IN THE CONSUMER DISPUTES REDRESSAL FORUM, PATHANAMTHITTA,

Dated this the 24^th  day of November, 2011.

Present : Sri. Jacob Stephen (President).

Sri. N. Premkumar (Member)

C.C.No.15/2010 (Filed on 28.01.2010)

Between:

1.  Mathew George, 

     Kannamala House,

     Puthussery, Mallappally,

     Pathanamthitta Dist.

2.  Annamma Parampadikunnel George,

     W/o. Mathew George,  --do--   --do--.

(By Adv. George. K. Mathew)                                                                    ….    Complainants.

And:

1.  Birla Sun Life Insurance Co. Ltd.,

     Registered Office, 6^th Floor,

     Vanam Centre, Makhwana Road,

     Off Andheri-Kurla Road,

     Near Marol Naka Andheri East,

     Mumbai – 400 059, represented by

     New Business and under writing

     K.V.R.K. Raju.

2.  Binu. K., Executive Unit Manager,

     Birla Sun Life Insurance Co. Ltd.,

     5^th Floor, R.D. Heights,

     Pattom, Trivandrum – 695 004.

(By Adv. T. Harikrishnan)

3.  V.L. Varghese,

     Birla Sun Life, Department,

     (Instruments), CBS Head Office,

     CSB Bhavan, P.O. Box No. 502,

    St. Mary’s College Road,

    Thrissur – 680 020.

4.  The Manager,

     Catholic Syrian Bank,

     Puthussery South,

     Mallappally,

     Pin – 689 602.

(By Adv. Elizabeth George)                                                           ….  Opposite parties.

O R D E R

Sri. N. Premkumar (Member):

                        Complainants filed this complaint for getting a relief from the Forum.

                        2. Facts of the case in brief are as follows:  2^nd complainant is the wife of the 1^st complainant.  They are NRI account holders of the 4^th opposite party.  The 4^th opposite party is the insurance advisor of the opposite parties 1, 2 and 3.  As the interest rate of NRI deposits was very low the 4^th opposite party suggested and advised the complainants to invest their money with the 1^st opposite party.  Accordingly, on 4.3.2008 2^nd and 4^th opposite parties approached the complainants and lured them investing their money in the NRI account with the 1^st opposite party.  They canvassed complainants in depositing the money under the investment scheme of Birla Sun Life Insurance Co. Ltd. and made believe them that if they invest money under the said scheme they would get high returns and attractive benefits.  The 2^nd opposite party explained that the said investment is a kind of mutual fund.  Complainants were agreeing and signing the above said investment papers.  They also assured that complainants were at a liberty to seek withdrawal of their money.  Believing the words 1^st complainant invested ` 6 lakhs vide D.D No.393918 drawn on the 4<sup>th</sup> opposite party on 18.3.2008 in favour of 1<sup>st</sup> opposite party.  2<sup>nd</sup> complainant invested ` 6 lakhs vide D.D.No.395917 drawn on the 4^th opposite party on 19.3.2008 in favour of the 1^st opposite party.  The said amounts were acknowledged by the 1^st opposite party.  Thereafter, complainants received official documents and papers from the 1^st opposite party and shocked to see that they were being cheated by opposite parties 2 and 4 by misrepresentation, fraudulently forced them to sign and take a policy under the scheme Birla Sun Life Insurance Gold Plus II.  Immediately they intimated the matter to the 4^th opposite party and complained to 4^th opposite party about the insurance of the policy.  Complainants have ever requested for the said policy.  The complainants had agreed to was, only for a mutual fund investment and on that basis they had agreed to sign up the papers with opposite parties.  They wanted to withdraw their money, but the 4^th opposite party still want on convincing them that it was a good investment having high returns and that the complainants need not worry.  Thereafter, the complainants requested the opposite parties 2 and 3 to issue a statement of accounts to determine the performance of the investment but they failed to do so. 

                        3. After repeated requests of the complainants, the 1^st opposite party issued a statement of accounts and see that the 1^st opposite party was deducting amounts monthly from the money invested by with the 1^st opposite party towards mutual investment fund, by selling shares for life insurance and towards processing charges, service charges and other charges.  They requested the 1^st opposite party to cancel the life insurance policy, but 1^st opposite party has refused to do the same.  Thereafter they received from the 1^st opposite party two lapsation notice intimating them that their policy had lapsed due to non-payment of insurance premiums from March 28, 2009.  The 2^nd opposite party asked the complainants to remit an amount of ` 10,000 each towards insurance premium.  When the complainants enquired and asked the 2<sup>nd</sup> opposite party why they should remit the said amounts.  They replied that it was necessary to do so otherwise they would loose the amount already deposited.  Fearing that the complainants would loose the said deposited amount of ` 6 lakhs each and on the compulsion of the 2^nd opposite party, the 1^st complainant on 25.5.2009 issued a cheque of ` 10,000 and 2<sup>nd</sup> complainant issued a cheque of ` 10,000 on 26.5.2009 to the 1^st opposite party.  The said amounts were acknowledged by 1^st opposite party.

                        4. It is revealed that 1^st opposite party was deducting amounts every month from the money invested towards the insurance, processing charges, service charges and other charges.  These matters were not disclosed to the complainants by the opposite parties at the time of canvassing for the investment or even at the time while signing the mutual fund investment papers.  Had the opposite parties disclosed these matters to complainants, they would not have invested money with the 1^st opposite party.  The complainants have at no point of time agreed to take an insurance policy viz. Birla Sun Life Gold Plus II Policy.  They deposited the said amount of ` 6 lakhs each under the investment scheme of the 1^st opposite party and not an insurance policy.  The complainants are senior citizens and they do not require any insurance coverage by remitting such huge amounts towards insurance policy premium.  The opposite parties had actually by false words cheated the complainants in taking a policy of insurance whereby huge amounts were being deducted from the money invested by them. 

                        5. Opposite parties assured that the complainants were investing the said amounts under an investment scheme whereby they need only make a one time payment and that no further payment be made.  The opposite parties offer assured the complainants that the complainants get the assured sum on maturity of the investment period.  Thus there is misrepresentation and fraud on the part of the opposite parties and they failed to comply with the assurance given by them.  The committed concealment of facts from the complainants and there by committed gross deficiency of service.  This caused grave mental agony and financial loss to the complainants.  On 9.11.2009 the complainants send a lawyers notice to opposite parties 2 and 4.  The 2^nd opposite party has not received the notice and the same has been returned unserved.  The 4^th opposite party has receive the notice but not responded.  Complainants are entitled to get the deposited amount with 12% interest.  Hence this complaint for getting the deposited amount of ` 12,20,000 with 12% interest and a compensation of ` 2,00,000 with cost.

                        6. Opposite parties 1 and 2 entered appearance and filed version jointly stating that complaint is not maintainable either in law or on facts.  According to them, 1^st complainant submitted an application on 20.3.2008 for a life insurance policy under Gold Plus II for ` 30,00,000.  The sales illustrations also signed by him.  2<sup>nd</sup> complainant also submitted an application on 20.3.2008 for a life insurance policy under Gold Plus II for ` 30,00,000.  On receipt of the applications and initial amount they issued receipt to complainants.  Complainants were given detailed description of policy features including premium amount to be paid, charges, terms and conditions.  After having understood and agreed to the terms and conditions complainants signed the application form by theirs free will and consent.  They also signed a declaration contained in the policy illustration. 

                        7. According to them, they had given to all the policy holders about the option of Free Look Period of 15 days through welcome letters delivered along with the policy contract.  Under the Free Look Option, if the policy holder finds any discrepancy in the policy documents sent to him, he may exercise the Free Look Option for informing the opposite parties concerned department in writing.  In such cases, the request for change in plan could have been considered by them.  Complainants did not avail of the Free Look Option to get to rectify the error or to cancel the policy.  In these circumstances, complainants accepted all the contracts.

                        8. Moreover, as per the terms of the contract the policies of both complainants were lapsed on April 28, 2009 due to non-payment of renewal premium.  The complainants paid second renewal premium for the policies and got them revived on May 28,2009.  This shows that complainants were aware about the policies and amount due towards premium.  Otherwise complainants would not have paid nominated his wife 2^nd complainant as nominee on June 2009 communicated to change the nomination in favour of his son Mr. Kenleg. V. George.  Opposite parties done it as per request.  There is no cause of action and deficiency of service in this case.  Therefore, opposite parties 1 and 2 canvassed for the dismissal of the complaint with cost.

                        9. Opposite parties 3 & 4 entered appearance and filed version jointly stating that complaint is not maintainable either in law or on facts.  4^th opposite party admit that complainants are their NRI account holders and they introduced 1^st complainant a reliable Life Insurance Company.  They never told the complainants to invest any money in the NRI account with 1^st opposite party.  The complainants submitted applications with 1^st opposite party for life insurance policy under Gold Plus II for face amount of ` 30,00,000 each.  The sales illustrations duly signed also are submitted for insurance of policy in their name.  Complainants were given detailed description about the said policy features, including the premium amount to be paid, all the charges that shall be levied, terms and conditions before signing of the said application forms.  It was only after being completely aware as regards to the features of the policy and terms of the policy including the premium amount to be paid annually towards the policy, and after having understood and agreed to the terms and conditions attached there with that the complainants applied and signed the said application form by their free will and consent. 

                        10. It is clearly evident from the name of the 1^st opposite party, that it is insurance company and not a company selling Mutual Fund.  It is also noted that complainants by their free will had paid the second premium also.  The complainants did not avail of the free look option to get to rectify the errors if any, or to cancel the policy.  Hence, it is clear and evident that the complainants were well aware of the terms and conditions of the policy and that they accepted all the contracts with free will.  The allegations raised in the complaints are not true.  Therefore, complaint lack bonafides and not entitled to get any relief.  Hence they canvassed for the dismissal of the complaint.

                        11. From the above pleadings, following points are raised for consideration:

(1)   Whether the complaint is maintainable before the Forum?

(2)   Whether the reliefs sought for in the complaint are allowable?

(3)   Relief and Costs?

             12. Evidence of the complaint consists of the oral deposition of PW1 and Exts.A1 to A13.  After closure of evidence, both parties were heard.

            13. Point Nos.1 to 3:-  In order to prove the complainant’s case, complainant filed proof affidavit and documents.  He was examined as PW1 and documents produced were marked as Exts. A1 to A13.  Ext. A1 is the D.D. application form dated 19.03.2008 for ` 12,00,000 issued by the 4<sup>th</sup> opposite party to complainants.  Exts. A2 and A3 are the receipts of Ext. A1 issued to complainants.  Ext. A4 is the first premium receipt and policy details issued to first complainant by first opposite party.  Ext. A5 is the first premium receipt and policy details of second complainant issued by first opposite party.  Ext. A6 series are the statement of accounts deducting amounts monthly from the money invested by complainants issued by first opposite party.  Ext. A7 series are lapsation notices issued by first opposite party.  Ext. A8 series are the receipts of renewal premium of ` 10,000 issued by the first opposite party.  Ext. A9 is the copy of lawyer’s notice issued to opposite parties 2 and 4.  Ext. A10 is the unserved returned envelope of second opposite party with the endorsement that addressee left.  Ext. A11 is the postal receipt of 4^th opposite party issued to Ext. A9.  Ext. A12 is the acknowledgment card of Ext. A9.  Ext. A13 is the cover in which papers were received on 02.06.2008. 

            14. On the basis of the contentions and averments of the parties, we have perused the entire materials on record.  The complainants’ case is that they are NRI account holders of 4^th opposite party.  4^th opposite party insisted than to invest Rs./ 6 lakhs each in first opposite party and assured that the amount invested is in mutual fund and get returns.  After getting the details of investment, they realized that opposite parties committed mis-representation and the amount invested is in Birla Sun Life Gold Plus II policy.  According to them, they are senior citizens and they need not want huge insurance policy.  According to opposite parties, complainants were fully understand the details of policy including premium amount etc. and signed the application form and declaration with their free will.  They were not availed the option of free look period of 15 days after getting the welcome letters and also renewed second renewal premium also. 

            15. There is no dispute regarding the payment of ` 6 lakhs each through 4<sup>th</sup> opposite party to first opposite party.  The only dispute is that the misrepresentation and fraud on the part of opposite parties by joining the Birla Sun Life Gold Plus II policy.  According to complainants, they were not given sales illustration at the time of canvassing the scheme.  They were impressed by opposite parties that the invested amount is in mutual fund and get returns.  It is evident in PW1’s deposition which is as follows:  “Rm³ Hcp t]mfnknbpw Bhiys¸«n«nÃ.  Rm³ Catholic Syrian Bank sâ D]tZi{]Imcw Hcp investment  F¶ \nebnemWv H¶pw c­pw FXrI£n Øm]\¯n\v ]Ww \evInbXv.  Rm³ t]mfnkn FSp¯nÃ. B.Sc, B.Ed degreeþbpw  Computer Science Diplomaþbpw F\n¡v D­v.  I¼\nbn \n¶pw F\n¡v Sales Illustration e`n¨n«nÃ.  Fsâ investmentþsâ return, stock marketþsâ  variationþs\ base sNbvXmbncn¡psa¶v ]dªncp¶p.”.

            16. According to 4^th opposite party, they never told the complainants to invest any money in the NRI account with first opposite party.  But they only introduced first opposite party to complainants a reliable life insurance company.  .In their averment, they willfully suppressed that they working as a corporate agent of first opposite party.  A copy of documents filed by first opposite party shows that 4^th opposite party is the corporate agent of first opposite party and C.A. code is I 01414.  What prevented from 4^th opposite party for not disclosing their identity in this case?  Since the 4^th opposite party being a promoter and corporate agent, it is their business tactics to canvass persons for the sale of first opposite party’s insurance products.

            17. Opposite parties’ contention is that complainants have not availed the option of free look period of 15 days after delivering the welcome letters and policy to cancel the policy.  Complainants’ contention is that they complied the option of free look period by giving the complaint to 4^th opposite party.  But they did not take any further step.  This fact is evident in PW1’s deposition which is as follows:  “Ext.A4 welcome letterþÂ Free Look Period F¶ hyhØ ]dªn«p­mbncp¶p.  AX\pkcn¨v F\n¡v Cu policy ths­¶v I¼\nsb Adnbn¡Wsa¶v ]dªv Rm³ 4þmw FXrI£n _m¦ns\ Adnbn¨ncp¶p”.

            18. Being an agent of first opposite party, master and servant relationship is applicable to 4^th opposite party.  It is the boundan duty of 4^th opposite party to inform the matter to first opposite party within the look out period.

            19. It is admitted complainants are the NRI account holders of 4^th opposite party.  The 4^th opposite party is well aware of complainants’ income and the outstanding amount in their account.  They can easily assess their capacity to pay requisite premium.  As a bank, 4^th opposite party is a trustee and conscience keeper of complainants with regard to their account.  As a rule, account holders details are not disclosed.  Being a corporate agent of first opposite party, it is every chance on the part of 4^th opposite party to disclose the income details of complainants and share with other opposite parties.  If it happened, it is a clear breach of trust on the part of 4^th opposite party.  Exts. A4 and A5 shows invest fund provisions also.  Naturally, it creates confusion.  Evidence on record does not reveal that 4^th opposite party has studied all the details regarding the first opposite party’s policy.  As a bank, 4^th opposite party is expected to advise the benefit of their NRI account holder and not to act upon the whim and fancies of first opposite party by way of unfair canvassing.  In this case, 4^th opposite party wrongly advised and giving false promise to complainants, the senior citizens to join mutual fund which is really the insurance scheme and thereby deliberately forget the value of code of conduct.  It is unfair, illegal, malafide, unscrupulous and against all the cannons of consumer justice.  Had the opposite parties disclosed the real fact regarding the policy, the complainants would not have invested money with the first opposite party.  Therefore, the complainants were trapped by undue influence, false and deceptive ways by opposite parties.  Hence as per Sec. 16, 17 and 18 of Indian Contract Act 1872, the contract signed by complainants is voidable.

            20. Ext. A8 shows that complainants paid second renewal premium for the policies and revived on 28^th May, 2009.  According to opposite parties, complainants were aware of the policies and amount due towards premium, otherwise they would not have paid the renewal premium.  According to complainants, they renewed the premium because second opposite party asked them to renew the premium otherwise they loose the deposited amount of 6 lakhs each and on compulsion of second opposite party, they remitted the renewal premium.  This fact is evident in PW1’s deposition which is as follows:  “28.4.2009þ lapse Bb premium renew sN¿p¶Xn\v letter Ab¨ncp¶p.  AXv In«n¡gnªv representative h¶v kao]n¨v 2^nd instalment AS¨nsæn lapse BbXmbn IW¡m¡psa¶pw, 2^nd premium AS¨v policy validate sNbvsX¦n am{Xsa policy cancel sN¿m\pÅ At]£ ]cnKWn¡pIbpÅpsh¶pw ]dªp.  AXnsâ ASnØm\¯n 28.5.2009þ 2^nd premium AS¨p”.  From the above facts and circumstances, it is seen that by remitting second premium amount does not mean that complainants were estopped from claiming the deposited amount from first opposite party.

            21. On a perusal of Exts. A9, A10, A11 and A12 show that the complainants’ issued legal notice to opposite parties 2 and 4.  Evidence on record shows that complainants informed the complaint to opposite parties 1 and 2 also.  .It is evident in PW1’s statement which is as follows:  “policy cancel sN¿Wsa¶mhiys¸«v H¶pw c­pw FXrI£n Øm]\¯n\v bmsXmcp I¯pw Xm¦Ä Ab¨n«nsöv ]dbp¶p?(Q)  FXrI£n IÄ¡v t\cn«v \ÂInbnÃ.  Fsâ _m¦v hgn \ÂInbncp¶p”(A).  Evidence on record does not reveal that opposite parties have not respond on Ext., A9.  What prevented than to respond on complainants notice? Is it an escape from the liability of mis-representation and fraud?

            22. On a perusal of record, it is seen that a copy of document containing proposal form, declaration etc. filed by first opposite party.  In the said document, application No.A, carton No. 5771 and 5472 are seen and complainants’ signature is seen in it.  But below that portion, it is stated that “in case for any reason, this proposal has not been filled in by the proposer, he may execute the following declaration”.  On that part, complainants’ signature is not seen.  Evidence on record shows that the application forms were not filled by complainants even though their signature is a must in that portion.  Therefore, complainants have not understood the significance of the proposal and thereby not binding the contract by non-completion.  Hence it is voidable.

            23. On going through the overall facts and circumstances of the case, we come to the conclusion that opposite parties failed their attempt to disprove the complainants’ case.  They also failed to convince their contention by any oral or documentary evidence.  Therefore, complainants’ case stand proved unchallenged as against the opposite parties.  Absence of free consent proposal form signed by the complainants is inoperative and voidable.  On the basis of the observations and discussions herein above, we find that there is undue influence on the part of opposite parties which compel the complainants to invest the huge amount to insurance policy with the pretext that the amount invested is in mutual fund and get returns.  Therefore, opposite parties committed mis-representation and concealment of fact in their business dealing, which is not only a clear deficiency of service, but also an unfair trade practice.  Therefore, complaint is allowable by directing the opposite parties 1 to 3 to return the amount of ` 12,20,000 to the complainants with interest.  The 4^th opposite party is directed to pay the cost.

            24. In the result, this complaint is allowed, thereby the opposite parties 1 to 3 are directed to pay back the premium amount of ` 12,20,000 (Rupees Twelve lakhs twenty thousand only) with 6% interest per annum from the date of filing of this complaint till this date.  The 4<sup>th</sup> opposite party is directed to pay ` 2,500 (Rupees Two thousand five hundred only) as cost to the complainants.  Since interest is allowed, no compensation is allowable.  The amount so awarded is to be paid within 15 days from the date of receipt of this order, failing which the whole amount will follow 10% interest per annum from this date till the realization of the whole amount.

            Declared in the Open Forum on this the 24^th day of November, 2011.

                                                                                                                      (Sd/-)

                                                                                                            N. Premkumar,

                                                                                                                (Member)

Sri. Jacob Stephen (President)                  :           (Sd/-)

Appendix:

Witness examined on the side of the complainants: 

PW1    :           Mathew George.

Exhibits marked on the side of the complainants:

A1       :           D.D. application form dated 19.03.2008 for Rs. 12,00,000 issued by the 4^th

                         opposite party to the complainants.

A2                    Receipt No. 3976694 dated 20.03.2008 issued by the second opposite party

                         to the complainants.

A3       :           Receipt No. 3976690 dated 20.03.2008 issued by the second opposite party

                         to the complainants.

A4       :           First premium receipt and policy details issued to first complainant by

                         first opposite party. 

A5       :           First premium receipt and policy details of second complainant issued by

                         first opposite party.

A6 & A6(a):    Policy account statements issued by the first opposite party to the

                        complainants.

A7 & A7(a)  :  Lapsation notices dated 25.05.2009 issued by first opposite party to the

                         complainants.

A8       :           Receipts of renewal premium of Rs. 10,000 issued by the first opposite

                         party. 

A9       :           Copy of lawyer’s notice dated 07.11.2009 issued to opposite parties

 2 and 4.                  

A10     :           Unserved returned envelope of second opposite party with the

                         endorsement that addressee left.

A11 & A11(a) :Postal receipts of Ext. A9 lawyer’s notice.

A12     :           Acknowledgment card of Ext. A9 lawyers’ notice.

A13     :           The original cover which the policy details received. 

Witness examined on the side of the opposite parties    :  Nil.

Exhibits marked on the side of the opposite parties       :  Nil.

                                                                                                                        (By Order)

                                                                                                                              (Sd/-)

                                                                                                              Senior Superintendent.

Copy to:- (1)  Mathew George, Kannamala House, Puthussery, Mallappally,

                        Pathanamthitta Dist.

      (2) K.V.R.K. Raju, Birla Sun Life Insurance Co. Ltd., Registered Office, 6^th Floor,

                       Vanam Centre, Makhwana Road, Off Andheri-Kurla Road,

                       Near Marol Naka Andheri East, Mumbai – 400 059. represented by

                  (3) Binu. K., Executive Unit Manager, Birla Sun Life Insurance Co. Ltd.,

                        5^th Floor, R.D. Heights, Pattom, Trivandrum – 695 004.

                  (4) V.L. Varghese, Birla Sun Life, Department, (Instruments), CBS Head Office,

                       CSB Bhavan, P.O. Box No. 502, St. Mary’s College Road, Thrissur – 680 020.

     (5)  The Manager, Catholic Syrian Bank, Puthussery South, Mallappally,

                       Pin – 689 602.

                 (6)  The Stock File.