IN THE CONSUMER DISPUTES REDRESSAL FORUM, KOTTAYAM

Present:

Hon’ble Mr. Bose Augustine, President

Hon’ble Mr. K.N. Radhakrishnan, Member 

Hon’ble Mrs. Renu P. Gopalan, Member

  C C No. 336/2015

Friday, the 29^thday of July, 2016.

Petitioner                                 :         Paul Joshua,

                                                          Ancheril House,

                                                          Devalokam P.O.

                                                          Kottayam – 686 638.

                                                          (Adv. Leena Krishnan)

                                                                   Vs.                                         

Opposite Parties                      :   1) Aviva Life Insurance Company Ltd.

                                                          Rep. by Chief Operating Officer,

                                                          Aviva Life Insurance,

                                                          2^nd Floor, Prakashdeep Building,

                                                          7 Tolstoy Marg,

                                                          New Delhi – 110 001.

                                                    2)  The Branch Manager,

                                                          Aviva Life Insurance,

                                                          2^nd Floor, Kizhakkethil,

                                                          Arcade, Nagampadam,

                                                          Kottayam – 686 001.

                                                          (Adv. Saji Issac K.J.)

O  R  D  E  R

Hon’ble Mrs. Renu P. Gopalan, Member

1. The complainant filed the complaint on 07/02/2015.  The averments in brief are as follows;

          The complainant is working at RasalKhaima as a Purchase Manager.  In the month of July 2009, when the complainant came on leave, the 2^nd opposite party approached the complainant and persuaded him to join in an Insurance Policy Scheme.   The complainant was made to understand that, he needs to pay three times premiums only and it would be more profitable than any other mode of saving.  The complainant joined the scheme.  The complainant paid Rs.1 lakh as the first premium.  The opposite parties issued insurance policy bearing No.ALS2647293.  He remitted the other second and the third terms premiums also.                       In the month of July 2015, the complainant approached the 2^nd opposite party to return his money.  But, he learnt that his policy was lapsed.  But of dismay that the opposite party offered only an amount of Rs.1,00,584/- to the complainant, out of the premium amount of Rs.3 lakhs.  On enquiry, the opposite party informed him that this policy is for 15 years and he has to pay premium of Rs.1 lakh each for 15 years.

          The complainant alleged that, at the time of signing the policy document also, the 2^nd opposite party made him believed that this policy scheme was 3 years and the complainant had to pay the premium 3 times only.  The opposite party did not inform the complainant that the policy was lapsed though the opposite parties knew the E-mail ID of the complainant.  When the complainant perused the entire policy documents, he was shocked to see the signature shown in the policy certificate.  It was a fabricated one.  The signatures shown in it were not that of the complainant.  The complainant requested the opposite party several times to redress his grievances.  But the opposite parties did not care to take any positive steps.  In the circumstances, the complainant filed the complaint alleging deficiency in service and unfair trade practice on the part of the opposite parties and seeking realization of Rs.3,00,000/- with interest @ 10% per annum alongwith compensation to a tune of Rs.1,00,000/- and also the costs of this litigation.

2.         Notices to the opposite parties were sent from the Forum.  The 1st opposite party received notice in time, but they failed to appear before the Forum and file their version.  The 2^nd opposite party filed vakalath and version on 7/6/16.                  The 3^rd opposite party,  did not care to appear before the Forum and file version. 

       In CIVIL APPEAL NOS.10941, 10942 / 2013, NEW INDIA ASSURANCE   COMPANY LIMITED VS.   HILLI MULTIPURPOSE COLD STORAGE   PRIVATE LIMITED, the   Hon’ble Supreme Court

Categorically stated that, “ on receipt of the complaint, the opposite party is required to be given notice, directing him to give his version of the case, within a period of 30 days or such extended period not exceeding 15 days as may be granted by the District Forum or State Commission, otherwise it cannot be taken into file”.  Here in this case also, the 2^nd opposite party had not filed their version within 30 days or within the extended period of 15 days.  Hence, version filed by the 2^nd opposite party cannot be accepted.

3.           The evidence in this case consists of the Chief and Proof affidavit of the              complainant and Ext.A1 and A2 documents on the part of the complainant. 

4. Heard the Counsel for the complainant.

5. Based on the pleadings the following Points arise for consideration;

1. Whether the complainant comes under the purview of the Consumer Protection Act or whether the complaint is maintainable before the Forum?

2. Whether there is any deficiency in service on the part of the opposite parties?

3. Whether the opposite parties had committed unfair trade practice?

4. As to the reliefs and costs?

VI)      Point No.1

          At the outset, the question of maintainability of this complaint in this Forum arises.  The policy availed by the complainant is a Unit Linked Policy and is a speculative investment for speculative gain and hence the complainant is not a ‘consumer’ within the meaning of the Consumer Protection Act.  A Decision rendered by the Hon’ble National Commission in RAM LAL AGGARWALA VS. BAJAJ ALLIANZ LIFE INSURANCE COMPANY cited in III (2013) CPJ 203 (N.C.), the Hon’ble National Commission held as follows, “It is very clear from the terms and conditions that the cancellation of the policy is best known to the complainant on entering into agreement.  Further the policy being a Unit Linked Policy, such policies are speculative in nature and the disputes relating to the appellants are not entertainable before the Consumer Forum under Consumer Protection Act”.

          The Learned Counsel for the complainant submitted that, the complainant filed this complaint to return the amount, which he deposited.  According to him, the complainant was fraudulently inducted to join the opposite party’s scheme by false and fraudulent misrepresentation.  The benefits, the prose and corns of the same was not explained to him.  Explaining one and giving another policy is not a good practice.  It is an unfair trade practice.  Therefore, the above said decision is not applicable to the facts of the case on hand.

          But, here in this case, the policy issued to him as a ‘life insurance policy’.

          Besides this, the opposite parties made him to believed that, this is profitable an investment also.  Attracted by these assurances, the complainant had taken the policy.  The investment made by the complainant was not only to gain profit but also for the assurance for tax benefits too.  As per Ext.A₁, page No.35 it can be seen that, the insurer is eligible for benefits as applicable under the prevailing Income Tax Act, 1961.

          The complainant has joined in the opposite parties scheme by paying the premiums as consideration.  The insurer is expected to give a satisfactory service to the insured.  In this case, the insurer has not given a satisfactory service.                  The insured, ie. the complainant is a Consumer under Section 2 (1) (d) of the Consumer Protection Act.  As such, the complainant is perfectly maintainable before the Forum.

6. Points No.2 and 3

For convenience, Point Nos. 2 and 3 are considered together.

          The complainant contended that, he is entitled for the premium amount which he remitted with interest per annum from the date of deposit till realization.  The complainant alleged that, the opposite party was ready to give him only for an amount of Rs.1,00,484/-   The complainant was aggrieved by the decision of the opposites parties in deducting a bulk amount of the premium amount instead of paying him Rs.3,00,000/- with interest.  If the agent of the opposite party had given the correct information or explained the pross and corns and the necessary implications, and import and purport of the policy before the complainant was inducted to insurance scheme, he would not have opted for such a policy which was issued to him to the surprise and dismay of the complainant.  The individual or an insured takes the policy for his benefit not for the benefit of the Insurer.  It is the bounden duty of the opposite parties to explain the necessary implications of the policy and convince him the benefits accrued to him.  Especially so, when it is an adhesive contract where their terms and conditions of the policy are designed and suited to the interest and convenience of the opposite parties.

          In this case, the complainant had paid Rs.3,00,000/- with the opposite parties.  According to the complainant, the opposite parties are denying the claim of the complainant and offering her only an amount of Rs.1,00,484/- out of Rs.3,00,000/-

          From Ext.A₁, it is apparent that, the policy issued by the opposite parties is ‘a Life Insurance Policy’.  We are of the view that, it is certainly not a good conduct or a fair practice on the part of the opposite parties.  Many insured are ditched this way.  The cases of this nature are on the high ebb.  It is high time to deprecate such unfair trade practice on the part of the Insurer.  Now a days, the insurers are behaving in a haphesed manner to suit the interest and convenience of the insurers.  Here, in this case, the complainant had deposited Rs.3,00,000/-  with the opposite parties.  He was issued with the policy named as ‘Life Insurance Policy’.  The benefits, the prose and corns of the same was not explained to him.  Further inspite of his requests, demands, the opposite parties did not care to pay the sum assured to him.  The complainant was not given even a satisfactory answer from the opposite parties.  For a deposit of Rs.3,00,000/- , the opposite parties offered only an amount of Rs.1,00,484/- to the complainant after a lapse of almost 6 years.  If the complainant was explained the terms and conditions as stipulated in the policy, he would not have opted to join the policy.  Explaining one and giving another policy is not a good trace practice. 

     On a close perusal of Ext.A₁, it can be seen that it was printed in microscopic, fine letters having 38 pages.  Though, the opposite party company made an option of returning the policy within 15 days from the date of receipt of the policy.  They called it as ‘free look period’.  But, no one can read Ext.A₁ having 38 pages easily without a magnifying glass.  It can be seen the modes operandi of the opposite parties in printing 38 pages as if they are giving big benefits where as actually they are not giving the benefits as assured.  This is clearly an unfair trade practice.

          In this case, the complainant has suffered substantially due to the negligence, insufficiency service and unfair trade practice of the opposite parties.  There is definitely deficiency in service and unfair trade practice on the part of opposite parties.  Hence Point Nos.2 and 3 are also found in favour of the complainant.

7. Point No.4

          In the result, the complaint is allowed in part.

          Therefore,  

          The complainant had remitted 3 premiums with the opposite parties.  The complainant alleged that, the opposite party informed him that since, he did not make payment in the 4^th premium, his policy got lapsed in the 4^th year itself.

          THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) (Treatment of DISCONITUED LINKED INSURANCE POLICIES) REGULATIONS, 2010 had made certain Regulations. As per Regulations, the insurer has got certain obligations upon discontinuance of the Policy to insure the charges levied from the date of discontinuance certain rates are prescribed.

OBLIGATIONS OF AN INSURAR UPON DISCONTINUANCE OF A POLICY

1.           The opposite parties are directed to pay Rs.4,98,000/- (Rupees Four Lakh Ninety Eight Thousand Only) with 8% interest per annum from the date of receipt of each amount till realization.

2.         The opposite parties are also directed to pay Rs.5,000/- as the costs of this litigation.

          The Order shall be complied with within 30 days from the date of receipt of copy of the Order.  If not complied as directed, the award amount will carry 12% interest from the date of Order till realization.

          Pronounced in the Open Forum on this the 29^th day of July 2016.

          Hon’ble Mrs. Renu P. Gopalan, Member                   Sd/-

          Hon’ble Mr. Bose Augustine, President             Sd/-

          Hon’ble Mr. K.N. Radhakrishnan, Member     Sd/-

Appendix

Documents for the petitioner

Ext.A1  :  Copy of policy certificate

Ext.A2  :  Policy account statement dtd.01/06/16

Documents for the opposite party

Nil

                                                                                                          By Order

                                                                                                        Senior Superintendent