Chandigarh

DF-II

CC/463/2015

Sh. Veneet Gupta - Complainant(s)

Versus

ICICI Prudential Life Insurance Co. - Opp.Party(s)

Sh. Varun Chawla Adv.

03 Apr 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

Consumer Complaint  No	:	463 of 2015
Date  of  Institution	:	21.08.2015
Date   of   Decision	:	03.04.2017

 

 

 

 

1]   Sh.Veneet Gupta s/o Keshab Chand Gupta,

2]   Nakul Gupta s/o Sh.Veneet Gupta s/o Keshab Chand Gupta,

Both resident of House No.31, Sector 15, Panchkula

 

              …………..Complainants

 

VERSUS

 

1]   ICICI Prudential Life Insurance Co. Ltd., SCO No.134-135-136, First Floor, Madhya Marg, Sector 8C, Chandigarh 160009 through its Branch Manager.

 

2]   ICICI Prudential Life Insurance Co. Ltd., Registered Office: ICICI PruLife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025 through its Managing Director

 

3]   ICICI Bank, SCO No.237-238, Sector 20, Panchkula through its Branch Manager.

 

…………… Opposite Parties

 

 

                     AND

Consumer Complaint  No	:	502 of 2015
Date  of  Institution	:	09.09.2015
Date   of   Decision	:	03.04.2017

 

 

 

 

1]   Sh.Keshab Chand Gupta s/o Sh.Nand Kishore, resident of House No.31, Sector 15, Panchkula.

 

2]   Arjun Gupta s/o Sh.Veneet Gupta s/o Keshab Chand Gupta, r/o E-301, BuildinE, Pristine, Prolife Society, Wakad, Pune-411057, through Sh.Keshab Chand Gupta s/o Sh.nand Kishore, R/o House No.31, Sector 15, Panchkula.

 

 

              …………..Complainants

 

VERSUS

 

1]   ICICI Prudential Life Insurance Co. Ltd., SCO No.134-135-136, First Floor, Madhya Marg, Sector 8C, Chandigarh 160009 through its Branch Manager.

2]   ICICI Prudential Life Insurance Co. Ltd., Registered Office: ICICI PruLife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400025 through its Managing Director

 

3]   ICICI Bank, SCO No.237-238, Sector 20, Panchkula through its Branch Manager.

 

…………… Opposite Parties

 

 

BEFORE:   SH.RAJAN DEWAN          PRESIDENT

                                MRS.PRITI MALHOTRA           MEMBER

SH.RAVINDER SINGH            MEMBER

                            

Argued by: Sh.Varun Chawla, Counsel for complainant.

Sh.Gaurav Bhardwaj, Counsel for OPs No.1 & 2.

Sh.Sandeep Suri, Counsel for OP-3.  

 

 

RAVINDER SINGH, MEMBER

 

 

        The above mentioned two consumer complaints No.463/2015 & 502/2015 are within the same parties and also have common/similar and identical facts in issue and hence decided by this common judgment.

2]       The facts are being taken from the present Complaint Case No.463 of 2015 – Veneet Gupta & Anr. Vs. ICICI Prudential Life Insurance Co. & Ors.

 

3]       The facts in issue are that the complainants being allured by the assurances of representative of OPs to get high returns and good profit, purchased ICICI Pru Assure Wealth-Super policy of OPs commenced from 18.3.2010 (Ann.C-1) by paying the premium thereof.  It is averred that after first year of the policy, the premium mode was changed to monthly installment of Rs.16,667/- and paid directly to Opposite Parties through ECS (Electronic Clearing System) upto Feb., 2015.  However, the OPs also deducted the amount for the month of March, 2015, which was refunded only after much persuasion and exchange of e-mail communication. 

         It is stated that in March, 2015, when complainant approached OPs for surrender of the policy, he was shocked to know it to be approx.. Rs.10,48,000/- only against his invested amount of Rs.10,00,016/- whereas he was assured minimum appreciation @12% on the invested amount.  It is also stated that the OPs also told him that the surrender value being offered does not include the first year premium of Rs.2.00 lakh and the complainants can get the refund of full amount only after completion of policy term of 15 years, thus forcing the complainants to continue the policy for such period, whereas the representative of the OPs at the time of proposing for the policy imparted that the policy can be surrendered any time after 3 years without any surrender penalty. Alleging the above act & conduct of the Opposite Parties as deficiency in service and unfair trade practice, hence this complaint has been filed.

 

4]       The OPs NO.1 & 2 have filed joint reply and while admitting the factual matrix of the case, stated that the policy in question has been issued to the complainants as has been proposed by him vide proposal form Ann.R-1.  It is submitted that the complainants had not approached the OPs during the free look period, as provided in the policy document, by returning it within 15 days period thereby implying that he had agreed to all the terms & conditions of the policy. It is also submitted that the complainants have failed to provide any documentary evidence to show that the policies were sourced to him with any false assurances. It is further submitted that perusal of terms & conditions of the policy clearly states that the surrender value will be the fund value, which will be payable after a period of three years and the complainant/policyholder is eligible for the fund value. It is asserted that the fund value of the policy may increase or decrease as per market fluctuations and the OPs are not responsible for the volatility of the market.  It is also asserted that the OPs reversed the premium of Rs.16,667/- on 21.5.2015 received by it through ECS for the month of March, 2015 to the complainant’s account via direct credit.  It is further asserted that the company is not liable to refund the amount, as demanded by the complainants, but is liable to pay only the surrender value and that too solely in accordance with the policy terms & conditions.  The OPs No.1 & 2 have also stated that the complainants are resident of Panchkula and has taken the policy at Panchkula and as such the District Consumer Redressal Forum, Chandigarh has no territorial jurisdiction to hear this complaint. Rest of the allegations have been denied with a prayer to dismiss the complaint, there being no deficiency in service on their part.    

 

         The OP NO.3 has filed short reply stating that no relief is per se made out against the OP No.3 in as much as the dispute is only in relation to the policy of insurance, which has been availed of by the complainants from the OPs NO.1 & 2.  It is also stated that no amount has been paid by the complainants to the OP No.3 and in case any amount is to be refunded, the same is to be refunded by OPs No.1 & 2 i.e. insurance company. It is further stated that the dispute is only in respect of the insurance company and not in respect of the bank.  Pleading no deficiency in service and denying rest of the allegations, OP No.3 has prayed for dismissal of the complaint.  

 

5]       The complainants also filed rejoinder reiterating contentions as raised in the complaint.

 

6]       Parties led evidence in support of their contentions.

 

7]       We have heard the ld.Counsel for the parties and have carefully examined the facts and pleadings along with entire evidence on record.

 

8]       The status of ICICI Pru Assure Wealth Policy (Ann.R/2) of Nakul Gupta is shown/scanned as follows:-

9]       The policy holder opted for Dynamic P/E Fund, which envisage to provide Long Term Capital appreciation through dynamic asset allocation between equity and debt.  The allocation to equity and equity related securities is determined by reference to the P/E multiple on the NIFTY 50%, the remainder is to be invested in debt instruments, money market and cash.

 

10]      The first premium of Rs.2,00,000/- deposited by the complainants on 18^th March, 2010 has been charged as premium allocation charges and whole amount of premium has been confiscated leaving no amount for any investment. 

 

11]      In the subsequent years of policy also, huge charges have been levied as per details given below:-

Policy Year	Annual Premium  Rs.	Premium  Allocation Charges Rs.	Mortality Charges Rs.	Service Tax Rs.	Policy Admn. Charges Rs.	Fund Management Charges Rs.
2011	200000	8000	939	1259	600	2686
2012	200000	8000	719	1535	600	5587
2013	200000	8000	451	1832	600	8735
2014	200000	8000	137	2151	600	12151

 

12]      On the face of record, the deductions made by the OPs are outrageous and cannot stand the test of judicial scrutiny.

 

13]      The Hon’ble Supreme Court of India in United India Insurance Co. Ltd. Vs. Harchand Rai, Chandan Lal, reported as (2004) 8 SCC 644 has held:-

“a policy should be a meaningful policy so that a common man can understand its pros and cons”

           

14]      The Hon’ble Supreme Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., decided on 22.2.2000 held:-

‘It is not only the duty of the insured but also the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally.’

   

15]      The consumer deserves to get what he pays for in real quantity and true quality.  In every society, consumer remains the centre of gravity of all business and industrial activity.  He needs protection from the manufacturer, supplier, wholesaler, retailer, as well as the service provider.  There is dire need to protect the interest of investors too. 

 

16]      The deductions as made out in the present case are unfair on the part of OPs No.1 & 2.  Such fraudulent unfair trade practices caused great distress to the system shaking the faith of the common person in the rule of law.

 

17]      The Insurance Regulatory and Development Authority (IRDA) vide notification F.No.IRDA/Reg/10/2002 dated 16.10.2002 provides;

“The prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of insurance cover.”

 

18]      There ought to be a proper regulatory framework to address genuine concerns of customers, who invest in mutual insurance sector with a vision to see their money grow, but found cheated at the hands of companies. 

 

19]      The deductions made by OPs in the present case, out of investment amount deposited by the complainants, being unfair and unreasonable and shock the conscience of public at large and required to be adjudged void. 

 

20]      Sh.M.K.Sharma, Chairman, Board of Director, ICICI, while presenting annual report 2015-16 announced:-

“The ICICI franchise is unique in that it extends beyond banking to outstanding franchises in every segment of financial services.  It is a matter of great satisfaction that the value created by the insurance businesses of the group was demonstrated during the year through investments in each of the subsidiaries.  This further adds to the group’s financial strength and its platform for capitalization on the vast growth potential for financial services in India.”

 

21]      Ms.Chandra Kochar, MD + CEO also during her annual report for the year 2015-16 disclosed that ICICI achieved an operating profit of Rs.238.63 billion a year on year growth of 21%.  Other segments of financial services, like insurance and mutual funds witnessed healthy growth.  ICICI Prudential Asset Management Company became the largest Mutual Fund in India with assets under management of over Rs.1.8 trillion.

 

22]      ICICI total assets reported in Annual Report for 2015-16 are:-

Financial Year	Assets in Rs.(Billion)
2012	4890.69
2013	5367.99
2014	5946.42
2015	6461.29
2016	7206.95

 

23]      The consolidated profit after tax, as per annual report 2015-16 is reported as under:-

Year	Rs. in Billion
2012	76.43
2013	96.04
2014	110.41
2015	122.47
2016	101.80

 

24]      The ICICI Prudential Asset Management Company has built-up a huge empire at the cost of investors but always project downfall in the market, while disbursing the claims of the innocent customers.

 

25]      The OPs have failed to prove that complainant/insured was ever apprised properly about the details of the policy or its terms & conditions before getting the proposal signed from him or afterwards thereto.   

 

26]      The objection regarding lack of territorial jurisdiction by this Forum at Chandigarh are unfounded and overruled.  The ICICI Prudential Life Insurance Company has its office in Chandigarh and as such this Forum has the jurisdiction to hear the present complaint.

 

27]      Keeping into consideration the facts as discussed in preceding paragraphs, the deduction of Rs.2,00,000/- (Two Lakhs) first year’s premium deposited by the complainants on the pretext of premium allocation charges, held to be illegal and an unfair trade practice on the part of Opposite Parties NO.1 & 2.  As such, the complaint is hereby allowed against OPs NO.1 & 2 with following directions:-

1. To pay Rs.2,00,000/- along with interest @12% p.a. w.e.f. 18.3.2010 till realization to the complainant/policy holder, apart from surrender value of the policy, if not paid;
2. To pay Rs.50,000/- compensatory cost on account of mental agony and harassment to the policyholder/complainant.
3. To pay litigation cost of Rs.10,000/- to the complainant/policy holder

   

28]      Similarly, the connected complaint Case NO.502 of 2015 – Keshab Chand & Anr. Vs. ICICI Prudential Life Insurance Co. Ltd. & Ors., is also allowed against OPs NO.1 & 2 with following directions:-

1. To pay Rs.2,00,000/- along with interest @12% p.a. w.e.f. 18.3.2010 till realization to the complainant/policy holder, apart from surrender value of the policy, if not paid;
2. To pay Rs.50,000/- compensatory cost on account of mental agony and harassment to the policyholder/complainant.
3. To pay litigation cost of Rs.10,000/- to the complainant/policy holder

 

         The OPs No.1 & 2 shall comply with this order within a period of 30 days from the date of receipt of copy of this order, failing which they shall also have to pay penal amount of Rs.1.00 lakh each and deposit the same in the account of Secretary, State Consumer Disputes Redressal Commission, UT, Chandigarh, which shall be utilized for purchase of law books, references etc. for State Commission & District Fora and Bar.

 

29]      However, the complaint qua OP No.3 stands dismissed.

 

30]      A copy of this order be placed in connected complaint Case NO.502 of 2015 – Keshab Chand & Anr. Vs. ICICI Prudential Life Insurance Co. Ltd. & Ors., which shall be deemed to form a part of that order.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

03^rd April, 2017                            Sd/-

(RAJAN DEWAN)

PRESIDENT

 

 

Sd/-

 (PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER