT. MADHU MUTNEJA                       MEMBER

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by:  Complainant in person

                        OPs exparte.

PER LAKSHMAN SHARMA, PRESIDENT

1.                           Sh. Mohinder Singh has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act only) praying for the following reliefs :-

i)                   to pay the amount deposited alongwith interest

ii)                to pay Rs.1,00,000/- as compensation for harassment;

iii)              to pay Rs.5,500/- as litigation expenses.

2.                           In brief, the case of the complainant is that in September 2009, Rajiv Kumar (opposite party No.2) contacted him and allured him to make investment in the insurance plan of the opposite party.  He represented to the complainant that if he invested a sum of Rs.1,000/- per month for three years, he would get at least Rs.56,000/-.  According to the complainant, being an illiterate person, he signed on certain blank papers under the influence of opposite party No.2.   It has been averred that he has already paid a sum of Rs.37,000/- to the opposite parties.

According to the complainant, after three years, when he contacted the opposite parties for repayment of his money, he was told that as against Rs.37,000/- he would get only Rs.33,000/-.  However, thereafter only a sum of Rs.21,242/- was paid to the complainant.  The complainant sent a legal notice dated 2.10.2012 asking the opposite parties to refund the amount paid by him with interest, but to no avail. 

In these circumstances, the present complaint has been filed seeking the reliefs mentioned above.

3.                           None appeared on behalf of opposite party No.1 on 23.4.2013 when the case was listed for filing its reply and evidence.  Accordingly, it was proceeded against exparte.

4.                           None appeared on behalf of opposite party No.2 despite service.  Hence, he was proceeded against exparte vide order dated 4.2.2013. 

5.                           We have heard the complainant in person and have gone through the documents on record.

6.                           It has been contended by the complainant that on the assurances given by opposite party No.2, he invested a sum of Rs.1,000/- per month for three years.  It has further been contended that he was assured that he would get at lest Rs.56,000/- after three years.  However, after three years, when the complainant contacted the opposite parties for repayment, he was paid a sum of Rs.21,242/- only vide letter dated 26.9.2012 whereas he had deposited a total sum of Rs.37,000/-.  In support of his contentions, the complainant has filed his duly sworn affidavit.

7.                             In the absence of any written version from the side of the opposite parties, the stand of the complainant goes un-rebutted.  Still further, our own Hon’ble State Commission in a similar case titled as Shelly Sharma Vs. Rajinder Mann & Others-F.A. No. 385 of 2012, decided on 7.2.2013, has held that the subscriber of an insurance policy, having paid 3 regular premiums, is entitled to the refund of total premium amount, less the necessary charges on the date of discontinuation, after the completion of the lock-in-period, as per Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010, as notified vide notification dated 1.7.2010.  The relevant Regulation 7 reads as under:-

“Obligations of an insurer upon discontinuance of a policy

7.         The obligations of the insurer in this regard shall be as follows:-

i.          To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and  incidental thereto.

ii.         To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iii.       To ensure that the discontinuance charges reflect the actual expenses incurred.

iv.        To structure the discontinuance charges within the statutory ceilings on commissions and expenses and

v.                  To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium) do not exceed the limits specified below:-

 AP - Annualised premium

FV- fund value on the date of discontinuance

Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied.

Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

Thus, from the perusal of Regulation 7, extracted above, it is crystal clear that the opposite Parties, could not have deducted anything more than Rs.1,500/- because the complainant paid the premium for three years.  Since the complainant paid a sum of Rs.37,000/-, as premium to the opposite parties,  he was entitled to  get Rs.37,000 – Rs.1500 = Rs.35,500.  However, the opposite parties paid only Rs.21,242/-. Hence the opposite parties are proved to be deficient in rendering proper service.

8.                           In view of the above discussion, the present complaint is allowed and the opposite parties are directed as under :-

i)                   To pay the amount of Rs.35500 – Rs.21242 = Rs.14,258/- as per Regulation 7, extracted above;

ii)                To pay Rs.7,000/- as compensation for mental agony and harassment.

iii)              To pay Rs.5,000/- as cost of litigation;

9.                           This order be complied with by the opposite parties, within 45 days from the date of receipt of its certified copy, failing which the amounts at Sr.No.(i) &(ii) shall carry interest @18% per annum from the date of this order till actual payment besides payment of litigation costs.

10.                       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

30.4.2013.

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

 (MADHU MUTNEJA)

MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER