Punjab

Ludhiana

CC/21/345

Kamaljit Kaur - Complainant(s)

Versus

HDFC Life Ins.Co.Ltd - Opp.Party(s)

Narinder Singh Adv.

27 Aug 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                             Consumer Complaint No: 345 dated 20.07.2021.                              Date of decision: 27.08.2024. 

 

Kamaljit Kaur Dulay aged 53 wife of Kuldip Singh Dulay, resident of Dera Sahib, village Dulay, Distt. Ludhiana.                                                                                                                                                     ..…Complainant

                                                Versus

1. HDFC Life Insurance Company Ltd., 11^th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai-400011 through its Chairman/Managing Director/authorized signatory.
2. HDFC Life Insurance Company Ltd., HDFC Bank Branch Dehlon, Ludhiana through its Branch Manager/Authorized Signatory.                                                                                             …..Opposite parties 

Amended Complaint Under Section 35 of the Consumer Protection Act as amended upto date.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Randeep Singh, Advocate.

For OP                           :         Sh. Nitin Kapila, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that in the year 2020, one Poonam and Rajwinder Kaur, the officials of the OPs on the instructions of Asish Verma, Branch Manager of OP2 approached and allured the complainant to get insurance policy of the OPs with assurance to get huge benefits by opting their 10 years policy plan. The OPs further allured the complainant to deposit Rs.7 Lacs in said insurance policy and believing their representation, the complainant deposited Rs.5,26,316/- as premium for policy No.22542821. The complainant stated that in February 2021, he went to the OPs to know about status of the policy where she came to know that the policy is having maturity date as 05.05.2068 for which he had to deposit annual premium of Rs.5,26,316/- for 12 years. Thereafter, the complainant requested the OPs to cancel the policy and to refund the deposited amount but the OPs lingered on the matter. The complainant approached higher authorities of the OPs at Mumbai but to no avail. The complainant also moved an application for cancellation of the policy but the OPs threatened the complainant to terminate his policy without any refund by giving two years of lock-in-period. The complainant many times approached the OPs with request to return the deposited amount but all went in vain. According to the complainant, she would never obtain such policy if she had knowledge of conduct of the OPs.  The complainant claimed to have suffered mental pain, torture and agony  due to deficiency in service on the part of the OPs for which the OPs are liable to pay compensation to the complainant. In the end, the complainant has prayed for issuing direction to the OPs to refund the amount along with interest as well as to pay compensation of Rs.5,00,000/-.

2.                Upon notice, the OPs appeared and filed written statement to the amended complaint and assailed the complaint by taking preliminary objections on the ground of maintainability; the complaint being an abuse of the process; the complainant being not a Consumer; the complainant has not come with clean hands; suppression of material facts;  lack of jurisdiction etc. The OPs stated that on the basis of proposal form of the complainant, HDFC Life Sanchay Par Advantage Plan was issued by them for a sum assured on maturity for Rs.31,57,896/- vide policy No.22542821 dated 09.05.2020 having risk commencement from 05.05.2020. The complainant signed all the documents duly understanding admitting the terms and conditions of the policy in presence of witness Gaganpreet Singh and Ashish Verma, Branch Manager, Dehlon. Even the policy documents were sent to the complainant. According to the OPs, as per the third paragraph of forwarding letter, titling as “cancellation in the free look period” and para No.7 of the policy terms and conditions, it was mentioned about the option to return the policy stating the reasons thereof within 15 days from the date of receipt of the policy document but the complainant did not opt for the same and continued the policy. The OPs further stated that the complainant was aware regarding the terms and conditions of the policy as her husband Kuldeep Singh Dulay had taken a similar policy bearing No.22649765 issued on 12.06.2020 with date of risk commencement 04.06.2020.

                   On merits, the OPs reiterated the crux of averments made in the preliminary objections. However, the OPs stated that they responded to the application dated 20.05.2021 of the complainant via an Email dated 24.05.2021 stating the reason as to why the policy could not be answered which states that ‘both of your policy numbers 22542821 and 22649765 is a traditional/conventional plan and currently it is under 2 years of lock in period. After completion of the lock in period, the guaranteed surrender value will be paid to your surrender. However, if you surrender or stop paying the premium, the policy before, the policy will be terminated. So, we request you to reconsider your decision to surrender and stay insured to continue enjoying uninterrupted benefits of your policy.’ The OPs further stated that the provision of 2 years lock in period, as also mentioned in the Email was explained to the complainant before hand while entering the policy and is also clearly mentioned in the policy document which was accepted by the complainant. The OPs have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                The complainant filed application for correction of the complaint, which was allowed vide order dated 10.11.2022 and the complainant filed amended complaint on 02.01.2023.

                   The counsel for the OPs suffered statement not to file amended written statement to the amended complaint and prayed to read the earlier filed written statement as reply to amended complaint.

4.                In evidence, the complainant tendered her affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents Ex. C1 is the copy of welcome letter dated 10.05.2020, Ex. C2 is the copy of policy schedule, Ex. C3 is the copy of First Premium Receipt, Ex. C4 is the copy of application dated 20.05.2021 for cancellation of policy, Ex. C5 is the copy of Email of the OPs, Ex. C6 is the copy of Aadhar Card of the complainant  and closed the evidence.

5.                On the other hand, the counsel for the OPs tendered affidavit Ex. RA of  Sh. Arpit Higgins, Senior Manager Legal & Compliance of Chandigarh branch of the OPs along with documents i.e. Ex. R1 is the copy of Authority letter, Ex. R2 is the copy of welcome letter dated 10.05.2020 as well as policy documents, Ex. R3 is the copy of Customer Consent Document, Ex. R4 is the copy of policy details, Ex. R5 is the copy of payment processing intimation dated 05.06.2020, Ex. R6 is the copy of payment processing intimation dated 05.07.2020, Ex. R7 is the copy of payment processing intimation dated 05.12.2020,  Ex. R8 is the copy of Customer Verification Details, Ex. R9 is the copy of Proposal Form/Electronic Proposal form for single/joint life and closed the evidence.

6.                We have gone through the amended complaint, affidavit and documents as well as written statement, affidavit and documents produced by both parties.

7.                Admittedly, the complainant, being an account holder of HDFC Bank Ltd., branch Dehlon, Ludhiana, filled the Customer Consent Document (CCD)- HDFC Bank cum Proposal Form dated 05.05.2020 Ex. R3,

on the basis of which the OPs issued an insurance policy Ex. C2 = Ex. R2 under HDFC Life Sanchay Par Advantage plan. The policy was a Non-Linked Participating Life Insurance Plan. Extract of other relevant details reads as under:-

Plain option	Immediate Income
Survival Benefit Payout Mode	Survival Benefit Payout
Guaranteed Income (Applicable only for Deferred Income Option)	0.00
Survival Benefit Frequency	12
Survival Benefit Payout Date	05/06
Date of Risk Commencement	5th May 2020
Date of Issue/Inception	9th May 2020
Premium Due Date(s)	5th May
Death Multiple times Annualized Premium	Rs.5,473,686.00
Sum Assured on Death	Rs.54,73,686.00
Sum Assured on Maturity	Rs.3,157,896.00
Annualized Premium	Rs.526,316.00
Policy Term	48 years
Premium Paying Term	6 years
Premium Paying Frequency	Annual
Premium per frequency	Rs.526,316.00
Underwriting Extra Premium Frequency	Rs.0.00
Total Premium per Frequency	Rs.526,316.00
Grace Period	30 days
Final Premium Due Date	05/05/2025
Maturity Date	05/05/2068

 

The relevant clauses 1(1) as well as 7 of the policy terms and conditions reads as under:-

“1. Surrender Value     

1. The Policy will acquire a Guaranteed Surrender Value (GSV) upon the payment of the first two years premiums.

2. Lapsed Policies and Paid-Up Policies

(1) If any Premium remains unpaid after the expiry of the Grace Period and your Policy has not acquired a GSV, your Policy’s status will be altered to lapsed status and the cover will cease.

7. Free Look Cancellation

In case the Policyholder is not agreeable to any of the provisions stated in the Policy, the Policyholder has an option to return the Policy to the Company stating the reason thereof, within 15 days from the date of receipt of the Policy. If the Policy has been purchased through Distance Marketing mode, this period will be 30 days. On receipt of the Policyholder’s letter along with the original Policy document (original Policy Document is not required for policies in dematerialized form), the Company shall arrange to refund the Premium paid, subject to deduction of the proportionate risk Premium for the period on cover and the expenses incurred by the Company for medical examination (if any) and stamp duty (if any).”

 

8.       The complainant, a HDFC Life Sanchay Par Advantage Policy holder has raised a grievance by filing the present complaint and has prayed for refund of premium along with compensation and litigation expenses. The complainant has claimed the refund of premium mainly on following three grounds:-

i.        The OPs have not explained the terms and conditions to the complainant and the complainant was kept in dark.

ii.       The officials of the OPs have mis-sold the policy in order to achieve their targets of sale of insurance policies.

iii.      The complainant cannot deposit the huge premium amount every year as she is having limited resources of income.

The complainant has repeatedly averred that she was not explained about the terms and conditions of the policy as well as frequency and duration of payment of premium, date of maturity etc.

9.                Undisputedly, the complainant received welcome letter dated 10.05.2020 Ex. C1, policy schedule Ex. C2. Perusal of welcome letter Ex. C1 = Ex. R2 shows that a policy document kit comprising of policy schedule, first premium receipt, copy of proposal form, benefit illustration, policy terms and conditions and other relevant documents (Ex. R2, Ex. R3, Ex. R4) were sent to the complainant. It has been specifically mentioned in bold letters that this is a yearly mode policy and your premium payment term is 6 years. The final premium due date is 05.05.2025 and the maturity date has been mentioned as 05.05.2068. Further this letter referred to Cancellation in the Free Look Period of the policy and reminded the complainant that in case of disagreement with the terms, features and conditions stipulated in the policy documents, she may opt out of this plan by stating reason of disagreement in writing and return the policy to the company within 15 days. Therefore, it is evident that the complainant received all the policy documents and was free to exercise her free look period option by according specific disagreement to the terms and conditions of the policy. Even she could have sought the modification of the terms and conditions within stipulated period. Admittedly, the complainant did not exercise her valuable right and it amounts to acceptance of terms and conditions of the policy. Now it does not lie in the mouth of the complainant that the terms and conditions of the policy were not explained or supplied to her. In the proposal form Ex. R9 the qualification of the complainant has been mentioned as Post Graduate and her occupation has been mentioned as Teacher-Lecturer. As such, it is not the case of the complainant that she was not aware regarding the terms and conditions of the policy.

10.              In order to substantiate his claim with regard to mis-sold of policy by the OPs, Poonam, Rajwinder Kaur the authorized agents as we as Ashish Verma, Branch Manager of OP2 who allegedly approached and influenced the complainant were required to be arrayed as a party in the complaint but for the reason best known to the complainant, said persons were not joined in the complaint. Further the complainant got the insurance policy in question  by submitting Customer Consent Document (CCD) - HDFC Bank through HDFC Bank Ltd., Branch Dehlon with which the complainant was having a saving bank account. The stamp of the said bank is appended on the said Ex. R3 and the said bank has not been made a party to the present complaint. The OPs have also taken a definite stand the complainant signed all the documents in presence of witness Satnam Singh, Gaganpreet Singh and said Ashish Verma, Branch Manager, Dehlon. So this Commission is of the view that said persons namely Poonam, Rajwinder Kaur and Ashish Verma were the best persons who could have corroborated or rebutted the contentions of the complaint. So the bald allegations levelled by the complainant are not sufficient to conclude that the policy had been mis-sold.

11.              The complainant has represented herself to be unable to invest huge amount of Rs.5,26,316/- in 6 years. Perusal of the proposal form Ex. R9 shows that an income of Rs.25,00,000/- was proposed and verified during the process of issuance of the insurance plan. Moreover, the complainant has invested the amount under “Immediate income plan i.e. Regular cash bonus starting from the 1^st policy year and Deferred income plan i.e. guaranteed income plus regular cash bonus starting one year after the end of the premium paying term.” Even the complainant started receiving the benefits of the insurance plan in the shape of income of Rs.7789/- each as reflected from the receipts/payment processing intimation Ex. R5 to Ex. R7. However, the complainant has not disclosed this fact in the complaint regarding receipt of such payments from the OPs.

12.              Further the OPs in response to application for cancellation of policy dated 20.05.2021 (Ex. C4) of the complainant, sent an Email Ex. C5 to the complainant, which reads as under:-

“We refer to your communication dated May 20, 2021, regarding the cancellation request your policy no.22542821 and 22649765.

Both of your policy numbers 22542821 and 22649765 is a Traditional/Conventional plan and currently it is under 2 years of Lock in Period.

After completion of the lock-in period, the Guaranteed Surrender value will be paid to you on surrender. However, if you surrender or stop paying the premium the policy before the policy will be terminated.

So we request you to reconsider your decision to surrender and Stay Insured to continue enjoying uninterrupted benefits of your policy.”

In this Email Ex. C5, it has been specifically mentioned by the OPs as well as, as per clause 1 (Surrender Value) the policy will acquire Guaranteed Surrender Value (GSV) upon the payment of the first two years premiums. Admittedly, the complainant did not make payment of second regular premium and as such, the policy of the complainant stood terminated as per policy terms and conditions.

13.              The counsel for the complainant has contended that the guidelines of The Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 are applicable and binding upon the OPs and as such, the complainant is entitled to the surrender value. The counsel for the complainant further relied upon 2018(1) CLT 340 in M/s. Kotak Mahindra Old Mutual Life Insurance Ltd. Vs Dr. Nishi Gupta and 2013(4) CPJ 128 in Reena Singh Vs Max New York Life Insurance Company Limited and others.

14.              Perusal of the policy documents shows that the policy is a non-linked, non-participating life insurance policy. The aforesaid guidelines of The Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 are applicable to the unit linked insurance plans and not to the a non-linked, non-participating life insurance policy. Clause 7.2 asserts primacy to the policy document. It provides that in the event of any inconsistency of conflict between the terms and conditions contained in the policy documents and the terms and conditions contained in any other document such as marketing material  or sales brochure, the terms and conditions contained in the policy document shall prevail over all other terms and conditions contained in various other documents. Admittedly, the complainant has paid only one premium and there is requirement of at least payment of two regular premiums for having 6 years term. Since the complainant has paid just only one premium and as such, the policy in question has not acquired the surrender value as stipulated in Part D Clause 1(1) of the policy.

15.              The counsel for the complainant has contended that the policy is eclipsed by Section 36 of the Indian Contract Act, 1872 defines that the contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made.  As such, it is liable to be declared void as its terms and conditions particularly term of the policy creates an embargo beyond the redemption upon the rights of the complainant. Further the complainant being a customer of the bank, the officials of the bank have exercised undue influence and misrepresented the material facts in order to achieve their allocated targets. It is settled law that the validity of the contract on the grounds of misrepresentation or induced by undue influence can only be a subject matter for adjudication by Civil Court and it cannot be decided summarily. Further Section 2(46) of the Consumer Protection Act defines the ‘Unfair Contract’, which is reproduced as under:-

“(46) “unfair contract” means a contract between a manufacturer or trader or service provider on one hand, and a consumer on the other, having such terms which cause significant change in the rights of such consumer, including the following namely:-

1. requiring manifestly excessive security deposits to be given by a consumer for the performance of contractual obligations; or
2. imposing any penalty on the consumer, for the breach of contract thereof which is wholly disproportionate to the loss occurred due to such breach to the other party to the contract; or
3. refusing to accept early repayment of debts on payment of applicable penalty; or
4. entitling a party to the contract to terminate such contract unilaterally, without reasonable cause; or
5. permitting or has the effect of permitting one party to assign the contract to the detriment of the other party who is a consumer, without his consent; or
6. imposing on the consumer any unreasonable charge, obligation or condition which puts such consumer to disadvantage.”

 However, Section 47 (1) (ii) and 58 (1) (ii) of the Consumer Protection Act, 2019 confers the jurisdiction for declaring particular contract to be unfair upon State Commission as well as National Commission and this Commission has no jurisdiction to entertain cases against the unfair contract. So the contention of the counsel for the complainant is devoid of any merits and substance. In the given set of facts and circumstances, the complaint deserves dismissal.

16.              As a sequel of above discussion, the complaint fails and the same is hereby dismissed. However, there shall be no order as to costs. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

17.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

 

(Monika Bhagat)                              (Sanjeev Batra)               Member                                         President  

 

Announced in Open Commission.

Dated:27.08.2024.

Gobind Ram.