BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

C.C. No. 213/2011 Filed on 21.06.2011

Dated : 16.01.2012

Complainant :

Thomas Stephen, S/o Stephen Pereira, residing at T.C No. 30/1026(1), CKRRA 170, Mosque Lane, Pettah P.O, Thiruvananthapuram.

(By adv. B. Sakthidharan Nair)

Opposite parties :

1. Max New York Insurance Company Ltd., 90 A Section 18, Udyog Vihar, Gurgaon 122 015 represented by Managing Director and CEO.

    

2. The Branch Manager, Max New York Life Insurance Company Ltd., Opposite Holy Angels' Convent, General Hospital Junction, Thiruvananthapuram.

    

3. Mrs. Jessy. L, Agent Code:145882, Max New York Life Insurance Company Ltd., Opposite Holy Angels' Convent, General Hospital Junction, Thiruvananthapuram.

(By adv. A.G. Syamkumar)

This O.P having been heard on 24.12.2011, the Forum on 16.01.2012 delivered the following:

ORDER

SMT. BEENAKUMARI.A: MEMBER

The case of the complainant is as follows: The 3^rd opposite party, the agent of the 1^st and 2^nd opposite parties canvassed the complainant to obtain an insurance policy of the opposite party. The 3^rd opposite party did not explain the details of the policy such as terms and conditions of the policy, details of policy allocation charges, policy administration charges and the minimum years of premium payment etc. The 3^rd opposite party obtained the signature of the complainant on an unfilled proposal form on 08.08.2007 and obtained Rs. 25,000/- towards initial premium. The agent filled the proposal form contrary to the IRDA Regulations. As per the Regulation an agent can fill the proposal form only when the proposer is illiterate. When the proposer is literate the agent or anybody other than the proposer can fill up the form. Thus the opposite parties did not comply with the requirements envisaged under law including Insurance Regulatory and Development Authority (Protection of Policy Holders interest) Regulation 2002. The complainant received the policy on 14.09.2007 and found that the charges levied by the company were exorbitant, huge and was not intimated to the complainant by the opposite parties at the time of canvassing for taking the policy. As per the letter received along with the policy the premium paid would be refunded if the proposer was not agreeable to the terms and conditions of the policy provided the policy was returned within 15 days. Accordingly on 21.09.2007 the complainant returned the policy and informed the 1^st opposite party that he would like to cancel the policy since he did not agree to the terms and conditions, an specifically requested the opposite party to refund the premium paid to the opposite party. But the opposite party did not refund the premium paid as unequivocally undertaken by it. Instead the officers of the opposite party pressurized the complainant to continue the policy through telephone. But the complainant remained adamant on his stand and demanded refund. Thereafter the opposite party sent two of its officers to the complainant's house and pressurized the complainant to continue the policy and assured him if minimum 3 premiums were paid by the complainant as a special case, he would get handsome returns and refused to take back the policy or refund the premium paid. Thus the opposite party insurance company was in a dominant position and exerted undue influence on the complainant to continue the policy on the assurance that on payment of altogether 3 premiums he would get a handsome return. Believing the words of the opposite parties officers the complainant was constrained to remit 2 more premiums in August 2008 and September 2009 to the tune of Rs. 20,000/- each. Thus the total premiums paid by the complainant were Rs. 65,000/-. Thereafter the complainant surrendered the original policy and all the connected documents on 28.08.2010. But to the greatest shock and surprise of the complainant, the opposite party issued a cheque only for Rs. 49,491/- dated 10.09.2010. The complainant immediately informed the opposite party his protest against the recovery of unconscionable amount from the premium paid by him. It is pertinent to point out that out of the total premium paid by the complainant viz; Rs. 65,000/-, a sum of Rs. 49,491/- alone was returned. It is submitted that the opposite parties not only suppressed the annual charges before receiving the first premium but also compelled the complainant to continue the policy on the assurance of handsome return coupled with the illegal deduction of annual charges from the premium paid by the complainant are clear case of deficiency in service on the part of the opposite parties. Even though the complainant raised his grievances before the Insurance Ombudsman, the Ombudsman did not properly consider the complaint. The decision of the Insurance Ombudsman is advisory in nature and not binding on the complainant. The Insurance Ombudsman wrongly observed that the complainant had filled in the proposal form which was contrary to the case advanced by the complainant. Further the petitioner did not withdraw his letter dated 21.09.2007 intimating the opposite party to cancel the policy, at any time. The petitioner was unaware of the terms and conditions when the agent (3^rd opposite party) obtained his signature on 08.08.2007. The policy and terms and conditions were received 37 days after the proposal form was forwarded. Hence it cannot be contended that the complainant was aware of the terms and conditions before affixing his signature in the proposal form. The 3^rd opposite party being the agent of the 1^st opposite party, the 1^st opposite party is liable for the act of the 3^rd opposite party being the principal. It is submitted that had the agent of the opposite parties explained all the details of the policy before signing the unfilled proposal form and also before paying the initial premium the complainant would not have signed the proposal form and pay the first premium. The opposite party ought to have refunded the premium paid by the complainant when he returned the policy within 15 days of receipt of it without exerting undue influence on him to pay two more premiums on the assurance of handsome returns on payment of 3 premiums as a special case. Thereafter it was not fair on the 1^st opposite party to deduct unreasonable amounts as administration and annual charges from the premium paid by the complainant. Had the complainant deposited the premium in the scheduled co-operative bank he would have get interest at the rate of 12% per annum. Thus the opposite party had not only unreasonably deducted a sum of Rs. 19,609/- but also deprived the reasonable annual returns. Complainant also sustained mental pain and agony. Even though the complainant requested the 1^st opposite party on 22.09.2010 through e-mail to allot units for the entire premiums paid by him and to refund the amount according to the present Net Asset Value the opposite parties did not heed to his request. Hence he filed this complaint before this forum to realize a sum of Rs. 19,609/- with interest at the rate of 12% per annum from 08.08.2007 till realization and a compensation of Rs. 75,000/- towards monetary loss, mental pain and agony of the complainant.

In this case opposite parties remained exparte. Complainant has filed proof affidavit and he has produced 13 documents which were marked as Exts. P1 to P13.

The points to be ascertained are:-

1. Whether there is deficiency in service and unfair trade practice from the side of opposite parties?

2. If so, reliefs and costs.

    

Points (i) & (ii):- The 3^rd opposite party agent of the 1^st and 2^nd opposite parties canvassed the complainant to obtain an insurance policy of the 1^st opposite party Max New York Insurance company Ltd. The 3^rd opposite party did not explain the details of the policy to the complainant and obtained the signature of the complainant on an unfilled proposal form which was against the IDRA Regulation and obtained Rs. 25,000/- towards initial premium. When the complainant received the policy on 14.09.2007 he found that the charges levied by the opposite party was exorbitant and huge. As per the letter received along with the policy the premium paid would be refunded if the proposer was not agreeable to the terms and conditions of the policy provided the policy was returned within 15 days. Accordingly on 21.09.2007 he returned the policy and informed the 1^st opposite party that he would like to cancel the policy and requested the opposite party to refund the premium paid by him to the opposite party. Copy of the letter is produced here and marked as Ext. P1. But the opposite parties did not refund the premium as unequivocally undertaken by it. Instead the officers of the opposite party pressurized the complainant to continue the policy. Thus the opposite party was in a dominant position and exerted undue influence on the complainant to continue the policy on the assurance that on payment of altogether 3 premiums he would get a handsome return. Believing the words of the opposite parties the complainant was constrained to remit 2 more premium in August 2008 and September 2009 to the tune of Rs. 20,000/- each. Thus the total premium paid by the complainant was Rs. 65,000/-. Premium receipts were marked as Exts. P3 and P4. Thereafter the complainant has surrendered the original policy and all the connected documents to the opposite party on 28.08.2010. But the opposite party issued a cheque only for Rs. 49,491/- dated 10.09.2010. Ext. P8 is the copy of that cheque and its covering letter. The complainant immediately informed the opposite party his protest against the recovery of unconscionable amount from the premium paid by the complainant viz; Rs. 65,000/- as sum of Rs. 49,491/- alone was returned. Copy of that letter is produced here and marked as Ext. P9. The complainant argued that the opposite parties not only suppressed the annual charges before receiving the first premium, but also compelled the complainant to continue the policy on the assurance of handsome return coupled with the illegal deduction of annual charges from the premium paid by the complainant. This is a clear case of deficiency in service on the part of the opposite parties. The complainant was unaware of the terms and conditions when the agent, 3^rd opposite party obtained his signature on 08.08.2007. The policy terms and conditions were received 37 days after the proposal form was forwarded. Immediately thereafter the complainant intimated the opposite parties to cancel the policy through letter dated 21.09.2007, i.e; Ext. P1 along with the policy within 15 days i.e; within lock in period. But the opposite party did not cancel the policy but pressurized him to continue the policy. The opposite parties ought to have refunded the premium paid by the complainant when he returned the policy within 15 days of receipt of it without exerting undue influence on him to pay two more premiums on the assurance of handsome returns on payment of 3 premiums as a special case. It was not fair on the 1^st opposite party to deduct unreasonable amounts as administration charge and annual charge from the premium paid by the complainant. The complainant in this case paid an amount of Rs. 65,000/- to the opposite parties. And the opposite parties returned only an amount of Rs. 49,491/- after a lapse of long period. The complainant claims Rs. 19,609/- (Rs. 65,000/- - Rs. 49,491/-) with 12% annual interest along with compensation. From the above mentioned discussion and evidence we find that the claim of the complainant is genuine and reasonable.

In the result, the complaint is allowed. The opposite parties are directed to pay Rs. 19, 609/- to the complainant along with 9% annual interest from 21.09.2007 till the date of realization along with Rs. 5,000/- as compensation and Rs. 2,000/- as costs. The opposite parties are jointly and severally liable for the same. Time for compliance one month from the date of receipt of the order, failing which the amount shall carry interest @ 12%.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 16^th day of January 2012.

Sd/- BEENAKUMARI. A : MEMBER

Sd/-

G. SIVAPRASAD : PRESIDENT

Sd/-

S.K. SREELA : MEMBER

jb

C.C. No. 213/2011

APPENDIX

I COMPLAINANT'S WITNESS :

NIL

II COMPLAINANT'S DOCUMENTS :

P1 - Copy of letter dated 21.09.2007

P2 - Copy of letter dated 23.10.2007

P3 - Insurance premium receipt dated 30.10.2008

P4 - Insurance premium receipt dated 01.10.2009

P5 - Copy of letter dated 09.09.2009

P6 - Copy of statement of account

P7 - Copy of policy amendment request form

P8 - Copy of letter dated 09.09.2010

P9 - Copy of e-mail dated 22.09.2010

P10 - Copy of reply e-mail dated 23.09.2010

P11 - Copy of letter dated 30.10.2010

P12 - Copy of letter dated 15.11.2010

P13 - Copy of letter dated 04.09.2009

III OPPOSITE PARTY'S WITNESS :

NIL

IV OPPOSITE PARTY'S DOCUMENTS :

NIL

Sd/-

PRESIDENT

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