Delhi

North East

CC/179/2014

Neelu Sharma - Complainant(s)

Versus

HDFC Standard Life Ins. co. - Opp.Party(s)

23 Aug 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No. 179 of 14

 

In the matter of:

 

	Ms. Neelu Sharma R/o 588, First Floor Shakti Khand-4, Indirapuram Ghaziabad, U.P. 201010	Complainant
	Versus
1.       2.	HDFC Standard Life Insurance Co. Ltd 1st Floor, Star City Mall Plot No.1A, Mayur Place, Mayur Vihar Phase-1, Delhi-110091.   Mr. Ashish Ramchandani Head of Sales, HDFC Life 5th Floor, K.M. Trade Tower, Radisson Tower Hotel, Kaushambi, Ghaziabad. U.P	Opposite Parties

 

DATE OF INSTITUTION:         JUDGMENT RESERVED ON:               DATE OF DECISION      :

16.05.2014 20.08.2018 23.08.2018

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

Ravindra Shankar Nagar, Member

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. The facts of the case as succinctly put in the present complaint are that the complainant had taken HDFC SL ProGrowth Flexi Life Insurance Policy bearing no. 14610803 (Hereinafter referred to as “Policy”) from OP for a total sum assured of Rs. 12,00,000/- effective from 30.09.2011 on payment of monthly premium of  Rs. 2500/- (annual premium of Rs. 30,000/-). The duration of the policy was 15 years as also its premium paying term. The complainant paid Rs. 7500/- vide cheque no. 967742 dated 16.09.2011 drawn on PNB, New Delhi to OP as the initial premium payment amount for September – November 2011. The complainant has stated that at the time of inception of policy, she had filled a form for Electronic Clearing System (ECS) mandate to the OP for deducting premiums at monthly intervals from her salary December 2011 onwards and in November 2011 had given an application to OP for updation of her address change/ residential address for future correspondence. However, the OP failed to deduct the premium for the month of December 2011- January 2012 from her account which was brought to her attention in January 2012. Complainant was then asked by OP in January 2012 to pay Rs. 5,000/- for the above mentioned months for which she submitted a cheque to OP and filled ECS mandate form again for 2^nd time in Feb 2012. However, the said cheque of Rs. 5000/- was never presented by OP and the reason given to complainant was internal resolution with respect to the policy. In June 2012 demand for outstanding premiums was made by the OP to the tune of Rs. 17,500/- for December 2011 to June 2012 for which a cheque vide no. 708897 dated 11.07.2012 drawn on PNB, Vivek Vihar, Delhi of said amount was given by the complainant again and she was made to fill the personal statement of health for revival of lapsed policy form on 20.07.2012. However, the cheque of Rs. 17,500/- was again returned by OP to the complainant vide letter dated 30.07.2017 with reason of non-receipt of premium which was due on 30.12.2011 for which the policy was discontinued on 19.02.2012. The complainant was asked to revive the said policy by paying Rs. 20,000/- on or before 19.08.2012. However, the said letter was sent on complainant’s previous/ old address despite her November 2012 application to the OP updating her new address. The complainant gave a cheque vide No. 708900 dated 25.08.2012 of Rs. 22,500/- drawn on PNB for outstanding premium for the months December 2011 to August 2012 and the said cheque was cleared as per passbook entry submitted by complainant. However, the said cheque was later returned by the OP but again on her previous address  and letter accompanying therewith was not received by complainant and was kept in return mail of OP and OP never informed complainant regarding the same vide any email. Thereafter, there was series of email correspondence between complainant and OP from September 2012 till March 2013 pertaining to complainant’s grievance of lapsed status of her policy and non-renewal thereof despite making repeated payments vide cheques on three occasions and given ECS mandate to OP to deduct premium from her bank and for which reason she had been denied benefits of policy for an year and the complainant also expressed her anguish on OP failing to update the new address despite application for which vital correspondence could not reach to the complainant. The complainant had further submitted that she was asked by OP to undergo medical test again in September 2012 which she agreed to. In March 2013 the OP mailed the returned cheque of Rs. 22,500/- to the complainant vide cheque no. 294638 dated 27.02.2013 again at her old address and was assured by OP of process of renewal of her policy being in full swing. The complainant at this juncture submitted a letter dated 04.03.2013 to OP for speedy resolution with respect of her policy enforcement from inception with all due benefits and vide letter dated 05.03.2015, address change application was again filed by complainant. However, OP vide letter dated 15.03.2013 from its Customer Service Department to the complainant apprised the complainant of non-receipt of renewal premiums December 2011 onwards for which Revival Letter  was sent to the complainant on 19.01.2012 (as per complainant at her old address despite her request of address change in November 2011), however due to non-responsiveness on the part of complainant before the expiry of notice period, the policy was discontinued on 20.02.2012 and therefore, the cheque of Rs. 22,500/- towards policy revival was returned.   The complainant during this period submitted a cheque of Rs. 40,000/- vide cheque no. 528398 dated 19.03.2013 drawn on PNB to the OP for premium due from December 2011 to March 2013. The same was encashed by OP on 22.03.2013 as per the passbook entry filed by complainant.  The same was acknowledged by OP vide receipt no. C0233670. However, despite receipt of the aforementioned amount, the policy in question was not activated by OP and therefore, the complainant vide email dated 02.05.2013 asked for closure of her policy and refund of Rs. 47,500/- alongwith interest from 30.09.2011. The OP vide email dated 13.05.2013 to complainant attached the NEFT Form for faster processing of pay  out and asked the complainant to fill the said form alongwith a cancelled cheque with her name printed on thereon and the same was submitted by complainant vide cheque no. 528408.  The complainant wrote follow up mail to OP on 15.05.2013 for release of her dues. The said complaint was duly registered by OP vide complaint no. 01000000224108 and stated to reply to complainant with a resolution within 14 days thereon. However, no response / feedback was received from OP and series of follow up mails from complainant to OP ensued from 20.05.2013 till 28.05.2013. Vide letter dated 28.05.2013, the OP reproduced and reiterated the contents of its previous letter dated 15.03.2013 and reaffirmed its stand vide e-mails dated 01.06.2013 and 06.06.2013 of its decision remaining unchanged pertaining to lapsed status of the policy and non-revival thereof. The complainant lodged a complaint vide complaint no. 01000000231926 dated 01.02.2013 with OP expressing her grievance that despite submitting cheques of Rs. 5000/-, 17,500/-, 22,500/- and Rs. 40,000/- at the request and instructions of the OP, her lapsed policy could not be revived by OP even though she had given clear ECS mandate for deducting premium from her bank account to OP. The same was received by OP on 02.07.2013. The said complaint was registered by OP vide letter dated 04.07.2013. However, issue remains unresolved. The complainant wrote several emails from 27.07.2013 to 30.07.2013 to OP. Thereafter the complainant approached the Insurance Ombudsman, Lucknow in Mid-July 2013 vide email dated July 2013 and followed up the complaint with mails uptil December 2013. The Insurance Ombudsman, vide email dated 10.03.2014 rejected the complaint of the complainant as non entertainable on grounds of beyond the scope of that Forum and not falling within the purview of Insurance Ombudsman Adjudication. Meanwhile in July 2013 the complainant wrote to IRDA, Hyderabad vide email between period July 2013 to February 2014 for redressal of her grievance and had sought information vide RTI application dated 26.12.2013 to IRDA Hyderabad against which reply dated 30.01.2014, complainant was informed that her complaint stood closed and the OP has refunded Rs. 40,000/- to the complainant. However, the complainant submitted that the said amount has never been received by her till filing of complaint and therefore, vide present complaint against OP, the complainant as prayed for refund of Rs. 47,500/- alongwith interest and Rs. 10,000/- towards litigation cost and Rs. 12,00,000/- for mental harassment as was also the insurance cover agreed upon in the said policy which the OP has wrongfully denied the complainant of. Complainant has annexed receipts of Rs. 7500/- as initial premium for Sep to November 2011, copy of policy covering letter dated 22.09.2011 alongwith policy schedule and schedule of benefits, personal statement for revival of lapsed policy, copy of letter dated 30.07.2012, copy of emails from 5 Sep 2012 to 16 May 2013, copy of returned cheque  of 22,500/- vide mail, copy for letter dated 04.03.2013 and 05.03.2013, copy of cheque of Rs. 40,000/- and cancelled cheque, copy of personal statement of revival of lapsed policy alongwith ECS mandate form, copy of letter dated 15.03.2013, copy of receipts acknowledgement of Rs. 40,000/- by cheque by OP dated 19.03.2013, copy of email dated 13.05.2013, copy of NEFT mandate form, copy of cancelled cheque vide                      no. 528408, copy of email dated 02.05.2013 and 15.05.2013 , copy of letter dated 17.05.2013 by OP to complainant, copy of emails from 20.05.2013 to 6.6.2013, copy of letter dated 29.05.2013 from OP to complainant, copy of grievance letter dated 01.07.2013 by complainant to OP with acknowledgement dated 04.07.2013 by OP, copy of email dated 27.07.2013 to 30.07.2013 exchanged between complainant and OP, copy of emails from 29.05.2013 to 15.06.2013, copy of emails dated 18.06.2013 to 10.03.2014 exchanged between complainant and Insurance Ombudsman, Copy of complaint dated 27.07.2013 by complainant to Ombudsman, IRDA, Lucknow and emails between 02.06.2013 and 10.01.2014 regarding non revival of her policy and OP holding on to her Rs. 47,500/- premium amounts and lastly RTI application dated 26.12.2013 seeking information by complainant from IRDA, Hyderabad regarding status of complaint, action taken and resolution and reply thereto by IRDA dated 30.01.2014 apprising the complainant of status of her complaint “Closed” and amount of Rs. 40,000/- refunded by OP.
2. Notice was issued to OP which entered appearance on 09.07.2014 and filed its written statement on 20.08.2014. OP took the preliminary defence that the present case involves complicated / disputed factual question which cannot be adjudicated upon in summary proceedings as per judgment of Hon’ble Supreme Court in OIC Vs Muni Mahesh Patel (2006) 7 SCC 655. The OP took the defence that OP never received any letter of intimation of address change from the complainant in November 2011 as alleged by the complainant. The OP denied that the reason for non deduction of premium vide ECS from the complainant’s bank account towards the said policy was due to some internal problem of the OP company as alleged by the complainant. OP further denied having asked the complainant to deposit Rs. 5,000/- for back premium of December 2011 / January 2012 or any cheque having being submitted for the said amount by the complainant to OP. OP also denied the averment of the complainant that she had filled the ECS mandate form again in February 2012 or any ECS mandate for the entire year of 2012. The OP took the plea for returning the cheque of Rs. 17,500/- (by reversing the same) that the same was insufficient for revival of policy and therefore returned to the complainant vide letter dated 30.07.2012 which was sent to the complainant’s last known / available on record address of the OP since it did not receive any address change update in November 2011 as alleged by the complainant. The OP urged that the policy could not be revived due to inaction on the part of the complainant of having denied to undergo medical test again for revival thereof. The OP reasoned out the returned of cheque of Rs. 22,500/- to the complainant on ground of the complainant having denied undergoing medical examination again despite being aware of it being mandatory requirement to get the policy revived. The OP stated that the complainant submitted letter for change of address for the first time on 05.03.2013 and ECS form for the first time on 19.03.2013. However she failed to undergo medical test despite OP having requested her on 23.04.2013 and 29.04.2013 for the same due to which non cooperation, the subject policy could not be revived. The OP further took the defence that it had explained the factual position to the complainant vide letter dated 29.05.2013 and e-mail dated 01.06.2013 and reply e-mail dated 06.06.2013 (to e-mail dated 02.06.2013 of the complainant) reiterating the stand taken in its earlier letter dated 15.03.2013 and 29.05.2013 of its inability to revive the policy in question due to medical test not having being undertaken by the complainant and therefore refunded the cheque of Rs. 40,000/- which was paid by the complainant in March 2013 on 26.06.2013 vide cheque no. 338031 dated 25.06.2013. The OP denied having received any sum of Rs. 7500/- towards additional renewal premium as alleged by the complainant towards revival of policy and submitted that therefore the same cannot be refunded. In light of return of the said cheque and non revival of policy, OP urged that there was no grievance against the OP and therefore prayed that the complaint be dismissed under Section 26 of CPA.
3. Rejoinder was filed by the complainant in rebuttal to the defence taken by OP in its written statement wherein the complainant stated that as per policy terms and conditions, the OP was supposed to deduct the premium of the policy monthly through ECS from the account of the complainant and failure to do so resulted in ensuing problems with the policy and responsibility for such deduction lay solely with the OP and failure to do so constitutes deficiency of service. Complainant further denied having submitted the ECS form for the first time on 19.03.2013 and not any time before as urged by the OP. Complainant also denied having received any cheque of Rs. 40,000/- towards refund of premium as claimed by OP. The complainant claimed additional relief to the tune of Rs. 20,368/- towards legal fees, print out, photocopy, conveyance charges and interest on the amount withheld (Rs. 47,500) @ 9%  compounded quarterly calculated till September 2014.
4. Evidence by way of affidavit was filed by complainant. Evidence by way of affidavit was filed by the OP exhibiting authorization letter in favour of Manager Legal of OP, letter dated 30.07.2012, letter dated 29.05.2013 and e-mails dated 01.06.2013 and 06.06.2013.
5. Vide proceedings held on 01.09.2014, the OP had given an offer of settlement to the tune of Rs. 55,000/- to the complainant towards full and final payment to the complainant but the same was rejected by the complainant.
6. Written arguments were filed by the complainant as well as the OP in reassertion of their respective grievance / defence. Complainant prayed for relief to the tune of Rs. 12,000/- in addition to the sum of Rs. 47,500/- towards premium amount and Rs. 10,000/- towards litigation expenses alongwith interest @ 9% compounded quarterly till January 2016 on the premium amount withheld by the OP totaling the relief claim to the tune of Rs. 86,438/-. The complainant placed on record e-mail dated 09.12.2015 from OP to the complainant received on 28.01.2016 by the complainant pertaining to the refund of Rs. 40,000/- vide cheque no. 338031 dated 24.06.2013 as refund of excess amount received towards policy no. 14610803 HDFC SL ProGrowth- Flexi.
7. We have heard the rival contention of both the parties and have giving out anxious consideration to the documentary evidence placed on record in support of the respective grievance / defence put forth by the complainant and OP before us.

A specific question was put to the complainant as to why she did not file the complete proposal form / policy documents pertaining to the policy in question taken in September 2011 to prove her allegation that she had given ECS mandate to the OP to deduct monthly premium directly from her bank account at the inception of taking policy coverage for which the complainant had no explanation other than admitting inadvertent omission on her part. Further the complainant was asked for conspicuous absence of any documentary evidence placed on record for address change application in November 2011 as alleged by her for which again she had no cogent explanation. The Hon’ble National Commission in the judgment of S. Ratnavelu Vs New India Assurance Co. Ltd 1995 (2) CPR 164 (NC) had held that an important communication in relation to the change of location had either to be delivered by hand or at least by registered post and an endorsement should have been made in the policy about the change of address signed by an official duly authorized. Secondly, mare production of proof of certified posting cannot lead to the inference that any such communication was received by the addressee. The Hon’ble National Commission further held that it was not only duty the complainant/insured to intimate the change of address but also to get endorsement of the change of address duly signed by official of insurance company in the policy of insurance. The Hon’ble National Commission had dismissed the complaint and upheld the order of Hon’ble SCDRC in favour of insurance company. Thus the present scenario of the absence of any documentary evidence to prove address updation notification by complainant to OP is decided against the complainant in the present case.  

8. From perusal of documents and passbook entries filed by the complainant pertaining to her saving account held with PNB, it can be seen that the initial premium deposit for three months of September to November 2011 was made to the tune of Rs. 7500/- on 21.09.2012 vide cheque no. 967742 towards the said policy after which the policy as per the documentary evidence went into lapsed status December 2011 onwards due to non receipt of premium. The OP received cheque of Rs. 22,500/- on 25.08.2012 but returned the same on 11.03.2013. Likewise OP received sum of Rs. 40,000/- vide cheque towards policy premium from the complainant but as per records returned the same on 25.06.2013. The Hon’ble National Commission in the judgment of Ressy Stephen Vs LIC (2008) I CPJ 39 (NC) had held in a case where the quarterly premium due was not paid and the policy lapsed and the insurance company settled the claim by way of ex-gratia payment that there was no illegality or jurisdictional error in the order passed by SCDRC and District Forum in dismissing the appeal / complaint as the policy had lapsed. Further the Hon’ble National Commission in the case of Consumer Protection Association Vs Chairman, LIC 1996 III CPJ (NC) 178 had observed that when the full amount of premium payable on the policy had not been paid by the proposer and the proposal had not been accepted and there had been no final acceptance of the proposal by LIC due to deficit premium, it could not be said that a contract of insurance had been concluded as between the proposer and the LIC and no policy issued and therefore held LIC not liable to pay any amount to the widow of DLA upholding the decision of SCDRC. These judgments support the stand / defence of the OP in the present case in as much as the subject policy in question was in lapsed status December 2011 onwards due to non receipt of premium and the cheque of Rs. 17,500/- vide cheque no. 708897 dated 11.07.2012 drawn on PNB given by the complainant to OP towards the back premium from December to July was returned to the complainant as deficit premium and the complainant was asked to pay a sum of Rs. 20,000/- towards outstanding premium for the said policy in question vide letter dated 30.07.2012 by OP to the complainant.
9. However a glaring fact cannot be overlooked in the present case that notwithstanding the factum of lapsed policy, the OP continued to receive premium amounts from the complainant not once but thrice from July 2012 till March 2013 thereby keeping her hope alive by giving assurance explicit and implicit of revival of the policy which can be seen in the perspective / context of various e-mails correspondence exchanged between the complainant and OP, mostly written by the complainant September 2012 onwards till April 2013 wherein the complainant repeatedly and continuously urged the OP to revive her policy in view of having issued several cheques for premium on the request of OP only to be returned later on to her by OP on the pretext of non fulfillment of requirements by the complainant. However in none of the e-mails by OP to the complainant has there been any reference to the inability to revive the e-mail on grounds of medical test not having been undertaken / undergone by the complainant. Contrarily in e-mail dated 05.09.2013 by complainant to OP, the complainant had express her willingness to undergo the medical test again but expressed her reservation on bearing the expense for the same. The Hon’ble National Commission in the judgment of Rajni Patwar (Smt) Vs LIC (1997) 3 CPJ 48 (NC) had held that the insurance company cannot be absolved of its liability, because if the policy had lapsed, they should have intimated the insured and refused to accept the premium paid after the lapsed and therefore had held that it was gross negligence on the part of the insurer to have accepted the premium for seven months after the lapse of policy and that they were held guilty of deficiency of service and allowed the appeal of the complainant.
10.  In the light of the above mentioned judgment, the conduct of the OP July 30^th 2012 onwards when it has for the first time raised a demand of Rs. 20,000/- for revival of policy which was discontinued as per its own admission on 19.02.2012 and thereafter continued to receive back premiums of Rs. 22,500/- in August and Rs. 40,000/- in March only to return the same subsequently, in our view is grossly negligent practice and deficient service on the part of OP which perhaps the OP had itself realized in the early stage of proceedings wherein it had given an offer of settlement of Rs. 55,000/- to the complainant four year ago for full and final settlement before this Forum since the Complainant had not received/accepted the cheque of Rs. 40,000/- earlier on but the offer was declined by the complainant.
11.  We therefore hold OP guilty of deficiency of service in having received the premium amounts from the complainant notwithstanding the failure of the complainant to place on record any evidence to prove that she had authorized the OP to deduct the premium monthly through ECS from the account December 2011 onwards and direct the OP to refund the cheque of Rs. 40,000/- paid by the complainant to the OP in March 2013 towards premium from December 2011 till March 2013 alongwith simple interest @ 9% thereon from the date of institution of complaint till realization. We also direct the OP to pay a sum of Rs. 20,000/- towards mental harassment and agony and Rs. 10,000/- towards litigation expenses to the complainant. Let the said order be complied within 30 days from the date of receipt of copy of this order.              
12.  Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
13.   File be consigned to record room.
14.   Announced on  23.08.2018

 

(N.K. Sharma)     President

(Sonica Mehrotra) Member

(Ravindra Shankar Nagar) Member