Chandigarh

StateCommission

A/27/2015

Prem Chand - Complainant(s)

Versus

Kotak Mahindra Old Mutual Life Insurance Company Limited - Opp.Party(s)

Harash Manocha, Adv.

13 Feb 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

First Appeal No.	27 of 2015
Date of Institution	04.02.2015
Date of Decision	13.02.2015

 

Prem Chand son of Sh.Isher Das Guru, resident of House No.2165/2, Sector 45-C, Chandigarh - 160047

…..Appellant/Complainant.

Versus

1. Kotak Mahindra Old Mutual Life Insurance Company Limited, SCO 141-142, 2nd Floor, Sector 9, Chandigarh 160017

 

1. Kotak Mahindra Old Mutual Life Insurance Company Limited, Kotak Infiniti, 7th Floor, Zone-4, Bldg. No.21, Infinity Park, Opposite Western Express Highway, General A K Vaidya Marg, Malad (E) Mumbai 400097

 

.…..Respondents/Opposite Parties.

BEFORE:    JUSTICE SHAM SUNDER (RETD.), PRESIDENT

                SH. DEV RAJ, MEMBER

                MRS. PADMA PANDEY, MEMBER

 

Argued by:Sh.Harsh Manocha, Advocate for the                              appellant.

PER PADMA PANDEY, MEMBER

                This appeal is directed against the order dated 10.12.2014, rendered by the District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint filed by the complainant (now appellant) and directed the Opposite Parties (now respondents) as under :-

“9]            In view of the foregoing discussion, we partly allow the complaint of the complainant against the Opposite Parties.  The Opposite Parties are jointly & severally directed to pay a consolidated amount of compensation to the tune of Rs.20,000/- and also to pay litigation expenses of Rs.7000/-. 

        This order shall be complied with by the Opposite Parties jointly & severally within a period of 45 days from the date of its receipt, failing which they shall be liable to pay interest on the compensation amount of Rs.20,000/- at the rate of 18% p.a. from the date of filing of the present complaint till it is paid, apart from paying litigation expenses.”

1. The facts, in brief, are that the complainant purchased Kotak Smart Advantage Policy from the Opposite Parties on 28.11.2009 on the premium term of Rs.36,000/- annually, to be paid Rs.18,000/- half yearly. It was stated that Policy No.01789455 was issued by the Opposite Parties for a term of 15 years. It was further stated that the Opposite Parties did not invest the first year premium of Rs.36,000/- to purchase units and kept the same separately to grant fixed advantage benefit @135%, which came to be Rs.48,600/- on completion of policy term of 15 years, provided all due premiums had been paid.  It was further stated that the illustration given in the Policy documents was fake, imaginary and misleading, which amounted to unfair trade practice on the part of the Opposite Parties. It was further stated that after speaking to Customer Care Executive of the Opposite Parties at Mumbai on 16.05.2013 to revive Policy No.01789455, the complainant was advised to make payment of three half yearly premiums due on 28.05.2011, 28.11.2011 and 28.05.2012 to complete the requirement of lock in period of three years under the revival of the policy terms. 
2.         The complainant visited the local office of the Opposite Parties at Chandigarh on 17.05.2013 to make the payments but found that the said branch was under renovation and, hence, he had been left in lurch as no alternative address was provided to him. Accordingly, the payments were directly sent to the Opposite Parties Head Office. It was further stated that these payments were made through Central Bank of India vide cheque No.032951 dated 17.05.2013 for a sum of Rs.18,000/- and cheque No.034888 dated 17.05.2013 for a sum of Rs.36,500/- (together with Rs.500/- revival charges as per policy terms) with a request for revival (at page No.7 to 11). The payments made by the complainant were duly accounted for.  It was further stated that the Opposite Parties sent SMS on 31.5.2013 at 2.56 PM asking the complainant to visit their Panchkula Office.  It was further stated that major policy revival forms duly completed for Policy Nos.01789455 & 01576750, as required by the Opposite Parties, were sent through Regd. Post dated 01.06.2013, vide letter dated 31.05.2013 (at page No.13 to 16).   However, the Opposite Parties inspite of verbal talk as well as sending of numerous reminders dated 17.05.2013, 31.05.2013, 26.06.2013, 15.07.2013, 23.08.2013 & 05.09.2013 , failed to resolve the matter.

4.             It was further stated that the complainant again sent all the relevant letters, payment details as well as copy of major revival form to the head office of the Opposite Parties through emails on 26.09.2013 and 30.09.2013 but neither they resolved the matter nor any communication was received. Ultimately, the Opposite Parties returned the amount of Rs.55,000/- paid towards the due premiums, as asked for by them.  It was further stated that the Opposite Parties had done this only to grab the first year premium of Rs.36000/-, which was kept separately to give assured benefits.  It was further stated that the Opposite Parties were deficient, in rendering service, as also, indulged into unfair trade practice.  When the grievance of the complainant was not redressed, left with no alternative, a complaint under the Consumer Protection Act, 1986 (hereinafter to be called as the “Act” only), was filed.

5.             In their written statement, Opposite Parties No.1 and 2, admitted the issuance of Insurance Policies, in question, on receipt of premium amount as per information and declaration provided in the application form (Annexure R-2 Colly.). It was further stated that Policy bearing No.01789455 was terminated on 28.5.2013 due to non-payment of the premiums on due dates, as per its terms & conditions.  It was further stated that the premium against the said Policy was received by the Opposite Parties only in June, 2013.  It was further stated that the complainant submitted only three half yearly premiums and the next premium was due on 28.05.2011 and, accordingly, an intimation/renewal notice regarding the payment of renewal premium was also sent to him but despite the reminder, no renewal premium was received and on account of non-payment of the renewal premium, the Policy moved into the lapse mode. An intimation in this regard, was sent to him vide letter dated 28.05.2011. It was further stated that  the complainant was clearly informed vide the said letter dated 28.05.2011 that he had an option of reviving the Policy but despite being served the aforementioned reminder, the complainant did not approach the Company for any premium payment. Thereafter, the Opposite Parties sent a letter dated 28.03.2013 and informed that if the policy was not revived by 27.05.2013 the same would be terminated but he did not revive his Policy and, accordingly, Policy No.01789455 was terminated due to non-payment of premiums and the surrender value of Rs.16,475.41 was paid to him vide cheque No.529991, as per the Policy terms and conditions.  It was further stated that the complainant in order to make up case against the Opposite Parties, in a very clever manner, submitted a combined amount of Rs.55,000/- through three separate cheques, after the foreclosure of the Policy, but since the Policy had already been forfeited on 28.05.2013 itself, therefore, the amount of Rs.55,000/- was refunded back to the complainant. 

6.             It was further stated that considering the case in totality, the Opposite Parties had reversed foreclosure and revived the Policy, as a goodwill gesture, for Policy No.01576750.  Thereafter, the Opposite Parties sent letter dated 06.12.2013 and informed the complainant that the last premium due under the said Policy had been duly apportioned against the Policy and all the premiums due had been received.  Thereafter, the complainant voluntarily approached the Opposite Parties with surrender request and hence submitted surrender form dated 21.12.2013 for surrender of his Policy.  The request was duly processed and an amount of Rs.96,971.07 was credited to his bank account towards surrender of Policy.  It was further stated that  the Policy was duly revived and all premiums paid by the complainant were allocated against the Policy and all accumulated benefits therein were duly provided to him by way of his surrender payout.  It was further stated that  by paying the surrender amount, the Company duly discharged its liability arising out of Clause 6 of the terms & conditions of Policy No.01576750 (Annexure R-5). It was further stated that the Opposite Parties were neither deficient, in rendering service nor indulged into unfair trade practice.    

7.             The complainant, filed replication to the written statement, wherein he reiterated all the averments, contained in the complaint, and refuted those, contained in the written versions of the Opposite Parties. 

8.             The Parties led evidence, in support of their case.

9              After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the District Forum, allowed the complaint, as stated above. 

10.            Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.

11.            We have heard the Counsel for the appellant and have gone through the evidence and record of the case, carefully. 

12.            The Counsel for the appellant/complainant submitted that the respondents/Opposite Parties deliberately delayed the revival of the Policy. The appellant constantly requested the respondents for revival of the policy but to no avail. He further submitted that the payment made by the appellant was duly accepted by the respondents in their account on 13.06.2013. He further submitted that after a considerable time of four months, a sum of Rs.55,000/- was refunded by the respondents being excess amount on 27.09.2013 without any valid reason or detailed letter. He further submitted that even if the revival of the Policy was turned down by the respondents, no written confirmation was ever sent by them and the fund value for the third premium amounting to Rs.16475.41 had not been paid, which after considerable delay of almost one year, credited to his account through NEFT on 15.04.2014, during the pendency of the complaint before the District Forum. He further submitted that the very purpose of insurance had been defeated by the respondents by refusing revival of the Policy. He further submitted that the complainant being ex-serviceman and senior citizen, was being punished to lose the hard earned money amounting to Rs.36,000/- without any fault. It was further submitted that it was the malicious intention of the respondents to grab the amount, aforesaid, by not reviving the Policy. He further submitted that cheque No.529991 dated 30.5.2013 for Rs.16475.41 has already been returned to the respondents vide letter dated 15.7.2013 (at page No.25 of the District Forum record), immediately after its receipt. He further submitted that the order of the District Forum declining the relief of first year premium of Rs.36,000/- with interest, is not justified. He further submitted that the District Forum directed the respondents to pay  consolidated amount of compensation of Rs.20,000/- and litigation cost of Rs.7000/-, which is meagre and not justified.  

13.          After giving our thoughtful consideration, to the submissions, raised by the Counsel for the appellant/complainant, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, at the preliminary stage, for the reasons to be recorded, hereinafter.

14.            The allegation of the Opposite Parties with regard to the Policy No.01789455,  before the District Forum, that the complainant submitted only three half yearly premiums and the next premium was due on 28.05.2011 and, accordingly, an intimation/renewal notice dated 29.4.2011 (at page No.135 of District Forum record) regarding the payment of renewal premium was also sent to the complainant but despite the reminder, no renewal premium was received from him and on account of non-payment of renewal premium, the policy moved into the lapse mode and intimation regarding the same was also sent to him (complainant) vide letter dated 28.5.2011 (at page No.137 of District Forum record). Thereafter, the Opposite Parties sent a letter dated 28.3.2013 (Annexure R-7), wherein, it was specifically mentioned that if the policy is not revived by 27.5.2013 the same shall be terminated but he did not revive his Policy and, accordingly, Policy No.01789455 was terminated due to no-payment of premiums and the surrender value of Rs.16475.41 was sent to him vide letter dated 30.5.2013 (at page No.140 of District Forum record).

15.            As per the written statement of the Opposite Parties, before the District Forum, the complainant after foreclosure of the Policy, aforesaid, submitted a combined amount of Rs.55,000/- through three separate cheques but since the Policy had already been forfeited on 28.5.2013 itself, the amount of Rs.55,000/- was refunded back to the complainant vide letter dated 27.9.2013 (Annexure R-8).

16.              The main allegation of the appellant/complainant is only that the Opposite Parties after encashing his two cheques of Rs.54,500/- which also included the revival fee of Rs.500/- alongwith the three premium amounts of Rs.18,000/- each, failed to revive his policy and after having enjoyed the money for nearly four months, preferred to return the same and also the amount of four premiums, which was deposited in the Policy in question, reduced to Rs.16,475/- due to the lapse of the Policy and the complainant was denied the benefit of the Policy.  The Opposite Parties while defending the case of the complainant, before the District Forum, claimed that as per the terms and conditions of the Policy, the condition of revival, as mentioned in Clause 7, which reads as under :-

 “The company may accept or decline the request for revival (made by the policyholder in writing) of a lapsed policy, or accept the request for revival on such terms & conditions as it deems fit.  The revival of the policy will be effective after the company’s approval is communicated in writing to the policyholder.” 

Annexure R-7 is a copy of the letter dated 28.03.2013. From this document, it is proved that the complainant was advised about the revival of the Policy and mentioned that the revival period of the Policy ended on 27.5.2013.  The complainant sent a letter dated 17.05.2013 to the Company for revival of Policy No.01789455 (at page No.11) alongwith two cheques dated 17.05.2013 (at page No.12) of the record of the District Forum. From this document, it is proved that the communication from the side of the complainant dated 17.5.2013 was certainly within the revival period and even the cheques i.e. bearing No.032953 dated 17.05.2013 for a sum of Rs.18,000/- and bearing No.034888 dated 17.05.2013 for a sum of Rs.36,500/- were issued much before the lapse of the Policy and within the revival period.  However, the District Forum rightly held in its impugned order that the act of the Opposite Parties in encashing the cheques, without first communicating about their decision, whether they preferred to entertain the request of the complainant or deny the same, is a bad business practice.  The District Forum rightly held that the Opposite Parties should have first taken a categorical stand about their decision, with regard to the revival of the Policy, rather than accepting the consideration amount from the complainant and the Opposite Parties after accepting the amount, decide the matter after a gap of four months, which amounted to unfair trade practice on the part of the Opposite Parties.  Even as per the Protection of Policyholders Guidelines (IRDA) 2002 Regulation 10(1)(g), the Opposite Parties were duty bound to respond to the communication dated 17.5.2013, within 10 days of its receipt, which is reproduced hereunder:-

10. Policyholders’ Servicing

 

1. An insurer carrying on life or general business, as the case may be, shall at all times, respond within 10 days of the receipt of any communication from its policyholders in all matters, such as:

 

Xxxxxxxxxxxxxxx

(g)   issuance of an endorsement under the policy; noting a change of interest or sum assured or perils insured, financial interest of a bank and other interests; and”

Even the Opposite Parties preferred not to respond to the communications of the complainant, within prescribed time period, leading him to believe that his policy had been revived.  The District Forum rightly held that the act of the Opposite Parties in deciding the matter of the  complainant after a gap of four months, certainly amounted to deficiency in service on their part.

17.       Though there is a mention in the letter dated 15.7.2013 that the complainant was sent cheque bearing 529991 dated 30.05.2013 (at page No.25) for a sum of Rs.16675.41 (In fact Rs.16475.41) which was returned to the Opposite Parties, as the same was not acceptable to him, yet no photocopy of the same (cheque) was annexed with the said letter dated 15.7.2013, which was sent by the complainant to the Opposite Parties to establish that actually the same (cheque) was sent alongwith this letter. Therefore, the complainant has also not placed on record his account statement or the statement of account of the Opposite Parties to prove the fact that he did not encash the said cheque for the period, in question, and the same was got encashed by the Opposite Parties on their receipt.       As such, the District Forum rightly granted compensation to the complainant for the harassment and mental agony, which he suffered at the hands of the Opposite Parties.

18.            Keeping in view the facts and circumstances of the case, we are of the considered view that the District Forum was right, in awarding compensation to the tune of Rs.20,000/- and litigation expenses to the tune of Rs.7000/- in the complaint, as stated above. In our considered opinion, the appeal filed by the complainant deserves to be dismissed.  Hence, the order passed by the District Forum, being based on correct appreciation of evidence and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.

19.            For the reasons recorded above, the appeal, filed by the appellant/complainant, being devoid of merit, must fail, and the same stands dismissed, with no order as to costs. The order of the District Forum is upheld.

20.            Certified Copies of this order be sent to the parties, free of charge.

21.            The file be consigned to Record Room, after completion.

Pronounced.

13/02/2015                                                        Sd/-         

 [JUSTICE SHAM SUNDER (RETD.)]

PRESIDENT

 

 

Sd/-

 (DEV RAJ)

MEMBER

 

 

Sd/-

(PADMA PANDEY)

        MEMBER

 

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