Sri. P. Satheesh Chandran Nair (President):

                   The complainant filed this petition u/s.12 of the C.P. Act 1986 for getting reliefs from the opposite parties.

                   2. The case of the complainant is stated as follows:  The complainant purchased two life insurance policies of Kodak Mahindra of Kodak Mahindra Old Mutual Life Insurance Ltd. on 24.12.2009 vide Policy No.1820254 in the name of the complainant and Policy No.1820351 in the name of his wife K.S. Santhakumary.  The executive of the opposite party made to believe that they recently launched a special type of insurance policy, specially for married couple who are capable to pay at Rs.1 lakh annual premium.  The opposite party assured that, although the policy time is for 15 years, the complainant need to pay only for 3 years and they will be able to get back the entire invested money together with substantial profit at any time, after paying 3 years regular premium.  Apart from this offer the opposite party offers all kinds of protection from any misfortune incidence, handsome salary for unemployed educated youth in the insured family and even foreign trips.  According to the complainant, after paying the full 3 years premium he wanted to surrender the policy.  At that time, the opposite party suggested to continue the policy or to wait till the share market is to be improved.  The complainant understood that he will get back only the fund value of 2^nd and 3^rd year premium and the entire 1^st year premium will be forfeited.  It is again contended that anywhere in the terms and condition the forfeiture of the 1^st year premium was mentioned.  According to him, the forfeiture of the 1^st premium at the time of surrender of the policy is against the assurance given by the officials of the opposite party hence the act of the opposite party with regard to the forfeiture of the 1^st year premium amounts to deficiency in service and unfair trade practice on their side.  Therefore, the complainant filed this case to give proper direction to the insurance company to pay back the full surrender value including the 1^st year premium, compensation, cost etc. etc. 

                   3. This Forum entertained the complaint and issued notice to the opposite party 1 and 2 for their appearance.  The complainant filed an I.A.No.98/15 for impleading additional opposite party 3 and additional opposite party 4 in the party array.  This Forum allowed the prayer of the complainant and impleaded the above additional opposite parties in the party array.  The complainant filed a petition to delete opposite party 2 from the party array hence the opposite party 2 is deleted from the party array on 11.10.2015.  Opposite party 1 entered appearance on 11.12.2015.  Though opposite party 3 and 4 received notice from this Forum, they did not turn up hence opposite party 3 and 4 declared exparte on 11.12.2015.  At this juncture, opposite party 1, 3 and 4 are only in party array as opposite parties. 

          4. Opposite party 1 filed version as follows:  According to opposite party 1 the case is not maintainable either in law or on fact.  It is contended that the complainant availed Unit Linked Investment Plan (ULIP) and the said investment plan cannot be questioned before the CDRF.  The contesting opposite party has not compelled the complainant to avail the policies as stated by the complainant.  If the complainant had any objection with regard to the said Unit Linked Investment Plan he could have raised objection in the free look period.  The complainant and his wife remitted the policy premium only up to 24.12.2012.  Though the opposite party issued notice for remittance of further premium, they failed to remit the premium after 24.12.2012.  According to this contesting opposite party, the complainant did not file any surrender application for the said policies.  As per the insurance law, the insured and insurer are strictly binding on terms and condition of the policies.  According to opposite party 1, the complainant filed a petition before the Insurance Ombudsman for the same purpose and the said complaint was also dismissed.  It is again contended that a Unit Linked Investment Plan is basically a combination of insurance as well as investment.  Apart from the premium paid is utilized to provide insurance policy holder while the remaining portion is invested in various equity and debut schemes.  According to opposite party 1, the deduction of 1^st year premium has been explained in the policy document and as stated earlier an opportunity was also given to the complainant to approach the insurer within the free look period if any discrepancies are there.  Hence the opposite party prayed to dismiss this complaint with compensatory cost to the opposite party.

           5.  We peruse the complaint, the versions and the records before us, we framed the following issues:

1. Whether this Forum has jurisdiction to try this case?
2. Whether the opposite parties committed any deficiency in service as alleged by the complainant?
3. Regarding reliefs and costs?

          6. The evidence of this case consists of the oral evidence adduced by PW1 and Exts.A1 to A6.  On the other side opposite party 1 examined the Branch Manager of Pathanamthitta as DW1 and marked Exts.B1 to B9.  The complainant he who examined as PW1 filed a proof affidavit in lieu of his chief examination.  When we peruse his proof affidavit, it is more or less as per the contention of his complaint.  Ext.A1 is the copy of policy document dated 26.12.2009.  Ext.A2 is the copy of policy document dated 24.12.2009.  Ext.A3 is the copy of letter dated 03.01.2015.  Ext.A4 is the copy of reply of Ext.A3 dated 20.01.2015.  Ext.A5 is the request dated 30.01.2015.  Ext.A6 is the copy of repudiation letter dated 07.03.2015. On the other side Exts.B1 to B9 were marked.  Ext.B1 is the copy of OTC proposal form (Policy No.01820351).  Ext.B2 is the copy of OTC proposal form (Policy No.01820254).  Ext.B3 is the copy of Ext.B1 policy condition documents.  Ext.B4 is the copy of Ext.B2 policy condition documents.  Ext.B5 and B6 are the copy of letters dated 29.11.2012 sent by the opposite party to the complainants.  Ext.B7 is the letter dated 05.12.2014 sent by the opposite party to the 1^st complainant.  Ext.B8 is the copy of Order dated 03.07.2015 issued by the Insurance Ombudsman against the complainant.  Ext.B9 is the copy of Surrender Value Certificate dated29.04.2015.  On the defence side as stated earlier one Suresh Varghese, the Branch Manager of opposite party 1 examined as DW1.  He also filed a proof affidavit in lieu of his chief examination and when we peruse the proof affidavit, it also shows that DW1 mainly relying the contention put forward by opposite party 1 in his version.  The DW1 deposed that the complainant availed Unit Linked Investment Plan and the said Unit Linked Investment Plan cannot be tried by this Forum.  It is deposed that the complainant has not approached with objection within the free look period.  Therefore, it can be deemed that the complainant has no objection with regard to the policy in question.  It is also deposed that the officials of the opposite party did not influence the complainant to avail this kinds of policies.  The complainant and the opposite parties are strictly binding on the terms and condition of the policy in question.  After the closure of the evidence, we heard both sides. 

          7. Point No.1:- At the time of filing the version the opposite party contended that the case is not maintainable before this Forum.  In order to substantiate their case, the opposite party failed to adduce any material evidence to convince us.  It is to see that the complainant and his wife are insured of the opposite party.  The opposite parties are insurer with regard to the two policies connected to the complainant and his wife.  The opposite party is also admitting that up to 24.12.2012 they remitted premium to opposite party without fail.  As per the contention of the complainant, it can be inferred that an insured can surrender his insurance policy after the completion of 3 years.  When we peruse all the above aspect it can be inferred that the complainant is a consumer of the opposite party and the opposite party is a service provider of the complainant.  Hence the case is maintainable before this Forum and Point No.1 found in favour of the complainant.

          8. Point Nos.2 & 3:-  For the sake of convenience, we would like to consider Point No.2 and 3 together.  The main question to be considered is whether the opposite party committed any deficiency in service against the complainant.  It is come out in evidence that the complainant and his wife availed two insurance policies vide Policy No.01820351 dated 24.12.2009 in the name of the wife of the complainant Smt. Santhakumary and another policy bearing No.01820254 in the name of the complainant dated 24.12.2009.  The premium amount is Rs.50,000/- and the total premium paid is Rs.1,50,000/- for each policies.  When we peruse the whole case records and available evidence before us, it can be seen that whether the opposite party has any right to forfeit the 1^st year premium at the time of surrendering the policy after the completion of 3 years.  It reveals that there is no dispute between the parties with regard to the total remittance of premium amount, i.e. Rs.1,50,000/- each.  DW1 as the witness of opposite party 1 deposed that the complainant did not file any application for surrender of the policy as alleged.  When we peruse the case record, it can be seen that as per Ext.A5 on 30.01.2015 the complainant and his wife have sent a letter to the Grievance Officer, Kodak Mahindra Old Mutual Life Insurance Ltd. for the return of 1^st year premium.  As per Ext.A6, the Grievance Cell of the opposite party given a reply to the complainant stating that the above mentioned Ext.A5 complaint is closed and also informed the complainant to approach the Ombudsman, if any grievance is existing.  In the light of Ext.A5, A6 it reveals that the complainant in this case taken an earnest attempt to surrender his insurance policy.  Ext.A1 and A2 are the copy of the insurance policy of the complainant and his wife respectively.  In Page 10 of Ext.A1 and Ext.A2, the surrender details are mentioned.  The surrender clause described as, “the policy can be surrendered only after completion of three policy years and three annual basic premiums are paid.  The surrender value applicable will be the then fund value in Main and Top Up accounts (based on unit price) less a surrender charge (refer clause 14).  The Top up accounts will also be surrendered together with the main account and there will be no option to surrender these two accounts viz. The main and the Top up accounts separately.  The surrender value of the Top up accounts will be the fund value in the Top up accounts.  Needless to say that in case of surrender, the policy shall stand terminated and no further death benefit or maturity benefit is provided”.  In the light of the above terms, it is clear that an insured can surrender his policy after the completion of 3 years and the surrender value will be the then fund value in main and top up account.  It is also clear that at the time of the surrender of the policy, the policy shall stand terminated.  In Page No.11 of Ext.A1 and A2 the forfeiture of the policy is also described.  When we read the whole description of the ‘forfeiture of policy’ in Ext.A1 and Ext.A2, it is clear that anywhere in this portion there is no whisper with regard to the forfeiture of the 1^st year premium.

          9. When we peruse the exhibits marked on the side of 1^st opposite party, it is clear that Ext.B1 and B2 are proposal forms. Ext.B3 and B4 are policy condition document of Ext.B1 and B2.  We would look into Ext.A1 and A2 on one side and Ext.B3 and B4 on the other side, it is clear that Ext.Ext.A1 and A2 on complainant side and Ext.B3 and B4 on opposite party side are one and the same.  Hence there is no need of any further explanation with regard to Ext.B3 and B4.  Ext.B5 and B6 are notices issued by opposite party 1 and 2 to the complainant and his wife respectively.  This letter explained the change in fund mandate and methodology of NAV of ULIP funds.  These two exhibits mainly described that opposite party company has raised the ceiling for investing in money market instrument to 100% in Kodak Guaranteed Growth, Kodak Pension Growth, Kodak Guaranteed balanced funds and as a result of the equity holding these funds may be produced to 0%.  The revision will provide flexibility to fund managers to manage the funds better in times of market volatility etc.  Anyway, this Circular (Ext.B5 and B6) are also not referring anything with regard to 1^st year premium at the time of surrender.  Ext.B7 is a letter issued by opposite party 1 in favour of the complainant with regard to the complainant’s request of automatic cover maintenance.  As per this Ext.B7, opposite party 1 is acknowledged that the complainant’s policy will continue under automatic cover maintenance mode.  Ext.B8 is the award of Ombudsman complaint No.KOC-L-026-1415-0596 dated 29.06.2015, which was served to opposite party 1 on 03.07.2015.  It is true that the award of the Ombudsman is against the interest of the complainant.  However, we are not binding by this order and we have to consider the genuine grievances of the complainant with regard to the deficiency in service of the opposite party.  Ext.B9 is the fund value statement of complainant No.2 on 29.04.2015.  As per Ext.B9 the net amount payable as fund value on 29.04.2015 is Rs.1,30,008.95.  DW1 is examined for and on behalf of opposite party 1.  DW1 is actually opposite party 4 in this case and he was declared exparte as stated above due to his non appearance on the prescribed day of posting.  As a witness of opposite party 1 through him of this Ext.B1 to B9 were also marked.  Apart from it, he filed a proof affidavit in lieu of chief examination for and on behalf of this the above said opposite party 1.  At the time of cross-examination he answered, “policy documentþ GsX-¦nepw Øe¯v 1^st year premium XncnsI Xcnà F¶v ]d-ªn-«pt­m?  (A) CÃ.  Ext.A4þ Page 2þ 1þmw hÀjs¯ premium marketþ invest sNbvXn-«nà F¶v ]d-bp-¶Xv icn-bsÃ? (A)  icn-bm-Wv.  1^st year premium amount, companyþbpsS investmentþ InS-¡p-I-bsÃ? (A) AsX”.  When we peruse the testimony of DW1, it can be easily inferred that anywhere in the policy document, there is no whisper with regard to the forfeiture of 1^st year premium as pleaded by the opposite party 1.  When we peruse the version of the opposite party 1 and the deposition of DW1 in cross, we can clearly understood the inconsistency of the version and deposition of opposite party 1.  Moreover, DW1 admitted that the 1^st year premium has not been invested in any market and it is kept under the investment of the company.  In the light of evidence adduced by the complainant as PW1 and DW1 in this case, it can be inferred that the contention put forward by the complainant is highly probable than the contention raised by the opposite party 1.  It is so interesting to see that the DW1 is deposed against the strong pleading of opposite party 1 in this case.  It is to be understood that additional opposite party 3 and 4 are subordinate officers of opposite party 1.  Opposite party 1, additional opposite party 3 and 4 are equally and severally liable to the complainant.  As discussed earlier, the complainant succeed to prove deficiency in service and unfair trade practice of the opposite parties 1, additional opposite party 3 and 4 under section 2(1)(g) and 2(1)(r) of the C.P. Act, 1986.  The complainant cited a decision reported in CPJ III 2012 Page 2 of Union Territories State Commission Redressal Commission Chandigarh, in Bhartendu Sood & Anr. Vs. Bajaj Allianz Life Insurance Co. Ltd.  The dictum is, “Consumer Protection Act, 1986 – Sections 2(1)(g), 2(1)(r), 15 – Insurance (Life) – Unit Linked Policies ‘Capital Unit Gain’ - Fund Value decreasing – Alleged deficiency in service – Unfair trade practice – District Forum allowed complaint – Hence appeal – There was decrease in the market value of units of appellant No.1, and, on the other hand increase in market value of units of appellant No.2, whereas, the NAV, the amount of investment, the date of investment and the policies in which investment was made by appellants were same – Respondent is deficiency in rendering service to appellant and also indulged in unfair trade practice – OP is directed to refund the amount deposited by appellants – Compensation awarded”.  As per this decision, the Hon’ble Union Territories State Commission, Chandigarh directed the insurance company to refund the amount deposited by the complainant along with the savings bank interest prevalent at the time of refund, from respective dates of its deposit till realisation, instead of payment of fund value on the basis of NAV as directed by the District Forum and also awarded compensation and cost etc. to the complainant.  When we go through the above decision it can be inferred that the case discussed in this petition and the case discussed in the above cited case are more or less in the same nature.  In the light of the above findings and the above cited decision we find that this complaint is allowable and Point No.2 and 3 are also found in favour of the complainant. 

          In the result, we pass the following orders:

1. The opposite party 1, Additional opposite party 3 and 4 are directed to refund the amount deposited by the complainants’ vide policy Nos.1820254, 1820351 along with the savings bank interest rate, prevalent at the time of refund, from the respective date of its deposit till its realisation.

2.  The opposite party 1, additional opposite party 3 and 4 are also directed to pay a compensation of Rs.10,000/- (Rupees Ten Thousand only) and a cost of Rs.3,000/- (Rupees Three Thousand only) to the complainants with 10% interest from the date of receipt of this order onwards.

             Dictated to the Confidential Assistant, transcribed and typed by her, corrected by me and pronounced in the Open Forum on this the 9^th day of August, 2016.

                                                                      (Sd/-)

                                                     P. Satheesh Chandran Nair,

                                                                    (President)

Smt. K.P. Padmasree (Member – I)             :     (Sd/-)

Smt. Sheela Jacob (Member- II)                 :     (Sd/-) 

Appendix:

Witness examined on the side of the complainant:

PW1  :  N. Sreenivasan 

Exhibits marked on the side of the complainant:

A1 :  Copy of policy document dated 26.12.2009. 

A2 :  Copy of policy document dated 24.12.2009. 

A3 :  Copy of letter dated 03.01.2015. 

A4 :  Copy of reply of Ext.A3 dated 20.01.2015. 

A5 :  Request dated 30.01.2015. 

A6 :  Copy of repudiation letter dated 07.03.2015. 

Witness examined on the side of the opposite parties:

DW1  :  Sunish Varghese 

Exhibits marked on the side of the opposite parties:

B1 :  Copy of OTC proposal form (Policy No.01820351). 

B2 :  Copy of OTC proposal form (Policy No.01820254). 

B3 :  Copy of Ext.B1 policy documents. 

B4 :  Copy of Ext.B2 policy documents. 

B5 & B6 :  Copy of letters dated 29.11.2012 sent by the opposite party

                 to the complainants. 

B7 :  Letter dated 05.12.2014 sent by the opposite party to the

        1^st complainant. 

B8 :  Copy of Order dated 03.07.2015 issued by the Insurance Ombudsman

        to the opposite party. 

B9 :  Copy of Surrender Value Certificate dated 29.04.2015.    

                                                                                              (By Order)

Copy to:- (1) N. Sreenivasan, Sumangalam House, Pannivizha,

          Near Pannivizha Service Co-Operative Bank,

          Adoor.P.O., Pathanamthitta Dist.- 691 523.

     (2) K.S.Santhakumari,       -do.  –do.                                                

     (3) Managing Director, Kotak Mahindra Old Mutual Life Insurance  

          Ltd., (Mumbai), 7^th Floor, Kotak Towers, Building No.21,

          Infinity Park, Off Western Express Highway, General AK Vaidya  

          Marg, Malad (E), Mumbai – 400 097.

     (4) Manager, Bajaj Capital Insurance Broking Ltd., 1^st Floor,  

          Souparnika Building, Opp. Crime Branch Road,

          Kadappakkada, Kollam – 691 008.

              (5)  The Branch Manager, Kotak Life Insurance Co.,

                    College Road, Kizhakkedathu Building, Pathanamthitta.

     (6) The Branch Manager, Kotak Life Insurance Co.,

          Chandrima Building, 3^rd Floor, Cross Junction,

          Thiruvalla – 689 101.

     (7) The Stock File.