IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA

Thursday the  30^th  day of  November, 2023

Filed on: 28.04.2023

Present

Smt. P.R.Sholy, B.A.L, LLB  (President in Charge )

In

CC/No.109/2023

     between

Sri. K.Krishnakurup                                                    1.  Executive Vice President

S/o K.N.Velayudhakurup                                                            (Technology & Service Delivery) 

Mayooram House                                                                         ICICI Prudential Life Insurance Company (P) Ltd

Komana Muri                                                                         Vinod Slik Mills Compound,

Ambalappuzha, PW-13                                                                Chakravathy Asok Road, Kantivali (East)

Ambalappuzha-688561                                                                Mumbai-400101, Maharashtra      

Alappuzha                                                                   (Adv. Saji Isaac.K.J)                        

(Adv. P.K.Sadanandan)                                             2.   Manager,  ICICI Prudential Life Insurance

                                                                                                    Company Pvt.Ltd, Dist Office, Opp to

                                                                                                   Mathrubhumi Office, Alappuzha -688011

                                                                                                (Exparte)

O R D E R

SMT. SHOLY.P.R (PRESIDENT IN CHARGE)

Complaint filed u/s 35 of the Consumer Protection Act, 2019.

1.       Brief fact of complainants case are as follows:-

Under the strong compulsion and attractive offers and benefits narrated by 2^nd opposite party, the complainant happened to subscribe a life insurance policy of 1^st opposite party by name ICICI PRU  Pinnacle Super – L P UIN105L 121 VO3 of sum assured Rs. 5,00,000/- (5 lakhs)  having a term of 10  years in which yearly premium amount is Rs. 50,000/- (Fifty thousand only). The first payment of the premium was on 6/9/2013 at the office of the 2^nd opposite party at Alappuzha.  Thereafter on different  dates such as 6/9/2015, 6/10/2016, 13/9/2017, 1/1/2017 and 29/3/2018 the complainant paid Rs. 2,50,000/- (Two lakh fifty thousand only) in favour of the 1^st opposite party through the complainants bank account.

          On the basis of the total payment of Rs. 2,50,000/- (Two lakh fifty thousand only),  as per the terms of policy agreement the complainant had to eligible to get a total amount of Rs. 4,00,000/- (Rupees Four lakhs) as different benefits, profits from share market along with interest etc from the opposite parties and thereby the complainant applied for surrendering the policy on 27/4/2021.  On 21/5/2021 the complainant had got only an amount of Rs. 1,64,568.15/- from the 1^st opposite party through his bank account.  Aggrieved by the same though the complainant sent registered  notice and call  over telephone, there was no response from the part of the opposite parties.  Hence alleging deficiency in service and unfair trade practice on the side of opposite parties, complainant filed this complaint for  declaration and to refund of Rs. 2,35,432/- along with interest @ 12% being the balance amount of surrender value of Rs.  4 lakhs deducting the accepted amount of Rs. 1,64,568.15./-

2.        Version filed by  the opposite party is as follows:-

 This commission has no jurisdiction to entertain the complaint as Unit Linked Policies are driven by the Share market & therefore no person can certainly commit on its performance and therefore the investment made under Unit Linked Policy is a  speculative gain and speculative investment  matter does not come under Consumer Protection Act. The company had made amply clear in the first sentence of the policy terms and conditions that the present policy is a unit linked insurance policy and the risk in the investment portfolio is borne by the policy holder.

 Therefore, it is clear that the complainant had willingly and voluntarily invested in the market linked policy, knowingly undertaking to bear the risk of market fluctuations and the consequent consequences and also being aware of the fact that the said investments are majorly made in the  equity market.  Thus, the complainant had invested for securing profits of market investment and to make speculative benefits of the better performance in the market. In the present complaint allegations levied by the complainant are for receiving an amount lesser than the amount invested in the market hence the present litigation is clearly for a  speculative gain and hence is to be dismissed on these lines alone.

          The terms of the policy are in the nature of a contract and their interpretation has to be made in accordance with the strict construction of the contract. The words in an  insurance contract must be given paramount importance and interpreted as expressed without any addition, deletion or substitution.  This Commission cannot pass any order in contravention to the terms and condition of the policy contract.

The terms and conditions of the policy clearly stipulates that the mortality charges and policy administration charges shall be deducted by the cancellation of units  and the same was duly complied to by the opposite party company subject to market and other risks. That the terms and conditions of the policy clearly that the proceeds of the policy is invested in the market and will be subject to market conditions. Further the complainant was an advisor with the opposite party company from  2013 -2023 and was well aware of the policy feature and  touch points of the company as he  himself has sourced the subject policy for himself. If the complainant had any grievance regarding the same, then he should have approached company in the freelook period. The complainant cannot claim higher returns after the surrendering  of the policy and receiving the surrender value of Rs. 1,64,568.15/- as per clause 5.1 of the policy terms and conditions.

 An insurance policy is issued as per the mandate submitted by the proposer. The complainant submitted a proposal in the form of an application form/proposal form to the company and the opposite party company issued  the policy strictly on the basis of the  mandate given by the complainant and issued the insurance policy in conformity with the insurance  proposal received by it.  The complainant is not expected to invest money, especially a huge amount of Rs.2,50,000/- without fully satisfying himself regarding the terms and conditions of the policy.  The complainant at the time of availing the policy was 65  years old and the policy bearing number 18044297 was issued on  06/09/2013 to the Life Assured.

Since the subject policy is a ULIP policy, the extra premiums were deducted by way of cancellation of units as clearly  mentioned in the terms  and conditions. Hence the present complaint is nothing but an  afterthought to extract the money, which has gone towards charges of the  policy. The terms and conditions of the policy very clearly state that the  mortality charges and policy administration charges shall be deducted by  cancellation of units. Hence the same was clearly aware by the  complainant. The complainant cannot claim higher returns after the surrendering of the policy and receiving  the surrender value of Rs.  1,64,568.15/- as per clause 5.1 of the policy terms and conditions. The policy holder cannot simply place  reliance on  oral promises provided by anyone purportedly on behalf of an insurance  company and  the insurance company is under no obligation to issue a policy in accordance with such oral promises and assurances. It is settled principle of law that if any person signs any document, it is presumed that he/she has signed the same after reading and understanding it properly.

 In accordance to clause 4(1) & 6(2) of the Insurance Regulatory and Development Authority ( Protection of policy holder’s Interests) Regulations, 2002, an  insurance company is required to send a welcome kit consisting of policy terms and conditions, forwarding letter and a copy of the proposal form to  the policy holder in order  for the same to reviewed by him and approach the company within free look period for the cancellation or change in the policy terms.  The complainant retained the policy document and did not raise any objection during the free look period with any of his grievance regarding the policy or its terms and conditions.  The complainant has not disputed the receipt of the same and has himself annexed the policy documents along with the present complaint.  The complainant did not approach the opposite party company to raise any discrepancy in terms and conditions.  More importantly, the complainant kept on paying the renewal premiums for  5 years and  had also  opted for a fund switch on 17/1/2019.  The plan/subject policy opted by the complainant was an insurance/ investment plan. Along with the investment option, the opposite party company had duly covered the risk on the life of the complainant from September 2013-May 2021 as the primary service rendered by the company was that of an insurance policy.  The complainant wanted to cover his life as well as obtain lucrative returns hence the reason why he choose a ULIP policy.  In a ULIP policy, premium paid by the complainant will only be invested in the market after deducting the charges as mentioned in the terms and  conditions unlike other products (Mutual funds or share trading) wherein the entire fund  is invested in the market.

          Under the plan opted by the complainant, he was covered by the company for Rs. 5 lakhs from 6/9/2013 to  4/5/2021. Had any unfortunate event occurred during the said period, then the opposite party company  would have had to honor the full claim amount of Rs. 5 lakhs to the nominee. Since the same is an  insurance policy, for undertaking the risk on the life  of the  complainant, the opposite party company deducts mortality charges from the units and  only the remaining units are invested in the market. Therefore the complainant merely cannot raise any grievance for not receiving the  desired returns from the policy after receipt of the surrender value of Rs. 1,64,568.15/- as per clause 5.1 of the terms and conditions. 

The complainant himself was appointed as the advisor of the opposite party company on 14/8/2013 and continued to be an advisor till 10/3/2023 and hence  is well aware with the touch points of the company as well as the policy terms and conditions. Therefore, he cannot alleged that he was induced to take the subject policy.  It is evidence on the face of  proposal form that complainant was capable enough  to read and understand the policy terms and conditions and hence the presumption is that he signed the same after going through its contents and understanding the same thoroughly. It has also been clearly written in the benefit illustration that risk in the investment portfolio and that the risk involved as the fund value is subject to market fluctuations and market forces.   It is also pertinent that the Benefit Illustration clearly explains the projected annualized charges deductible from the policy during the continuation of the policy and the amount available or surrender of the policy at the end of each policy year.

In this case as mentioned in the preceding paragraphs, it is submitted that the subject policy is a Unit Linked Policy (Share Market Linked) wherein the policy  fund value may appreciate or depreciate based on the performance of investment, fund  in which the amount was invested, fund in which the amount  was invested, mortality charges – which are linked to the age of the Life Assured, administration  charges and various factors influencing the capital market.  Accordingly due to such high charges, the fund value of Rs. 1,64,568.15/- was paid to the complainant on the surrender of the policy.  Since there is no deficiency on the part of the opposite party company, that the complaint does not raise any Consumer Disputes as defined  under the Consumer Protection Act.  The deficiency in service has to be distinguished from the  tortious acts of the opposite party. In the absence of deficiency in service the aggrieved person may have a remedy under the common law to file a suit for damages but cannot insist for grant of relief under the Act for the alleged acts  of commission and omission  attributable  to the opposite party which otherwise do not amount to deficiency in service.

3.       On the above pleadings following  points for consideration are:-

1. Whether the complaint is maintainable before this Commission?

2. Whether there is any deficiency in service from the part of opposite parties?

3. Whether the complainant is entitled to the reliefs sought for in the complaint?

4. Reliefs and costs?

 4.      Evidence in this case consists of oral evidence of PW1 and Ext.A1 to A7 on the side of complainant and Ext.B1 to B9 on the side of the opposite parties.

5.       Point  No.1:-

 Admittedly the  insurance policy taken by the complaint from the opposite parties is under ULIP in which  the premium amount divided into two parts, one is  insurance and the other part is allotted to investment. As knows from Ext.A5 this multiple benefit reiterated from Ext.B3. The learned counsel  appearing for the 1^st opposite party raised a  contention in their version that this commission has no jurisdiction to entertain the dispute regarding Unit Linked Policies.  Relying upon the rulings placed by the counsel for the 1^st opposite party in Smt. Paramjit Kaur. V.  Aviva Life Insurance Co. Ltd held by the Hon’ble State Consumer  Dispute Redressal Commission  Chandigarh and in Ram Aggarwal. Vs. Bajaj Allianz Life Insurance Co. Ltd.  & Anr. 111 2013 CPJ 203 (NC) held by the Hon’ble National Commission we have no jurisdiction to entertain the present case as the same is not maintainable before the Consumer Commission. Accordingly the complaint is not maintainable.

6.       Point No.2 & 3:-

Considering the merits of the complaint we discussed these points as follows:-

The complainant’s case is that he had subscribed a life insurance policy of  1^st opposite party, the plan named ICICI PRU Pinnacle Super LPUIN 105 L 121 VO3 having policy certificate No.18044297.  The complainant who is  a retired employee of the Minerals and Metals Trading Corporation, New Delhi pleaded that he happened to subscribe this policy under the strong compulsion and attractive offers and benefits narrated by 2^nd opposite party. The total sum assured is Rs.5 lakhs and the duration of the policy is 10 years in which the yearly premium amount is Rs. 50,000/- for first  5 years.   The policy period commencing from 6/9/2013 when the complainant had paid the 1^st premium amount of Rs. 50,000/- to  the opposite parties  and he had remitted a total amount of Rs. 2,50,000/- towards the said policy.  In the mean time the complainant applied for surrendering the said insurance policy before attaining the maturity of the policy after completing the 5 years  payment of premiums.   Though the  complainant had remitted a total amount of Rs. 2,50,000/- towards the insurance premium the amount given as surrender value is Rs. 1,64, 568/- to the complainant on  21/5/2021.   Though the complainant demanded a surrender value of Rs.4,00,000/- from the opposite parties  they did  not responded the said claim of the complainant.   Hence the complainant filed this complaint for declaring the complainant as a consumer and the opposite parties are committed unfair trade practice and also for declaring the 1^st opposite party issued a policy certificate on 6/9/2013 having policy No. 18044297 to the complainant and for directing the opposite parties to pay Rs. 2,35,432/- along with interest @ 12% to the  complainant considering the full surrender value of Rs. 4 lakhs to the premium amount remitted as Rs.2,50,000/- in the policy concerned.  Per contra the 1^st opposite party contented that since the policy subscribed by the complainant is a Unit Linked Insurance Plan and as per the terms and conditions of the said policy they had paid the eligible amount as surrender value of the policy to the complainant. On the basis of the said matter the 1^st opposite party raised a preliminary objection regarding maintainability of the complaint as discussed above and that point is closed earlier. The opposite party also contented that the plan opted by the complainant was an insurance coupled with investment plan and accordingly along with the investment option, the opposite party had duly covered the risk of the life of the complainant for a period of 10 years from 2013 as the primary service rendered by the company.  The complainant wanted  to cover his life as well as obtain better returns, thereby he choose this type of insurance policy, or else if he intented to get better returns only he should have considered options like mutual funds or share trading or fixed deposit or public  provident fund.  In the policy opted by the complainant only a  portion of premium amount after deducting the charges as mentioned in the terms and conditions of the policy be invested in the market.  Accordingly in this type of policy the policy fund value may appreciate or depreciate  based on the performance of investment, fund in which the amount was invested, mortality charges which are linked to the age of the life assured, Administration charges and various factors influencing the capital market, and thus due to such high charges, the fund value of Rs. 1,64,568.15/- was paid to the complainant on the surrender of the policy. Moreover as per Ext.B2, the policy surrender form, which the complainant admitted during cross examination warns for  a further thinking regarding  the loss of  life insurance cover, opportunity to earn good returns etc. by surrendering the said policy.  In the said discussion it is to be noted that as a  Unit Linked Insurance Policy, the risk in the investment portfolio is borne by the policy holder, complainant.  It is further noted that no contra evidence adduced by the PW1 for proving his investment in the policy for Rs. 4,00,000/- as claimed in the complaint.  In the said circumstance stated above we are also in a position to hold the view in the judgments relied by the learned counsel appearing for the 1^st opposite party in the following,

1. Life Insurance Corporation of India & Anr  vs. Sunita in SLP (Civil) No. B 13868/2019.

2. Suraj Mal Ram Niwas Oil Mills (P) Ltd  Vs, United India  Insurance Co. Ltd [(2010 10 SCC 567)]

3. Reliance Life Insurance Co. Ltd Vs. Madhavacharya  (Revision Petition No.211 of 2009)

4.  Export Credit Guarantee Corporation of India Ltd.  vs. Garg Sons International [2013 (1) SCALE 410]

5. General Assurance Society Limited Vs. Chandu Mull Jain & Anr   [AIR (1966) 3 SCR 500.

6. United India Insurance Co. Ltd Vs. Harchand Rai Chand Rai Chandan Lal I (2003) CPJ 393.

7. Vikram Greentec (I)  & Anr.  Vs. New  India Assurance Co.  Ltd. II (2009 CPJ 34

 In all these verdicts the Hon’ble Apex Court of our country had taken a view that the insurance contract to be strictly interpreted as per terms and conditions of the policy. Hence we  cannot pass an order in contravention to the terms and conditions of the contract of policy. In this present policy in clause 5.1 of Ext.B5, Policy terms and condition stipulates the terms for withdrawals and discontinues by surrendering the policy before attaining the maturity of the said policy. The said terms and condition reproduce as follows:-

 Surrender i. Surrender means voluntary termination of the policy by  you.  ii. The policy can be surrendered only after completion of five policy years. iii. The surrender value will be payable at the time of surrender or after completion of  five policy years, whichever is later.  iv. On surrender, we will pay the fund value including the Top up Fund value, if any. v. No surrender penalty will be levied after the fifth policy year.  vi. No guarantee will be applicable on surrender vii.  In case you surrender the policy before the termination of a tranche of the Return Gurantee Fund that you are invested in, the Units will be redeemed at the prevailing NAV viii. The policy will terminate on payment of the surrender value. ix.  Surrender will  extinguish all rights, benefits and interests under the policy. x. Surrender value may be taxable as per prevailing tax laws.

          Keeping in mind the above condition we concluded that the insured cannot claim any thing more than what is covered by the insurance policy. Further it is to be noted that the complainant, insured himself is an  adviser of the opposite party insurer and hence he had every knowledge regarding the terms and conditions of the policy which  he subscribed from the opposite party. 

The PW1 categorically admitted during cross examination that “the agent” mentioned in Ext.B1 is himself and further admitted that the said policy is unit linked. Though he denied in a question regarding the duty of an agent of opposite party during the re-examination by the learned counsel,   it cannot swallow without a pinch  of salt which has expressed such an educated retired employee of Central Government institution.

 Here in this case the surrender value of the policy was calculated on the basis of clause 5.1 of terms and conditions of the policy. Admittedly PW1 is a retired Central Government employee, accordingly no doubt, he is able to understand the policy conditions. From the evidence on record it is pellucid that the amount calculated as surrender value of the policy was on the basis of condition No.5.1 in Ext. B5 for which the complainant has no dispute of receipt of the same.  In said circumstance in the lite of the above discussion and applying the decisions cited above we found no deficiency in service or unfair trade practice on the side of opposite parties and so these points are found against the complainant.

6.       Point No.4:-

In the result complaint stands dismissed. Both parties shall bear their respective costs.

Dictated to the Confidential Assistant, transcribed by him corrected by me and pronounced in open Commission on this the  30 ^th   day of  November, 2023.

                                            Sd/- Smt. P.R. Sholy (President in Charge)

Sd/-Smt.C.K.Lekhamma (Member)

Appendix:-Evidence of the complainant:-

PW1                     -        K.Krishnakurup(complainant)

Ext.A1                  -        Copy of Insurance Certificate 

Ext.A2                  -        1^st Premium Receipt & Statement of Account

Ext.A3                  -        Letter issued to the complainant

Ext.A4                  -        Registered Letter

Ext.A5                  -        Insurance Policy Details

Ext.A6                  -        Account  Statement issued by SBI

Ext.A7                  -        Account Statement

Evidence of the opposite parties:-

Ext.B1                  -        Proposal Form

Ext.B2                  -        Policy Surrender Form

Ext.B3                  -        Unit Statement

Ext.B4                  -        Copy of Customer Declaration Form

Ext.B5                  -        Policy Document

Ext.B6                  -        Letter dtd.12/10/2017

Ext.B7                  -        Letter dtd. 8/6/2018

Ext.B8                  -        Personal Health Declaration Form

Ext.B9                  -        Request for Fund switch submitted by the complainant

// True Copy //

To       

            Complainant/Oppo. party/S.F.

                                                                                                                           By Order

                                                                                                                               Assistant Registrar

Typed by:- Br/-

Compared by:-