D.O.F. 27.06.2008 D.O.O. 02.11.2010 IN THE CONSUMER DISPUTES REDRESSAL FORUM KANNUR Present: Sri.K.Gopalan : President Smt. K.P.Preethakumari: Member Smt.M.D.Jessy : Member Dated this the 2nd day of November, 2010. C.C.No.154/2008 K. Sivadasan, ‘Mayukh’, Near Municipal Quarters, : Complainant Kakkad Road, Kannur (Rep. by Adv. M.K. Suresh Kumar) Metlife India Insurance Co. Pvt. Ltd., Brigage Sesha Mahal, 5, Vani Vilas Road, Basavanagudi, Bangalore – 560 004 : Opposite party (Rep. by Adv. P.R. Jaipuriar) O R D E R Sri. K. Gopalan, President. This is a case filed under Section 12 of Consumer Protection Act for an order directing the opposite party to pay ` 8,500 with interest @ 10% and also a compensation of ` 10,000 for mental agony. The case of the complainant in brief are as follows : The complainant had taken a ‘METLIFE’ policy for ` 1,00,000 on 11.10.2005 from the opposite party and ` 10,000 was paid as 1st premium. Complainant could not pay subsequent installments due to financial stringency and became due on 11.10.2006. On 12.09.2007 complainant wrote to opposite party his inability to continue the policy and requested to refund the amount. On receiving the letter opposite party asked to send the original policy by his reply on 27.09.2009. Complainant thus sent the policy on 08.10.2007. Opposite party send a cheque for ` 783 on 17.10.2003 without any other communication. Service guideline of opposite party provides for withdrawal of the amount deposited. The refund sought is the amount of `.10,000 deposited by him. Opposite party send a cheque for only 7% of the amount deposited by carving out the lion share. It is done without the consent of the complainant. The opposite party Insurance Company had already informed in their reply that the actual value of deposit was ` 10,082 as on the date of withdrawal. Hence he is eligible for that amount less expense of remittance. Penalty cannot be for the full amount deposited and is against the law prevailing in other Insurance Companies. Had he intimated the actual refund value was only ` 783 the complainant would not have opted for refund and would have continued payment of further installments suffering all difficulties. The amount taken from the complainant’s policy is shockingly exorbitant and it has no comparison which is illegal and unjustifiable complainant issued lawyer notice but opposite party did not settled the matter. At the maximum the deduction should only be ` 1,500 and paid minimum of ` 8,500 to the complainant. There is a deficiency in the service on the part of opposite party since high rate of amount deducted. Hence this complaint. Pursuant to the notice opposite parties appeared and filed version denying the main allegation of the complainant. Opposite party contented as follows : The complainant has not approached the Forum with clean hands and lacking bonafide cause of action. The opposite party has acted as per the terms and conditions of the policy contract. The complainant has not been entitled for any payment over and above the surrender value. He was already been paid the surrender value. As per Clause 14 no cash value is payable on surrender during the first year. The cash value payable on surrender from second year is equal to the value of the units less the surrender penalty. Complainant informed his inability to pay installments seeking cancellation of his policy on 12.09.2007. The complainant was asked to surrender his policy document. Complainant has submitted the original policy and once again sought cancellation of the policy. The policy surrendered in the second year of policy. The unit balance in the complainant’s account as on 11.10.2007 was ` 449.8960. The account value as on 11.10.2007 was ` 10,082.03. The surrender penalty (100% of the first year premium) was Rs. ` 9,299. Thus after applying the surrender penalty, the surrender, value which was payable, on cancellation of the complainant’s policy was ` 783.03. Accordingly, the cheque for the same was send to complainant. Opposite party received legal notice on 01.12.2007 alleging breach of policy and demanding full amount. It was replied on 03.12.2008 and informed that opposite party was not liable to refund any further amount. The policy was a unit linked policy and terms and conditions clearly provided the manner of refund in the event of surrender. Opposite party sent reply to legal notice clarifying all the issues raised thereunder. Hence prayed to dismiss the complaint. On the above pleadings the following issues have been taken for consideration. 1. Whether there is any deficiency in service on the part of opposite parties? 2. Whether the complainant is entitled for the relief as prayed in the complaint? 3. Relief and cost? The evidence consists of the oral evidence adduced by complainant PW1, Ext.A1 to A4 and B1 to B4. Issues 1 to 3: Admittedly complainant had taken Met Life Policy from the opposite party Insurance Company. The case of the complainant is that he could not pay premium subsequent to the 1st installment ` 10,000. He requested opposite party to refund the amount less eligible interest and other expenses. On receiving the information opposite party asked him to surrender the policy. Complainant surrendered the same and in consequence opposite party sent a cheque for ` 783. Complainant was shocked to see that he was only eligible for such a meager amount. The actual value of amount was ` 10,082. Complainant alleges that had the opposite party intimated him that the actual refund value was only ` 783. Complainant would not have opted to surrender the policy for refund and some how or other managed to continue the policy. His actual request was to refund the amount already paid (` 10,000) with the eligible interest. The opposite party raised the contention that they have merely acted as per the instructions of the complainant. The refund amount was sent pursuant only to complainant’s own request to cancel the policy and to refund the amount. Opposite party did not take any arbituary decision to refund. Opposite party further contended that after receiving the express instructions of the complainant, there was no requirement under law or equity to obtain his consent once again for refund. Chief affidavit in lieu of chief examination filed by both sides in tune with respective pleadings. But opposite party did not entered in box for cross examination. Ext.B1 to B4 marked on the side of the opposite party. Ext.B1 is the true copy of the policy with terms and conditions. Ext.B2 is the true copy of the request letter dated 08.10.2007 sent by complainant. Ext.B2 though only photocopy is clear that the subject matter is with respect to cancellation of policy on refund of the policy amount. Ext.B3/A3 is the legal notice dated 01.122007 sent by complainant to opposite party. In the legal notice Ext.A3/B3 complainant alleged that sending the amount ` 783 by ending the policy opposite party had breached the conditions of agreement firstly not intimated complainant regarding the refundable amount and obtained his consent for the refund. Secondly the amount received by opposite party has not been refunded. Thirdly opposite party acted arbitrarily. It is also alleged in Ext.A3/B3 that all the attempts on the side of the complainant to know the details were not heeded by opposite party. Ext.B3 was replied by opposite party and the copy of the same is marked as Ext.B4 in which he has taken the defence that clause 14 of the terms and conditions of the Met Smart Policy clearly elucidate surrender benefit. No cash value is payable in the case of surrender during the first year. The cash value payable on surrender from second year is equal to the value of the units less the surrender penalty. The surrender penalty is a percentage of the first year base policy premium including extra premiums if any. However, it can be seen that complainant has alleged that opposite party has not heeded any of his enquiry to know the particulars of surrender. The trend of the opposite party to hide the real fact from the customers quite clearly revealed from not informing the complainant specifically. The actual amount for which he was entitled to, especially considering the fact that the said amount is only nominal. The terms and conditions of agreement must be known to each other. There is obligation on the part of opposite party to make it assure that the parties are aware of the terms and conditions. Opposite party contented that complainant is well aware of the terms of the policy. That means opposite party has taken into account that the complainant requested opposite party to surrender the policy knowing well that he will get only ` 783 in case of surrender. So the attitude of the opposite party that there was no requirement under law or equity for the opposite party to obtain the consent of the complainant once again for refund the amount by canceling the policy. Hence it is evident that opposite party is not at all particular to assure that the complainant surrendered his policy for cancellation and refund of amount knowing well that as per terms he would get only ` 783. Whether or not, complainant is aware he has asked to surrender, so that opposite party is hurry to cancel it to refund the amount on the pretext that avoiding delay is a service to complainant to get the amount as early as possible. Opposite party has no case that they have made known to complainant the surrender value. Opposite party has not at all taken into consideration that such an awareness to complainant is necessary in this case. The case of the complainant is that the policy would not have surrendered if it was known to him that he was eligible for only such a meager amount. The spirit of this allegation cannot be discarded. Complainant made a payment of ` 10,000 as premium and the amount he received is only ` 783. This is a great difference. It is not a question of right or wrong but difference is great as far as an ordinary person is concerned. Hence if the complainant is worried of his loss there is nothing unusual. In such cases if a party is not made known with respect to his actual loss that is a denial of natural justice. Complainant adduced evidence as PW1 by means of chief affidavit thus : “Rm³ FXr-I-£n-I-tfmSv Bh-iys¸«Xv Rm\-S¨ kTJy Xncn-¨p-In-«m-\mWv. BbXn \n¶v 7% am{X-ta -In-«p-I-bp-f-fp F¶v FXr-I-£n-IÄ Fs¶ Ad-nbn-¨n-cp-¶n-Ã. A§ns\ FXr-I-£n-IÄ Fs¶ Ad-nbn-¨n-cp-s¶-¦n Rm³ IjvS-s¸«v _m¡n Xh-W-IÄ IqSn A-S-¡p-am-bn-cp-¶p.” No contradictory evidence place on the part of opposite party to challenge it. PW1 deposed in his cross examination that “opposite partybpsS agent aptJ-\-bmWv policy FSp-¯Xv. AhÀ Fs¶ hnfn¨v kT-km-cn-¨-Xm-bn-cp-¶p. \n_-Ô-\-IÄ a\-Ên-em-¡nbn«Ã policy FSp-¯-Xv. Opposite party could not adduced any evidence to show that complainant took this policy knowing the terms and conditions of the policy. Opposite party did not challenge the statement of evidence that policy is taken upon the talk of the agent of opposite party. Opposite party could at least examine this agent as a witness in order to prove that those terms were made known to complainant. Complainant when asked another question deposed that policy surrender sN¿p-t¼mÄ Xs¶ surrender kT-_Ôamb hy-h-Ø-IÄ Clause 14 IrX-y-ambn ]d-ªn-«pv F¶p ]d-ªm Ad-nbn-Ã. Complainant cannot be disbelieved in the absence of contra evidence. Complainant specifically alleged that it is through the agent of opposite party the policy was taken by him. It is he who most competent person to say what was actually happened and complainant was made known these relevant conditions etc. It is quite understandable that in the usual practice the agent do not explain the terms which are not favourable to customers at the time of canvassing, but expository on favourable side would naturally be excellent. When such is the ground reality known to everybody it necessitates the examination of concerned agent compulsory so as to make it assure the facts available more reliable and acceptable. But opposite party took no initiative to examine any one of the witnesses including this material witness to bring forth the truth before the Forum. The available evidence placed before the Forum leads to the conclusion that opposite party has not taken interest to give opportunity to complaint to realize what was his actual surrender value, which is amount to deficient service in the dealings of opposite parties. The case of the complainant is brought out in cross examination deposing that he would not have surrendered the policy if the actual surrender value was made known to him. Thus a close analysis of facts in its practical spirit make it clear that there is deficiency in service on the part of opposite party. In the light of the above discussion we are of considered opinion that the opposite party is liable for the deficiency in service and an amount of ` 3500 (Rupees Three thousand five hundred only) apart from the amount already paid as compensation together with a sum of ` 1000 as cost of this proceedings. The issues 1 to 3 are found in favour of complainant. In the result the complaint is allowed directing the opposite party to pay an amount of ` 3500 (Rupees Three thousand five hundred only) apart from the amount already paid together with a sum of ` 1000 (Rupees One thousand only) as cost of this proceedings within one month from the date of receipt of this order failing which the complainant is entitled for an interest @8% per annum from the date of order to realization of the amount. The complainant is entitled to execute the order after the expiry of 30 days as per the provisions of Consumer Protection Act. Sd/- Sd/- Sd/- President Member Member APPENDIX Exhibits for the Complainant A1. Photocopy of the letter dated 12.09.2007 A2. Phtocopy of the reply dated 27.09.2007. A3. Photocopy of the Lawyer Notice. A4. Postal order for ` 100. Exhibits for the opposite party B1. Schedule of Met Smart dated 11.10.2005. B2. Letter dated 08.10.2007. B3. Lawyer Notice dated 01.12.2007 B4. Letter dated 03.01.2008 from Associate Director, Legal, MetLife. Witness examined for the complainant PW1. Complainant Witness examined for opposite party Nil /forwarded by order/ SENIOR SUPERINTENDENT | 
