CONSUMER DISPUTES REDRESSAL FORUM (EAST)

GOVT. OF NCT OF DELHI

CONVIENIENT SHOPPING CENTRE, SAINI ENCLAVE: DELHI-92

CC No.1095 /2014:

In the matter of:

Smt. Rajpreet Sharma

H.No.404, Haveli Haider Quli,

Chandni Chowk, Lahori Gate,

Delhi – 110 006

Complainant

Vs

1. Max New York Life Insurance Co.Ltd.    

(Through its GM/ Regional Manager/ Manager)

Regd. Office:

MAX House, III^rd Floor,

1, Dr. Jha Marg, Okhla,

New Delhi – 110 020.

2. Axis Bank Ltd.

(Through its BM/ SBM/ Manager/ RM/ GM)

78, Old Rajinder Nagar Market, Rajinder Nagar,

Delhi – 110 060

                                                            Respondents           

ORDER

Ms. Poonam Malhotra, Member :

            This complaint has been filed with the allegation that the complainant is the wife of blind Doctor who is skilled in Astrology & Palmistry.  They have Bank Account with Respondent No.2. A representative of Respondent No.2 visited her residence in the month of February, 2012 to deliver a new cheque and they enquired from him regarding the Fixed Deposit Scheme of the Bank. He adduced being an agent of Respondent No.1 to invest money in an Insurance Scheme of Respondent No.1 and assured a 100% safe fund and no hidden charges, the benefit of tax, etc. Being lady she could not understand the purpose behind the attractive lucrative offers. She was told to pay only premium for three years only and enjoy the benefit of returns for the lifetime. Her signatures were obtained on blank papers/ documents. A cheque of premium was received without explaining the Terms & Conditions. The amount was deducted from the account of the complainant and the policy bearing No.860179662 having sum insured of Rs.4,37,447/- and a premium of Rs. 59,998.85/- being paid either through cash or from the Bank Account of the complainant with Respondent No.2.  In the last week of October 2014, an insurance consultant visited the office of the husband of the complainant who told him that they will have to pay the premium for a minimum period 10 years and the policy in question will be mature in 2050. She immediately registered a complaint with the respondents for the misrepresentation of facts and false representation made for selling the policy. Pressure was put upon her to retain the policy and assurance was given for investigating the matter. Reluctant behaviour of the respondents towards the complainant is illegal, arbitrary, unjustified, and amounts to breach of trust. The complainant and her husband have been befooled, misguided by adoption of Unfair Trade Practice by the respondents. The complainant has prayed for the refund of Rs.3,79,996.55/- with interest @ 24% p.a., compensation and cost of litigation.

            Respondent No.1 filed its reply wherein it has raised the plea that on the basis of the Proposal Form Life Partner Plus Limited Pay Endowment to age 75 Plan bearing No. 860179662 commencing from 17/02/2012 policy was issued to the complainant assuring her life for a sum of Rs.4,37,447/- on the payment of annual premium of Rs.59,085.97/- and the last premium was to be paid on 17/02/2021.  The complainant was covered under the said policy for 38 years i.e., till 17/02/2050 and it is with her consent that the policy was issued to her.  Cancellation was not sought by her within the free-look period. She paid premium upto 17/02/2014.  The total amount of Rs.1,79,997.70/- has been paid.  She has full knowledge of Terms & Conditions of the policy and this complaint has been filed to escape the liability to pay the regular premiums. The policy documents in this case were received in the year 2012, as such this complaint is barred by limitation.

            Respondent No.2 also filed their WS denying their involvement in the issuance of the policy but it was filed subject to payment of cost.  The Respondent No.2 failed to pay the cost imposed. In these circumstances, the written statement of Respondent No.2 was struck off from the record vide order dated 30/01/2015.

            Both the parties have filed an affidavit in evidence.  

            Heard and perused the record.

            This fact is not in controversy that alongwith the complainant her husband who is  a blind Doctor and a skilled Astrologer and Palmist was also issued policies by the respondent on the same date. The respondent has raised the question of limitation, that this policy was issued in February, 2012 and this complaint has been filed in November, 2014 as such this complaint is not filed within the period of two years from the date of accrual of cause of action. This is contended by the complainant counsel that the cause of action does not emanate from the issuance of the policy but it arises, when the fact of misrepresentation and unfair trade practice adopted by the respondent was made known to the complainant. There is a specific averment in this regard that it is in the first week of October, 2014 that insurance agent apprised them of the fact that they will have to pay premiums for 10 years and their policy will mature only in the year 2050.  This fact is not controverted that the Proposal Form was not filled by the complainant. It is specifically mentioned in the complaint as well as in the affidavit. The signatures were obtained on the Blank Form. In view of the fact that this Form being not filled by the complainant is uncontroverted on record the respondent cannot take the benefit of the contents of this Proposal Form, simply because of the fact that the complainant had jotted down her signature on it. It is to be proved as a fact that the microscopic representation of Terms & Conditions on this Form were read over by the complainant and it is only after reading of those conditions and understanding the same that she put her signature on this Form. Since this fact is not denied in any of the affidavits of the respondent that the agent of the Insurance Company brought the fact of paying the 10 instalments and its maturity date is 2050 it shall be taken that it is only in October, 2014 the complainant came to know the fact of unfair trade practice adopted by the respondent.   As such the present complaint cannot be accepted to be barred by limitation and is, thus, maintainable.  The complainant Ld. Cl. argued that the Bank and Respondent No.1 were hand in gloves. This fact is known to the bank only that she is having a good balance in her Savings Bank Account and premium over which insurance agent gets commission will be high if the tenure of the policy is extended to a period if brought to the knowledge of the complainant, she might have not agreed. The statement filed by the respondent in the Form clearly indicates that coverage term will be upto 75 years and the total amount which she will get after coverage term is only Rs.4,37,447/-.  With an annual premium of Rs.59,998.85/-, the premium for ten years which the complainant shall pay goes to Rs.5,99,885/- approx. i.e., annual premium of Rs.59,998.85/- multiplied by 10 years.  The Insurance Company will use this amount upto 2050 and at the age of 75 years they will pay her only the amount of Rs.4,37,447/-. It makes clear that the respondent company will use this amount for about 38 years without paying any interest to the complainant and then the amount paid by them will be approximately Rs.1,00,000/- less than what they have received from the complainant.  It is also contended by the Ld. Cl. for the complainant that average life span expectancy presently is around 65 years of age, otherwise, nobody knows how long an individual is going to live. In view of the uncertainty of life how the Respondent No.1 could sell the policy for such a long duration.  Apart from this, in the premium details it has been mentioned that she has to pay Rs.60,000/- premium from her bank account maintained with the Respondent No.2. The Ld. Cl. for the respondent fails to explain how they can claim an amount in excess to the amount of premium mentioned in the Proposal Form. The only argument which is advanced from the side of the respondent is that she is bound by the terms and conditions as mentioned in the Proposal Form. We have already noted down above that once these conditions were not known and explained they cannot be binding upon the complainant. The question of violation of Section 23 of the The Indian Contract Act is also very much clear since the contract is based on uncertainty of fact.  It is a settled principle that one who knowingly enters into a contract with improper object or to be very specific to the facts of this case as against public policy cannot enforce his rights thereunder. Though the expression “public policy” or “opposed to public policy” has not been defined in the Indian Contract Act, 1872 but from the very nature of the expression “public policy” or “opposed to public policy” the legislative intent is clear that the expression means and includes some matters which concern the public good and public interest. Reverting back to the facts of this case, in view of the discussion made above there is room for doubt that the agreement entered into between the parties to the present lis was badly hit by Section 23 of the Indian Contract Act as opposed to public policy.  Since the agreement in the case in hand is one the object of which is unlawful, the said agreement is void by virtue of Section 23 of the Indian Contract Act.

Before parting with the judgment, we would like to say that the private insurance companies in order to augment their business and for earning profits are indulging in malpractices in connivance with the banks to bring more and more people under the Insurance Net. They issue insurance policies to innocent citizens and collect premium from the persons so insured.  This has become a practice with the private insurance companies to entrap the simple innocent citizens on the pretext of providing insurance cover to them and thereafter fleecing them and usurping their hard earned money.  The Forums are receiving large number of such complaints in which the Officers and Officials of such insurance companies just with the intention of earning more premium to augment the profits of their company are cheating the innocent citizens. These malpractices need to be taken care of by IRDA and other competent authorities and Government of India.  If need be the license of such insurance company, found indulging in unfair trade practice, should be terminated and they be prosecuted for the fraud committed with the innocent customers. 

            Taking into consideration the discussion and observations made supra, we allow this complaint and direct the Respondent No.I to refund to the complainant the entire amount deposited together with interest @ 12% p.a. thereon from the date of deposit till it is finally paid to the complainant.  We, further, award the compensation of Rs.50,000/- to the complainant on account of harassment, mental pain and agony.  This shall also include the cost of litigation.  If this amount is not paid within 45 days the complainant shall be entitled to get interest @ 12% p.a. on the amount of compensation and cost also till it is finally paid to the complainant.

            Copy of the order to be sent to both the parties as per rules.