Complaint filed on: 17-08-2022
Disposed on: 31-01-2023
BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL COMMISSION, TUMAKURU
DATED THIS THE 31st DAY OF JANUARY, 2023
PRESENT
SMT.G.T.VIJAYALAKSHMI, B.Com., LLM., PRESIDENT
SRI.KUMARA.N, B.Sc. (Agri), LLB., MBA., MEMBER
SMT.NIVEDITA RAVISH, B.A., LLB. (Spl)., LADY MEMBER
CC.No.121/2022
Sri. K.V.Honnappaji
S/o Late Veeranna,
Aged about 62 years,
“Sri Veerabhadraswamy Nilaya”,
Srigandha Main Road,
Saraswathipuram, 2nd Stage,
Tumkur City.
……………….Complainant/s
(In person)
V/s
1. Exide Life Insurance Company Ltd.,
3rd Floor, JP Techno Park, No.3/1, Millers Road,
Bangalore – 560 001.
2. The Branch Manager,
Exide Life Insurance Company Ltd.,
Kavitha Group Towers, 1st Cross Road,
Opp. Allahi Sahib Tower, Above
Mini Motors, Tumakuru-572 102.
……………….Opposite Party/s
(By Sri. Lakshiminarayan .C., Adv.,)
:ORDER:
BY SRI. KUMARA.N., MEMBER
This complaint was filed by the complainant under Section 35 of the Consumer Protection Act, 2019, with a prayer to direct the OPs to pay the insured amount of Rs.2,50,000/- along with other benefits with interest @ 18% pa, and Rs.1,00,000/- compensation towards mental agony, along and in total amount of Rs.6,50,000/- with interest @ 18%pa..
2. The Opposite Parties were, Exide Life Insurance Company Ltd, 3rd Floor, JP Techno Park, No.3/1, Millers Road, Bangalore – 560 001, and The Branch Manager, Exide Life Insurance Company Ltd, Kavitha Group Towers, 1st Cross Road, Opp. Allahi Sahib Tower, Above Mini Motors, Tumakuru-572 102. (hereinafter called as OPs / insurance company).
3. It’s the case of the complainant, that, he was a retired Employee, bought Exide Life Golden Years Retirement plan bearing NO.03541634 on 30.03.2017 from the OPs and the annual premium installment was Rs.50,000/- per year, accordingly five installments of Rs 250000/- were paid to the OPs regularly and as per the terms and conditions of the insurance company / OPs, the complainant is entitled to surrender the policy after 5 years lock – in – period i.e. 31.03.2022, but the OPs not considered the policy for encashment after the five years and the OPs converted the said policy, i.e. Exide Life Golden Years Retirement plan policy into a new policy namely, Exide Life New Immediate Annuity plan policy bearing No.04547308 on 07.04.2022 without consent and acceptance of the complainant. The complainant submitted that, there is no any material evidence and documents to show that the complainant has given consent to convert the said policy and hence the company’s contention is not sustained and deserves to be squashed. It is further contended that the complainant is a retired employee and his daughter is pursuing Engineering degree course at SIT, Tumkur and he is very much need the money for his personal and domestic financial commitments, hence he approached the OPs several times to pay the said policy amount, but the OPs did not responded positively nor initiated any action. The complainant issued legal notice on dated 24-05-2022, but the OPs did not responded to the legal notice served. The complainant is very much entitled for the amount after completion of the lock – in – period of five years as per the terms and conditions of the policy. But the OPs did not return the said amount; hence, the complainant filed this complaint alleging the deficiency in service on the part of OPs.
4. The complaint registered and notices served to the OPs, after service of notices the OPs appeared through their counsel and filed the version contending that the complaint is not maintainable and the complainant suppressed the real facts. The OPs admitted the fact that the complainant obtained Exide Life Golden Years Retirement plan bearing NO.03541634 on 30.03.2017 and the annual premium installment opted was Rs 250000/- with premium paying terms of 10 years with vesting period of 15 years, said policy discontinued by the complainant on 31-03-2022 and the OPs communicated the same to the complainant vide OPs letter dated 30-03-2022. As per the terms and conditions of the said policy, the complainant failed to pay the premium amount to continue the policy, the discontinued funds was converted in to Annuity policy, i.e. Exide Life New Immediate Annuity plan, the policy bearing No.04547308 on 07.04.2022 and the communications sent to the complainant on 23-02-2021, 29-04-2021 and 14-06-2021. The OPs submitted that the OPs & the complainant, as per mutually agreed contractual terms and conditions said policies issued and functioned as per IRDA guidelines, as such there is no deficiency on the part of OPs, prayed to dismiss the complaint with cost.
5. The complainant and OPs filed their affidavit evidence and the complainant produced 16 documents, which were marked as EX P1 to EX P16 and. the OPs counsel produced six documents which were marked as Ex.R1 to R6.
6. We heard the arguments from the complainant and the OPs counsel filed written brief in addition to part of oral arguments advanced and prayed time for further arguments. . In spite of sufficient time / opportunities the OPs counsel not advanced their further arguments, hence their further arguments taken as nill. The points that would arise for determination are as here under:
7. The points that would arise for determination are as here under:
- Whether the complainant proves the deficiency of service on the part of OPs?
- Is complainant entitled to the reliefs sought for?
- What order ?
8. Our findings on the aforesaid points are as follows:
Point No.1: in Partly Affirmative
Point No.2: As per the final order.
:REASONS:
9. Point Nos.(1) & (2): The complainant in person argued that, the complainant was 56 years old at the time of OPs approached the complainant to take the Exide Life Golden Years Retirement plan, and OPs assured that the said policy is high return yielding and after the five years of term maximum benefits in terms of monitory benefits will be given in this policy. The complainant by believing the OPs words and assuming that after the five years the complainant will be attaining the age of 61 years and getting the good return, accordingly the complainant on 30-3-2017 given consent and signed the forms by paying first premium of Rs 50000/-. After few days the complainant received the policy bond bearing NO.03541634 from the OPs and the complainant paid the five years premium regularly to the OPs, which account to Rs 250000/- and as per the terms and conditions of the insurance company / OPs assurance at the time of taking said policy, the complainant is entitled to surrender the policy after 5 years lock – in – period i.e. 31.03.2022, but the OPs not considered the policy for encashment after the five years and the OPs converted the said policy, i.e. Exide Life Golden Years Retirement plan policy into a new policy namely, Exide Life New Immediate Annuity plan policy, and issued policy bond bearing No.04547308 on 07.04.2022 without consent and acceptance of the complainant, which leads to deficiency on the part of OPs, The complainant need money for his daughter education purpose, with that intention only the complainant taken the said policy i.e. Exide Life Golden Years Retirement plan from the OPs. The complainant in their affidavit has reiterated the averments of the version and produced 16 documents. Ex P1 – Part A covering letter with policy schedule, Ex P2-Exide Life insurance cover note along with premium of Rs 50000/- per annum paid receipts dated 30-03-2017,(Receipt No 34631294 Dated 11-12-2017, Receipt No OT008000153 Dated 06-03-2019, Receipt No OT014808173 Dated 17-03-2020, Receipt No 538237430, Dated 08-03-2021), Ex P 3 – Exide Life new immediate annuity with policy No 04547308, Ex P4 – Acknowledgement of receipt of complainant application to free lock cancellation, Ex P 5- Legal notice dated 24-05-2022, Ex P6 to Ex P7- Postal receipts and acknowledgements, Ex P 8 – postal track of legal notice served, Ex P9- copy of complainant request query registered by the OPs, Ex p 10- Ex P11 reply of OPs, Ex P12- Complainant letter dated 20-06-2022, Ex P 13 postal acknowledgement, Ex P 14, copy of Reply of Insurance ombudsman dated 27-06-2022, Ex P15,- EX P16 were, OPs letters to other customers and surrender enquiry form. The complainant prays to allow the complaint.
10.The OPs counsel argued that, OPs functioning as per IRDA rules, and the prevailed policy of the government and issued the said policy by collecting premium, after the complainant and OPs mutually agreed the terms and conditions (Contract). The complainant suppressed the facts, as such there is no deficiency on the part of OPs, and prayed to dismiss the complaint with cost. The OPs counsel produce documents, Ex R1- Part A covering letter with policy details, EX R2 Proposal form, Ex R3 Plan summary, Ex R4 OPs letter dated 14-06-2021to the complainant, Ex R5 OPs letter to the complainant, EX R6 Copy of the Exide Life New Immediate Annuity plan policy, and issued policy bond bearing No.04547308 on 07.04.2022.
11. The fundamental principle is that insurance is governed by the doctrine of uberrima fidei. This postulates that there must be complete good faith on the part of the insured. This principle has been formulated in MacGillivray on Insurance Law12 succinctly, thus:
―[Subject to certain qualifications considered below], the assured must disclose to the insurer all facts material to an insurer’s appraisal of the risk which are known or deemed to be known by the assured but neither known or deemed to be known by the insurer. Breach of this duty by the assured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms…‖
The relationship between an insurer and the insured is recognized as one where mutual obligations of trust and good faith are paramount.
12. Honorable SUPREME COURT OF INDIA in CIVIL APPEAL NO. 6778 OF 2013 in JACOB PUNNEN & ANR.Vs.UNITED INDIA INSURANCE CO. LTD. Case Opinioned that insurance company has obligation and duty to intimate the insured at the time of renewal of exiting insurance policies, if there is any change in the terms and conditions of insurance.
13. Section 2(47) of the Consumer Protection Act, 2019 defines the term ‘unfair trade practices’ which include:
- Manufacturing spurious goods or providing defective services.
- Not issuing cash memos or bills for the goods purchased or services rendered.
- Refusing to take back or withdraw the goods or services and not refunding the consideration taken for the purchase of the goods or services.
- Disclosing the personal information of the consumer.
14. Concept of Unfair Contract; The consumer protection Act 2019, 'Unfair Contract' is defined under Section 2(46) and it refers to any contract between a consumer and a manufacturer or service provider or trader whose terms brings about a significant change in the consumer rights under the Act. These terms are namely such as:
- requirement of excessive security deposits by the consumer in for facilitating the performance of obligations under the contract;
- imposing penalty for breach of contract on the consumer which is not in proportion with the loss suffered due to such breach;
- not accepting early debt repayment along with the applicable penalty;
- allowing one of the parties to terminate the contract without any reasonable cause or unilaterally;
- entitling one party to assign the contract to the detriment of the consumer and without his consent;
- imposing unreasonable condition, obligation or charge on the consumer that puts him in a disadvantageous position;
15. in this case the complainant produced (a) copy of Exide Life Golden Years Retirement plan policy bond bearing NO.03541634 dated 03-04-2017 (EX P1 & EX R1), which reveals that premium amount was Rs 50000/-, mode was annual, premium payment terms & vesting term was 10 & 15 years respectively, and name of the life assured was the complainant with risk commencement date was 30-03-2017. (b) Copy of Exide Life New Immediate Annuity plan policy bond bearing No.04547308 dated 07-04-2022,(EX P 3, EX R6), which reveals that, total amount adjusted was Rs 260544/- & date of policy commencement was 31-03-2022, which proves that the complainant paid the premium of 50000/- per year for five years, totaling to Rs 250000/- to the OPs. (C) Copy of PART A; covering letter with policy schedule dated 03-04-2017 (EX P 1, Ex R1), which was OPs letter to the complainant, where in stated as,
- Vesting benefits will be subject to you attaining an age of 55 years or policy term completion, whichever is later.
- if you surrender the policy the proceeds will be paid to you only on attaining an age of 55 years or at the end of 5 year lock – in period applicable from policy commencement date, whichever is later.
(D) Copy of PART E-4; Discontinuance / Surrender Charge; (Ex P1, EX R1), stated as 5 year & onwards, NA (Not applicable).
(E) Copy of the plan summery page 1 of 4, of the OPs letter (EX P1, EX R3) , in page No 2 of 4, stated that surrender value of the complainant policy at 5 years as Rs 277164/-
(F) Copy of the proposal form (EX R2) (Proposal form No NA 03784487) submitted by the complainant to the OPs, in Sr No 15, where in, preferred language for letter, the complainant opted KANNADA.
16.The OPs in their version, page No 3, para 4, stated as, the complainant had opted Exide Life Golden Years Retirement plan, premium was Rs 250000/-, to be paid annually, which is contrary since the complainant opted to pay premium of Rs 50000/-, which is to be paid annually (EX P1 & EX R1) and in para wise reply to the complainant, that the OPs converted existing Exide Life Golden Years Retirement plan to Exide New immediate annuity policy bearing Number 04547308, without the consent of the complaint, OPs in their version in page No 3, replied as, the OPs has sent three letters to the complainant, dated 23-02-2021, 29-04-2021 and 30-01-2022, which were contrary, when the complainant paid premium of Rs 50000/- vide Receipt No 538237430, Dated 08-03-2021(EX P2),.The Exide Life Golden Years Retirement plan, premium was Rs 50000/-, to be paid annually (Ex P1, EX R1)and when complainant paid five years premium to the said policy, which was valid up to 30-03-2022 , which was admitted by the OPs in their letter (EX R5) dated 30-01-2022.
17. The complainant allegation of OPs converted existing Exide Life Golden Years Retirement plan bearing No 03541634 dated 03-04-2017 to Exide New immediate annuity policy bearing Number 04547308, dated 07-04-2022, without the consent of the complaint, the OPs not produced believable evidence / documents to prove, that such notices were served to the complainant, before converting the existing policy to new policy. On perusal of the Proposal form No; NA 03784487 (EX R2), submitted by the complainant to the OPs, the complainant opted KANNADA language communications, in spite of it OPs not produced any such communications made documents to the complainant.
18. When existing policy valid up to 30-03-2022, and when the complainant paid premium of Rs 50000/- vide Receipt No 538237430, Dated 08-03-2021(EX P2), the OPs in their version stated that, three letters dated 23-02-2021, 29-04-2021 and 30-01-2022, sent to the complainant, which leads to unfair trade practice of the OPs.
19. The complainant obtained Exide Life Golden Years Retirement plan policy bearing NO.03541634 dated 03-04-2017, from the OPs, and paid the premium of Rs 50000/- annually for the period of five years, which account to Rs 250000/-. As per the contract, the complainant eligible for (EX P1 & EX R1) the surrendering of said policy at 5 years after the premium paid. The OPs, after the five years of term, when complainant sought for policy surrender, it was the bound duty of the OPs to return the eligible claim amount along with admissible benefits as agreed to the complainant, but OPs not settled, and converted existing policy to new policy without the consent of the complainant, This act of the OPs not only amounts to deficiency in service but also unfair trade practice, and caused harassment to the complainant and the OPs liable to pay compensation to the complainant since they compelled the complainant to approach OPs several times, Insurance ombudsmen, and this commission, which caused mental agony to the complainant. The OPs stated in their letter that surrender value of the complainant policy at 5 years was Rs 277164/-, accordingly the OPs liable to pay the said amount to the complainant along with interest @ 8.50% from 01-04-2022 to till date. The complainant prayed to award Rs 100000/- towards mental agony and all together Rs 650000/- along with interest 18% pa.
20. In the above discussion, we are of the opinion that it is just and proper to direct the OPs to pay policy surrender value of Rs 277164/- along with interest @ 9.00% from 01-04-2022 to till date and compensation of Rs.25000/- with litigation expenses of Rs.10,000/- to the complainant ,hence, we proceed to pass the following;
The complaint filed by the complainant is allowed in part with costs.
The OPs are directed to pay Rs.2,77,164/- along with interest @ 9.00% from 01-04-2022 to till date of realization and compensation of Rs.25000/- with litigation expenses of Rs.10,000/- to the complainant.
The OPs are further directed to comply the above order within 45 days from the date of knowledge/receipt of this order, After the lapse of 45 days of non comply of this order, it carries penalty of Rs 200/ Day.
Furnish the copy of order to the complainant and opposite parties at free of cost.
