Chandigarh

DF-II

CC/195/2014

Surjeet Kaur - Complainant(s)

Versus

HDFC SL - Opp.Party(s)

Hitesh Pandit,Adv

20 Mar 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	195 of 2014
Date  of  Institution	:	15.04.2014
Date   of   Decision	:	20.03.2015

 

 

 

 

 

Mrs.Surjeet Kaur w/o Gurdev Singh, Village Chapparchiri Khurd PO Landran, Tehsil Sasnagar Mohali Gurudwara, Tehsil & Distt. Mohali, Punjab. 

 

             …..Complainant

 

Versus

 

1]  HDFC SL Chandigarh, 1^st & 2^nd Floor, SCO No.1A-120, Sector 43, Chandigarh through its Manager.

 

2]  HDFC Bank Ltd., SCF 24, Phase-II, Mohali through its Branch Manager.

 

….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

        

 

Argued By:  Sh.Hitesh Pandit, Counsel for the complainant and complainant in person.

Sh.Nitin Thatai, Counsel for Opposite Party-1.

Sh.Sunil Narang, Counsel for Opposite Party-2.

 

 

PER JASWINDER SINGH SIDHU , MEMBER

 

 

          As per the case of the complainant, she was having saving bank account with Opposite Party No.2 Bank.  It is averred that the employees of Opposite Party No.1 after presenting wrong facts, got the signatures of the complainant on the blank insurance proposal form without her knowledge on the pretext of official purposes. It is also averred that the complainant is an illiterate lady and only knows to sign in Punjabi and does not know a word of English. It is further averred that the insurance proposal form was filled in by the bank official and the complainant was only asked to put her signatures.  However, the complainant was shocked to receive an insurance policy issued in her name, as she had never applied for any insurance cover  (Ann.C-1 & C-2). Thereafter, the complainant within free look period of 30 days, from the receipt of the policy cover, requested the OPs No.1 & 2 vide letter dated 1.6.2013 (Ann.C-3) to cancel her policy, but the same was rejected on the ground that the request has been received after free look period (Ann.C-4). It is pleaded that the policy was sent on 21.5.2013 by the insurance company under regd. post to the complainant and further the complainant had requested for cancellation of the policy on 01.06.2013, which was well within the free look period of 30 days. Hence, this complaint has been filed alleging the above acts & conducts of the OPs as gross deficiency in service and indulgence into unfair trade practice.

 

2]       Opposite Party No.1 in its reply, while admitting the factual matrix of the case, has maintained that the Complainant had submitted a proposal dated 18.2.2013 (Ex.OP-2), for the purchase of HDFC SL Progrowth Super-II Policy; the proposal was accepted, on the standard rates, based on the information provided and consequently, a policy was issued bearing No.15840771 dated 26.2.2013 (Ex.OP-3).  It is asserted that before acceptance of the proposal by the Opposite Party No.1, the contents of the proposal/application, illustration and the addendum forms were read and explained to the LA in English language i.e. the language best known to her. It is also asserted that the policy document delivered to the complainant on 21.3.2013 provided her a period of 30 days within which period she could have returned the policy, but since she failed to do so, hence now she cannot be allowed to wriggle out of the terms & conditions of the policy. The LA had paid the initial premium of Rs.2.00 lacs, but did not pay the subsequent premiums, as a result, the policy of insurance has already been lapsed.  Hence, the Complainant is not liable to get the refund of the annual premium paid. Denying all other allegations, Opposite Parties have prayed for dismissal of the complaint.

 

         The Opposite Party No.2 has also filed reply stating therein that the Complainant signed the proposal form after fully understanding the terms & conditions of the policy and accordingly, as per the proposal dated 18.2.2013 submitted by the complainant, for the purchase of HDFC SL Progrowth Super-II Policy; which was accepted on the standard rates, based on the information provided, a policy was issued bearing No.15840771 dated 26.2.2013. It is pleaded that the complainant also signed a declaration in Punjabi that she had understood all the terms & conditions of the proposal form, therefore, the allegation of the complainant that the bank official of Opposite Party No.2 got signed from her on blank paper is absolutely wrong and denied. It is asserted that the policy document delivered to the complainant on 21.3.2013 provided her a period of 30 days within which period she could have returned the policy, but since she failed to do so, hence now she cannot be allowed to wriggle out of the terms & conditions of the policy. The LA had paid the initial premium of Rs.2.00 lacs, but did not pay the subsequent premiums, as a result, the policy of insurance has already been lapsed.  Hence, the Complainant is not liable to get the refund of the annual premium paid. Denying all other allegations, Opposite Parties have prayed for dismissal of the complaint.

 

3]      Parties led evidence in support of their contentions.

 

4]      We have heard the learned counsel for the parties and have perused the record.

 

5]       The complainant who has declared herself to be an illiterate lady, who only appends her signatures in Punjabi Language and that she does not know a single word of English Language.  The complainant has preferred the present complaint against the Opposite Parties on the ground that she is a bonafide bank account holder of Opposite Party No.2 wherein she had been maintaining her account for quite some time and that the official of Opposite Party No.2 mislead her in selling a policy belonging to Opposite Party NO.1 by diverting an amount of Rs.2.00 lacs as a premium by getting her signatures on blank documents, which were used by them in proposing the policy in question of Opposite Party No.1 and also utilized an amount of Rs.2.00 lacs for this purpose. The complainant has also alleged that on receipt of the policy document at her end on 27.5.2013, she had requested the cancellation of the same by writing a letter dated 01.06.2013 (Ann.C-3), which was duly received by Opposite Party No.1 on 01.06.2013, but according to the complainant, it failed to refund the premium amount even though the same was within the free look period of 30 days as mentioned in the offer letter.

 

6]       The Opposite Part No.1 has contested the claim of the complainant claiming that the complainant had proposed a policy by filling-up a proposal form for this purpose and that after due process, a policy was issued on 26.2.2013, which was received at her end on 21.3.2013 as per Ann.OP-5 and therefore, her request dated 01.06.2013 for cancellation of the policy in question was beyond the free look period of 30 days, which ended on 21.4.2013.  Therefore, her request was not acceded to and therefore, there is no cause of action in her favour to file the present complaint.  Opposite Party No.2 has also towed the lines of Opposite Party No.1 while defending itself against the complainant’s allegations.    

 

7]       It is necessary at this stage, to deal with the question of maintainability of the present complaint on the ground whether the complainant is a consumer qua Opposite Party No.1 or not for the reason that the counsel for Opposite Party No.1 at the time of arguments had heavily relied upon a judgment titled Ram Lal Aggarwalla Vs. Bajaj Allianz Life Insurance Co. Ltd. & Ors., R.P.No.658 of 2012, decided on 23.4.2013 by the Hon’ble National Commission, New Delhi, a copy of which was produced by the counsel at the time of arguments along with other judgments.

 

8]       We have perused the judgment quoted above in which the Hon’ble National Commission, New Delhi, had dismissed the revision petition filed against the orders of Hon’ble Orissa State Commission, which had upheld the order of District Forum, Cuttack in which the District Forum while detailing the matrix of the case had opined that the complainants, who were husband & wife, were highly literate individuals and the husband himself was a leading Advocate & Notary Public and his wife was the agent of the Insurance Company with Agent Code No. 1000093544 of Opposite Party–Bajaj Allianz. The ld.District Forum, Cuttack while pointing out the huge quantum of money totaling to nearly Rs.4.50 lacs of premium, which was being renewed as well as a top up amount was also being added to them, had declared that this investment was being done by the complainants for the purpose of investment into shares for speculative gains, declaring them as not covered under the preview of Consumer Protection Act.  

 

9]       It is important to quote here that the case of the complainant, which has been contested by Opposite Party No.1 by filing a detailed reply has nowhere sought the dismissal of the present complaint on the ground of its maintainability on the basis of the judgment argued above.  Therefore, the pleadings of the Opposite Party No.1 are to be looked into rather than any additional ground that has been created at the time of arguments.  Furthermore, it is necessary to quote here other two set of judgments of the Hon’ble National Commission, New Delhi i.e. Life Insurance Corporation of India Vs. Smt.Sudhi P.P., R.P. No.2674 of 2013, decided on 15.01.2014 And Dr.Aditya Prasad Roy VS. Mr.Suresh Mahalingam & Ors., R.P.No.4351 of 2014, decided on 6^th Jan., 2015, wherein the Hon’ble National Commission, New Delhi, while dealing with similar set of Unit Linked Policies had decided them on merits, as in the present case, and has nowhere given its specific observation that the complainant did not fall under the definition of consumer and the dispute did not fall under the preview of Consumer Protection Act. It is also necessary to quote here that the complainant, in the present case has nowhere quoted that she had opted for the policy in question for the purpose of investment whereas her stand is that she was misguided by the officials of Opposite Party No.2 and after getting here signatures on blank document, the policy in question was issued to her. Therefore, it would not be appropriate for us to deviate from the merits of the present case, which has been contested by the Opposite Parties on merits and not on its maintainability.

 

10]      The complainant, who has claimed that she had received the policy document at her end on 27.5.2013 and a request for its cancellation was given to Opposite Party NO.1 through its communication dated 01.06.2013 (Ann.C-3).  Though the complainant has placed on record the copy of envelope Ann.C-1, which according to her contained in the policy document bears the Postal Receipt dated 21.5.2013, which was sent to her through regd. Post.  This envelope actually belongs to Opposite Party NO.2, as it bears the stamp of Phase-II, Mohali – address of Opposite Party No.2.  The Opposite Party No.1, while contesting this claim of the complainant, has placed on record Ex.OP-5, which is a return receipt showing the receipt of the policy document at complainant’s end on 21.3.2013.  Though, no mode of its delivery is found mentioned on this exhibit nor the same has been disclosed in Opposite Party NO.1’s pleadings.   It is also necessary to quote here that Annn.C-2 at its Top, displays the details of Speed Post No.EQ791181370IN, which the Opposite Party No.1 has failed to explain.  As none of the parties have come out with a conclusive evidence to prove its contentions, nor have falsified the other’s evidence.  In these set of circumstances, the case of the complainant with regard to her having availed the free look period has not been proved.

 

11]      The complainant, who has pleaded that the policy in question was not subscribed by her on her free will, rather the same was mis-sold to her after getting her signatures on the blank papers.  The Opposite Party No.1 while contesting the complainant’s claim has specifically quoted the contents of the proposal form wherein she had appended her signature in vernacular (Punjabi Language).  The complainant, who has claimed to be an illiterate and only capable of writing her name in Punjabi, is shown to be a Graduate in Column, wherein her personal details have been mentioned on Page No.14 of Ex.OP-2, which is highly unlikely.  The Opposite Party No.1 has also specifically quoted a document namely Most Important Document, which is Ex.OP-4.  However, the same document in its footnote contains a declaration, which was supposed to be filled up by the person, who had explained the contents of proposal form in the Language known to the Proposer.  This declaration is found to be Left unsigned, which clearly indicates that the Most Important Document of Opposite Party NO.1 heavily relied upon by it has been entertained even though the same was incomplete and does not bear the complete date as 18/02/2013, as claimed. This column was necessarily required to be filled-up as the complainant has appended her signatures in vernacular Punjabi language.  Therefore, the Opposite Party NO.1 is found wanted in not having acted in a responsible manner while dealing with the undated proposal form of the complainant.

 

12]      It is necessary to mention here that the complainant, who is a simple house wife is shown to be an agriculturist having an annual income of Rs.7.00 lacs per annum and had subscribed for a policy of premium of Rs.2.00 lacs payable ever year.  However, as per the KYC norms, it was incumbent upon Opposite Party NO.1 to seek a copy of J Forms along with proposal to reach a conclusion about her paying capacity of continuing with the policy for the period subscribed for.  There is none such document on record. Even the Anti-Money Laundering regulations, which are applicable to the present case of the complainant for the reason that the premium amount having exceeded Rs.50,000/- per annum have not been looked into by Opposite Party NO.1 before issuing the policy.  These two important factors clearly indicates that whatsoever the reasons, Opposite Party No.1 has failed to adhere to the mandatory provisions as envisaged under IRDA Regulations or the issuances of any policy to a proposer. 

 

13]      Interestingly, the policy document, which was received at the complainant’s end was delivered to her, along with miniaturized copies of proposal form as well as unsinged illustrations, which is a clear cut violation of the Insurance Regulatory and Development Authority Life Insurance Products – Guidelines for Unit Linked Insurance Products Circular No.032/IRDA/Act1/Dec-2005, dated 21.12.05 Clause 1.2, which reads as the Policyholder should be given the full details, “using the same font”, related to the investments, and other features of the policy issued to the insured.

     

         The aforementioned circular necessitate that the insured must be supplied with the copy of proposal form and all other such documents in the original font as it was signed, so that the insured can go through it before exercising his/her option of cancellation of the policy during the free look period.  This act of Opposite Party No.1 is clear cut unfair trade practice on its part, as it did not want its prospective subscriber to exercise the free look option in a fair manner.   

 

14]      While dealing with the defence of Opposite Party No.2, which has preferred to file its reply only after the receipt of copy of reply of Opposite Party No.1, had even gone to the extent of quoting the contents of reply of Opposite Party No.1 in verbatim forgetting that such contents were not to be answered by it, but by Opposite Party No.1 alone.  The Opposite Party No.2 though having claimed that the policy in question was duly explained to her and the same was signed by her after fully understanding the terms & conditions of the policy.  However, it has not explained as to why the identity of the person explaining the policy and his signatures were not obtained on Ex.OP-4.  Though Opposite Party No.2 has explained this factor while pointing out the contents of Ex.OP-6.  The Opposite Party No.2 has not disclosed as how it could place its reliance upon Ex.OP-5, which did not belong to its office records and was not within its reach till the same was filed by Opposite Party No.1. Though the author of affidavit filed along with the reply of Opposite Party No.2 and is signed by one Sh.Jasmeet Singh, Branch Manager of Opposite Party No.2 in its verification clause states that the reply to Para No.1 to 13 on merit/evidence are true & correct to the best of his knowledge and belief, and as per the official records maintained in its office.  However, no copy of its official record has been annexed by Opposite Party No.2 in support of its pleadings and contentions.

 

15]      The complainant having failed to prove that she had exercised her free look option within the prescribed 30 days period, has not renewed the said policy and as such the same is lying in a lapse mode and in such set of circumstances, the Opposite Party No.1 by now should have disclosed to the complainant about the fund value that the policy had accrued at the time when it became discontinued, thus attracting the provisions of IRDA Regulations, 2010, dated 1^st July, 2010.  Regulation No.7 & 9 of the aforementioned regulations require that no deduction can be made beyond the prescribed limits as well as that the complainant is entitled to exercise her option of maintaining the said policy with Opposite Party No.1 as per the guidelines as envisaged in Regulation No.9. The Regulation No.7 & 9 of the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 which are reproduced  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

5. 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:-

 

Where the policy is discontinued during the policy year.	Maximum Discontinuance charges for the policies having annualized premium up to Rs.25000/-	Maximum discontinuance charges for the policies having annualized premium above Rs.25000/-
1	Lower of 20% (AP or FV) subject to a maximum of Rs.3000.	Lower of 6% (AP or FV) subject to maximum of Rs.6000/-
2	Lower of 15% (AP or FV) subject to a maximum of Rs.2000.	Lower of 4% of (AP or FV) subject to maximum of Rs.5000/-
3	Lower of 10% (AP or FV) subject to a maximum of Rs.1500.	Lower of 3% (AP or FV) subject to maximum of Rs.4000/-
4	Lower of 5% (AP or FV) subject to a maximum of Rs.1000.	Lower of 2% (AP or FV) subject to maximum of Rs.2000.
5 and onwards	NIL	NIL

 

 

 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.”

            8.         xxxxxxxxxxxxxx

9.         Every insurer shall send a statement of account, on a half yearly basis, within fifteen days, in respect of every policy in force including discontinued policies where the proceeds are yet to be paid to the policyholder or her nominee as the case may be, his last known address, which shall contain the following details :-

(i) The total premium paid by the policyholder

(ii) Next due date of the premium

(iii) Pattern of the investment chosen

(iv) Pattern of investment

(v) Status of the policy

(vi) Total fund value

(vii) Total units

(viii) Detail of charges recovered.

 

16]      In the light of above observations, we are of the concerted view that the complainant has failed to prove deficiency in service on the score that the Opposite Parties did not entertain her free look option. However, the Opposite Party No.1 is directed to communicate to the complainant as per the aforementioned regulations seeking her desire with regard to the policy in question within 30 days from the receipt of certified copy of this order.  Accordingly, the present complaint stands disposed of in there terms.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

20^th March, 2015

                                                                            

 (RAJAN DEWAN)

PRESIDENT

 

 

 

 

 (JASWINDER SINGH SIDHU)

MEMBER

Om                                                                                                                       

 

 

DISTRICT FORUM – II

CONSUMER COMPLAINT NO.195  OF 2014

PRESENT:   None   Dated the 20th day of March, 2015

O R D E R                        Vide our detailed order of even date, recorded separately, the complaint has been disposed of.                    After compliance, file be consigned to record room.

 

(Jaswinder Singh Sidhu)	(Rajan Dewan)
Member	President