BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE

                                                                     Dated this the 31^st of March 2011

PRESENT

                                                     SMT. ASHA SHETTY           :   PRESIDENT

                                                                          SMT.LAVANYA M. RAI       :   MEMBER

                                                                            SRI. ARUN KUMAR K.        :   MEMBER                  

COMPLAINT NO.118/2010

(Admitted on 03.04.2010)

Mr.Benent D Silva,

Aged about 43 Years,

So. Maxim D Silva,

Bens Complex, Padmaleela Park,

Padavu  B, Kalpane, Kulshekar,

Mangalore  575 005.                                   …….. COMPLAINANT

(Advocate for the Complainant: Sri.B.Jinendra Kumar).

          VERSUS

1.  HDFC Standard Life Insurance,

Regd. Office: Ramon House,

H.T. Parek Marg, 169,

Backbay Reclamation,

Mumbai  400 020.

2. Mr.Paresh,

Managing Director,

Ramon House, H.T. Parek Marg,

169, Backbay Reclamation,

Church Gate, Mumbai – 400 020.

3. The Regional Manager,

HDFC Standard Life Insurance,

Kottara, Mangalore – 2.

4. Mr.Ravish,

Area Incharge,

HDFC Standard Life Insurance Co. Ltd.,

Kottara, Mangalore.                            ……. OPPOSITE PARTIES

(Advocate for the Opposite Party No.1 to 4  Sri.P.Ashok Ariga).

                                      ***************

ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:

1.       This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs. 

The brief facts of the case are as under:

The Complainant submitted that, he had invested certain sum of amount in HDFC Standard Life Insurance Growth Fund on 15.03.2007 as per policy No.10957995.  The Complainant noticed in the month of September 2009 that his investment has been shifted to secure managed fund without any authorization from the Complainant.  It is stated that, the Complainant has not been intimated of the switching over to the secure managed fund which has resulted in losses.

The Complainant further submits that, he has discussed in detail with the Opposite Parties regarding the unauthorized transaction in his account which has led to a severe depletion in his funds port-folio.  Subsequently the Complainant has addressed a letter dated 19.09.2009 to the Opposite Party No.3 for which the Complainant has received a reply notice dated 20.11.2009 from the Grievances Redressal Officer HDFC Standard Life, they have admitted unauthorized switch over transaction on 22.01.2008 and 05.02.2008, informed that the same has been corrected by reversing to the original growth fund.  After receipt of the above said notice dated 20.11.2009 from the grievances redressal officer HDFC Standard Life Insurance, the Complainant has addressed another letter dated 30.11.2009 to the Opposite Party informing that only two unauthorized transaction has been reversed and one more unauthorized switch over transaction made on 24.11.2008 has not been looked into.  For the above said letter, the Opposite Party grievances redressal officer intimated the Complainant that, they are unable to reverse the transaction as per their record the signature on the fund switch request letter are matching with the signature of the Complainant proposal form.  It is stated that, the Complainant was shocked to receive the above said letter and submitted that, at no point of time the Complainant has given any request to switch over the transaction.

It is further submitted that, the Company admitted the earlier two switch over transaction and reversed the units to original growth fund, the unauthorized switch over on 24.11.2008 was not accepted by the Company.  It is stated that, had the Complainant investments been in the growth fund without unauthorized switching over to the secured fund on 24.11.2008, the value of the Complainant’s fund would be Rs.7,78,859.51 as on 06.01.2010. On account of unauthorized switch over on 24.11.2008 caused loss to the Complainant, the value of the fund is now Rs.3,08,096.47.  It is stated that, because of the deficiency on the part of the concerned officials the Complainant has suffered financial loss to the tune of Rs.4,70,763.04.  Feeling aggrieved by the above, the Complainant issued a legal notice dated 06.01.2010 calling upon the Opposite Parties to make good the loss immediately but he Opposite Parties not complied the same.  Hence the above complaint filed under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Parties to pay a sum of Rs.4,70,763.04 and also Rs.25,000/- claimed as compensation and cost of the litigation expenses. 

2.       Version notice served to the Opposite Parties by RPAD. Opposite Parties appeared through their counsel filed common version and stated that, the Complainant has invested in HDFC Regular Premium Pension Plus with a Half Yearly Premium of Rs.2,50,000/- dated 15^th March 2007.  The Complainant has allocated the entire amount of the premiums to be invested in the Growth Fund.  The Complainant has reduced the premium to Rs.10,000/- as per the request letter dated 3^rd March 2008. It is stated that, the Opposite Parties have received the fund switch request with regard to the policy from the Complainant.    It is stated that, the Opposite Parties have received the letter dated 19^th September 2009, wherein the Complainant has stated that there was unauthorized shifting of his investment from the Growth fund to Secure Managed Fund.  The Opposite Party re-considering the case of the Complainant and after perusing the documents submitted for the Fund Switch over, has reversed the two fund switch transactions along with all its benefits which was done on 22^nd January 2008 and 4^th February 2008 and the same was informed to the Complainant wherein approximately 712 units were added to his investment with a Net Asset Value approximately raising upto Rs.19,919/-.  The Opposite Party has also sent a letter regretting the reversal of the third transaction which has been done on 22^nd November 2008 since the signature in the request letter submitted matches with the signature of the Complainant in the proposal form, the third transaction was denied based on the genuineness of the signature in the fund switch request when compared against the signature of the Complainant in the proposal forms.  It is further stated that, the Complainant has not made out any deficiency of service on the part of the Opposite Party since as a good service gesture and all the notices were answered and the grievance of the Complainant was redressed based on the legitimacy/authenticity of the same.  Opposite Parties stated that, there is no cause of action made out by the Complainant for the filing this complaint and stated that, this FORA has no jurisdiction to entertain the complaint since the allegation made by the Complainant in his complaint with regard to forgery and creation of false document, the impugned matter involves determination of detailed facts which cannot be established except on detailed evidence, both oral and documentary as to whether any fraud, forgery committed by the Opposite Parties and stated that, the complaint under summary proceedings is not possible and prayed for dismissal of the complaint. 

3.       In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the Complainant proves that the Opposite Parties committed deficiency in service?

2. If so, whether the Complainant is entitled for the reliefs claimed?

3. What order?

4.         In support of the complaint, Mr.Benent D’Silva (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him.   Ex C1 to C9 were marked for the Complainant as listed in the annexure.   One Sri. Sunil B. Shankar (RW1), Zonal Legal Manager of the Opposite Parties filed counter affidavit and answered the interrogatories served on him.  Ex R1 and R2 were marked for the Opposite Parties as listed in the annexure.   Both parties produced notes of arguments.

          We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:                          

                       Point No.(i): Affirmative.

                       Point No.(ii) & (iii): As per the final order.   

Reasons

5.  Point No. (i) to (iii):

The facts which are not in dispute is that, the Complainant had invested in HDFC Standard Life Insurance Growth Fund on 15.03.2007 as per policy No.10957995 (i.e., Ex C1).  It is also admitted that, under the said policy, the HDFC Standard Life Insurance Company Limited and the policy holder i.e., the Complainant entered into a contract based on the proposal made by the policy holder.  The above said policy is written and will be governed by the applicable laws in-force in India.  The installment premium is Rs.2,50,000/-, the mode of payment is half yearly from the date of commencement and the final premium due on 15.09.2011 and the investment is for 11 years.  That means, the policy is still in force.

Now the point in dispute between the parties before this FORA is that, the Complainant came up with this complaint stating that, he has been paying the premium regularly but in the month of September 2009 he has noticed that his investment has been shifted to secure managed fund without any authorization from the Complainant.  Thereafter Complainant discussed with the Opposite Parties with regard to the unauthorized transaction in his account and addressed a letter to the Opposite Party No.3 dated 19.09.2009 (i.e., Ex C2) and received a reply from the Opposite Parties dated 20.11.2009 (i.e., Ex C3) admitted the unauthorized switch over transaction on 22.01.2008 and 05.02.2008 and also informed the Complainant that it has been corrected by reversing to the original growth fund.  It is further stated that, according to the Complainant, the one more unauthorized switch over transaction made on 24.11.2008 has not been looked into and addressed a letter to the Opposite Parties but the Opposite Parties replied that the Complainant had given a request letter to switch over the transaction from growth fund to secured fund. According to the Complainant, he had not submitted any request letter to switch over the fund from growth fund to secured fund.  The Complainant stated that, because of the unauthorized switch over, he had incurred financial loss to the tune of Rs.4,70,763.04, hence this complaint.

Per contra, the Opposite Parties contended that the Complainant had given request letter to the Opposite Parties to switch over the growth fund to the secured fund, accordingly they have switched over the growth fund to secured fund and contended that there is no deficiency.

The Complainant filed oral evidence by way of affidavit and produced Ex C1 to C9.  Opposite Parties also filed oral evidence by way of affidavit and produced Ex R1 and R2.

On scrutiny of the oral as well as documentary evidence available on record, we find that, the Complainant is the policy holder of HDFC Unit Linked Pension Plus Policy for 11 years. There is no dispute with regard to the payment of premium or any other matter.  The only dispute in this case is that, according to the Complainant, without the authorization of the Complainant on three occasions the Opposite Parties switched over the amount under this policy into the another policy i.e., secured fund policy and caused financial loss.  It is stated that, two unauthorized switch over amount has been reversed to the Complainant’s account but the 3^rd switch over dated 24.11.2008 transaction has not been reversed by the Opposite Parties.  But the Opposite Parties contended that, the Complainant had given request letter to switch over the above amount to the secured fund and relied Ex R1 and R2 i.e., Unit liked proposal form i.e., request form for fund switch and premium redirection.  However, we have perused the very important document i.e., Ex C2 a letter dated 19.09.2009 addressed by the Complainant to the Opposite Parties, wherein the Complainant specifically stated that, he had invested amount in growth fund in the year 2007 but during the continuation of the policy he has noticed that his investment has been shifted to secure managed fund without his knowledge or authorization which resulted in loss and he had asked to set-right the matter at the earliest.  For the above said letter the Opposite Parties i.e., HDFC Standard Life Insurance Grievances Redressal Officer addressed a reply and stated as under i.e., Ex C3.  The same has been re-produced for the better appreciation:-

                                                                 H D F C

                                                                         STANDARD LIFE

November 20, 2009.

Mr.Benet D’Silva,

Bens Complex Padmalela Park,

Padavu B Kalpane,

Kulshekar,

Mangalore – 575 005,

Karnataka.

            Sub: Investment Status of your Unit Linked Pension Plus Plan.

            Ref.: Policy No.10957995

Dear Mr.D’Silva,

            This is with reference to your letter dated on September 19, 2008, where in you have stated that you have never requested for fund switch.

            We regret the inconvenience and disturbance caused to you in this regards.

            We confirm that the fund switch transactions processed on January 22, 2008 and February 5, 2008 are reversed to the original growth fund.

            We assure you that we the matter has been highlighted to the concerned department and corrective measure are put in place to avoid the recurrence of such instances in future.

            Further, we wish to inform you that the current status of your policy is ‘Inforce’.  The next renewal premium of Rs.10,000/- is due on March 15, 2010.

            For any further queries or clarifications, please contact us through any of the following modes:

Write to us at our correspondence address mentioned in the footnote

Call us toll free on ………………

Send us a call …………………………….

………………………

Yours sincerely

For HDFC Standard Life Insurance Co. Ltd.

      Sd/-

Pramila Bangera

Grievance Redressal Officer.

          It is pertinent to note that, in the above said letter the Opposite Parties reversed two transactions processed on 22^nd January 2008 and 5^th February 2008.  But with regard to the transaction dated 24.11.2008 there is no whisper in the above letter.  If at all the Opposite Parties obtained a request letter from the Complainant, it would have been find a place in the above said letter because the alleged 3 transactions took place in the same year i.e., in the year 2008.  We are very surprise to note that, what the impediment was caused to the Opposite Parties to disclose the above matter if at all the Complainant issued request letter.  Apart from that, on scrutiny of the Ex R2 i.e., the alleged disputed request letter dated 24.11.2008, the Opposite Parties not produced original of the  above said documents at the earlier stage and later the same has been summoned by this Forum after hearing the arguments of the Opposite Parties.   On careful scrutiny/comparison of the signature found in Ex R2 with the signature found in the proposal form, earlier correspondences,  vakalathnama as well as affidavit of evidence in chief filed before this FORA, we noticed that, the slant/stroke found in the signature of Ex R2 is differ from the signature found in the above documents.  After comparing the above signature, we are of the opinion that the signature found in Ex R2 i.e., the request for fund switch and premium redirection is not of the Complainant.   The same has been created for the purpose of this case, hence, we are declined to accept that the request form for switch over of the fund is submitted by the Complainant.  Further we also noticed that, when the Complainant disputed the earlier two transactions i.e., 22.01.2008 and 05.02.2008, the question of giving authorization for the 3^rd alleged transaction made on 24.11.2008 cannot be believed that he has consented/authorized for the above transaction.  As we know, no prudent person ready to loose the benefits. 

           In the instant case, we observed that, the Complainant had opted for growth fund policy and paid the premium regularly, the policy is in force.  When that being the case, it is very hard to believe that the Complainant issued a request letter to switch over the amount to secure managed fund.  By taking into consideration of the above discussion, we are of the opinion that, the document produced by the Opposite Parties cannot be believed and the request letter form produced by the Opposite Parties’ officials just to overcome the mistake committed by them.  As we pointed out herein above, the signature found in the alleged request letter is not tallying with the signatures found in other documents, hence the contention of the Opposite Parties that complainant submitted request form for fund switch cannot be considered in this case. 

          In view of the above discussion, it is proved beyond doubt that the Opposite Parties without the authorization from the Complainant switched over the amount on three occasions i.e., on 22.01.2008, 05.02.2008 and on 24.11.2008. No doubt, the unauthorization transaction dated 22.01.2008 and 5.2.2008 have been reversed but the unauthorized transaction dated 24.11.2008 has not been reversed but on the other hand, the officials of the Opposite Party company in order to avoid their burden created a document i.e., Ex R2 and produced before the FORA, which cannot be accepted in this case as genuine. 

          On overall seeing the material on record, we find that, some lapse has been committed by the Opposite Parties’ officials while doing switchover transaction. But in the instant case, Opposite Parties made unauthorized switch over transaction without the knowledge of the Complainant which amounts to deficiency in service. 

          In view of the foregoing reasons, we hold that, the Complainant is entitled for the adequate compensation as well as the loss suffered by him in the above unauthorized transaction. However, we have noticed that, the 1^st and 2^nd unauthorized transaction has reversed along with all its benefits and added to his investment with a net asset value.  Similarly, the Opposite Parties shall reverse the unauthorized transaction dated 24.11.2008 along with all its benefits prevailed on the above said date shall be added to investment of the Complainant with a net asset value.  And also we hereby direct the Opposite Parties to pay compensation of Rs.15,000/- for the harassment and inconvenience caused to the Complainant.  The HDFC Company is at liberty to recover the above said compensation from the erred official.  Apart from that, Rs.1,000/- awarded as cost of the litigation expenses.  Compliance/payment shall be made within 30 days from the date of this order.

6.       In the result, we pass the following:                                  

ORDER

          The complaint is allowed.  The Opposite Parties i.e., HDFC Standard Life Insurance Company Limited represented by its Managing Director or Regional Manager or Area In-charge are hereby directed to reverse the unauthorized transaction committed on 24.11.2008 along with all its benefits prevailed on the above said date shall be added to investment of the Complainant with a net asset value.  Further the Opposite Parties are directed to pay Rs.15,000/- (Rupees fifteen thousand only) as compensation and Rs.1,000/- (Rupees one thousand only) as cost of the litigation expenses.  Compliance/payment shall be made within 30 days from the date of this order.

 On failure to comply the above said order, the compensation and cost of Rs.16,000/- shall also carry interest at the rate of 10% p.a. from the date of failure till the date of payment.

The copy of this order as per the statutory requirements be forwarded to the parties free of charge and therefore the file be consigned to record.

(Page No.1 to 14 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 31^st day of March 2011.)

    PRESIDENT                    MEMBER                       MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – Mr.Benent D’Silva – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 – 16.03.2007: Copy of the HDFC Standard Life Insurance Policy No.10957995.

Ex C2 – 19.09.2009: Letter issued by the Complainant to the Opposite Party No.3.

Ex C3 – 20.11.2009: Reply from Prameela Bangera, Grievance Redressal Officer HDFC Standard Life.

Ex C4 – 30.11.2009: Letter issued by the Complainant.

Ex C5 – 09.12.2009: Letter from Prachi Dhapare to the Complainant.

Ex C6 -                  : Copy of the Email show the loss occurred to the Complainant.

Ex C7 – 06.01.2010: Lawyer’s notice issued by the Complainant to the Opposite Parties.

Ex C8 – 21.02.2010: Reply notice issued by the Opposite Party.

Ex C9 -                 : Acknowledgement (5 in numbers).

Witnesses examined on behalf of the Opposite Parties:

RW1 – Sri. Sunil B. Shankar, Zonal Legal Manager of the Opposite Parties.

Documents produced on behalf of the Opposite Parties: 

Ex R1 – Notarized copy of the proposal form.

Ex R2 – Notarized copy of Fund Switch and Premium Re-direction request letter.

Documents produced by the Opposite Parties:

Doc. No.1: 22.01.2008: Original of the Fund Switch over request letter.

Doc. No.2: 04.02.2008: Original of the Fund Switch over request letter.

Dated:31.03.2011                                 PRESIDENT