Chandigarh

StateCommission

A/43/2016

SBI Life Insurance Co. Ltd. - Complainant(s)

Versus

Mohammad Salim - Opp.Party(s)

Vandana Malhotra & Rajneesh Malhotra,Adv.

31 Mar 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

UNION TERRITORY, CHANDIGARH

 

Appeal No.	43 of 2016
Date of Institution	29.01.2016
Date of Decision	31.03.2016

 

1. SBI Life Insurance Co. Ltd., Corporate Address: “Natraj”, M.V.Raod & Western Express Highway Junction, Andheri (East), Mumbai

 

2.  Regional Director, SBI Life Insurance Company Ltd., SCO No.109-110, First Floor, Sector 17-B, Chandigarh.

 

              …..Appellants/Opposite Parties No.3 and 4.

                           Versus

1. Mohammad Salim s/o Mohammad Amin, r/o House No.1451/19, Sector 29-B, Chandigarh.

.…..Respondent No.1/Complainant.

2. The General Manager, State Bank of India, Local Head Office, Sector 17-B, Chandigarh.
3. The Manager, State Bank of India, Branch Office Sector 30-B, Chandigarh.

.…..Respondents No.2 & 3/Opposite Parties No.1 and 2.

BEFORE:    SH. DEV RAJ, PRESIDING MEMBER

                MRS. PADMA PANDEY, MEMBER

 

Argued by:

 

Sh.Rajneesh Malhotra, Advocate for the appellants.

Sh.Mohammad Salim, respondent No.1 in person.

Service of respondents No.2 and 3 dispensed with vide order dated 02.02.2016.

                               

PER PADMA PANDEY, MEMBER

                This appeal is directed against the order dated 01.12.2015, rendered by the District Consumer Disputes Redressal Forum-II, UT, Chandigarh (in short ‘the Forum’ only), vide which, it allowed the complaint qua Opposite Parties No.3 and 4 and dismissed the complaint qua Opposite Parties No.1 & 2, filed by the complainant (now respondent No.1) and directed Opposite Parties No.3 and 4 (now appellants)    as under :-

“15]      From the above observations, we are of the concerted view that the Opposite Parties No.3 & 4 are found deficient in rendering proper service to the complainant. Hence, the present complaint of the Complainant is allowed qua OPs No.3 & 4jointly & severally and dismissed qua Opposite Parties No.1 & 2. The Opposite Parties No.3 & 4 are directed jointly & severally as under:_

                                            i.            To refund the fund value of the policy in question, to the complainant, calculated as per Clause 7 & 9 of IRDA Regulation, 2010 as well as Clause No.13 of IRDA Regulations 2013.

                                          ii.            To pay an amount of compensation to the tune of Rs.20,000/- along with litigation expenses amounting to Rs.7000/-.

         The above said order shall be complied within 45 days of its receipt by the Opposite Parties No.3 & 4 jointly & severally; thereafter, they shall be jointly & severally liable for an interest @18% per annum on the compensation amount of Rs.20,000/- from the date of this order till it is paid, besides paying litigation expenses of Rs.7000/- as well as to pay fund value, as aforesaid.” 

2.        The facts, in brief, are that the complainant took a policy “SBI Life Flexi Smart Policy” from the Opposite Parties bearing No.56017833304 with effect from 23.07.2012 (Annexure C-1).  It was stated that at the time of taking the said policy, the representative of the Opposite Parties told the complainant that he has to pay insurance premium for 10 years and the first premium would be of Rs.50,000/- and for subsequent years, the complainant has to pay Rs.25,000/- each year.  The complainant paid the sum of Rs.50,000/- as first premium vide receipt (Annexure C-2).  However, when the complainant visited Opposite Parties for deposit of second premium of Rs.25,000/-, he was shocked to know that the premium for all subsequent years is Rs.50,000/- instead of Rs.25,000/-. As such, the complainant expressed his inability to pay a sum of Rs.50,000/- every year and requested to return the first premium paid i.e. Rs.50,000/- but the Opposite Parties flatly refused to pay the same.  Thereafter, the complainant approached the Insurance Ombudsman and filed a complaint but it was dismissed vide  Annexure C-4, stating that the policy, in question, was entrusted to the complainant on the basis of the proposal form completed by him and he failed to invoke the benefit of 15 days free look option given with the policy. It was further stated that the Opposite Parties were deficient, in rendering service, as also, indulged into unfair trade practice.  When the grievance of the complainant was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (in short the “Act” only), was filed.

3.           Opposite Party No.1 did not turn up despite service, hence it was proceeded against exparte vide order dated 14.08.2015.

4.           In their written reply, Opposite Party No.2 (State Bank of India) admitted regarding the issuance of the policy, in question, having annual premium of Rs.50,000/-.  It was denied that the complainant was lured by the representative of the bank, as alleged.  It was stated that the contract of insurance was signed between the complainant and SBI Life Insurance.  It was further stated that State Bank of India has nothing to do with the working of SBI Life, which happened to be an independent subsidiary, thus, the replying Opposite Party has been unnecessarily arrayed as party in the instant case. It was pleaded that the claim of the complainant was also dismissed by the Insurance Ombudsman being devoid of any merit.  It was further stated that the replying Opposite Parties were neither deficient, in rendering service nor indulged into unfair trade practice.       

5.                   In their written statement, Opposite Parties No.3 and 4 (SBI Life Insurance Company), admitted the issuance of policy, in question.  It was stated that the policy was issued to the complainant as proposed by him vide proposal form (Annexure A), which was duly signed by him.  It was further stated that the complainant did not raise any issue or complaint regarding the terms & conditions of the policy during the free look period and enjoyed the benefits of the policy for the period he paid the premium. It was further pleaded that due to non-receipt of subsequent premiums from the complainant, the policy was lapsed.  It was further pleaded that the Opposite Parties had also sent Lapse Intimation to the complainant (Annexure C colly).  It was further pleaded that teh demand of the complainant to cancel the policy and refund the premium paid was not maintainable. It was further stated that the replying Opposite Parties, were neither deficient, in rendering service nor indulged into unfair trade practice.       

6.           The complainant, filed rejoinders to the replies of Opposite Party No.2 and Opposite Parties No.3 and 4  wherein he reiterated all the averments, contained in the complaint, and refuted those, contained in the written versions of Opposite Parties No.2 to 4. 

7.           The parties led evidence, in support of their case.

8.           After hearing the Counsel for the contesting parties, and, on going through the evidence and record of the case, the Forum, allowed the complaint qua Opposite Parties No.3 and 4 and dismissed the complaint qua Opposite Parties No.1 and 2, as stated above. 

9.           Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties No.3    and 4.

10.         We have heard the Counsel for the appellants, respondent No.1 in person and have gone through the evidence and record of the case, carefully. 

11.         After giving our thoughtful consideration, to the evidence, on record, we are of the considered opinion, that the appeal is liable to be partly allowed, for the reasons to be recorded, hereinafter.

12.         The Counsel for the appellant has submitted that while passing the impugned order, the Forum ignored the terms and conditions of the Policy and wrongly placed reliance upon the IRDA guidelines, which are not applicable to the facts and circumstances of the present case. He further submitted that the policy was issued on the basis of the proposal form duly signed by the policy holder. He further submitted that the Forum has failed to appreciate the fact that the policy was issued with the date of commencement as 23.07.2012 and the said policy document was dispatched to the policy holder on 26.07.2012 and in case, the policy holder was not satisfied with the terms and conditions of the policy, he/she had the option to return the policy under free look period but the Company did not receive any written request from the complainant for cancellation within free look period. He further submitted that the appellants did not receive any renewal premium due from 23.07.2013 onwards under the policy and as a result, the policy lapsed. He further submitted that SBI Life credited on 13.01.2016, an amount of Rs.40,316.03 in favour of Mr.Mohammad Salim (complainant) being the full and final payment under the said policy, as per the terms and conditions of the policy. He further submitted that the said amount was payable on 23.07.2015, which could not be paid due to pendency of the case and, as such, SBI Life also paid an interest @10.50% for the period of delay in making the payment. On the other hand, respondent No.1/complainant stated that he applied for ‘SBI Life Flexi Smart Policy’ vide proposal dated 18.07.2012 and paid initial premium of Rs.50,000/-.   He further submitted that he was misrepresented by the representative of the Opposite Parties, who disclosed that the complainant had to pay Rs.50,000/- only once and, thereafter, to pay Rs.25,000/-, as premium for the subsequent years.  He further submitted that when he approached the office of the Opposite Parties for the payment of second insurance premium, which became due on 23.07.2013, he was shocked to know that the premium amount for subsequent years was Rs.50,000/- instead of Rs.25,000/-. To prove this fact, he also placed on record a letter dated 26.08.2013 (Annexure C-3), which was sent by Mr. Pradeep Chopra, Asstt. Mgr., SBI, Sector 30, Chandigarh to The Branch Head, SBI Life Insurance, Sector 17, Chandigarh, in which, it has been clearly written that as per the information provided by Mr.Sushil Dogra BDM, SBI Life, the premium of the policy was Rs.50,000/- for the first year and thereafter Rs.25,000/- for the remaining tenure (per year), which is not the case. It was further mentioned in the said letter that when the customer came to know about this fact, he expressed his inability to pay Rs.50,000/- every year and therefore, he decided to surrender his policy. However, the said request of the complainant was declined by the Opposite Parties vide reply sent on 18.10.2013 (at page No.94 of the Forum file). It is, no doubt, true that the complainant did not get any amount from the Opposite Parties, despite surrender of the policy, before the Forum. Even the complainant filed a complaint before the Insurance Ombudsman, Chandigarh, which was dismissed. Moreover, the appellants stated at page No.14 of the appeal that SBI Life has credited on 13.01.2016 an amount of Rs.40,316.03 in favour of Mr.Mohammad Salim bearing account No.10304745220 being the full and final payment under the said policy as per the terms and conditions of the policy alongwith interest @10.50% for the period of delay in making the payment. This fact is clearly proved from letter dated 13.01.2016 (Annexure ‘A’ ) annexed by the appellants. So, it is clearly proved that the appellants refunded the fund value of the policy, in question, and, as such, they partially complied the order of the Forum, which is mentioned at para No.15(i) of the impugned order.

13.         Even if the contention of the Counsel for the appellants that IRDA Regulations/Guidelines to the policy, in question, were not applicable is accepted, still the order of the Forum in so far as compensation and litigation cost is concerned, in our opinion, does not call for any interference. 

14.         It would not be out of place to mention here that the Assistant Manager of the State Bank of India, Sector 30, Chandigarh vide its letter dated 26.08.2013 (Annexure C-3) has communicated to the Branch Head, SBI Life Insurance, Sector 17, Chandigarh, which reads as under :-

“This is regarding the SBI Life Flexi Smart policy which Mr.Salim had opted for from our branch. As per the information provided by Mr.Sushil Dogra BDM, SBI Life, the premium of the policy was Rs.50,000/- for the first year and thereafter Rs.25000/- for the remaining tenure, (per year), which is not the case.

When the customer came to know about this fact, he expressed his inability to pay Rs.50000/- every year and therefore he has decided to surrender his policy. Due to miscommunication of information between the SBI life and the customer, it is requested that his request for the surrender may please be accepted.”

It is clearly proved from the aforesaid letter that the complainant was lured by the employee/officer of the Bank and Mr.Sushil Dogra BDM, SBI Life, that the premium of the policy for the first year would be Rs.50,000/- and thereafter, for the remaining tenure it would be only Rs.25,000/-. Therefore, the appellants are definitely, in the eyes of law liable to pay compensation and litigation expenses for falsely luring the complainant, as granted by the Forum, besides the fund value, as per terms and conditions of the Policy. In our opinion, interest @ 18% awarded by the Forum, in the event of non-compliance of the order within the laid down period is somewhat on the higher side. The interest @12% p.a. if granted shall meet the ends of justice.

15.         Keeping in view the facts and circumstances of the case, the order passed by the Forum is modified qua relief vide Clause 15(i) and rate of interest in the event of non-compliane of order from @ 18% p.a. to 12% p.a.

16.          For the reasons recorded above, the appeal, filed by the appellants/Opposite Parties No.3 and 4, is partly accepted and the order of the Forum is modified as under :-

i)            To refund the fund value of the policy in question, to the complainant, as per terms and conditions of the Policy (An amount of Rs.40,316.03 has already been paid to the complainant by the appellant, as stated at page No.14 of the appeal).

ii)           To pay an amount of compensation to the tune of Rs.20,000/- along with litigation expenses amounting to Rs.7000/-, to the complainant, as already granted by the Forum.

              The above said order shall be complied within 30 days of its receipt by the appellants/Opposite Parties No.3 & 4 jointly & severally; failing which, they shall be jointly & severally liable to pay interest @12% per annum instead of 18% per annum on the compensation amount of Rs.20,000/- from the date of this order till it is paid, besides paying litigation expenses of Rs.7000/-, as aforesaid. 

17.         Certified Copies of this order be sent to the parties, free of charge.

18.         The file be consigned to Record Room, after completion.

Pronounced.

31.03.2016                                                                   

(DEV RAJ)

PRESIDING MEMBER

 

 

 (PADMA PANDEY)

        MEMBER

 

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