Dt. 16.06.2016
JAGANNATH BAG, MEMBER
This complaint has been filed alleging deficiency in service and unfair trade practice on the part of the OPs.
The Complainants being approached by OP No.3, decided to invest in Unit Linked Insurance Policy (ULIP), a sum of Rs.9,00,000/-. It was assured by the OP-3 that there were no hidden charges or there would be no deduction of initial charges from the sum invested. Further, it was assured there will be good return against the policy which was close to Mutual Fund with added insurance policy. The Complainants issued three cheques of Rs. 3,00,000/- each drawn on HDFC Bank Ltd. on 30.11.2007. The Complainants had been given a few application forms as a part of initial application procedure and they filled in three places (Place, Date and Customer’s Signature) which according to OP-3 was mandatory to get full details of the investment plan (Terms and Conditions). The Complainants expected to decide about the number of policies to be obtained after having a look into the final terms and conditions of all the policies which the OP-3 promised to deliver within 20 days from 30.11.2007. The OPs issued five receipts all dated 06.12.2007 for the sum of Rs.9,00,000/-. In spite of several requests for supply of full instruction details of the policies the OPs did not provide the documents within 20 days from the opening date of the policy though promised as such by OP-3. The Complainants being NRIs had to leave India on 29.12.2007 without receiving the policy documents. On 10.08.2009 the Complainants being back home got the policy documents from their security guard. It was found that the money paid by the Complainants towards first premium was split up into five fractions in order to issue 5 policies . Out of five policies, three policies were issued in favour of Complainant No.1 and two policies in favour of Complainant No.2. One of those polices , however, was not received. In addition to splitting the amount of three cheques for five policies keeping the Complainant in dark the OPs made one policy for Rs.1,99,999/- withholding Re. 1/- in advance so that the OPs would deduct 60% allocation charge from the premium, otherwise the charge for policy above Rs.2,00,000/- premium would have been 40% as mentioned in the Policy Certificate. The same thing was done in respect of another policy. It was observed by the Complainants in one of the policy documents that if the policy was of Rs.8,00,000/- to 10,00,000/- premium p.a. then the allocation charge would be lesser i.e., 70% of the premium would be utilised to participate in the investment performance of the funds of HDFC Standard Life Insurance Co. Ltd and accordingly the Unitised Fund Value of the policy would increase which means that for the amount of Rs.9,00,000/- premium p.a. one would always prefer one policy rather than five different policies of same nature. The policies issued by the OPs were different from policies as were promised by the Representative/Authorised Agent of the OP-1. OPs deducted lots of charges under different heads which were not initially mentioned. The premiums of the policies were automatically deducted from the account of the Complainant No.1 and a total sum of Rs.17,20,000/-stands paid towards premiums of the policies. The Complainants contacted OP Nos. 2 and 3 and expressed their grievance about discrepancies but they expressed their inability to redress the grievance as the Complainants had failed to exercise the option to return the policy within the period of 15 days from the date of receipt of the policy. Though the Complainants sought for refund of the amount invested in the policies, the OPs asked the Complainants to approach the Insurance Ombudsman for redressal of their grievance. Allegedly, the signatures of the Complainants as shown in spaces meant for Customer Signature in the application form and direct debit mandate and declaration form were forged . Several communications were made with the OPs through email but no tangible result came out . The Ld. Insurance Ombudsman informed by their letter dated 28.01.2010 that the subject matter of the complaint was not covered under RPG Rules, so they were unable to admit the complaint . Thereafter the Complainants moved an application under Article 226 of the Constitution of India before the Hon’ble High Court challenging the order of the Ombudsman . The application was disposed of with the observation that the Hon’ble High Court did not have jurisdiction to entertain the application and the petitioner was given liberty to approach the appropriate Court or Forum. Hence the complaint.
In their complaint it has been alleged that with investment/payment of a sum of Rs.17,20,000/-, the Complainants have been issued wrong policies which were not intended and those policies were issued only in order to gain higher commission by unfair means even by forging the signatures and amount details on application papers and terms and conditions of the policy documents. Having suffered in the hands of the OPs , the Complainants have prayed for refund of the premium amount of Rs.17,20,000/- together with interest @ 18% from the date of payment till realisation or alternatively to revive the policies of the Complainants with all benefits available from the date of opening of the policies till its maturity and also compensation of Rs.15,00,000/- for mental agony harassment etc., apart from litigation cost of Rs.2,00,000/-.
Notices were served upon all OPs .
None but OP No.1 has filed written version and challenged the complaint. In their written version it has been stated that it is the Complainant who approached the OPs for availing some policies. After understanding the details of the policy, the Complainants applied for Unit Linked Endowment Suvidha Plus. On the basis of applications received five policies were issued in favour of the Complainants with effect from 04.12.2007 for 10 years in each case. The Complainants also issued Mandate forms for direct debit of the premium from their Savings Bank A/c. The original policy documents were sent to the Complainants at their address as shown in the application forms. Subsequently Complainant No.1 requested the OP for reducing the yearly premium for Policy No.11435681 from Rs.3,00,000/- to Rs.10,000/-. Since the Complainant stopped payment against policy Nos.11435346 and 11435344 , the premium for those policies remained unpaid in the first 3 years after commencement , as a result of which those policies got lapsed . After deducting the charges, the OP refunded the sum of Rs.41,854/- vide cheque no.781036 dated 31.12.2010 and another sum of Rs.43,048 vide cheque No. 781048 dated 31.12.2010. The Complainants did not choose to revive their cancelled policies. In denying and disputing the allegations as made out in the complaint, the OP-1 asserted that the Complainants never intended to purchase one policy for Rs.9,00,000/-. On the contrary they applied for five policies, three in the name of Complainant No.1 and two in the name of Complainant No.2 and as such, five separate policies were issued to the Complainants who, being educated persons were satisfied with the terms and conditions and benefits of the said policies. The OPs never divided the premium for five policies in order to get more allocation charges. Further, the Complainants had lost their opportunity to cancel the policies within free look period and again it was denied that wrong policies were issued in the name of the Complainants as alleged .There was no deficiency or unfair trade practices on their part. Accordingly the complaint was liable to be dismissed.
The Complainants have filed evidence on affidavit and questionnaire being put up by the OPs, replies have been submitted. OP No.1 has also filed their evidence on affidavit and the questionnaire being placed by the complainant, replies have been submitted by the OP No.1. The Complainants have filed BNA together with the citation of the judgement of the Hon’ble Supreme Court in the case of Chamber Cooperative House Society –Vs- Development Credit Bank Ltd, AIR 2004 S.C.184, 2003 117, Comp Cas 118 SC, the judgement of the Hon’ble Supreme Court in M/S Sriram Industrial Enterprises Ltd –Vs- Mahak Singh and Ors. and also the judgement of the Hon’ble Supreme Court in Kishore Lal –Vs- Chairman, Employees State Insurance Corporation, all in support of the view that the question of fact can be dealt with or decided under the C.P. Act , though summary trial is provided under the Act.
Ld. Advocate for the Complainant submitted during hearing of the case that the Complainants relied on the words of the authorised Agent being OP-3 acting as agent of OP-1 who assured that there would be no hidden charges . The proposal forms were signed by the Complainants on the understanding that the details of the policies would be made available within 20 days from the receipt of the proposal form so that they could decide about the number of policies to be obtained but such details were not sent to the Complainants though the OP-3 was told that the complainants would leave India at the end of December, 2007. It was by the OPs themselves that they filled in the application forms with an ulterior motive which would suit their own business purpose only. As a result, the policies were issued in such manner that the Complainant were subjected to a huge loss in spite of payment of a total sum of Rs.17,20,000/- towards payment of premium of the policies . The signatures of the Complainant as shown in the spaces of Customer Signature in policy papers were forged as the OPs manipulated in their own interest. The OP No.3 all along played a deceptive role in connivance with the other OPs and further the Complainants could not go through the policy before August, 2009 when they came to India on a temporary vacation . As soon as it was realised that the OPs issued five different policies, in place of one single policy they contacted with the OPs but those OPs refused to redress the grievance of the Complainants. It was a clear case of unfair trade practice and deficiency in service. The prayer for relief as brought up in the petition of complaint deserves to be allowed with litigation cost and compensation.
Ld. Advocate appearing for the OPs submitted that separate proposal forms duly signed by the Complainants were submitted and policies were issued as per their instruction. The original documents have been submitted before the Commission and it is evident from those documents that the Complainants signed several proposals with a view to having return from their invested sums and also insurance coverage. Two of the policies were lapsed as premium for those policies within the 3 years of availing the policies were not deposited. Further, no cancellation proposal in respect of the policies was submitted by the Complainants within the free look period. There was no deficiency in service on the part of the OPs and there was no mis-sale of policy . As such the complaint is liable to be dismissed.
The points for consideration are as follows:
- Is the Complainant a consumer ?
- Is there any deficiency in service or unfair trade practice on the part of the OPs.?
- Are the Complainants entitled to the relief as prayed for ?
The Complainants paid consideration for the service of the OPs so far as insurance coverage and financial benefits were involved against payment of consideration in the form of premium. Accordingly, the Complainants are consumers vis-à-vis the OPs who are service provider. The other two points are taken up together for brevity of discussion and arriving at a decision.
There can hardly be any dispute that the Complainants had discussion with OP No.3 being Finance Consultant /the authorised agent of OP-1 before purchasing the policy. As the agent is supposed to be thoroughly conversant with the policy benefits and also their terms and conditions , the proposers do have the reason to rely on the words of the agent before going through the written documents including terms and conditions of the policy. There is no reason to disbelieve that the Complainants impressed upon the OP No. 3 that they would be leaving India in a very short time and accordingly it was the responsibility of the agent as well as his principal i.e., OP No.1 / OP No.2 to send the policy documents to the Complainants at the earliest within 20 days from the date of opening of the policy as promised but that did not happen. In was only after the Complainants left their house on 29.12.2007 as seen from their Air Tickets , that the policy documents reached the security guard of the house of the Complainants. As a result, the Complainants could not peruse the policy documents and could not avail themselves of the opportunity of exercising the option to return the policy within the free look period.
The Hon’ble Apex Court is seen to have held in the case reported in 1984 AIR 1014, 1084 SCR (3) 350 that ‘ the mere execution of the policy is not an acceptance ; an acceptance to be complete must be communicated to the offeror , either directly or by some definite act, such as placing the contract in the mail’.
The receipt of policy document by the Complainants in the present case was not submitted by the OPs which could establish that the Complainants neglected to exercise their option to return the policy/ policies as per policy condition. The premium amount of Rs.17,20,000/- was received by the OP Insurance Company . The sum of Rs.84,902/- as claimed to have been sent to the Complainants in two cheques does not appear to have been availed by the Complainants. No proof of encashment of the cheques could be produced by the OPs either.
It is on record that the total initial amount of Rs.9,00,000/- was received by the OP and break up of the total amount was made in such manner as was convenient to them for issue of five separate policies though no instruction was given by the Complainants. Without having any confirmation about the deposit of Rs.9,00,000/- in five different policies, the OP Insurance Company decided on their own and in their own interest without caring for the benefit of the Complainants. This happened as the Complainant did not fill in the application forms providing necessary information in the particular columns of such forms.
What is more important and a matter of serious concern is that the report dated 22.01.14 of the handwriting expert i.e., Examiner of Questioned Documents, QDEB, CID , West Bengal has been received and it appears from such report that the person (Arun Kr Das, Complainant ) who signed the specimen signatures did not sign the questioned signatures and also the person (Sonali Das, Complainant ) who signed the specimen signatures did not sign the questioned signatures . There has been no challenge by the OPs in the matter of the report of the handwriting expert .
It is proved that the signatures of the Complainants as shown on quotation for HDFC Unit Linked Endowment Plus and the application form and mandatory debit forms are forged which establishes the allegations made by the Complainants and confirms the liability on the part of the OPs to face the consequences. The OPs must compensate for their deficiency in service .
It may be added that the OP No.3 by absenting herself from the proceedings of the complaint case made it for adverse inference that she has little to counter the allegations made against her by the Complainants. Accordingly the allegation of deficiency in service also lies against her. In the said facts and circumstances we are inclined to hold that the OPs can not avoid their responsibility for the loss and harassment suffered by the Complainants. The complaint succeeds. Hence,
Ordered
that the complaint be and the same is allowed on contest . The OPs shall jointly and / or severally pay the sum of Rs.17,20,000/- with interest @ 10% p.a from the date of filing the complaint till full realisation. The OPs shall also pay a litigation cost of Rs.10,000/- to the Complainants jointly and severally. The entire amount shall be paid within a period of 40 days from the date of this order failing which interest on the entire decretal amount shall be payable by the OPs to the Complainants @ 8% p.a. The Complainants shall be at liberty to go for execution of this order against the OPs as provided under the Consumer Protection Act.
