| Final Order / Judgement | CONSUMER DISPUTES REDRESSAL COMMISSION – X GOVERNMENT OF N.C.T. OF DELHI Udyog Sadan, C – 22 & 23, Institutional Area (Behind Qutub Hotel) New Delhi – 110016 Case No.324/11 Sh. Hitendra Parashar 1418, Sector 19, Faridabad Vs. 1.HDFC Standard Life Insurance Company Limited 22, Community Centre New Friends Colony New Delhi-110065. 2. HDFC Standard Life Insurance Company Limited 5R-1A, B.K. Chowk NIT Faridabad Haryana 121 001 3. HDFC Standard Life Insurance Company Limited Regd/ Office: Raman House H.T. Parekh Marg, 169 Backbay Reclamation Mumbai-400 020.…..RESPONDENT Date of Institution-03.08.2011 Date of Order- 22.03.2024 O R D E R MONIKA SRIVASTAVA– President Complainant has filed the present complaint seeking refund of Rs. 60,000/- paid to the OP towards premium of lifetime insurance cover, direction to the OP to provide insurance cover of Rs.5,00,000/- as per the terms and conditions of the insurance policy sold through the complainant, Rs.27,607/- towards the loss suffered by the complainant on account of illegal cancellation, Rs.5,00,000/- as damages and compensation and Rs. 25,000/- towards litigation charges. OP 1 to 3 is HDFC Standard Life insurance Co. Ltd at different addresses. - It is the case of the complainant that he was sold the policy unit linked ‘Young star plus policy’ in December 2007 and the complaint was told to invest Rs.1,00,000/- in the said policy as first instalment with the promise that thereafter he will have to pay only Rs.10,000/- as second and third instalments. He was further told that at the end of three years the amount invested by the complainant will be around Rs.1,25,000/- after making payment of Rs.10,000/- is premium for second and third year. The complainant was further told that only 60% charges will be deducted from the first instalment of the said policy and thereafter there will be no other extra charges of any kind for the whole tenure of the policy.
- It is said that the complainant was further given an insurance of promised return of at least Rs. 20,000 per annum. Assurance, promise of profits, risk and security against the said investment were duly explained to the complainant by the executive of the OP. True copy of the handwritten note of the executive of the OP is annexed as annexure C1.
- It was also told that the said policy continues in case of irregular premium payment after 3 years (5 years lapse in premium payments continually will lead to cancellation of further premium payment) but investment made and insurance cover will continue. The complainant was assured by giving a chart that even in the worst scenario the complainant shall get the returns up to Rs.54,00,000/- by the end of 25th year of the policy and the efficient management of the OP would ensure that the complainant is totally insulated from any exposure to risk insurance benefits available to him under the policy.
- As per the agreed terms, the complainant gave Rs. 1,00,000/- for the initial deposit towards the proposal of the OP and receipt dated 28.12.2007 confirmed the payment towards the premium amount. Thereafter complainant received policy bearing number 11455060 and the same is annexed as annexure C3.
- It is further stated that though the complainant was promised that he will have to pay Rs.10,000/- for the second and 3rd instalment however the complainant was forced to deposit Rs.12,500/- as second and third instalment. It is stated that instalments for all 3 years were duly paid without any delay or default in the payment. It is stated that by the end of third year of the said policy, the complainant had invested a sum of Rs 1,25,000/- however he did not receive any returns as assured by the OP.
- It is further stated that on 03.01.2011 complainant received a statement account for the said policy and he was shocked to find that the amount of Rs.37,393/- was left as against the investment of Rs.1,25,000/-. Copy of the statement of account received by the complainant is annexed as annexure C5. Complainant was surprised that every month additional charges were deducted from the account of the complainant without any prior intimation to the complainant. It is stated that the complainant was kept in complete darkness about the charges and riders which were deducted from the account of the complainant.
- It is stated that complainant immediately contacted the customer care of the OP for clarification of these unsolicited charges but to no avail. It stated that despite various communications personal visits by the complainant, his queries were not satisfactorily answered by the OP and each time the complainant was given a different reason for losses and deductions.
- It is further stated that a letter dated 03.01.2011 was sent by the complainant to the OP with instructions to delete all the riders illegally levied on the account of the complainant. The letter is annexed as annexure C6. It is stated that complainant was not provided any proper information or assistance to settle his grievances which amounts to gross violation of his consumer rights. It is further stated that complainant vide his letter dated 08.01.2011 demanded the entire investment of Rs 1250/- along with promised returns but in return he received the letter dated 24.01.2011 along with the fund value cheque of Rs.34,982.33/-.
- It is further stated by the complainant that initially the OP had taken an amount of Rs.60,000 towards the insurance premium which had not been invested in the market, the initial premium of Rs.40,000 and the subsequent premium of Rs.25,000 was to be invested in the market thus even in the worst case if the investment of the complainant suffers loss i.e Rs. 65,000/-, the complainant is still entitled to the insurance provided under the policy. It is stated that the arbitrary cancellation of insurance policy of the complainant despite accepting entire premium of Rs.60,000 towards insurance amounts to unfair trade practice on the part of the OP. It is stated that even if the investment of the complainant suffers losses, the benefit of life insurance cover cannot be taken away. Copy of the letter dated 08.01.2011 and 24.01.2011 are annexed as annexure C7.
- It is stated that the complainant accepted the fund value cheque of Rs.34982.33 under protest and reply to the letter dated 24.01.2011was given vide email dated 16.02.2011. It is stated that due to the illegal and unlawful act of the OP, the complainant has suffered great mental pain and agony beside suffering financial loss on account of misrepresentation by the executives of the OP.
- Complainant sent a legal notice dated 15.04.2011 seeking refund of Rs.87,607/- which was invested by the complainant however OP vide their reply dated 10.05.2011 refused the claim of the complainant on false and whimsical grounds. Copy of the legal notice and its reply ares annexed as annexure C9 (colly).
- In their reply, OP has stated that the complainant has not come to this Commission with clean hands, complainant is a well educated man and had knowledge of terms and conditions of the policy and had himself sought the funds switch over and reduction of premium and is now trying to undo his own decision by placing the burden on the OP.
- It is stated that complainant after having accepted the terms and conditions of the policy and after availing the services for three years cannot retract from the said terms and conditions. It is stated that complaint merits dismissal as bank has not been made a necessary party and most of the allegations in the complaint pertain to bank or its executives.
- It is further stated that complaint is based on disputed questions of facts and misrepresentation which does not fall within the domain of this Commission for determination. It is stated that complainant signed the proposal form and gave a DD of Rs.1,00,000/- towards the payment of the first premium and on the said proposal form it was clearly mentioned that the policy will not commence only written acceptance of application by OP has received.
- It is stated that the proposal signed by the complainant contained the illustration with respect to policy and the complainant had also signed addendum to unit linked place and customer declaration. It is further stated that the complainant after understanding of the terms and conditions of the plan and the investment risk involved had chosen to invest in the particular portfolio.
- It is stated that unit linked polices are in the nature of mutual funds where apart from the insurance cover, the insured chooses to manage his own money by investing the same in the choice of his own fund as has happened in the case of the complainant. It is stated that the complainant managed his own investment and also switched funds and sought premium reduction and therefore, it is the complainant who is responsible for the units accumulated.
- It is stated that the premium payment date for the policy was 28 December every year, due to non-receipt of premium on 28.12.2010 payment of policy was cancelled. It is further stated that policy documents were duly received by the complainant in time but he did not approach the OP during the free look period and availed premium reduction, deletion of riders have been done and premium redirection under this policy.
- It is further stated that as per “Option to return” clause contained under the policy document complainant had an option to return the policy within 15 days of the receipt of the policy in case he was not agreeable to any of the provisions in the policy but he did not do so.
- It is stated that only premium of the complainant which was Rs.1,00,000/- was reduced to Rs.12,500/- at his own request and he is now trying to confuse the Commission regarding period for receiving of returns with lock in period of three years. It is stated by the OP that complainant was duly aware of all the charges as the same is specified in the policy documents and were in the knowledge of the complainant. It is stated that complainant, out of his own choice has invested in the policy for continuous three years but did not deposit the premium for the fourth year leading to the cancellation of the policy and therefore, is entitled only to the amount as per his accumulated units. It is further stated that that as per the insurance policy, the complainant was entitled only to an amount of Rs.34,982.33/- as per the number of accumulated units only. It is also stated that complainant is not a consumer, it is also denied that the complainant has suffered any mental pain, agony, harassment and embarrassment.
- In his rejoinder, complainant has stated that since he has availed services of the OP he is a consumer as per the definition provided under CPA. It is denied by the complainant that it was a commercial transaction between the complainant and the OP.
- It is reiterated by the complainant that he was offered unit linked ‘Young star plus’ policy by the two executives of the OP with a promise that the complainant had to invest Rs.1,00,000/- as first installment and thereafter has to only pay Rs.10,000/- as second and third installment. It was further stated that the amount invested by the complainant at the of three years would be around Rs. 1,30,000/- and that only 60 percent charges will be deducted from the installment of the said policy and thereafter there will be no other extra charges of any kind for the whole tenure of the policy. He was further given an assurance that he would be given assured return of at least Rs.20,000/- per annum.
- It is stated that all these profits, risk, security were duly explained to the complainant by the executive of the OP on a piece of paper and that OP is liable to abide by the assurances and promises made by its representatives to the complainant on their behalf. It is also stated that the executives of the OP had stated that the said policy will continue in case of irregular premium payment after three years i.e. the investment made and insurance cover will continue. a chart was shown reflecting that even in the worse scenario the complainant would get a return of Rs.54,00,000/- by the end of 25th year of the policy and the effective and efficient system investment management of the OP would keep the complainant totally insulated from any exposure to risk insurance benefits available to him under the said policy.
- It is further stated by the complainant that market risk was never explained to the complainant in fact, he was misled by the representatives of the OP about assured and guaranteed returns. It is stated that executives of the OP lured, misled and cheated the complainant which is demonstrated by annexure C1. It is also reiterated that the complainant has been kept in dark about the various charges and riders which was later deducted from the account of the complainant. It is also submitted by the complainant that in order to examine the cause of losses or minimize them made desperate efforts to understand the situation in order to safeguard his own interest. However, none of his communications gave any satisfactory result. It is reiterated that the OP has mismanaged the funds as against the promises made by the executives of the OP.
- This Commission has gone through the entire material on record. The complainant has placed on record handwritten note made by the agent of the OP though it does not bear the name of the agent which provides the snippets of the policy and reinforces what the complainant has alleged in his complaint. The complainant has also placed on record policy dated 29.12.2007 which also gives entire list of schedule of benefits, schedule of investment options and schedule of charges. Letter dated 18.12.2008 has also been placed on record issued by the OP wherein it is stated that renewal premium is Rs.12,500/- w.e.f. 28.12.2008 as per the request of the complainant to change the premium.
- The complainant has also placed on record statement issued by OP of transaction activity for each fund from 28.12.2007 to 31.12.2010 which reflects that each month Rs.455/- was deducted from the fund of the complainant as monthly policy charges. Thereafter in December, 2009 charges were reduced to 300+. Another letter has been placed on record pertaining to premium redirection dated 30.12.2008 and another letter dated 03.01.2011 is placed on record written by the complainant seeking deletion of riders from the policy and thereafter a letter dated 08.01.2011 by the complainant wherein the complainant has raised the issue relating to the monthly charges being taken out from his fund without any communication at the time of purchase and later on.
- In reply of this letter, letter dated 24.01.2011 has been written by the OP wherein it is stated that all the features and details of the plan were explained to the complainant at the time of taking the policy and therefore, it is not a mis-sale and accordingly, Rs.34,982.33/- was refunded back to the complainant. In their reply to the legal notice of the complainant, OP has stated that premium was reduced in the second year from Rs.1,00,000/- to Rs.12,500/- as per the request of the complainant however, no such document has been placed on record. It is also stated in the reply that the policy has been cancelled to the non-payment of the premium however, in their letter dated 24.01.2011, OP has stated that in case if the value of account limited goes below the minimum paid up value as satisfied in the policy schedule of the policy document then the policy gets cancelled. Therefore, it is contradictory for OP to make two kinds of statement one, in their reply to the legal notice to the complainant and the other in their correspondence dated 24.01.2011. It is also noticed that the OP has not placed any document along with reply as well as his evidence which corroborates the case of the complainant.
State Consumer Disputes Redressal Commission, West Bengal in DHFL Pramerica Life Insurance Co. Ltd. vs Satya Mondal on 13 October, 2020 has stated Now a days, it is an open secret that insurance agents, with a view to achieving their sales targets, often resort to falsehood and the degree of such practice has reached such an extent that the IRDA has to take a protective step by formulating Protection of Policyholders' Interest Regulations 2002. Unfortunately, in spite of all efforts, the practice still continues unabated. In view of the facts and circumstances narrated above, we are of the considered view that the policy terms and conditions were not properly explained to the Respondent/Complainant. The policy, therefore, was a proven mis-sale. - This Commission is of the view that the OP has indulged in unfair trade practices by mis selling the policy to the complainant and by not disclosing the entire risk and benefits to the complainant. It is also observed by the Commission that complainant was regularly getting statements for his funds but did not realise that his fund value was constantly falling and did not raise any objection with the OP in time. Therefore, the OP is directed to refund a sum of Rs.87,607/- with interest @5% to the complainant from the date of deposit of his money i.e. 2007 till it is paid within three months from the date of pronouncement of order, failing which OP would liable to pay interest @7% on the said amount. Complainant is not found entitled to any other relief. This amount to shall be paid within three months from the date of pronouncement of the order.
Copy of the order be provided to the parties as per rules. File be consigned to record room. Order be uploaded on the website. | |
