This is an application u/s.12 of the C.P. Act, 1986.

          Complainant by filing this complaint has submitted that at the beginning of February, 2013, the Agent/Marketing Executive of the OPs 3 and 4 contacted the complainant over telephone for availing short-term one time investment redeemable/repayable after 90 days with 14 percent cumulative interest and complainant was allured immensely with the feasibility of achieving lucrative interest and filled up the form for the purpose of investment at the request of the OPs 3 and 4  when they came to his house and then complainant for making short-term fixed deposits (one-time),redeemable after 90 days with 14 percent cumulative interest and got signed two forms by the complainant and for that purpose, they had collected two cheques bearing no.9376099 dated 05-02-2013 and 937100 dated 17-02-2013 for Rs.50,000/- each drawn on SBI, Chowringhee Branch, Kolkata – 700 071 from the complainant. 

          Subsequently, on receiving the two documents complainant found that same are policy certificates and he was astonished and so, confirmed that unscrupulously agents of OPs 3 and 4 put the entire money to HDFC SL Classic Assure Insurance Plan at the disposal of OPs1 and 2 for a period of 10 years by duplicating/tampering complainant’s signature who informed the said fact immediately over telephone to those fraudulent agents of OPs 3 and 4 but they assured that they will come to complainant’s house soon and replace those defective insurance policies by replacing fixed deposit certificate as committed by them.  After couple of days these agents came to the house of the complainant and took the original policy certificates with the assurance of replacing fixed deposit certificate within a week.  But thereafter, that agents of OPs 3 and 4 neither returned the defective insurance policy certificates nor the fixed deposit certificate and now, such sort of act is mis-selling on the part of the OPs.  So, finding no other alternative complainant filed a written complaint to the OP1 stating fraudulent activities of the agents of the OPs 3 and 4 for cancellation of the policies and for refund of total investment of Rs.1,00,000/- but on receipt of the letter of the complainant OP2 replied to the effect that as the said request for cancellation was not received within 30 days free-look period they were unable to process a refund of premium paid towards those policies and further stated that as per terms and conditions of the policy complainant made act.   Thereafter, complainant fervently appealed to the OP2 but they did not pay any heed.  Thereafter, complainant applied for duplicate copy of those policy documents from the OPs 1 and 2 on payment of requisite fees and complainant has received the same from the OPs1 and 2 on 17-02-2014 and from that duplicate document complainant came to know that the cancellation in the free look period means that if anyone intends to cancel the policy he or she will have to return the same within 30 days from the date of purchase.  Practically, complainant by filing this complaint has submitted that for such sort of corrupt practice complainant lodged a police case at Thakurpukur P.S. against above name of OP but police did not take any7 step.  Though it is true that OPs 3 and 4 are appointed and/or delegated agent of the OPs1 and 2 and they mis-sold the same by alluring the complainant and complainant had no desire to purchase any insurance policy but he intended to deposit it in a fixed deposit for its repayment after 90 days with high interest rate of 14 percent and in the above circumstances for conjoin act of the OPs complainant has been deceived for which complainant has filed this complaint for redressal.

          On the other hand, OPs 3 and 4 by filing written statement submitted that entire allegation against them is false.  They only supplied all papers informed them as corporate broker of OPs 1 and 2 and complainant realized the fact and then he submitted the filled up form along with cheque but OPs3 and 4 did not receive such cheques, did not file that application form only they help the complainant to realize the conditions of the policy benefit etc.  In fact, complainant being interested contacted with the OPs 3 and 4 and OPs 3 and 4 help them by supplying all papers but only help for log in and they have also stated that they collected the documents and sent it to the OP1 which is their duty and presenting the client with the various policies and letting him to choose among them and that was also being performed duly and the subsequent act was done by the OP1 so, OPs 3 and 4 are no way related for the present case and complainant was aware of the entire terms and conditions of the policy, all instructions were given to him, so, entire complaint is false, frivolous and so the complaint should be dismissed.

          On the other hand, OPs1 and 2 by filing written statement submitted that on receipt of the said duly filled up proposal form from the said broker, OP issued two policies both being HDFC SL Classic Assure bearing policy Nos.15826141 and 15850396 in favour of the complainant and complainant duly received it and it was sent by the Bluedart Courier on 21-02-2013 and complainant received it on 26-02-2013 but no cancellation was made within free look period for which as per policy condition OPs failed to settle the claim of the complainant for refunding the same.

          It is specifically mentioned that complainant paid only one premium but failed to pay subsequent premium in respect of both the policies so, both the policies status lapsed due to non-payment of premium but after passing of more 6 months on 10-08-2013 complainant sent a complaint alleging mis-sell and that was received by the OP and thereafter, OP replied the complainant and submitted that they are unable to dispose of the matter.  So, there was no laches on the part of the OPs 1 and 2. 

          It is specifically mentioned that the broker represents their client interest i.e. the policy holder, so, the OP Insurance Company cannot be held liable for the act of such brokers and OP is not aware of the agent of the broker to the complainant and it was not mis-sell by the present OP so, in the circumstances, they have prayed for dismissal of the case.

Decision with Reasons

On an indepth study of the complaint, written version and further considering materials on record and also relying upon the argument as advanced by both the parties it is admitted position that OP3 and 4 acted as agent-cum-broker on behalf of the OPs1 and 2 and it is not denied.  At the same time OPs1 and 2 has admitted that they never received the said application form for purchasing the policies directly from the complainant rather in page 2 Para 5(c) OPs 1 and 2 have admitted that they received proposal form from the said brokers OPs3 and 4 and on receipt of the said duly filled up proposal form from the said broker they issued the policies then it is clear there was no attempt on the part of the OPs 1 and 2 to satisfy that the complainant as was called intended purchaser of the policy was satisfied about the terms and condition of the policy and his consent was taken without alluring him and he realized the total content of the policy document.

          Most peculiar factor is that this broker and agent of OPs3 and 4 have submitted that they did nothing.  They only instructed the complainant and gave him all chances to realize the fate of the policies etc., but OPs1 and 2 have not stated anywhere that they are admitted broker or agent, never allured or misrepresent about their broker.  On the contrary, complainant has stated that he only signed in the form relying upon the assurance made by the OPs3 and 4 that it is one time deposit scheme and after 90 days along with interest he shall have to get the benefit particular on receipt of the policy document complainant was surprised and verified went to the OPs3 and 4, they again told the complainant that it was wrongly issued.  So, it shall be rectified and returned and fact remains OPs3 and 4 received it but did not return the original document.  Fact remains thereafter, complainant reported the matte to the OPs1 and 2 but they did not take any step against the OPs3 and 4 and ultimately complainant when found that on his prayer for refund of money was refused then and there complainant prayed for copy of the said documents and when the said copy of the documents were supplied by the OPs1 and 2 complainant realized that with ill purpose and with a such motive OPs3 and 4 managed to secure the said document and did not return because it is completely a policy for long years with condition of payment of further payment etc.  Now, the question is whether the complainant knowing fully well of the content of the proposal form signed?  In this regard we have gone through the materials and also the entire fact and have gathered that complainant has no financial capacity to pay Rs.50,000/- each for two policies per year at the same time OPs1 and 2 as seller of the product never examined the complainant’s financial capacity to pay such premium per year.  Further no consent of the complaint was taken by the OPs1 and 2 before accepting the proposal which were actually presented by OPs1 and 2’s broker or agent OPs3 and 4.  Further OPs1 and 2 have not stated in the written version that they are satisfied that complainant, realized the terms and condition of the policy and thereafter, he signed but truth is that only signature is there and other part of the proposal form were filled up by brokers and no doubt that brokers are appointed by the OPs1 and 2 for selling their product and without broker or agent the present OP has no business all over the India for which OP has taken a casual defence that as because proposal form along with cheque were deposited by the OPs 3 and 4 they issued it.  But nowhere OPs1 and 2 have stated that at the time of accepting that proposal form they talked with the complainant and they were satisfied that complainant realized the contents of the agreement and thereafter, he signed.  Another factor is that OPs1 and 2 have stated in the written version that when mis-sell has been done by the OPs3 and 4 for which they are liable but principally OPs3 and 4 have their no existence if they are not appointed by OPs1 and 2 but against their activities OPs1 and 2 have not stated anything and no step has been taken against OPs3 and 4.  As per provision of law it is the duty of the insurance company to verify the authority about the consent of the insured that has not been done in this case.  On the other hand complainant again and again stated that OPs3 and 4 disclosed to him that amount is deposited for one time he shall have to get it after 90 days along with interest on higher rate that has not been denied by the OPs.  Moreover, complainant went to the OPs3 and 4 on receipt of that policies and handedover the policies to them and they assured that they shall have to rectify it but it was not returned and no doubt it is an unfair practice on the part of the OP’s agent 1 and 2.  Practically, in this case mis-sell was made by the OPs3 and 4 by misrepresenting the entire materials of deposit and admittedly, OPs3 and 4 deposited the sum to the OPs1 and 2 and the disclosure on such sort of benefit of such deposit and assurance has made by the OPs3 and 4.  Complainant at a time handed over the amount but peculiar factor is that it was converted into policies and giving no chance to the complainant to realize actually where he signed and only not to give any chance to the complainant to cancel the said policies for mis-sell within free-look period, such sort of practice is no doubt a deceitful manner of practice on the part of OPs1 and 2 and also OPs3 and 4 as they are appointed broker and agent of OPs1 and 2.  In so many cases it is the act of the private insurance companies to depute such dishonest cheat agent and brokers to trap the customers and in this case it has been adopted by the OPs3 and 4 and including OPs1 and 2.  It is not the single case but huge number of cases corporate agent and brokers of insurance company have adopted such practices and collected signatures on the application form giving no chance to realize the content of those document but it is the settled principle of law as per IRDA Guidelines that at first a meaningful form in block letters shall be placed before the customer and customer after realizing the same shall sign thereafter the question of filling up proposal form shall arise and very recently IRDA has also published different cautions to the insurance companies and also to the customers to that effect.

          In this case it is proved that the present complainant shall not sign in such blank proposal form if he would get such information from the Ops3 and 4 that this proposal forms are for opening or purchasing insurance policy and complainants shall have the liability to pay Rs.50,000/- each for years together and truth is that that fact was not disclosed to the complainant by the brokers and agent of the OPs1 and 2 i.e. OPs3 and 4 if actual position of the said policy and terms and condition would be ventilated in that case this complainant must not have to sign in any application form.  So, considering that fact it is found that by misrepresentation OPs3 and 4 sold the product of the OPs1 and 2 and managed to procure signature and cheques and subsequently converted it into a policy as per their own wish and for which it is proved that the present complainant is deceived by the OPs3 and 4 including OPs1 and 2 for which OPs1 and 2 have not taken any step against OPs3 and 4 when actual complaint was lodged before the OPs1 and 2 by the complainant. Another factor is that OPs1 and 2 have failed to prove that complainant signed in the application form knowing fully well about the terms and condition and he realized the meaning then he signed that means meaningful execution of proposal form must be proved and if that has not been proved then it is not an agreement only on the ground of collection of premium and collection of signature by the agent cum broker OPs3 and 4.

          After considering several complaint cases of similar nature and also considering the approach of the agent and the brokers or the sellers of the insurance product and also considering the peculiar type of financial condition of the 70 per cent people of India, we have gathered that moral and social approach of the insurance company are not here and there and truth is that in the present case also OPs 1 and 2 have failed to prove that the proposal forms were submitted by the complainant directly to the OPs1 and 2 and OPs 1 and 2 contacted with the complainant about his consent for such several years of premium etc. and OPs have not asserted so.  So, it is clear that everything was done in a casual manner at the behest of the agent and the broker and fact remains it is a social legislation so insurance company shall have to act in a very social and moral manner at the time of selling the product of the insurance company and it is duty of all the insurance officers and staff to come into contact with the applicant whose application is being presented by agent for ascertaining the meaningful execution by the insured and the consent of the insured about the terms and condition but mere signature in a printed form does not ipso facto prove that the insured has executed the same knowing fully well of the content. At the same time IRDA already directed that in the local language the form shall be printed and there must be a preface application in which everything shall be noted that is the terms and condition etc., payment of premium, its term and actual income of the insurance company and insured signature shall be in the local language but in this case that has not at all been done.

          So, considering the above facts and circumstances, and materials we have gathered that complainant has been deceived by the OPs 3 and 4 and in fact their act has been supported by the OPs1 and 2 for which without ascertaining the complainant’s income complainant’s consent, complainant’s realization they prepared two policies as per broker’s and agent’s word.  So, it is proved OPs1 and 2 did not act socially and morally but only relied upon the agent issued policies for their own benefit to create capital but fact remains that their social and moral responsibility as service provider is not discharged and there was no talk in between the service provider and the insured, at the same time complainant’s consent was not taken in meaningful words and manner.  So, in the circumstances, we are convinced to hold that no doubt the entire act on the part of the OPs are deceitful in manner and no doubt mis-selling was done by the OPs3 and 4 on behalf of the OPs1 and 2 and no doubt complainant was deceived due to such mis-sell and, in fact, complainant had no intention to purchase such policies for long year term for payment of total sum of Rs.1,00,000/- per year for long period. 

In the light of the above observation we are convinced to hold that the complainant had no intention to purchase such policies for long term period by paying Rs.1,00,000/- per year and, so material fact proves that complainant was deceived and duped by the OPs3 and 4 who are the agents of OPs1 and 2 so the complaint is proved beyond any manner of doubt and immoral, deceitful manner of act on the part of the OPs are also proved and for which the complainant is entitled to get the entire deposit premium amount after deducting 5 percent out of the same for total deposited premium amount of policies and OPs are directed to refund it along with litigation cost etc.

In the result, the case succeeds also on the ground of deceitful manner of act what has caused mental pain, financial loss to the complainant.

Hence,

Ordered

That the case be and the same is allowed on contest against the OPs1 to 4 with a cost of Rs.10,000/- and cost shall be paid by each OPs to the complainant separately.

          OPs 1 and 2 are hereby directed to refund a total amount of Rs.1,00,000/- to the complainant after deducting 5 percent  as service charge for maintaining the same in the office of the OP, to the complainant after treating all the policies as cancelled within specified time and to pay the sum in cash or by issuing pay order in the name of the complainant within 15 days from the date of this order failing which for non compliance of the Forum’s order penal damage  at the rate of Rs.100/- per day shall be assessed against each OPs till full satisfaction of the decree and if it is collected it shall be deposited to this Forum but even after this it is found that OPs are reluctant to comply this order in that case penal action shall be started against them for which further penalty and fine shall be imposed by them.