Order-13.
Date-17/02/2016.
In this complaint Complainant Arnab Chatterjee by filing this complaint has submitted that one representative came to the complainant’s premises who requested the complainant to invest a sum of Rs. 50,000/- for five year + 15 percent assured amount just like fixed deposit and assured that though it is an Insurance Policy.But it is like investment and relying upon the assurance of the representative of the op, complainant deposited Rs. 50,000/- as Fixed Deposit in the said policy and being assured he also deposited against policy being No. 15841831.
On the date of representation of the op, asked the complainant to sign some other papers and accordingly complainant as per direction of the op on good faith signed some papers without knowing the details of the policy plan, terms and conditions and the op agent collected a sum of Rs. 1,00,000/- for two policies and at the time of investment of the said amount op’s agents stated that it is an one time investment amount policy which the complainant shall get 15 percent interest p.a. and also represented by the agents that complainant can also take loan or withdraw the said amount at any point of time.But the agent of the op never handed over any paper/documents of the policy and never informed about the terms and conditions of the said fixed deposit policy.
Fact remains that complainant is a retired person and he has no pension and complainant on receipt of a phone call and SMS from the op and then complainant came to know that 1st policy was lapsed in the year 2012 for non payment of premium in the year 2014.So, under what circumstances the agent accepted and agreed to accept Rs. 50,000/- for second policy in the year 2013 without taking care of first policy.
But in the month of February, 2014 complainant wrote a letter to the ops for cancellation of the policy.But op in response of the said letter issued a letter to the complainant on 14.02.2014 and stated that the complainant’s complaint is registered and they would reply within 14 days.
Accordingly op wrote a letter to the complainant on 24.02.2014 and submitted that they are unable to cancel the aforesaid policy due to non submission of payment for cancellation of the policy within free look period i.e. 30 days is over.
Peculiar factor is that at the time of opening the aforesaid fixed deposit policy, op never handed over any documents to the complainant and the op also failed to furnish detail information about the policy only mislead the complainant and encashed the said amount of Rs. 1,00,000/-.
If actually policy is lapsed due to non payment of policy premium, the Insurance Company was bound to refund the said amount to the complainant as per IRDA of the year 2010-2012 after deducting some amount.
Fact remains that the entire form was duly filled up by the ops’ agents and complainant only signed in the last page not only that at the time of signing the said form op never handed over any carbon copy/duplicate copy to complainant and informed that they sent the details of the policy documents or terms and conditions within very short date but they never sent the said documents to the complainant within look out period and totally misled the complainant.
Considering the above fact, it is proved that it was completely a mis-sale and without giving the complainant any chance to realise that it is not a fixed deposit but completely a policy and same was sold and it is no doubt a deceitful manner of trade for which complainant has prayed for refund of the entire amount deposited and for redressal.
On the other hand op by filing written statement submitted that complainant knowing fully well of the terms and conditions of the policy applied for the policy and he put such a declaration under which he signed in the proposal form and on receipt of the written application and also the premium amount, op issued a policy being Policy No. 14286007 in favour of the complainant and document was dispatched to the complainant through Sri Chakra Transtech Courier and that was duly received by one G. Chatterjee on 22.03.2011. So, complainant was well aware of the terms and conditions of the said policy on receipt of the documents but did not file any application within free look period.
Further complainant received another filled up application form in which complainant’s father Mr. Gour Chatterjee was nominee and it was received from a corporate agent for issuance of policy being HDFC SL Pro Growth Super – II and on receipt of the filled up form and premium another policy was issued being No. 15841831 and it was for 15 years term with annual premium of Rs. 50,000/- payable for 15 years and the original policy documents were duly sent through Blue Dart Courier on 25.02.2013 which was duly received by the complainant. The allegation against the corporate agent of the op is completely vexatious and baseless.
But truth is that both the policies have been lapsed due to non payment of premium and for the fault of the agent company will not be liable vicariously and the op company by its reply dated 24.02.2014 rebutted the allegations of the complainant and informed that as the cancellation request was not made within free look period. So, they were unable to process the request and not to refund the premium amount.
Further complainant paid the first premium only but failed and neglected to pay subsequent premiums for which both the policies got discontinued as per the terms and conditions of the policy. But all other allegations of the complainant is false and fabricated and knowing fully well all the terms and conditions of the policy, complainant purchased it and in two occasions he purchased it by two different proposal forms. So, it is within his knowledge and there was no question of mis-sale and there was no deficiency and negligence on the part of the op for which the present complaint should be dismissed.
Decision with reasons
On an in depth study of the complaint and written version and particularly the policy, it is found that the complainant’s date of birth is 28.09.1991 and on the date of alleged purchase, the nature of occupation of the policy holder is student.
Policy No. 14286007 was issued on 22.03.2011 whereas policy document bearing no. 15841831 was issued on 25.02.2013. So considering the policy document it is clear that in respect of the first policy, complainant’s age on the date of purchase was 20 years and in respect of the second purchase, his age was 22 years. But he was a student. But in the policy, yearly payment is Rs. 50,000/-.
But peculiar factor is that it is impossible for a student to earn anything and there is no note in the policy document or application that complainant had his such income. No way in the policy, it is noted that his father purchased it in the name of his son and in the proposal form, there is no note that his father has signed in the proposal form in support of payment of the policy on behalf of his son.
But it is noted that status of the insured is a student and source of income is Rs. 3 lakhs (father’s income). But his father did not sign in the said application. But from the application form, it is clear that the said application forms were filled up by the corporate agent and there was no contract in between the complainant and the Insurance Company but one Raju Majhi (BDM) signed and he did everythingand that is the act on the part of the op Insurance Company and fact remains that complainant was not aware of the terms and conditions of the said insurance policy. Probably as a student he collected money from his father or from other sources as a BCS Student and with hope deposited as fixed deposit for getting a lucrative interest of 15 percent p.a. and relying upon the BDM, op Insurance Company and Raju Majhi, the BDM of op practically in both the cases allured the complainant and collected the premium and opened such a policy only by collecting signature in the form. But as a student practically in the first occasion he was a minor below 21 years and second case he was aged just about 22 years. No doubt Raju Majhi the BDM of op Insurance Company adopted same procedure in both the cases.
Most interesting factor is that op Insurance Company or BDM did not collect any consent of his father in support of payment of premium for 15 years to the extent of Rs. 50,000/- per year and truth is that complainant’s father is a retired person and he had no pension and being allured by Raju Majhi, he paid that amount to his son for purchase of said fixed deposit of the Insurance Company. But he had no intention to purchase such a policy but the allegation of the complainant is that it is a single premium policy like fixed deposit and by payment of one time premium, complainant shall have to get benefit after 5 years and complainant was not reported to pay further premium but stated that the policy shall continue against one premium and complainant shall have to get loan or may withdraw the same and in fact complainant was not aware of the fate of such deposit and that was not disclosed and the entire allegation against Raju Majhi BDM of the op and Raju Majhi signed in the application form and in the proposal form, it appears than that op received that proposal of Raju Majhi as BDM of op.
So, it is clear that the complainant was deceived by Raju Majhi the BDM and no doubt it is a mis-sale because we have gathered that complainant is a student and he has no income to pay any amount. But probably his father paid that amount with hope that after completion of education his son shall have to get a lump sum amount which shall be spent for his son’s further education carrier and it is admitted position that complainant’s father is a retired person having no further source of income at the time of purchase of the said policy.
Anyhow the op has tried to prove by producing the proposal form that complainant’s father income is noted, but no such document is produced by the op to show that complainant’s father has any source of income because it is proved that complainant’s father has no pension and in such a situation a student cannot continue such type of policy for 15 years and moreover considering the materials, it is found that complainant has/had no income and he has no income to pay continuously for 15 years at the rate ofRs. 50,000/- per year in each cases because he is a student.
Another factor is that the allegation is against that fellow Raju Majhi, the BDM of op, but op has not denied the allegation against that Raju Majhi whose name was not known to the complainant but it is found from the proposal form and invariably that fellow Raju Majhi BDM by alluring the complainant a student and giving him no chance to realise what would be the fate if he purchases such policy and giving hoax as one time premium policy that BDM managed to collect that money and collected it with signature in the proposal form and such an act is no doubt a mis-sale and deceitful manner of service.
Another factor is that op never sent any information to the complainant that his next policy premium should be paid on such and such date but he has failed to pay any next premium and he was also not intimated just after lapse of one policy that policy was lapsed. But op was sitting idle and that is the manner and method of trade of the op the present insurance company and that is being followed by the Insurance Company and in fact complainant is made an idiot at the hand of BDM Raju Majhi for his overall mis-sale, misconduct, mis-representation on behalf of the op and no doubt complainant is being deceived and in fact on overall evaluation of the materials, we are convinced that complainant was allured by the op BDM Raju Majhi and he mis-sold the same and complainant failed to realise the future of such sort of policy as that was not disclosed.
So, the allegation of the complainant against the op BDM Raju Majhi is well proved, but op has not denied the conduct of Raju Majhi the BDM of op, though it is admitted that op received the proposal form for premium from Raju Majhi BDM of op.
Most interesting factor is that policy already lapsed after one year because any further payment was not made. But complainant was assured by the BDM Raju Majhi that there was no need to pay further premium, it is one time premium policy. So, he did not pay it and after first year, no information was sent by the op for paying second premium or third premium etc. and as per IRDA Guideline we are convinced that when it is rule of IRDA that after one payment at the time of next payment the notice shall be sent to the insured for the policy premium but that was never sent in this case.
At the same time as per IRDA Guideline, op did not receive any consent Form from the complainant before accepting the proposal for satisfaction of the op that complainant realized about the fate of the policy, the terms and conditions of the policy and op also satisfied himself about the income of the student or his father’s income. But admitted position is that complainant’s father has no income after retirement because he is not a beneficiary of the pension etc.
It has become a practice of the private Insurance Companies’ to appoint such type of BDM Raju Majhi or corporate agents in the market who collects the one time premium and thereafter the Insurance Companies are found silent and there is no contact with the so called insured and in the present case op never talked with the complainant before accepting the proposal form and it is the situation which is proved by the complainant and in this regard op is silent and they have tried to say it is agent’s failure and op is not liable. But in the present case it is found that op received the proposal form from BDM Raju Majhi who is collector of proposal, that means op has appointed such BDM in the market who are mis-selling the product in such a fashion by saying payment of one term premium and no doubt in the market there is somany BDM from whom many persons purchased it on the ground that one time premium is paid and after five or three years he shall have to get certain amount.
In the present case also complainant was assured by the op’s BDM Raju Majhi that he shall have to get such amount after lapse of five years and he has no liability to pay further premium and such type of assurance is given by the private insurance companies and their corporate agents and BDM etc. and that is the practice and it is continued for years together and so many poor people or students are being deceived by the private insurance companies like the op.
Most interesting factor is that complainant when realized that he has been deceived by the op and their BDM, complainant wrote a letter for cancellation, may be it was beyond free look period but from his date of knowledge he sent letter and prayed for refund of the same. But op refused on the ground that the applications were not filed within free look period.
On the other hand it is also proved that op reported the complainant on 24.02.2014 first against the letter of the complainant dated 10.02.2014 for cancellation of the said policy to the effect that cancellation cannot be processed as it was not filed within free look period. But prior to that op never sent any communication to the complainant that he is defaulter or he has directed to pay the premium etc.
Most interesting factor is that op has not denied the allegation against the corporate agent or BDM Raju Majhi and about complainant’s status and his father’s poor condition and also about mis-sale of the product because ops are well aware of the fact that already policy is lapsed. But as per IRDA guideline of the year 2012-2014, it is the duty of the insurance company to refund the entire amount if it is lapsed after deducting 5 percent to 10 percent as service charge but that has not been followed and it is not being followed by the op insurance company for the purpose of grabbing money to increase their capital by adopting dishonest process and their only purpose to mis-sale their product to the poorer section of people is completely a fake target and this procedure was being adopted by the BDM Raju Majhi and other insurance companies also.
No doubt in this case op has tried to say that the income of the complainant is enough but no such document is produced by the op and no such document has produced to show that complainant has his good income to pay premium in respect of the said two policies or no such document is produced that the complainant has his huge money deposited in the savings bank at fixed deposit.
At the same time it is found that the op and their corporate agent and BDM Raju Majhiacted on behalf of the op for selling their product and in absence of them, the entire company shall be closed down. But even then the private insurance companies have been deputing such persons in the field for collecting one premium because they know very well after lapse of the policy that shall be grabbed from the insured the poorer section of people and insured shall be thrown in the dustbin and those agents just like BDM Raju Majhi are loitering in the field for collecting premium from the insured and in the present case it is no doubt proved that it is mis-sold product and that was done by BDM Raju Majhi and complainant deposited the money getting such assurance from Raju Majhi BDM of op that he shall have to get loan by paying only single premium and so he purchased the policy with hope that after purchasing he shall have to get loan but all those are hoax made by the BDM on behalf of the Insurance Company.
Another factor is that a student like the complainant must not have to purchase such a policy further he is aware of that 15 years must have to pay of Rs. 50,000/- per year because he has no future. There is no chance to get service after passing BCS in the present employment condition. His future is uncertain and at the stage giving such assurance BDM Raju Majhi managed to collect that through his father but his father is a poor but he is also struggling for further income after retirement. No consent letter is also collected by the op to show that before accepting the policy, they sent a consent letter and complainant by knowing fully well of the terms and conditions submitted proposal and it is further proved that there was no connection in between the complainant and op since the time of talk in between the complainant and op’s BDM Raju Majhiand till accepting of the said policy. But everything was done by Raju Majhi and as they are deceiving the insured in such a manner, so they are wealth of op’s company. So, against them op has nothing to say. Huge number of people are being deceived by the said insurance company like this complainant but even then the Insurance Company have not been following IRDA guidelines, though IRDA has been giving guidelines for protection of the insured but private insurance companies are found very much adamant not to follow this guidelines.
In this context it is to be mentioned that in so many cases against private insurance companies order is passed by this Forum as per IRDA guideline for refunding of the lapsed amount after deducting 5 percent to 10 percent as service charge and they have followed to pay the same and there are so many orders in the hands of the op Insurance Company, they also received copy from National Commission, State Commission so it was their duty to adopt that order in all respect when the policy is lapsed. But they have no intention to follow the principal of law but they are only to grab money from the market and thus op has been increasing the capital by grabbing that money for which in West Bengal this business are going to be closed and their product is not being sold and that is the position of Insurance Company in West Bengal.
In the light of the above observation and considering the materials we are convinced to hold that there is sufficient ground to believe that the item or product is mis-sold by the Raju Majhi BDM of op at the ops instruction and op has failed to prove the financial condition of the complainant and also his father’s financial condition as retired person having no pension and also has failed to prove before accepting the proposal that they talked with the complainant or they received the consent form as per IRDA guideline of the op and no such consent form was produced by the ops and so in the present case it is proved that there was no contract in between the complainant and op even after accepting the proposal from because in the application from everything is found erroneous, the address and such other items such as father’s income, the address of the complainant, it is noted South Calcutta Girls’ College, that means the alleged document of the policy were sent to South Calcutta Girls’ College and in another application of address of the complainant is noted otherwise and in fact policy holder’s address is noted in the policy schedule and thus the BDM Raju Majhi somehow collected the premium by placing some wrong information and in the above reason we are convinced that there is no such ground to disbelieve that the negligence and deficiency is on the part of the op and by mis-sale the product to the complainant by deceiving the complainant and taking chance of their simplicity as student and lack of knowledge, op managed to deceive the complainant through BDM and truth is that complainant has been deceived by the op and his BDM Raju Majhi for which the complaint succeeds and as per IRDA Guideline, complainant is also entitled to get relief.
Hence, it is
ORDERED
That the complaint be and same is allowed on contest against op with cost of Rs. 5,000/-.
Op is hereby directed to refund the entire deposited premium amount of Rs. 1,00,000/- after deducting 5 percent as service charge and also shall have to pay a sum of Rs. 5,000/- as compensation for harassing the complainant in such a manner and for mis-selling the product and accordingly op shall have to pay the entire decretal amount within one month from the date of this order failing which for non compliance of Forum’s order, op shall have to pay penal damages at the rate of Rs. 2,000/- per month till full satisfaction of the decree to this Forum.
Even if it is found that op is reluctant to comply this Forum’s order, in that case penal proceeding shall be started u/s 25 read with Section 27 of C.P. Act, 1986 for which further penalty and fine shall be imposed upon the op.
