Order-14.
Date-18/11/2015.
In this complaint Complainant Mrs. Madhumita Biswas by filing this complaint has submitted that complainant maintained a Savings Bank A/c bearing No. 04601930001060 with HDFC Bank Ltd., Kankurgachhi Branch and in order to earn higher rate of interest on the amount lying in the said Savings Bank Account, complainant proposed to the Bank’s representative/employee Avijit Dhar and Sakya Mahindra Reddy for investing of Rs. 3 lakhs from her savings bank account for a short term fixed deposit account as the said amount would be required in the next year for daughter’s marriage.
Then the said op nos. 3 & 4 convinced the complainant in this way that HDFC Bank Ltd. has launched a new savings policy which is one time investment and if complainant invest Rs. 3 lakhs from her savings bank account, she would earn a good return after one year in comparison to fixed deposit scheme and if required complainant would be able to withdraw the money along with interest after one year.Relying upon such proposal of op nos. 3 & 4, complainant invested the same in good faith to their proposed savings policy by withdrawing from savings bank account.
On receipt of the said amount HDFC Standard Life Insurance Co. Ltd. Issued a HDFC Savings Assurance Policy No. 13052797 dated 30.07.2009 for a term of 10 years fixing up rate of premium of Rs. 3 lakhs payable annually from the date of commencement i.e. 30.07.2009.Practically the malpractice and malafide activity of the said employee op nos. 3 & 4 came to know that when the complainant applied to the bank on 02.08.2010 for withdrawal then the department of HDFC SLICL vide letter dated 21.08.2010 clearly intimated their inability to process as the policy will acquire surrender value only after completion of three years of being in force.
On receipt of the letter complainant became astonished when in reply to her representation dated 24.12.2012 Sr. Vice President HDFC Standard Life Insurance Co. Ltd. intimated for not being able to process to refund the same and further submitted that the policy request for cancellation of policy has not been received within 15 days free look period and the status of the policy also stands lapsed due to non-payment of the renewal premiums which were due from 20.07.2010.
Being aggrieved by and dissatisfied with the negative action of the concerned Insurance Co., complainant issued a notice dated 22.03.2013 and in reply to the said notice, the Associate Manager (Legal) HDFC Life Insurance Co. issued a reply and thereafter complainant vide letter dated 08.04.2013 to the Chairman, IRDA Hyderabad narrated the entire facts but the Grievance Redressal Officer, IRDA without taking any positive action referred the issue to the Insurance Co. for redressal.
In reply to the above mentioned letter, the Branch Manager of HDFC Bank Ltd. vide letter dated 16.04.2013 also sent a reply mentioning unjustifiable and unreasonable reason.Lastly complainant vide letter dated 07.04.2015 requested the Vice President HDFC Life Insurance Co. Ltd. for reconsideration of her case but that was not entertained.
Fact remains that complainant is a house wife of middle class family having no source of income and before issuing the capability of affording such a big amount of Rs. 3 lakhs only towards payment of yearly premium for an incomeless house-wife should have been verified and it was not actually determined and without giving any chance the entire form was filled up and relying upon the version of op nos. 3 & 4 it is no doubt a mis-sale and that was done by op nos. 3 & 4.In the above circumstances, the complainant for deficiency of service and for unfair trade practice, filed this case for redressal.
On the other hand op no.2 HDFC Bank by filing written statement submitted that the complainant is not a consumer to the op as such complaint is not tenable.Moreover complainant being an highly educated lady of mature prudence is not supposed to be unaware of all the modern banking systems available at their disposal with their official websites, net banking facilities and all and every details that a person may require from a present day banker but all other allegations against Bank are false and fabricated.
Further it is submitted that Bank did not disclose any risks or commissions in the proposed investment at any point of time as alleged and Bank have not received for consideration for alleged Insurance service and in any way op no.2 HDFC Bank has no liability and bank had no role to play in the entire chain of choosing and or making an investment as per her own intentions and requirements and op no.2 never acted in an illegal manner and op no.2 Bank is not at all involved for purchasing the insurance policy from the op no.1 in any manner and never adopted any unfair trade practice and in the above circumstances, op no.2 prayed for dismissal of this case.
Whereas HDFC Standard Life Insurance Company op no.1 by filing written statement submitted that they accepted the proposal form along with demand draft/cheque of Rs. 3,00,000/- as premium after proper verification as the application was written and duly signed by the party and thereafter op issued policy being No. 13052797 in favour of the complainant and the said policy was for a term of 10 years as subject to payment annual payment of Rs. 3,00,000/- and policy was duly dispatched to the op on 03.08.2009 which was duly received by the complainant.
Thereafter complainant did not file any cancellation application within free look period.So, there is no question of mis-sale of policy, so, question of refund of amount does not arise and allegation of mis-sale was found to be incorrect and it was conducted after internal assessment.
It is specifically mentioned that the policy was lapsed due to non-payment of premium.Complainant could revive the same upon payment of the outstanding premium together with revival charges.But complainant did not opt for renewal of the policy and caused to issue a noticedated 22.03.2013 through her Advocate raising similar allegation but op Insurance Co. replied all the letters of the complainant duly.So, there was no negligence and deficiency on the part of the op.But as per policy condition, complainant is entitled to get the surrender value only after completion of three years from the date of purchase of the policy.So, there was no laches or negligence on the part of the op no.1 and op no.1 did not adopt any unfair trade practice.So, the present complaint is not tenable.
Decision with reason
On proper consideration of the complaint and written version and also considering the materials on record, it is found that no doubt complainant has a Bank Account bearing No. 04601930001060 with HDFC Bank Ltd., Kankurgachhi Branchand in the noted Bank Account there were certain amount and truth is that Arijit Dhar and Satya Mahindra Reddy are the employees of the said Bank.Complainant alleged that complainant asked them for fixing Rs. 3,00,000/- for higher interest when the said employees asked him to deposit the same in a separate account as she will get better interest and it can be withdrawn after one year and those employees op Nos. 3 & 4 are made parties.They were served with notices and the Branch Manager of HDFC Bank, Kankurgachi Branch is also made a party as op no.2 who filed written statement but he has not denied the allegation against their employees.Their employees have not appeared to contest this case.But we have gathered that complainant is a fellow lady as housewife and she has no knowledge about investment etc. and general people always ask the bank employees for help to fix their amount and in the present case no doubt op nos. 3 & 4 misled the complainant and somehow or otherwise secured her signature in the application form and thereafter it was completed as an Insurance policy and fact remains that op no.2 is an corporate agent of op no.1 and truth is that there is internal business of the HDFC Corporate Unit and there are the insurance business, banking business and other business.
So, all the HDFC Bank Ltd. are acting on behalf of HDFC Standard Life Insurance Co.In most of the cases the employees HDFC Bank for the benefit ofcommission in so many manners by falsely representing to the customers managed to procure such signatures on paper on the commencement day of insurance policy.Though the customers have no interest to purchase any insurance policy for 10 years with a liability on payment of Rs.3,00,000/- per year when the complainant has no such income as house wife.
Another factor is that Branch Manager of HDFC Kankurgachi Branch op has not denied the allegation against op nos. 3 & 4 as most of the allegationsare made by the complainant against op nos. 3 & 4, is well proved and truth is that the HDFC Bank Kankurgachi Branch is corporate agent of op no.1 and they are selling of the said policy to the customer.But in all the cases it is found that HDFC Bank Ltd. has been misguiding the customers of the bank and asked them to deposit in another account for better interest but ultimately it is found that they have opened their policies back behind their knowledge.
Most interesting factor is that op nos. 3 & 4 employee of op no.1 have not challenged the complaint but that has not been challenged op no.1 for which relying about complainant’s allegation about mis-representation of the entire fact and about policy we find that by adopting such an way HDFC Bank is collecting money from the customers and opening the policy and thereafter customers are found on the footpath.
Most interesting factor is that as per IRDA guideline, it is mandatory duty on the part of the insurance company to submit one consent letter form to the applicant as first and in the said consent letter certain items should be there, such as status of the applicant, financial capacity, yearly income, terms of the policy, period of payment of policy amount, manner of premium, maturity of the policy of the applicant and others and that must be filled up by the applicant and thereafter it shall be submitted to the insurance company.Thereafter insurance company shall have to verify the veracity of the application about payment of such premium and after that if insurance company is found satisfied that the applicant has his financial capacity to pay such an amount as premium, thereafter the application form for opening the policy shall be supplied.But op insurance company has failed to produce any consent letter of the complainant.At the same time it is found that application form was submitted by the Bank not by the complainant to the insurance company for which op insurance company has not produced that original application form and if it would be produced, in that case it would be found that only signature of the complainant is there and form was filled up by the Banking Authority and that is the practice of all the HDFC Bank to mis-sell the policy of the HDFC Standard Life.
Truth is that if the HDFC Bank does not act as a corporate agent of HDFC Standard Life Insurance, in that case insurance company of HDFC Bank shall be closed because they shall have their no direct employee.But they appoint some cheat agent in the rural areas and they have also mis-sold such products and have been harassing the consumers.But none is here and there to control the same, though Forum is here and there.This is the situation of the people of West Bengal even after existence of so many Fora.
Another factor is that as per IRDA guideline 2012-2014, it is mandatory duty on the part of the Insurance Company to refund the entire lapsed amount (Premium amount) against the policy which is lapsed after deducting 5 percent or 10 percent as service charge.But there is no question of forfeiture of entire amount, but that guideline have not been followed by any insurance company because all the private insurance companies think that the lapsed amount of the customer are their capital but that is not the social ethics of insurance trade as per Corporate Insurance Policy.
No doubt the IRDA is also found a defunct body, they are not taking any step only, they are giving guidelines but they are not hearing the customer about their redressal.Probably there is a pact in between IRDA and Insurance Company for which IRDA is giving instruction/guideline etc. but that has not been followed by insurance company at all.
In the present case it is proved that it is a mis-sale which was done by op nos. 3 & 4 the employee of op no.2 because they are the corporate agent of HDFC Insurance.Practically op nos. 1 & 2 are the company of same group of business man and that is called HDFC Group.So, HDFC Bank shall have to act on behalf of their insurance part and that has been done in the present case.Moreover in this case it is proved that insurance company has failed to prove that they were satisfied that applicant was aware of the entire fact of the application and knowing fully well she signed butcomplainant has been deceived by the bank employee’s op nos. 3 & 4.They have their duties to challenge the same when notice was served upon them when admittedly they employees of op no.2 it is proved so that it is no doubt a mis-sale.
Another factor is that for sake of the argument if it is accepted that the policy was opened and policy document was received by the complainant but even then complainant even after receipt of the same relied upon the version of op nos. 3 & 4 and complainant prayed for refund of the same. So it is not the laches on the part of the complainant and about misrepresentation and mis-selling, complainant in such a manner has been deceived by the op nos. 3 & 4 and the employee of op no.2 Bank.
Truth is that Insurance Company has not stated anywhere that they contacted with Madhumita Biswas point of Time.Moreover from the said policy document it was found that policy holders’s names were noted Madhumita Biswas, C/o HDFC Bank Ltd., Kankurgachi Branch, that means the policy was sent to HDFC Bank Ltd. not to the complainant. It simply proves that HDFC Bank Ltd. purposefully did not mention the detail status of the complainant Madhumita Biswas in lieu of that banks’ address was noted in the policy as HDFC.So, policy itself proves that Bank HDFC and their employees by mis-selling the complainant managed to secure the said Rs. 3,00,000/- from complainant’s and deposited to the Insurance Policy.
Considering all the above materials it can safely be said that all sorts of deceitful manner of act was adopted by the HDFC Bank for selling the same and it is no doubt a mis-sale.Fact remains that complainant is a house wife and she has no income, she has no capacity to pay Rs. 3,00,000/- per year continuously for 10 years.But insurance policy proves that everything was done by mis-selling to the complainant for which the policy holder’s address is noted – C/o HDFC Bank/Standard Life Insurance Co. Ltd, P-313 Vim Scheme, Kankurgachi and that is the office of HDFC Bank.So, directly or indirectly HDFC Bank by giving no chance to the complainant to realise what would be the fate of Rs. 3,00,000/- and managed to convert it as policy document by taking signatures of the complainant and such sort of act on the part of the op Bank and their employees is no doubt adopting unfair trade practice and deceitful manner of practice and they deposited the said amount.
So, it is proved that the entire sale is mis-sale and there is internal business pact in between the HDFC Standard Life and HDFC Bank because they are in the trade group of same umbrella of HDFC.
In the light of the above observation, we are convinced to hold that complainant was misled by op nos. 3 & 4 and practically complainant had no intention to purchase such a policy in question and so application of conditions do not arise because mis-sale had been done by op nos. 2 to 4 for which we find that at this stage such as per IRDA guideline op is bound to refund the total amount when it is mis-sale and that was done by the op nos. 2 to 4 and as per IRDA guideline op no.1 can get service charge at the rate of 5 percent p.a. i.e. Rs. 15,000/- out of Rs. 3,00,000/- and balance of Rs. 2,85,000/- shall be handed over to the complainant by the op no1 when complainant is entitled to get refund in view of the above findings and also on the ground that op HDFC Bank acted on behalf of op no.1 whether it is working genuinely or fraudulently is the responsibility of op no.1 and his employees.
Considering the deceitful manner of practice and unfair trade practice made by the op nos. 1 to 4, complainant has been deceived by the ops as corporate agent for which they shall have to pay the complainant and op nos. 1 to 4 shall have to pay jointly and severally a sum of Rs.25,000/- to the complainant for harassing, causing mental pain and agony and also for mis-selling such product by adopting unfair trade practice also relying upon the judgement of National Commission reported in 2015(2) CPR 11 (N.C.).
Further for getting relief, complainant has already lost huge money to face the situation.So, she has also entitled to get litigation cost.Accordingly the complaint succeeds.
Hence, it is
Ordered,
That the complaint be and the same is allowed on contest against op nos. 1 & 2 with cost of Rs. 5,000/- each and same is allowed exparte against op nos. 3 & 4 with cost of Rs. 5,000/-.
Op no.1 is hereby directed to refund Rs. 2,85,000/- after deducting Rs. 15,000/- as service charge from the total amount of Rs. 3,00,000/- within one month from the date of this order along with litigation cost of Rs. 5,000/- i.e. total Rs. 2,90,000/-.
Op nos.2 to 4 for adopting unfair trade practice and for harassing the complainant in such a manner and for mis-selling such item shall have to pay compensation to the complainant to the extent of Rs.25,000/- within one month from the date of this order.
For adopting unfair trade practice and for selling such goods in such a manner by the op nos. 1 to 4, op nos. 1 to 4 shall have to pay punitive damages to the extent of Rs. 15,000/- jointly to this Forum and it is imposed to check up such sort of conduct of the ops for selling the item in future to the customer.
Op nos. 1 to 4 jointly and severally shall have to pay the compensation amount of Rs.25,000/- and also shall have to pay litigation cost to the complainant within one month from the date of this order.
Ops are directed to comply the order very strictly from the date of this order, failing which for non-compliance of Forum’s order, ops shall be prosecuted u/s 25 read with 27 of C.P. Act 1986 for which further penalty and fine shall be imposed upon ops.
