Chandigarh

StateCommission

A/26/2024

RELIANCE NIPPON LIFE INSURANCE COMPANY LIMITED - Complainant(s)

Versus

HARSH KUMAR AGGARWAL SON OF LATE SH. RAM SWARUP - Opp.Party(s)

SANJEEV GOYAL

23 Oct 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(Additional Bench)

 

Appeal No.	:	26 of 2024
Date of Institution	:	15.01.2024
Date of Decision	:	23.10.2024

 

1. Reliance Nippon Life Insurance Company Limited, registered office at H. Block, 1st floor, Dhirubhai Ambani Knowledge City Centre, Navi Mumbai, Maharashtra-400710, through its M.D.
2. Reliance Nippon Life Insurance Company Limited, SCO 123- 124, 3rd Floor, Above Reliance Jewels Sector 17 C, Chandigarh -160017, both through their authorized signatory Ms. SWAPNIL MALVI

…Appellants/opposite parties

V e r s u s

1. Harsh Kumar Aggarwal Son of Late Sh. Ram Swarup, R/o # 192-A, Sector-4, MDC, Panchkula (Haryana)-134114.
2. Lakshya Aggarwal S/o of Sh. Harsh Kumar Aggarwal, R/o # 192-A, Sector-4, MDC, Panchkula (Haryana)-134114.

…..Respondents/complainants

Present:-              S/Sh.Sanjeev Goyal and Gaurav Bhardwaj, Advocates for the appellants.

                             Sh.Harsh Kumar Aggarwal, Advocate, respondent no.1 in person and Counsel for respondent no.2.

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Appeal No.	:	27 of 2024
Date of Institution	:	15.01.2024
Date of Decision	:	23.10.2024

 

1. Reliance Nippon Life Insurance Company Limited, registered office at H. Block, 1st floor, Dhirubhai Ambani Knowledge City Centre, Navi Mumbai, Maharashtra-400710, through its M.D.
2. Reliance Nippon Life Insurance Company Limited, SCO 123- 124, 3rd Floor, Above Reliance Jewels Sector 17 C, Chandigarh -160017, both through their authorized signatory Ms. SWAPNIL MALVI

…Appellants/opposite parties

V e r s u s

1. Samidha Aggarwal wife of Harsh Kumar Aggarwal, R/o # 192-A, Sector-4, MDC, Panchkula (Haryana)-134114.
2. Aseem Aggarwal S/o of Sh. Harsh Kumar Aggarwal, R/o # 192-A, Sector-4, MDC, Panchkula (Haryana)-134114.

…..Respondents/complainants

 

Present:-              S/Sh.Sanjeev Goyal and Gaurav Bhardwaj, Advocates for the appellants.

                             Sh.Harsh Kumar Aggarwal, Advocate for the respondents  

 

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BEFORE:              JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                             MRS.PADMA PANDEY, MEMBER.

                             MR.PREETINDER SINGH, MEMBER.

 

 

PER JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   By this common order, we propose to dispose of the above captioned two (02) appeals, filed by the opposite parties/appellants- (Reliance Nippon Life Insurance Company Limited), arising out of common order dated 08.11.2023 passed by the District Consumer Disputes Redressal Commission-II, U.T. Chandigarh (in short the District Commission), whereby the consumer complaints, details of which have been given in the chart below, were allowed  and the appellants were ordered to refund the entire deposited respective amount(s) to the respective respondents alongwith interest and lumpsum compensation. The particulars of the cases are as under:-

S.No	C.C. No.	Complainant (now respondents)	Opposite Parties (Now appellants)	Appeal Nos. and filed on
	435/2021	Harsh Kumar Aggarwal and Anr. Vs. M/s Reliance Nippon Life Insurance Co. Ltd	The Director, Reliance Nippon Life Insurance Company Limited and Another	Appeal No.26 of 2024 Filed on 15.01.2024
	436/2021	Samidha Aggarwal and Anr. Vs. M/s Reliance Nippon Life Insurance Co. Ltd	The Director, Reliance Nippon Life Insurance Company Limited and Another	Appeal No.27 of 2024 Filed on 15.01.2024

         

2.           The facts have been culled out from consumer complaint bearing no.435/2021- Harsh Kumar Aggarwal and Another Vs. M/s Reliance Nippon Life Insurance Co. Ltd. and Another.. Before the District Commission, it was the case of the complainants that they were approached by the agents of the opposite parties  namely Sh.Puneet Arora and Sh.Piyush Aggarwal who allured them by stating that the opposite parties are paying fixed regular additions (percentage of annualized premium) @ 8% for the first year, @ 9% for the second year and @ 10% for the third year  onwards, which are key features of the “Reliance Nippon Life Fixed Saving Policy” and that the said policy was to be issued for five years, which could be surrendered after three years with fixed regular additions.  Resultantly, the complainants issued cheque of Rs.3.00 lakhs dated 26.05.2018 against receipt to the opposite parties. It was averred that proposal form and the particulars of the cheque were filled by the opposite parties and the complainants only signed the cheque filled by them. At page No.9 of the policy, the income of the insured-Lakshya Aggarwal was shown to be Rs.60 lacs p.a. where he was only a student and just completed his B.Com. At the same time, the income of Harsh Aggarwal was shown to be Rs.2.50 crores whereas his total income for the FY 2017-18 was only Rs.31,53,400/-. Copy of the policy bearing No.53232721 was delivered after a month’s time, contents of which were blur and not legible.   The complainants paid three premiums through cheques in the sum of Rs.3,00,000/- dated  26.05.2018, Rs.2,91,500/- dated 06.05.2019 and Rs.2,93,544/- dated  31.05.2020 (Annexures C-4, C-8 and C-9) respectively.  It was averred that the opposite parties adopted unfair trade practice and made mis-representations and drew up a unilateral unfair contract/policy. A complaint dated 06.06.2020 (Annexure C-10) in this regard was also sent to the opposite parties. After completion of three years, the complainants approached the opposite parties for redemption, however, they offered to pay redemption value of Rs.4,30,371/- against the three premiums of Rs.8,85,044/- instead of Rs.10,39,000/- as promised. Finally, the complainants served legal notice dated 18.06.2021 (Annexure C-11) upon the opposite parties through OP No.1 personally and also made complaint through e-mail (Annexure C-12) but to no effect.   Hence consumer complaints were filed before the District Commission.
3.           The opposite parties contested the consumer complaint and filed written version, wherein it was stated that based on the answers, statements, premium amount, premium paying term opted and declarations made in the proposed form duly executed and submitted by the LA/proposer, the opposite parties had issued the policy No.53232721 to the proposed/LA @ annual premium of Rs.3.00 lakhs with policy term of 12 years, premium term of 10 years for sum assured of Rs.21,63,654/-. The policy was dispatched to the complainants through registered post (Annexure C-7).  The complainants had also signed declaration and authorized contained in the e-proposal form meaning thereby that the LA/proposer was explained all the terms and conditions of the policy and only after his satisfaction, he provided the details in the proposal form in English language after accepting the terms and conditions mentioned therein. It was stated that the complainants had received the policy document and all the applicable charges, premium paying terms, benefits etc. are duly mentioned in the policy and as such they were fully aware about the terms and conditions of the policy.  It  was further stated that the policy schedule filed by the complainant/LA itself states that the premium paying term under the policy was of “10 years” and as such they were fully aware of the minimum premium paying term and also about the premium payment being regular in nature. 
4.           Similar contentions were raised by the complainants in consumer complaint bearing no.436 of 2021- Samidha Aggarwal and Anr. Vs. M/s Reliance Nippon Life Insurance Co. Ltd. and another.
5.           The respective complainants filed rejoinders wherein they reiterated their version and controverted those of the opposite parties.
6.           The contesting parties led evidence in support of their cases.
7.           The District Commission after hearing the contesting parties, and on going through the material available on record, allowed the consumer complaints, as referred to above.
8.           Hence these appeals.    
9.           We have heard the contesting parties and have carefully gone through the material available on the record.
10.           Counsel for the appellants, in these cases, has vehemently contended that the District Commission failed to pass any convincing findings in the order impugned and it has reiterated the findings given by it in the earlier order dated 19.01.2023. He further submitted that the respondents have failed to avail option of free look period from the date of receipt of the respective policies. He further submitted that the respondents cannot wriggle out of the terms and conditions of the policies and declarations signed by them but the same stood ignored by the District Commission. He further submitted that the respondents are entitled to get refund of amount, if any, strictly as per terms and conditions of the respective policies.
11.           On the other hand, counsel for the respondents vehemently contended that the policies in question were mis-sold by the agent of appellants to the respondents. He further submitted that the respondents were made to believe that the appellants will pay fixed regular additions (percentage of annualized premium) @ 8% for the first year, @ 9% for the second year and @ 10% for the third year  onwards, which are key features of the “Reliance Nippon Life Fixed Saving Policy” and that the said policy was to be issued for five years, which could be surrendered after three years with fixed regular additions, which was not true,  because later on they were asked to make payment of premium, upto 10 years and policy terms was 12 years,  without taking into account the insured’s age, financial limits etc.  leading to several problems, qua inability to claim benefits when needed. He further submitted that even the terms and  conditions mentioned in the proposal form and also policies were in dotted lines.
12.           It may be stated here that perusal of the insurance policies placed on record reveal that the contents thereof are in a very small size of letters & blur i.e. in dotted lines and are not legible.  In various legal contexts, the Hon’ble Supreme Court has clarified that dotted lines or signature lines in the policies can carry specific implications. Generally, the principle is that if a document is not fully executed or if a party did not have the opportunity to understand or agree to its terms, those terms may not be binding on that party. For instance, if an insured person did not fully understand the implications of a policy or if key provisions were not clearly communicated, the court may hold that those provisions are unenforceable. This underscores the importance of transparency and clear communication in insurance contracts. It was so said by the Hon’ble Supreme Court in M/s Texco Marketing Pvt. Ltd.  Versus TATA AIG General Insurance Company Ltd. & Ors.  Civil Appeal No. 8249  of 2022, decided on  9 November, 2022 wherein it was clearly held that the insurance contracts got signed by the insured on dotted lines, are not binding upon the insured. Relevant part of the said order is reproduced hereunder:-

“…..These contracts are prepared by the insurer having a standard format upon which a consumer is made to sign. He has very little option or choice to negotiate the terms of the contract, except to sign on the dotted lines. The insurer who, being the dominant party dictates its own terms, leaving it upon the consumer, either to take it or leave it. Such contracts are obviously one sided, grossly in favour of the insurer due to the weak bargaining power of the consumer.

10.The concept of freedom of contract loses some significance in a contract of insurance. Such contracts demand a very high degree of prudence, good faith, disclosure and notice on the part of the insurer, being different facets of the  doctrine of fairness. Though, a contract of insurance is a voluntary act on the part of the consumer, the obvious intendment is to cover any contingency that might happen in future. A premium is paid obviously for that purpose, as there is a legitimate expectation of reimbursement when an act of God happens…”

13.            Furthermore, it has also been rightly observed by the District Commission that several consumers having different backgrounds and residing at different parts of the country are making similar allegations  that the representatives/agents of the  appellants are not disclosing the actual terms and conditions of the insurance policies but sell out the policies in a deceptive manner. Not only as above, it has also been observed by this Commission that the policies have been sold by the appellants in other cases also, many of whom are senior citizens without due consideration of their age and financial status, raising serious ethical and legal concerns. In our considered view, the insurance company, which has a fundamental responsibility to provide appropriate and tailored financial products, failed to adequately assess the needs and circumstances of the insured individual. This oversight left the insured vulnerable to the risks associated with a policy that was not suitable for their specific situation. This mis-selling practice not only undermines consumer trust in the insurance industry but also exposes the insured to significant financial strain. Thus, in view of peculiar facts and circumstances of these cases, it is held that the policies in question, got signed under pressure and without proper understanding i.e. on "dotted lines" are not binding upon the respondents.  The District Commission was also right in holding so.
14.           In this view of the matter, it is held that the District Commission was right in ordering the appellants to refund the entire amount deposited by the respondents.  It is therefore held that the orders dated 08.11.2023 passed by the District Commission-II, U.T., Chandigarh, in both the consumer complaints, referred to above, being based on the correct appreciation of evidence and law on the point, does not suffer from any  illegality or perversity, warranting the interference of this Commission.
15.           For the reasons recorded above, both these appeals being devoid of merit must fail and the same stand dismissed with no order as to cost. The orders of the District Commission stand upheld.
16.           Pending application(s), if any, stand dispose of, accordingly.
17.           Certified copies of this order be sent to the parties, free of charge and one copy thereof be placed in the connected case file, forthwith.
18.           The concerned files be consigned to Record Room, after completion and the record of the District Commission, after annexing the additional documents, if any, submitted before this Commission in these appeals, be sent back immediately.

 

Pronounced

23.10.2024
 

Sd/-

[JUSTICE RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

Sd/-

 (PADMA PANDEY)

          MEMBER

 

 

Sd/-

(PREETINDER SINGH)

MEMBER

Rg