DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA (PUNJAB)

CC No. 16 of 11-01-2010

Decided on : 04-01-2011

Jai Gopal Goyal aged about 42 years S/o Late Sh. Rattan Lal Goyal, R/o #5095, Gali Old Tehsil, Bathinda.

.... Complainant

Versus

1. Max New York Life Insurance Company, Max House, 3^rd Floor, 1 Dr. Jha Marg, Okhla, New Delhi.

2. Branch Manager, Max New York Life Insurance Company Ltd., Ist Floor, The Mall, Bathinda.

3. Smt. Charu Gupta, Agent Max New York Life Insurance Co. Ltd., The Mall, Bathinda.

   .... Opposite parties

Complaint under Section 12 of the Consumer Protection

Act, 1986.

 

QUORUM

Ms. Vikramjit Kaur Soni, President

Dr. Phulinder Preet, Member

Sh. Amarjeet Paul, Member

For the Complainant : Sh. Jai Gopal Goyal,complainant in person.

For the Opposite parties : Sh. N K Batta, counsel for the opposite parties.

Opposite party No. 3 already exparte.

O R D E R

VIKRAMJIT KAUR SONI, PRESIDENT

1. This complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 as amended upto date (here-in-after referred to as 'Act'). The complainant alleged that on the allurements of opposite party Nos. 1 to 3, he purchased a single premium policy of the amount of Rs. 50,000/- and he is not required to deposit any amount in future. He received a notice/demand of opposite party Nos. 1 to 3 for payment of renewal premium of the policy and further demand of Rs. 1,00,000/- as 2^nd installment. When the complainant requested the opposite parties that at the time of sale of the policy, it was stated to him that it was a single premium policy and no further installments was to be paid, then they stated that if the complainant would not make the payment of next installments, then the first installment shall also be forfeited. The opposite parties have obtained the signatures of the complainant on blank policy documents. The opposite parties have deducted lot of amount from the premium amount paid by the complainant. On receipt of call for demand of next premium, the complainant sent registered AD legal notice to the opposite parties, but no reply was received. Hence, this complaint seeking direction of this Forum to the opposite parties to refund Rs. 50,000/- alongwith interest and also pay him compensation and cost.

2. The opposite party Nos. 1 & 2 filed their joint written reply and have taken preliminary objections that complaint is barred by limitation and Consumer Protection Act and the machinery thereunder cannot be effectively utilized for determining complicated questions of fraud and cheating and in this regard they have taken support of law laid down by the Hon'ble Supreme Court in the case titled Oriental Insurance Company Ltd., Vs. Munimahesh Patel 2006(IV) CPJ 1. It has been submitted that complainant has opted for the annual premium payment plan. He was entitled to cancel the policy within the Policy Review Period and get the refund, but the benefit of the same could not be given at a later stage. To support their plea, they have relied upon the law laid down by the Hon'ble National Commission in the case titled Life Insurance Corporation of India Vs. Anil P. Tadkalkar 1 (1996) CPJ 159 (NC). The opposite parties have submitted that complainant duly filled and signed the proposal form after understanding terms and conditions. The complainant was fully aware of the annual mode of payment and Policy Review Period Provision wherein the policy holder has a period of 15 days from the date of receipt of the policy to review the terms and conditions of the policy and where the policyholder disagrees to any of those terms and conditions, he has the option to return the policy stating the reasons for his objections, upon which he would be entitled to full refund less expenses incurred on medical examination and on account of stamp duty. The complainant was duly informed about the status of the policy as per the standard procedure. Unit linked statements were duly despatched to him from time to time and he was also informed about the status of the policy regularly. The policy terms stipulate that the policy can be cancelled within 15 days of receipt of the policy documents by a policy holder in exercise of the free look option whereas the complainant did not choose to do that during the Policy Review Period. Thus, he is not entitled to any refund.

3. Despite service of notice, none appeared on behalf of opposite party No. 3 and as such, exparte proceedings were taken against it.

4. Parties have led evidence in support of their pleadings.

5. Arguments heard and written submissions submitted by the parties perused.

6. The learned counsel for the complainant had submitted that complainant had purchased a Life Insurance Policy from opposite party No. 3 and had paid a single premium of Rs. 50,000/-. He contended that opposite parties have sold this policy on the pretext that this is a single premium policy and he had no need to deposit other installments. The complainant received notice/demand call from the opposite parties for payment of renewal premium of policy and to pay Rs. 1.00 Lac as second installment. He alleged that the opposite parties have obtained the signatures of complainant on some blank policy documents.

7. The learned counsel for opposite party No. 1 & 2 has taken legal objections that this complaint is barred by limitation and a question of fraud and cheating is involved in the present case. He has taken support of law laid down by the Hon'ble Supreme Court in the case titled Oriental Insurance Company Ltd., Vs, Munimahesh Patel 2006(IV) CPJ 1.

   The learned counsel for opposite party No. 1 & 2 submitted that complainant had opted for the annual premium payment plan. He was entitled to cancel the policy within the Policy Review Period and get the refund, but he is not entitled to the same benefit at the later stage. The opposite parties have further taken support of precedent laid down by the Hon'ble National Commission in the case titled Life Insurance Corporation of India Vs. Anil P. Tadkalkar 1 (1996) CPJ 159(NC). The complainant had duly filled and signed the proposal form after understanding terms and conditions and was fully aware of the annual mode of payment and policy review period provision. He had the option to return the policy within the policy review period stating the reasons for his objection upon which he was entitled to full refund less expenses incurred on medical examination on account of stamp duty. The opposite parties have despatched the Unit Linked statements and also informed about the status of the policy regularly to the complainant.

8. The opposite party Nos. 1 & 2 have taken legal objection that complainant had purchased the policy in question on 12-12-2006, hence it is barred by limitation. The opposite parties have placed on file Ex. R-5 wherein maturity date of policy has been mentioned as 18-12-2016 and statement of account Ex. R-11 shows calculation of fund value as on 17-12-2009. Thus, there is a continuous cause of action and complaint is within limitation. The other objection of the opposite parties is that a question of fraud and cheating is involved in this case, thus this Forum cannot adjudicate this complaint. The documents placed on file proves deficiency in service on the part of the opposite parties and there is no question of fraud and cheating is involved.

9. A perusal of Unit Link Proposal Form Ex. R-2 shows that he had deposited Rs. 50,000/- as single premium vide demand draft No. 4869 & 4870 dated 11-12-2006. The opposite parties have placed on file statement of accounts Ex. R-7 to Ex. R-11 starting from Ex. 29-12-2007 till 18-12-2009. In these account statements the opposite parties have shown the variations in the market fund value. On 29-12-2007, the market fund value was Rs. 61,646/- and on 18-12-2008 vide Ex. R-9, the market fund value was Rs. 40,592/-. On 18-12-2009 vide Ex. R-11, the closing balance was shown as Rs. 55,016.27. These account statements show that money of the complainant was invested in the Unit Linked Policy and it has been increasing and decreasing according to the value of the market. A perusal of the terms and conditions Ex. R-4 & Ex. R-5 shows that these are not signed by any of the parties. Nothing has been mentioned on these terms and conditions that these are of same agreement which has been executed between the complainant and the opposite parties. In such circumstances, the support can be taken from IRDA rules which are applicable on all the Insurance policies. The regulation No. 10 (b) of the Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies) Regulations, 2010 is reproduced hereunder :-

   “10. (b).........The proceeds of the lapsed policies shall invariably be refunded to the policy holder after the expiry of the revival period or at any time after completion of 3 years term as and when demanded by the policy holder. In case there is no demand from the policy holder for refund, Insurance company shall refund the amount on its own by means of a cheque/demand draft to be delivered to the insured/nominee at his last known address. However, insurer may deduct charges on account of pre-closure and lapsation which should, in any case, not exceed the charges stated in regulation 8 above.”

10. The policy in question of the complainant has already completed three years period and according to the above said regulation, the complainant is entitled to receive the proceeds of the same but the opposite party Nos. 1 & 2 have not paid him the proceeds of the policy. Hence, there is deficiency in service on the part of opposite party Nos. 1 & 2.

    With utmost regard and humility to the aforesaid authorities cited by the learned counsel for the opposite parties, they are distinguishable on facts.

11. In view of above discussion, this complaint is partly accepted with Rs. 1,000/- as compensation and cost against opposite party Nos. 1 & 2 and dismissed qua opposite party No. 3. The complainant is directed to surrender the original policy to opposite party 2 within 10 days from the date of receipt of copy of this order, if the same is in his possession and if the original policy is not in his possession, after obtaining the duplicate copy of the same from the opposite party No. 2, The opposite party Nos. 1 & 2 are directed to pay the fund value as per their statement Ex. R-11 i.e. Rs. 55,016.27 to the complainant within a period of 45 days from the date of receipt of copy of this order. In case of non-compliance, the interest @9% P.A. will yield on fund value i.e. Rs. 55,016.27 till realisation.

    A copy of this order be sent to the parties concerned free of cost and the file be consigned.

Pronounced

04-01-2011 (Vikramjit Kaur Soni)

President

(Dr. Phulinder Preet)

Member

(Amarjeet Paul) Member