Dt. 03.05.16

JAGANNATH BAG, MEMBER

       The present appeal  is directed against the Order, dated 24.09.2014, passed  by the Ld. District Consumer Disputes Redressal Forum, North 24-Parganas, in CC Case No. 30/2014, whereby the complaint was  allowed in part on contest against O.Ps with cost.

       The complaint  case, in brief, was as follows :

       The Complainant’s father obtained a new insurance policy for his son  sometime in November, 2012. He was made to understand by the agent  of the OP/ Insurance Company, namely, Mr. Ashis Roy, that two other policies  of the Reliance Insurance Company,  which had been purchased earlier, not  having  much development and became  obsolete,  should be withdrawn and the new policy would be a better one. He was also  made to understand that the new policy  would be for three years and the policy would be  one time in nature . A sum of Rs. 90,000/- was paid by cheque which the said agent of the O.P Insurance Company took along with the existing  Reliance Insurance  policy with assurance that the Complainant’s  father  would get back the money within 46 days. The Complainant received the policy document  at the end of December, 2012 but found that  there were  some wrong / incorrect entries regarding  telephone number, e-mail I .D.  and the terms of the policy. The agent of the O. P. Insurance Company i.e, Mr. Ashis Roy collected the documents and as per his advice the Complainant and the father of the Complainant signed an application for correction of incorrect entries which was handed over to the agent along with the documents received from the O.P. Insurance Company. But neither the policy document nor the amount withdrawn from the  Reliance policies  were received by the Complainant. The Complainant realised that  there was an unfair trade practice on the part of the O.P. Insurance Company. On 18th February, 2013, the Complainant applied to the Manager, H.D.F.C. Life for  cancellation of the  policy, but the policy was not cancelled. An appeal to Grievance Officer at Mumbai was sent on the advice of the OP. On 10.03.2013, the Complainant resubmitted one complaint along with a copy of General Diary  with  Titagarh Police Station. But the policy was not cancelled. When the Complainant  and his father  went to the O. P. No. 3  for redressal of their grievance,  they were behaved  rudely. In the said circumstances, the complaint was filed with a prayer for  refund  of premium money  amounting  to Rs. 90,000/- and also for payment of a sum of Rs. 2,00,000/- as compensation for mental agony and pain and  unnecessary harassment , apart from litigation cost of Rs. 10,000/-.

       The complaint has been  contested by the O.Ps who filed,  written version, whereby it was contended, inter alia, that  the policy was not properly explained to the Complainant who chose the  policy under  HDFC Standard Life Sampurna Samridhi Insurance Plan and as per the  terms and conditions, the Complainant was required to pay yearly premium  @ 90,000/- for a period of 11 years. It was also contended  that the original policy document was duly received by the Complainant on 11.12.2012. The Complainant retained the original policy document  instead of returning the policy  within a period of 15 days,  i.e., the free look period. It was also contended that the request  for cancellation of the policy was sent for the first time through the Complainant’s letter dt. 18.02.2013. The Complainant’s  allegation about  missale of the policy was not correct. The Complainant was informed  that the OPs were unable to cancel the policy and refund the premium  as the request for cancellation was not made within free look period . Again, as the 2nd premium fell due in December 2013, the policy   reached  lapsed  status as per the terms and conditions of the Policy. The O.Ps, therefore, denied  all allegations of the Complaint and pleaded for dismissal of the complaint.

       Ld. Forum below having heard both parties and upon perusal of the materials on record  observed that, though a complaint is pending with the  Insurance Ombudsman, there was no bar to file complaint before the Consumer Forum and  again it was observed that if the Complainant is willing to cancel the policy, he cannot be  forcefully restrained from doing  the same. Relying upon the statement of the Complainant that he did not get any chance to examine the terms and conditions of the policy, Ld. Forum  below allowed the complaint with direction upon the OPs.  to refund the premium  money  after deducting  30% from such premium and also  directed the OPs to pay Rs.5000/-  as litigation cost  within  one month from the date of the order, failing which the O.Ps would be liable to pay  penalty of Rs.100/- daily  till the final payment which would be deposited in the  Consumer  Welfare Fund.

       Being aggrieved by and dissatisfied with the order of the Ld. District Forum below  the Complainant / Appellant has  come up before this Commission with the present appeal for direction to set aside the impugned  order.

        Ld. Advocate appearing for the Appellant submitted that the issuance  of the policy in question was a missale by the O.P Insurance Company through their agent who made  incorrect and wrong  presentation about the nature  and contents of the policy. The Complainant as well as his father were made  to understand that  the policy would be a onetime policy upon payment of Rs. 90,000/- only without any further payment of any premium. Again, after receiving the policy  document  several incorrect  entries  were found and the agent of the Insurance Company  collected  the policy documents which were handed over to him on good faith with the belief that the policy documents would be returned after due correction for which an allegation was  submitted. But the policy documents were not returned by the Insurance Company or agent on their behalf. Such act on the part of the Insurance Company was surely  deficiency in service and negligence  in their duty. Ld. Forum below considered the  material facts but  allowed the complaint with direction upon the O.Ps  to refund the premium  amount of Rs. 90,000/- after deduction of 30% of the said amount apart from  litigation  cost of Rs.5000/-. Such deduction, however, was  not just and fair. The entire amount of Rs. 90,000/- is refundable by the Insurance Company which should have been considered by the Ld. Forum.

        Ld. Advocate appearing for the OP/Respondent submitted that the allegation of the Complainant  about  missale of the policy in question  was not  tenable. The Complainant was made to understand about the nature and terms and conditions of the policy before payment of the 1st premium. The policy  was not  a onetime policy and  at no point of time  was the Complainant  told that the policy  duration was for three years only. Everything about the premium frequency, nature of the policy etc., were noted in the policy document and the Complainant being an educated person should have been made himself conversant with those information. After the policy was issued, the prayer for cancellation of the policy was not submitted within the free look period of 15 days from the date of receipt of the policy document. As such, there was no  question of cancellation of the policy and the 2nd Premium which fell due in  December, 2015 not being paid, the policy reached  lapsed status as per terms and conditions of the policy. There was no deficiency in service on the part of the O.P Insurance Company and the impugned order has been passed erroneously by the Ld. Forum below, relying upon the baseless allegations of the Complainant/Respondent. The direction of the Ld. Forum below to refund the premium amount after deduction of 30% is arbitrary and without any reference to the policy terms . The impugned order deserves  to be set aside.

              We have gone through the Memorandum of Appeal  together with copies of the impugned order, the petition of complaint, the written version filed by the O. P. Insurance Company before the Ld. Forum below,  the copies  of letters dt. March, 2013, 21st March, 2013 and  28th March 2013 among other documents.

              The point for consideration is whether the impugned  order  suffers material irregularity  or any illegality.

Decision with reasons

       It was the case of the Complainant/ Appellant  that he purchased  a policy under HDFC Standard Life Sampurna Samridhi Plan from the Respondent with the understanding that the Policy was a onetime Policy and  no payment other than Rs.90,000/- would have to be made for subsequent premium.

       On the other hand, it was the case of the Respondent Insurance Company that the Policy  was a  11-year policy with yearly premium of Rs. 90,000/- each, which  the Complainant was  informed  at the time of offering the policy by the agent. There was no reason for missale with the complainant  particularly  in view of the fact that the Complainant  received policy document after receipt of premium .The policy document was self explanatory  in every respect.

      The policy document is said to have been  received by the Appellant/Complainant  at the end of December, 2013, (Page-4, paragraph-8 of the complaint petition),  though as per the statement of the Insurance Company corroborated by Postal track report of the envelope issued  to the Respondent/Complainant,  the envelope  was received on 11.12.2012.

        Though it is a case of the Appellant /Complainant  that  there were some incorrect entries in the policy document  and the policy document  was handed over to the agent of the insurance company , it was not  a case of the Complainant that he returned  the policy document with a prayer for cancellation of the  policy.

       As revealed from the materials on record  the request  for cancellation of the policy was sent  vide the Complainant’s letter  dt. February 18, 2013.  This was a very important   fact  for consideration  by the  Ld. Forum below,  as  such request for cancellation of policy could be sent within the  free look period only.  There  appears to be  no  elaborate  discussion  on that aspect  of the matter by the Ld. Forum below. Further, there appears to be no proper reason as to why deduction of 30% of the premium money was ordered by the Ld. Forum below. Whether such order of deduction is related to any policy condition has not been hinted at. This gives reason to agitate about the fairness of the impugned order .  Since  the terms and conditions of a policy are binding upon both the insurer and insured, such terms and conditions  should have been given due  importance for adjudication of  the complaint .

       We are of the considered view that the Ld. Forum should have been more careful as to if the evidence produced by the OP/Respondents was such as to establish that they acted strictly in terms of the policy in question.

        Ld. Forum’s direction to deduct 30% of the premium money is not found to have been related to any policy terms or evidence whatsoever. We are inclined to hold  that the matter should be referred back to the Ld. Forum below for consideration  of the point as mentioned  above on the basis of evidence as  already filed by the parties concerned or as  may further be filed by them. The appeal, therefore, succeeds. Hence,

ORDERED

       That the matter be and the same  is sent back on remand   to the Ld. Forum below for fresh adjudication  giving  opportunities of hearing  to both parties who may  adduce  fresh evidence, if any, in their respective support. The impugned  order is set aside . Parties to appear before the  Ld. Forum below on 27.05.2016 for further order. There shall be no order as to costs.

       Copy of this order  be sent  to the Ld. Forum below for information in advance.