DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II U.T. CHANDIGARH Complaint Case No | : | 761 OF 2010 | Date of Institution | : | 23.11.2010 | Date of Decision | : | 29.11.2011 |
Brig(Retd)Bhawan Kumar Sud s/o Late Sh. Dina Nath Sud, r/o H.No.1262, Sector 21, Panchkula (Haryana) – 134116. ---Complainant V E R S U S [1] ICICI Prudential Life Insurance Co. Limited, Vinod Silk Mills Compound, Chakravarthy Ashok Nagar, Ashok Road, Kandivali (East), Mumbai – 400 101. [2] ICICI Prudential Life Insurance Co. Limited, SCO 9-10-11, Sector 9, Madhya Marg, Chandigarh. ---Opposite Parties BEFORE: MRS.MADHU MUTNEJA PRESIDING MEMBER SH.JASWINDER SINGH SIDHU MEMBER Argued By: Complainant in person. Sh. Gaurav Bhardwaj, Adv for OPs. PER JASWINDER SINGH SIDHU, MEMBER 1. Complainant has filed the present complaint against the Opposite Parties (hereinafter referred to as OPs for short), on the grounds that the Complainant subscribed for three insurance policies bearing No. 35764165, dated 11.01.2010; 31762771, dated 28.12.2009 and 35504554, dated 28.12.2009, respectively, by filling up the proposal form and having paid the requisite premium for each policy. It is also averred in the complaint that these Policies were issued after the three previous policies numbering 8356274, 8356275 and 12300610, issued on the dates 01.11.2006, 01.11.2006 and 31.12.2007, respectively, on having completed the three years lock-in period. Complainant has categorically stated in Para 2 of the complaint that he, along with his wife, Mrs. Urmil Sood were sold wrong policies by claiming that they would get better returns to the tune of 18 to 20% of the invested fund by their Advisers namely Mr. Amit Rai and Atul Vij. Believing the words of the Advisers, the Complainant filled up the required proposal form and also consented to cancel the previous policies and subscribed for the new ones by paying the amount so received from the OPs. The Complainant in Para 4 of the complaint states that during December 2009, when on the advise of the Agents of the OPs the Policy No.13137715 dated 29.12.2009 was raised after redeeming the Policy No. 03767664 having completed the three years lock-in period. It is alleged by the Complainant that having to suspicious about the facts of the Policy, he enquired and came to know that the Advisers of the OPs sold the said Policy against the AML (Anti Money Laundering) Guidelines of the OPs, which was mandatory as the annual premium of the said policy was more than Rs.1,00,000/-. While highlighting this fact, the Complainant has attached Ex.H and Ex.I on page 21 & 21, wherein, the procedure to be followed is mentioned. In Para 5 the Complainant states that in the month of March, 2010, he took up the matter by sending an e-mail dated 19.3.2010 (Ex.G) and apprised the customer care of OP No.1 about the facts and highlighted his concerns stating that (a) the breach of AML Guidelines while issuing the life stage pension policies amounting to Rs.5.50 lacs without demanding any proof of income from the Complainant; (b) the agents of OPs had got blank proposal forms signed by the Complainant and thereafter, completed the details as per their own suitability; (c) the Complainant had only provided the copy of PAN card and no income proof was asked at any stage, hence, it is not understood as to how the annual income of the Complainant was calculated to justify the issuance of these policies; (d) lastly, it was mentioned that on being asked as to why no single premium policy was issued the agents of the OPs replied that there was no provision of single premium policy at that particular point of time, however, the same had been started from March, 2010, on wards, which is, again, a falsity. The above mentioned communication of the Complainant was replied by Mr. Deepak Khurana, vide his e-mail dated 29.3.2010 (Ex.J) and subsequently, other communications of date 8th & 12th April, 2010 (Ex.K & L), respectively. The Complainant at Pg.3 (Para 8) of his complaint has further stated that as he was very much aware about the free look period, but as he came to know about the wrong selling of the policy during March, 2010, only, hence, the rejection of his complaint by the OPs, without addressing specific points raised by him. Hence, this act of the OPs is also deplorable. The Complainant had also demanded from the office of the OPs the financial documents they had relied upon while selling the said policies. Complainant had alleged that it was very much possible that the Agents of the OP may have faked the financial documents so as to sell the said policies as per AML guidelines of the OPs. The Complainant states that no communication was received at his end with regard to this particular aspect. The Complainant has also alleged in Para No. 13 of his complaint that while, selling the policies No. 3767664 and 3767665, on 21.11.2006, he had paid the premium of Rs.2.70 lacs each and the assured value, as per the promise of the Agents, at that point of time, was Rs.3.90 lacs and Rs.4,36,500/-, respectively for the said policies. Whereas, while, redeeming the said policies, the redeemed value came out to be Rs.3,29,054/- and Rs.2,83,207/-, respectively, meaning thereby, that the Complainant suffered a loss of Rs.2,20,293/- (Rs.67,000/- + Rs.1,53,293/-) on redemption of the said Policies, which is nowhere equal to the 18 to 20% gain as promised by the same Agents. The Complainant has alleged that though he was very prompt and had made several efforts to get the refund of premium of Rs.5.50 lacs, but OPs have failed to respond to his efforts. Thus, alleging unfair trade practice on their part, Complainant prays:- (i) Refund of the premium amount of Rs.5.50 lacs paid on policies mentioned, along with 18% interest; (ii) Complainant further prays for compensation of Rs.4.00 lacs on account of financial loss, along with mental agony caused to him and wife; 2. On notice, OPs have filed their version/ written statement and have contested the claim of the Complainant, by raising preliminary objections of the present complaint being false, frivolous, vexatious and abuse of process of law. OPs have further stated that there is no deficiency or negligence on their part and that this Forum has no jurisdiction to entertain the present complaint, as the Complainant has alleged misrepresentation, forgery, cheating against two particular individuals and the OP were no privy to their conversations with the Complainant. Hence, it does not amount to a consumer dispute. The OPs have also submitted a detail of all the six policies subscribed by the Complainant and the same detail is mentioned at Pg.3 & 4 of their reply. The OPs have also stated that the policy certificate along with policy documents, in original, were dispatched to the Complainant and the same were duly received by him. The Complainant not having raise any objections and having retained the said policies did not avail the free look period, meaning thereby that the Complainant agreed to the terms and conditions of the policies. The OPs further state that in unit linked insurance policies, the investment risk in the investment portfolio is borne by the policy holder. The policy holder is also aware of the risks and having invested in the units with full knowledge, cannot feign ignorance about them at a later stage. The OPs have further stated that there was no assurance whether the objective of any of the funds will be achieved. Hence, the allegations of the Complainant are without any basis. On merits, the OPs have clearly stated that the facts with regard to the policies are a matter of record, as mentioned in the proposal forms and the terms & conditions of the policies. The OPs have categorically under the title of risk of investments in the funds stated that the policy holder is aware of the risks involved in the investment in units on the following factors:- (i) Being linked to the market and other risks there can be no assurance whether the objective of any other funds will be achieved. (ii) That the fund value of each of the funds can go up and down depending on the factors and forces affecting the financial and debt markets from time to time and may also be affected by changes in the general level of interest rates. (iii) All benefit payable under the policy are subject to tax laws and other financial enactments as they exist from time to time. (iv) The investment risks in investment portfolios are to be borne by the Complainant. (v) The past performance of the fund is not necessarily indicated of future performance of the fund available with the said policy. The OPs in para 3 have denied the allegations of para 4 of the complaint stating that these allegations are raised on the own whims and fancies of the Complainant. As there was a slump in the market and the fund value of the policies had fallen, hence, during the period of recession, the value of funds was bound to depreciate. The OPs have also reiterated that the standard benefit illustration document clearly states that the unit value of the units of each of the funds can go up or down, depending upon the factors and forces affecting the financial market from time to time and may also be affected by the changes in the general level of interest rates. Hence, the allegations of the Complainant are totally unfounded and baseless. The OPs in para 4 of their reply have vociferously denied having committed any wrong and the allegations of manipulation done by an individual of the OPs are baseless. The OPs have categorically stated that the Complainant himself having declared that he had served on a very higher rank in the Indian Army cannot claim that the agents of the OPs had taken blank documents signed by the Complainant. It is further stated that no prudent person will ever sign blank documents. The OPs have also stuck to their stand that all queries of the Complainant as and when raised were duly replied to his full satisfaction. It is also mentioned that OPs had adhered to the IRDA guidelines as they are regulated by the same and while mentioning so have categorically stated that the policy bearing No. 13137715 was issued to the Complainant after receipt of duly filled proposal form and the requisite KYC documents including the bank statement of the Complainant. A copy of the proposal form, duly signed by the Complainant, was sent, along with the policy documents. It is further stated that the Complainant never approached the OPs for any discrepancy made in the proposal form during free look period, hence, it is implied that the Complainant had agreed to the policy and its terms & conditions and the same is binding on the Complainant. In para 7, the contents of para 8 of the complaint are denied, that there was no fake documentation done and the Complainant should be put to strict proof for the same. In Para 8, the contents of para 9, are addressed in a manner that the same being a matter of record, it is stated that the Complainant himself withdrew the complaint before the Hon’ble Ombudsman. Hence, requires no answer. Finally, the OPs have also stated that no reliance can be attributed on the I.T.R. [Income Tax Returns], as the same could be revised, even after filing them. Whereas, the policies were raised on the information provided by the Complainant, in the proposal form and upon receipt of the premium amount towards the respective policies. Hence, the OPs have strictly followed the norms, laid down, by its Regulatory Authorities. Lastly, the objections with regard to Para Nos. 12 & 13 of the complaint, are addressed that the Policy No. 13137806 and 03767665 are in the name of Mrs. Urmila Sood – the wife of the Complainant and hence, she is the right person to file the complaint, and not the Complainant, and as such, OPs are not liable to reply to any allegations with regard to the policies issued to Mrs. Urmila Sood. It is further stated that the Complainant has no locus-standi to pass on judgments regarding the dealings of the OPs with other consumers and he is a victim of his own wrong and neglect. On above mentioned reply, the OPs have prayed for the dismissal of the present complaint with exemplary costs. The Complainant having alleged mis-selling, misrepresentation, forgery and cheating against the two individuals, hence, the same requires a proper trial by a Civil/ Criminal Court, as the evidence has to be taken and the same is not possible in summary trial. 3. Parties led their respective evidences. 4. Having gone through the entire complaint, version of the OPs, the evidence of the parties and with the able assistance of the ld. Counsel for the parties, we have come to the following conclusions:- [i] The present complaint involves the insurance policies purchased, as claimed by the Complainant, the Nos. of these policies are 03767664, dated 21.11.2006; 03767665, dated 21.11.2006; 07219425, dated 03.01.2008; 13233599, dated 13.01.2010; 13137715, dated 29.12.2009; 13137806, dated 29.12.2009, respectively. Out of the above six, two policies numbered 03767664 and 03767665 dated 21.11.2006 were in the name of Master Aryan Sood and Ms. Disha Sood, both aged 2 years and 8 years respectively. In the first policy, the Complainant, who is the grandfather, was the proposer; whereas, in the second policy in the name of Ms. Disha, the proposer is Mrs. Urmil Sood, the grandmother of the child. As these two policies stand surrendered, on date 11/11/2009 and 15/11/2009, the money, so received by the Complainant and his wife Urmil Sood, was used to purchase two new policies numbered 13137715 and 13137806, both dated 29/12/2009, by filling up two different proposal forms, individually. In the present circumstances, we cannot proceed or look into the facts of the two surrendered policies, namely 03767664 and 03767665. [ii] One of the policies numbered 07219425, in the name of the Complainant, which was issued on 03/01/2008, is still in force, and as such, the Complainant still has the right to decide about the fate of the Policy. Even, if he considers the issues involved or alleged by the Complainant, the same do not allow us to look into the matter, as since the date of its purchase, and when the Complainant filed the present complaint on 29/11/2010, the complaint is time barred with regard to the said policy, as the limitation period of 02 years is already over. [iii] Another policy numbered 13137806, which was issued on 29/12/2009, is in the name of Mrs. Urmil Sood. The proposal form of the said policy was also filled up by her and had appended her signatures in English. In the present case, we feel that the best person to take cognizance about the said policy, was Mrs. Urmil Sood, as the Complainant has not filed any authority letter or power of attorney on behalf of Mrs. Urmil Sood, we feel that it would not be just to comment about the said policy, in the light of the allegations raised by the Complainant. However, we leave this issue open for Mrs. Urmil Sood to decide and proceed in the manner, she best decides for herself. [iv] Now, coming to the two policies numbered 13233599 and 13137715, which the Complainant had purchased by filling up the proposal form and appending his signatures. The date of issue of these policies is 13/01/2010 and 29/12/2009 respectively. Now, looking into the allegations of the Complainant with regard to these two policies, we feel that that it would be just to visit the proposal form, as well as the policy documents that were dispatched by the OPs to the Complainant. However, the due date of receipt of the policies is neither mentioned by the Complainant, or the OPs, nor the OPs have come up with any evidence as to on what date, the said policies were delivered to the Complainant. As we believed that the issue date of the said policies is 13/01/2010 and 29/12/2009 and in the light of the Complainant having taken cudgels against the OPs through his written communication on 19/03/2010, after having failed in his repeated queries, proves that the Complainant had registered his grievance, well within the free look in period, available with him. It is also evident from the communications that the OPs did a mere lip service while communicating with the Complainant and ultimately, not addressing to his grievances. There is no mention of the due date of receipt of these policies in the reply/ version of the OPs, nor they have come up with any postal/ courier receipt, to establish the exact date of delivery of the policies, at the end of the Complainant. [v] While going through the documents, sent by the OPs to the Complainant, which are annexed as Ex.T on page 12-14 , it is clear that the copy of application form/ proposal form submitted by the subscriber, is a mere miniature replica of the original. Though, a line “Examine your application form and inform us of any non-disclosure”, is repeatedly mentioned at the bottom of each page, meaning thereby that the OPs, while sending this document, also wanted to be sure that the subscriber is unable to read and correlate with the original policy issued by them. Though the OPs, while filing their version, have categorically stated in Para 4 of merits that they have always strictly adhered to the IRDA Guidelines, while issuing policies; whereas, we find that OPs have deliberately tried to hoodwink the said IRDA Guidelines, which requires OPs to send the copy of actual application form, along with the policy documents and not the reduced caricature. We feel that the OPs have breached Regulation 4(1) of IRDA Regulations under the title “PROPOSAL FOR INSURANCE”, as mentioned under IRDA (Protection of Policy Holders’ Interest) Regulations, 2002, and as such, when the Complainant had started pursuing his case with the OPs in March, 2010, he was not offered the opportunity to look into the actual application/ proposal form, in original. As such, we feel that his right for a “Free Look Period” has not started, till date, because the OPs have not supplied him with the original application/ proposal form to compare with. Even in the communication of the OPs to the Complainant dated 29.3.2010, Ex.J, OPs have clearly stated that in order to ensure transparency that the product and the policy, is as per the customer’s choice, OPs provide the customer with a copy of the application form, along with the policy document. The letter bears the name of Deepak Khurana, Process Leader – Customer Relations. From the above lines, it is clear that OPs not only violate the IRDA Guidelines, but prefer repeating the lies again and again, believing that it would become a truth, which is not so, as it would require super human qualities to read the copy of application/ proposal form annexed as Ex.T on page 12-14 of the complaint. [vi] Dealing with the allegations of the issuance of the said policies, without adhering to AML Guidelines, as mentioned in the extract of OPs handbook of sales (Ex.H & I), on page 20-21, wherein the KYC [KNOW YOUR CUSTOMER/ AML [ANTI MONEY LAUNDERING] GUIDELINES is required to be adhered to, to prevent insurance company from being used intentionally or unintentionally by criminal elements for money laundering activities. These guidelines were issued by IRDA through its communication dated 31.3.2006 and the same were to be adhered to by all the insurance companies, while issuing the insurance policies to their customer. We believe that in the present circumstances, it was the responsibility of the Agents of the OPs to ensure that the details of acceptable proof of identity/ address/ income are given in the scheduled annexure. In case of top-up premium/ new policies by the existing customers, if the original customer profile changes, it layers upward, an additional documentation needs to be done, and in the present case it was not done. In the para, where the responsibilities of advisers and intermediaries are mentioned, clearly states that they are the first line of control for the company to ensure the compliance of these guidelines. In the present case, though, we believe, that while the proposer had filled up the proposal form, but after the form has been filled up, it was incumbent upon the agents of the OPs to ensure that they had truly justified the responsibilities of the designation they held, meaning thereby that the agents of the OPs should have made themselves equipped with proper documents with regard to the income status of the Complainant, while issuing the two policies bearing No. 13233599 and 13137715, which had the total yearly premium amount of Rs.3.50 lacs. Even the previous Policy No. 7219445, dated 3.1.2008 also required annual premium of Rs.75,000/- and it was in the knowledge of the OPs. From the above facts, it is clear that the Complainant had to shell out Rs.4.25 lacs each year in order to continue with the said policies. We believe, that the OPs have hopelessly failed firstly, in advising the Complainant and secondly, in their own responsibility to adhere to the KYC Guidelines, as envisaged, in IRDA Regulations. The Complainant had clearly stated in his communication to the OPs dated 28.09.2010 (Ex.M), wherein, he has clearly stated that the OPs had violated the RBI Guidelines, as per which the regular premium policies, can be maximum upto 30% of the subscriber’s annual income; whereas, in the present case the policies issued amounting to almost nearly 70% of the declared income of the Complainant. The OPs failed to negate or rebut the allegation of the Complainant in any manner and the same stands against them, till date. Hence, OPs have failed to adhere to the Clause 3(5) of “Point of Sale” of IRDA Regulations, 2002, which speaks In the process of sale, the insurer or its agent or any intermediary shall act according to the code of conduct prescribed by: (i) the Authority; (ii) the Councils that have been established under Section 64C of the Act and; (iii) the recognized professional body or association of which the agent or intermediary or insurance intermediary is a member. [vii] The Complainant had also preferred to move the office of the Ombudsman for Redressal of his grievance, through a communication dated 22.4.2010. The Complainant had repeated his allegations with regard to the present policies in toto, as to what he has mentioned in his present complaint. However, the OPs, vide their letter dated 22.02.2011, had intimated the pending Consumer Complaint No. 761/2010, to the office of the Ombudsman, whereby, the Insurance Ombudsman, Chandigarh, through its communication dated 10.3.2011 (Pg.18), in para 3 clearly states that as the Consumer Complaint No. 761 of 2010 is pending with the District Consumer Forum, so the case is out of jurisdiction of this Forum. The case is filed as closed. Whereas, the OPs, while replying to this fact through Para 8 of their version/ reply has categorically stated that the Complainant had himself withdrawn the complaint before the Hon’ble Ombudsman, which is a blatant lie by the OPs, submitted on oath. The affidavit of Ms. Purnarnava Saha, Senior Manager (Legal) of the OPs is the exact repetition of the version of the OPs and the same is duly verified and attested by Notary Public. We are surprised that the officials of the OPs are so brazen that they have the courage to distort facts and submit the same on a legal document on oath. It is evident from the communication dated 10.3.2011 (Pg.17-18), submitted by the Complainant, that the clause in the affidavit pertaining to this matter is proved wrong. 5. In the light of above observations, we find a definite deficiency in service and unfair trade practice on the part of the OPs. Hence, we allow the present complaint and direct the OPs to:- [a] Refund the premiums realized by them against the Policies numbered 13233599, dated 13.01.2010 and 13137715, dated 29.12.2009, along with interest @9% per annum from the date of their respective deposits, till it is paid. [b] The OPs are further saddled with Rs.7,000/- as litigation costs. 6. The above said order shall be complied within 30 days of its receipt; thereafter, OPs shall be liable for an interest @18% per annum on the aforesaid amount, except for litigation expenses. 7. Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room. Announced 29th November 2011. Sd/- (MADHU MUTNEJA) PRESIDING MEMBER Sd/- (JASWINDER SINGH SIDHU)
| | MR. JASWINDER SINGH SIDHU, MEMBER | MRS. MADHU MUTNEJA, PRESIDING MEMBER | , | |
