DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Manish Sharma s/o Sh. Jagdish Sharma, resident of House No. 1622/1, Sector 40-B, Chandigarh.

                                                                                    ---Complainant

V E R S U S

[1]     Kotak Mahindra Old Mutual Life Insurance Ltd., through its Agent SPA Insurance Broker Panchkula 1, Agent Code 60129034, SCO No. 330, 1^st Floor, Sector 9, Panchkula.

[2]     Kotak Mahindra Old Mutual Life Insurance Ltd., Infinity Park, Bldg. No.21, 5^th Floor, Zone-2, Opp. Western Express Highway, Gen. A.K. Vaidya Marg, Malad (East), Mumbai – 400097, through its Managing Director and CEO.

---Opposite Parties

BEFORE:            MR. LAKSHMAN SHARMA                  PRESIDENT

                        MRS.MADHU MUTNEJA                MEMBER

                        SH.JASWINDER SINGH SIDHU            MEMBER

Argued By:     Sh. Saurabh Goel, Advocate for the Complainant.

Sh. Gaurav Bhardwaj, Advocate for the OPs.

PER JASWINDER SINGH SIDHU, MEMBER

1.             Complainant (hereinafter referred to as CC for short) has filed the present complaint against the Opposite Parties (hereinafter referred to as OP for short), on the grounds that the CC purchased a life insurance policy by paying an amount of Rs.20,000/- vide Cheque No. 700053 drawn on SBI, Sector 41 Branch, Chandigarh. At the time of purchasing the said life insurance plan, was advised by OP-1 [Agent of OP-2] that the life of the insured would be covered for the period of 10 years and the insured amount would be Rs.1.4 lakh.  

                The CC has declared himself to be of 61 years of age and claims that he had signed the proposal form which was not complete. The OP-1 had stated that he would fill up the relevant clauses applicable to the CC, as well as the plan he has opted for. The copy of the said proposal form as provided by the OP is annexed at Annex.C-1.  The CC on having received the said policy document in the month of Jan. 2011, could not go through the complete policy document as the said policy did not contain a legible copy of the proposal form that he had signed. It is also alleged that he could not avail the free look period as offered by the OP. It was in the month of March, 2011, that on receiving a welcome call from the customer care department of the OP, he came to know about the actual 10 year plan he had been subscribed for. The CC, immediately, contacted the OPs who failed to respond to his calls. Even his request for a legible copy of the proposal form was not honored.  

                Thereafter, the CC served a legal notice and registered his grievances through it.  The CC had specifically alleged in his legal notice that as the copy of proposal form was not legible and hence, he could not go through it and compare the same with the insurance policy issued in his name.  Thus, in such circumstances he could not avail the opportunity of free look period as offered by the OPs. The CC had also alleged that he had not subscribed for a 10 year plan as he was already 61 yeas of age and a retired govt. servant and further, did not have the means to pay the premium for 10 long years.

                The CC not satisfied of the reply to the legal notice through which the OPs had taken a strong stand and denied the CC a fresh copy of legible proposal form, has filed the present complaint.  The CC alleging unfair trade practice on the part of OPs has demanded the refund of Rs.20,000/- the premium he had paid along with an interest @ 18% p.a. The CC has further demanded compensation to the tune of Rs.50,000/- for mental harassment and agony, and further, another Rs.10,000/- for litigation expenses. 

2.             On notice, OPs have filed their joint version/ written statement and have contested the claim of the CC.

                OPs have taken a strong preliminary objection to the fact that the issues raised by the CC attract complicate questions of law and facts which need detailed fact finding by a competent court. As the Consumer Court can only adjudicate in summary proceedings, as such, the complaint deserves to be dismissed on this ground only. OPs have further stated that CC has not substantiated his claim with documentary proof and hence, the present complaint of the CC is based on surmises and conjectures, which does not require any reply.

                OPs have claimed that the CC was offered a free look period enshrined in policy document and as such, after not having availed this opportunity, is estopped from raising this issue at a much later stage. OPs in the same breath have explained the status of insurance agent to be the agent of the proposer i.e. the insured whereas the CC has wrongly construed the agent to be the agent of the OPs.

                On merits, the OPs have completely denied the contents of Para No.1 of the complaint. However, Paras No.2 and 3 are admitted to be of formal in nature, which do not require any specific reply. The OPs have stated in clear and uncertain terms that the CC after having thoroughly understood the features, terms and conditions of Kotak Surakshit Jeevan Plan had subscribed for the same. That the CC having committed himself by signing the proposal form containing the detail of the said policy cannot deny them now. OPs have stated that there is no clause in the proposal form that cannot be related with the policy document issued by them and hence, both these documents are in consonance with each other.

                In reply to Para No.6 and 7 of the present complaint, OPs further state that the policy document was dispatched to the CC on 6.12.2010 through Blue Dart Courier vide .AWB No 43693666015 and the same was received by one Madam” Veena” on 8.12.2010. Hence, the contentions of the CC that he received the policy document in the month of January 2011 are false and misleading.

                OPs further state that the policy document offers free look period of 15 days time from the receipt of the policy to which the CC was also entitled. The CC himself having failed to avail himself this opportunity by stating that the same is not legible to bare eyes is nothing but a lame excuse on his part. The CC also had the option to contact the customer care and the Grievance Redressal Officer of the OPs during the free look period and communicate his disagreement with terms and conditions of the policy contract but the CC failed to do the same. OPs have alleged that the CC has moved the present complaint on false and flimsy grounds and further tried to hide the delay and latches on his part. As such, OPs have prayed for the dismissal of the present complaint with exemplary costs.

3.             Parties led their respective evidences.

4.             Having gone through the entire complaint, version of the OP, 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) Though it is established that the CC had paid Rs.20,000/- as the premium for the purpose of a Life Insurance Policy from OPs, the said amount was paid through a cheque bearing No.700053 drawn on SBI, Sector 41 Branch, Chandigarh. Subsequently, a policy bearing No.02175817 dated 4.12.2010 was issued to the CC and the policy document was dispatched through courier on 6.12.2010 and as per the OPs, the same reached at the end of the CC on 8.12.2010.

(ii) The CC though as per his own disclosure in his complaint had made representation with the OPs with regard to the variation, to the effect with regard to the term of the policy. As the CC claims that he had not subscribed for such a long period and the fact was also mentioned to the agent of the OP who had helped him in filing up the proposal form.

(iii)     The first page of the policy document is a letter from the side of the OPs to the CC explaining the Name of the Policy, Policy Number, CC’s Client I.D. Number and Offer of Free Look Period, stating that in case CC was not agreeable to any of the provisions stated in the policy, the CC had an option of returning the policy stating the reasons within 15 days from the date of receipt of the policy. The cancellation request was to be submitted to the nearest branch of the OPs or sent directly to the Head Office. The policy document also contains the terms and conditions as applicable to the plan of the policy as well as the last four pages also bear the scanned miniature impressions of the proposal form of the CC. The OPs have strongly contested the present complaint of the CC on the ground that as he has failed to avail the free look period offered to him, hence, he cannot move the present complaint on an afterthought.  

(iv)     However, the demand of the CC with regard to the clauses of the policy in question to which he had not subscribed for could only be ascertained by comparing the same with the original proposal form. The CC has cited  the free look clause which is offered as per IRDA norms, if the same is not agreeable to the CC as mentioned in Para No.6 of his complaint. In the next Para No.7, the CC has categorically stated he could not exercise his right due to the illegible policy document. The bare perusal of the policy document from Page 1 to Page 11, as mentioned in the original Booklet attached with the main file, is a printed document and as such, is legible whereas the Pages where the copy of the proposal form is submitted is in a miniature size, and the same cannot be read with bare eyes.

It is important to visit the relevant clause of the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002 to which the CC has pointed out vide Para No.6 of his complaint, which speaks as follows: -

“4. Proposal for insurance

(1) Except in cases of a marine insurance cover, where current market practices do not insist on a written proposal form, in all cases, a proposal for grant of a cover, either for life business or for general business, must be evidenced by a written document. It is the duty of an insurer to furnish to the insured free of charge, within 30 days of the acceptance of a proposal, a copy of the proposal form.

(2) Forms and documents used in the grant of cover may, depending upon the circumstances of each case, be made available in languages recognised under the Constitution of India.

(3) In filling the form of proposal, the prospect is to be guided by the provisions of Section 45 of the Act. Any proposal form seeking information for grant of life cover may prominently state therein the requirements of Section 45 of the Act.

6. Matters to be stated in life insurance policy

(1) xxxxx

(2) While acting under regulation 6(1) in forwarding the policy to the insured, the insurer shall  inform by the letter forwarding the policy that he has a period of 15 days from the date of receipt of the policy document to review the terms and conditions of the policy and where the insured disagrees to any of those terms or conditions, he has the option to return the policy stating the reasons for his objection, when he shall be entitled to a refund of the premium paid, subject only to a deduction of a proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination of the proposer and stamp duty charges.”

(v)       While going through the above reproduced regulations of IRDA, we reach the conclusion that the policy document that is normally supplied in a Life Insurance Plan, actually contains three different documents (1) the covering letter from the side of the Insurer to the Insured (2) the original policy document and (3) the copy of the proposal form filled up by the Insured. In the present circumstances, the Booklet that was sent to the CC by the OPs clearly contains all these three features i.e. the covering letter, the terms and conditions as contained from Page No.1 to Page No.11 and lastly in place of the actual proposal form or the copy of the proposal form, there is only an impression of proposal form which is a scanned miniature reproduction of the actual proposal form submitted by the CC. While going through these pages, we believe that the OPs have deliberately reduced the size of the actual proposal form for the reasons best known to them whereas the stationary available on the document was sufficient to print the actual proposal form in its original size. We believe that the OPs did not want the CC to go through the proposal form and compare the same with the policy document issued by them. Though the OPs have fulfilled their obligation as per the IRDA Regulations mentioned above, but at the same time, indulged in an unfair trade practice by deliberately not supplying the copy of the original proposal form in its actual size. As such, we believe that the CC has not received the proposal form and hence, he is unable to exercise his option for a free look period till date.

(vi)     Though the OPs have taken a strong objection to the delay on the part of the CC, but have kept mum with regard to the several efforts that he had made for procuring the copy of the proposal form, which was in the custody of the OPs. Even if we believe that the CC had over stepped the 15 days period from the date of receipt of the document as sent by the OPs, the OPs would not have lost anything by supplying the copy of the proposal form to him even at a later stage, which actually they have not done till date. Though the OPs have submitted the same with their reply as Annexure R-1.

(vii)    OPs by their act of reducing the size of the proposal form have deliberately taken away the opportunity from the hands of the CC so as to avail himself of the true benefits of the plan that he had subscribed for. Furthermore, though there is a vague admission on the part of the OPs in Para No.5 at Page No.7 of their reply where they have stated that even for the sake of argument without admittance if it is believed that the proposal form is illegible, but still the CC had the policy terms and conditions to which he could have easily responded.

(viii)   From the above paragraph, though the OPs still held their ground but the status of the illegible proposal form is established. Hence, we believe that the CC has a right to an actual copy of proposal form to be supplied with the policy document so as to enable him in exercising his option of free look period. We feel that till the CC is supplied with the copy of actual Proposal Form his right to exercise the option of Free Look Period remains open.

5.             On the above observations, we allow the present complaint and direct the OPs to supply the CC with a certified copy of the proposal form. Thereafter, the CC will have the opportunity to exercise his option for a free look period for 15 days from the date of receipt of the certified copy of the proposal form. In case the CC desires for the refund of the premium, the same would be made immediately along with a simple interest @6% per annum by the OPs.

6.             OPs are further burdened with a consolidated amount of Rs.25,000/- on  account of unfair trade practice. This amount will be deposited with the State Legal Services Authority, U.T., Chandigarh A/C along with Rs.7,000/- as litigation costs to be paid to the CC.

7.             This order shall be complied with within 30 days from the receipt of copy of this order.

8.                 Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

21 November 2011.                                                                  

Sd/-

                    (LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)