Chandigarh

DF-I

CC/706/2014

Diwan Singh - Complainant(s)

Versus

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

Amarjit Singh Gill

13 Mar 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

 

Consumer Complaint  No	:	CC/706/2014
Date  of  Institution	:	29/10/2014
Date   of   Decision	:	13/03/2015

 

 

 

 

 

Diwan Singh s/o Sh. Amar Singh, R/o #457, Sec.40-A, Chandigarh.

……………Complainant

Vs

 

1.   Kotak Mahindra Old Mutual Life Insurance Limited, SCO 141-142, 2^nd Floor, Sector 9-C, Chandigarh, through its Branch Manager.

 

2.   Chairman & Managing Director, Kotak Mahindra Old Mutual Life Insurance Limited, Kotak Infinity, 7^th Floor, Zone-4, Bldg. No.21, Infinity Park, Opp. Western Express Highway, Genl. A.K. Vaidya Marg, Malad (E), Mumbai (Maharashtra) 400 097.

 

3.   Chief Manager (Police Serving), Kotak Mahindra Old Mutual Life Insurance Limited, Kotak Infinity, 7^th Floor, Zone-4, Bldg. No.21, Infinity Park, Opp. Western Express Highway, Genl. A.K. Vaidya Marg, Malad (E), Mumbai (Maharashtra) 400 097.

……………Opposite Parties

 

BEFORE:    SH.P.L. AHUJA              PRESIDENT

MRS.SURJEET KAUR                MEMBER

 

Present:      Sh. A.S. Gill, Counsel for Complainant.

            Sh. Mrigank Sharma, Counsel for OPs.

 

PER SURJEET KAUR, MEMBER

 

 

 

1.      Briefly stated, on the persuasion of the Agent of the Opposite Parties, the Complainant, who is a Class-IV employee with NIELIT, Chandigarh, had purchased two single premium life insurance policies bearing No.01909404 and No.01924196, on 27.02.2010 and 10.03.2010 for Rs.30,000/- & Rs.15,000/- respectively (Annexure C-1 & C-2). It has been averred that when in Feb. 2011, he received premium payment notices in respect of both the aforesaid Policies, he approached the officials of Opposite Party No.1, for rectification, in terms of policies, but never got any satisfactory reply and was rather made to move from one seat to another. After a long futile trail, ultimately, the Complainant received two letters dated 13.1.2013 intimating foreclosure of the aforesaid policies (Annexure C-3 & C-4). Subsequently, the Complainant received two separate letters dated 21.3.2013 from Opposite Parties, along with foreclosure Cheques amounting to Rs.2040.46P (Policy No.01909404) and Rs.1311.60P (Policy No.01924196) (Annexure C-5 & C-6). However, the Complainant never encashed these cheques and again approached the Opposite Party No.1 for redressal of his grievance, but to no avail. After losing all hopes, the Complainant served a legal notice dated 17.7.2014 on Opposite Parties, to refund the amount by making deductions as per IRDA Regulations, but the Opposite Parties vide letter dated 22.8.2014 refuted the claim of the Complainant (Annexure C-12 and C-13). In these circumstances, the Complainant has filed the instant Complaint u/s 12 of the Consumer Protection Act, 1986, before this Forum, alleging the aforesaid act & conduct of the Opposite Parties as deficiency in service and unfair trade practice.

 

2.      Notice of the complaint was sent to Opposite Parties seeking their version of the case.

 

3.      Opposite Parties in their reply, while admitting the factual matrix of the case, have pleaded that as per the terms & conditions of the Policy documents, the Complainant had purchased the policies in question with tenure of 10 years with an annual premium of Rs.30,000/- for Policy No. 01909404 and Rs.15,000/- for Policy No. 01924196 respectively. It has been asserted that the policies were issued as per the proposal form filled in by the Complainant and the same were duly received by him. Under the policy, the Complainant was allowed a free look period of 15 days for seeking cancellation of the insurance policies. However, he never approached under the said Free Look Period and therefore, the policy terms & conditions became final and binding in between the parties. It has been also pleaded that the next due date to pay the premium was on 15.3.2011 for both the subject policies, but the Complainant failed to make the payment even after sending reminders to revive the subject policies. Since the answering Opposite Parties did not receive the due renewal premium within the grace period, the subject policies entered into lapse mode w.e.f. 15.3.2011 as per Clause No.4 of the Policy Terms & Conditions. Thereafter, the foreclosure intimation letters dated 13.1.2013 (Annex. C-3 & C-4) were dispatched to the Complainant. Opposite Parties have maintained that since the captioned policies were terminated as per Clause 4, they (OPs) had processed the foreclosure refund amounting to Rs.2,040.46/- (Annex.C-5) through Cheque bearing No.484937 dated 21.3.2013 under the Policy No. 01909404 and Rs.1311.60/- (Annex.C-6) through Cheque bearing No. 484938 dated 21.03.2013 under the Policy No. 1924196, however the same have not been encashed by the Complainant. Opposite Parties have further pleaded that the IRDA Regulation dated 1.7.2010 are not applicable to the facts and circumstances of the present as the policies were issued before the said regulation. Denying all other allegations, the Opposite Parties have prayed for dismissal of the complaint.

 

4.      The Complainant also filed replication to the written statement filed by the Opposite Parties, wherein the averments as contained in the complaint have been reiterated and those as alleged in the written statement by the Opposite Parties have been controverted.

 

5.      Parties led evidence in support of their contentions.

 

6.      We have heard the learned Counsel for the parties and have also perused the record, along with the written arguments filed on behalf of the parties.  

 

7.      Admittedly, the complainant was issued two insurance policies (Ann.C-1 & C-2) by paying premium of Rs.30,000/- & Rs.15,000/- respectively.

 

8.      The main contention of the complainant is that he was mis-represented by the agent of the OP Company about the benefits of the Policies; their tenure; the agent had filled-up the proposal forms, as per his own wishes; did not disclose him the true contents thereof and thereby caused him loss of money, besides mental & physical harassment.

 

9.      The stand taken by the Opposite Parties is that the complainant after understanding the features, benefits and terms & conditions of the Policies in question, himself proposed for the said policies and opted to pay regular yearly premium of Rs.30,000/- & Rs.15,000/-.  Moreover, the complainant did not avail the option of free look period, to get his policies cancelled, within a period of 15 days from the date of their receipt. Therefore, there is no deficiency on the part of OP Company, rather the complainant failed to adhere to the terms & conditions of the policies in question. 

 

10.      Admittedly, the complainant put his signatures on the proposal forms Annexure R-1/1 (Pg. 54-59 of the written statement of Opposite Parties) and Policy (Pg. 83 to 86), in Hindi language, whereas the entire form has been filled-up in English language. The complainant also signed under the column of Declaration in Hindi. In this very column at Page No.57 of Annexure R-1/1, there is signature of one Gurprit Singh, Address – H.No.544, Green Enclave, Kharar, who filled it and explained the contents of the form to the complainant in Hindi. Moreover, it is evident from Annexure C-14 (Employment Certificate) that the Complainant’s educational qualification is Primary only.    

 

11.      The Opposite Parties have neither placed on record the affidavit of said Gurprit Singh nor the details of his qualification to authenticate & prove, beyond any doubt, that he had explained the contents of the proposal form in Hindi to the complainant and he was qualified enough to explain & translate the contents of the proposal form, printed in English language, into Hindi Language. Moreover, there is no document from the side of Opposite Parties either along with the proposal form or in the present complaint case to prove the identity & existence of any such person namely Gurprit Singh. Not only this, the address mentioned in it shows that he was any employee of OP’s Franchises through which the insurance was got done from the complainant, because just on the same page, against the Column of Name of Life Advisor/ Relationship Manager/ Specified Person, the name mentioned is ‘Surinderjit Kaur’.

 

12.      A perusal of proposal forms placed on record by the Opposite Parties (Annexure R-1/1) reveal that the same have been signed by the complainant in Hindi, whereas the entire form in both the Annexures has been filled-up in English language. More so, there is no certificate incorporated at the end of these proposal forms from the insured that the contents of the forms and documents had been fully explained to him and that he had fully understood the significance of the proposed contract. As such, it was a total violation of Regulation No.3 sub-clause (4) of Point of Sale of ‘The Insurance Regulatory and Development Authority (Protection of Policyholders’ interest) Regulations, 2002, and the same is reproduced as under:-

 

          3. Point of Sale

 

(4)  Where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the end of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract.

 

 

13.      So, the proposal form was not filled as per above regulations which is clear cut violations of ‘The Insurance Regulatory and Development Authority (Protection of Policy Holder’s Interest) Regulations, 2002.

 

14.      Furthermore, the terms & conditions of the Policy Documents (Ann.C-1 & C-2) as well as the proposal forms (Annexure R-1/1) have been printed in small letters in English. Apparently, how the complainant knowing only Hindi could have gone into the maze of these extensive terms & conditions and understood them including the free look period clause. Therefore, it cannot be said that non-exercise of the option in the free look clause estops him from approaching this Forum. These terms & conditions cannot be understood even by a literate person without the assistance of a person having knowledge of insurance business. Otherwise also, there is nothing to suggest that these terms & conditions were there, when the proposal forms were filled nor do they form part of the proposal forms.  Therefore, the insurer in the present case failed in its lawful duty/obligation in bringing to the knowledge of the complainant all the terms & conditions of the policy and their implications, resulting in deficiency of service on its part. 

 

15.      As far as the case law cited by the OPs is concerned i.e. V.N. Shrikhande Vs. Anita Sena Fernandes, 2011 (1) CLT 262; Life Insurance Corpn. of India & Ors. Vs. Siba Prasad Dash (Dr.) and Ors., 2008(4) CPJ (NC) 156; M/s Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. & Anr., 2011(1) CLT 485 and Kotak Mahindra Old Mutual Life Insurance Ltd. & Ors. Vs. Anu Goel, FA No.307 of 2013, decided on 10.09.2013 by Hon’ble Chandigarh State Commission, the same being distinguishable from the facts & circumstances of the present case, are not applicable, hence of no help to the Opposite Parties.

 

16.      Due to deficiency in service of Opposite Parties for non-explaining the terms & conditions of the Policies and their implications, we allow the present complaint.  The Opposite Parties are directed to jointly & severally refund to the complainant the total invested amount of Rs.45,000/- (Rs.30,000/- + Rs.15,000/-). The OPs No.1 & 2 are also directed to jointly & severally pay Rs.20,000/- as compensation for causing him harassment & mental agony, along with litigation cost of  Rs.10,000/-.

 

17.      This order be complied with by the Opposite Parties jointly & severally within a period of 30 days from the date of receipt of copy of this order, failing which they shall be liable to pay the above awarded amount of Rs.65,000/- (Rs.45,000/- + Rs.20,000/-) along with penal interest at the rate of 12% p.a. from the date of filing this complaint i.e. 29.10.2014  till its actual payment, besides paying litigation costs, as aforesaid.

 

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

Announced

13^th March, 2015                                      

Sd/-

(P.L. AHUJA)

PRESIDENT 

 

 

Sd/-

(SURJEET KAUR)

MEMBER