Per Hon’ble Mr. P.N. Kashalkar, Presiding Member :
Life Insurance Corporation of India (LIC) has filed this appeal challenging the judgement and order passed by the District Consumer Disputes Redressal Forum, Mumbai Suburban District, Bandra on 29th September 2010 passed in CC No. 681/2007. By allowing the complaint partly, the Forum below directed LIC to refund the amount of `756/- for the excess premium collected for 11 policies and also directed Opponent-LIC to pay `25,000/- by way of compensation for mental agony and pain and `5000/- as costs and also directed LIC to revise the premium in respect of disputed 7 policies as per the quotation given by their agent Mr. Divakar Patkar.
Facts to the extent material to be stated as under :
Complainant Mr. Shrikant M. Apte wanted to purchase 11 policies from LIC for the total sum assured `11,00,000/-. Each policy was to be for `1,00,000/- as sum assured. He agreed to pay monthly premium and payment was to be through his employer. According to the Complainant, initially, he deposited `5,000/- with Opponent’s agent Mr. Divakar Patkar on 11.11.2005. The Complainant was examined by an authorized medical officer of LICC on 30.11.2005. The Complainant paid further amount of `10,432/- by cheque to Mr. Divakar Patkar, Insurance Agent. The Complainant received the policy documents on 11.1.2006. On perusal of the policy documents, the Complainant found that there was a difference in respect of 7 out of total 11 policies and the monthly premium of these 7 disputed policies was in excess of the premium than what had been quoted earlier in writing by the LIC’s authorized Agent Mr. Divakar Patkar. The Complainant sent letter on 25.1.2006 to the Opponent for rectification in the premium but LIC informed by letter dated 14.2.2006 that the premium amount shown in the policy document was correct and that the quotation of the premium given by its authorized agent Mr. Divakar Patkar was incorrect. The Complainant insisted that he may be issued 11 policies as per the monthly premium quoted by its agent but 7 policies were having excess premium than quoted by Mr. Divakar Patkar and since rectification was not done, on the request of the Complainant, he moved Insurance Ombudsman. Insurance Ombudsman also has turned down the Complainant’s prayer and therefore, he filed consumer complaint seeking refund of excess payment of
`756/- and also made certain other prayers.
LIC filed written statement and contested the matter. According to the Opponent-LIC, quotation of premium given by Mr. Divakar Patkar contained footnote to the effect that the statements in the quotation were based on certain assumptions which were liable to be changed according to the Govt./Corporation’s policies. So quotation of the monthly premium made by Mr. Divakar Patkar was not final and binding on the LIC. LIC further took up a plea that as per Insurance Regulatory & Development Authority Regulations, the Complainant could have exercised an option of return of insurance policies during the ‘cooling off’ period, if he was not satisfied with the policies issued by the LIC, quoting monthly premium payable by him. He has not done so and therefore, prayer that vis-à-vis 7 disputed policies wherein yearly premium should be revised with that of quotation given by Insurance Agent, Mr. Divakar Patkar is not reasonable one and therefore, it pleaded that the complaint should be dismissed with costs.
Upon hearing both the counsels and on perusal of documents and affidavits placed on record, the Forum below found that in respect of 7 policies, premium quoted by the Insurance Agent, Mr. Divakar Patkar differed with the premium found in those 7 policies and he had been charged excess premium in respect of 7 policies and therefore, Forum below held that LIC was guilty of deficiency in service and unfair trade practice and was pleased to allow the complaint filed by the respondent and passed an order which is reproduced in opening para of this judgement. Dissatisfied by this award, LIC has filed this appeal.
We heard submissions of Advocate Mr. Vidyarthi with Ms. Sheetal Patil, Advocate for Appellant-LIC and respondent in person.
We are of the view that an impugned judgement/order passed by the District Consumer Disputes Redressal Forum, Mumbai Suburban District, Bandra is improper and unjust. The insurance policy is a contract of insurance between the Insurance Co. on one hand and insured on the other( who purchase policies). This contract proceed with the proposal form submitted by the person intending to take insurance policy. He also pays certain amount at the time of proposal and when the amount is accepted and policy is issued, there is a binding contract between two parties insured and Insurance Co. Once contract is complete by issuance of policy, the terms and conditions of the contract cannot be directed to be verified by either party. What amount of premium should be charged to any policy is a decision of an underwriting Company. It is the policy decision taken at the highest level and as per this decision, policies are issued to the insured. Once LIC decides to issue particular policy with monthly or yearly premium of certain amount, that decision cannot be a matter of dispute between the consumer and the Insurance Co. The policy decision is of underwriting company and simply because there has been variation between the quotation given by the Insurance Agent to the respondent herein than what has been charged to the respondent in respect of 11 policies, taken by him, that itself cannot be a ground for the District Consumer Disputes Redressal Forum to allow the complaint and to direct reduction of monthly or yearly premium payable by the respondent herein.
The Insurance Agent is a Facilitator between the Insurance Co. and the prospective policy purchaser. He is an agent of consumer as well as Insurance Co. He is not exclusive agent of Insurance Co. Moreover, he cannot bind the Insurance Co. if he gives quotation of any policy at lesser monthly or yearly premium than prescribed by the underwriting Insurance Co. So in the instant case, even if there was a difference between the quotation of monthly or yearly premium in respect of 7 policies out of 11 policies purchased by the respondent from LIC through Mr. Divakar Patkar, Insurance Agent, that does not mean that LIC is bound to issue policies to the respondent at the rate quoted by the Insurance Agent quoting wrong rates of premium on the part of the Insurance Agent. Under such circumstances, there is no jurisdiction to District Consumer Disputes Redressal Forum to pass an order of rectification and to direct LIC herein appellant to charge the premium in respect of the 7 policies directly in accordance with the estimation of premium given by Mr. Divakar Patkar, Insurance Agent which was lesser than LIC had fixed premium for certain policies. The agent cannot bind LIC in this way. We have already mentioned above that LIC Agent is a Facilitator, he acts independently to help the consumer to procure Insurance policies and he helps LIC to promote business and gets commission but his agency does not in any way bind LIC if he misquotes rates of premium in respect of few policies. Exactly this has happened in the instant case. Mr. Divakar Patkar had given quotation of certain amount to the respondent when respondent was going to catch 8.30 a.m. train in the morning. He hurriedly gave cheque to the agent and when he received policies, he found that out of 11 policies for 7 policies premium charged by LIC was higher than quoted by the Insurance Agent. If this was the main grievance of the Complainant, respondent herein, he had 15 days ‘cooling off’ period from the date of receipt of all policies. He could have returned 7 policies with a request to cancel the policies and to refund the premium since premium quoted in the policies were not in accordance with the premium quoted by the Insurance Agent to him. There was 15 days ‘cooling off’ period and during this period respondent Shri Shrikant Apte could have cancelled those policies since not agreeable to him on account of higher premium mentioned in the policy than quoted by the Insurance Agent and should have been refunded back his premium amounts paid on those 7 policies. This is permissible under IRDA Regulation. Shri Apte did not avail of the said facility available but continued to enjoy the policy and took up issue with the LIC authorities and also with the Insurance Ombudsman .Both of them rightly turned down his request. In our view, in the circumstances, LIC cannot be blamed for issuing 11 policies with monthly or yearly premium mentioned therein because once 15 days ‘cooling off’ period is over, the policy documents become binding on both the parties and contents therein are also binding on both of them. In the circumstances, in our view, the Forum below erred in law in allowing the complaint and giving direction to the appellant to refund certain amount of premium and not to charge yearly premium in respect of the 7 policies in excess of what has been quoted by Mr. Divakar Patkar, Insurance Agent in the quotation letter he had given to the Complainant. In our view, order passed by the District Consumer Disputes Redressal Forum, Bandra is per se bad in law. It encroached upon the pricing policy of the LIC, appellant herein which cannot be interfered with by any District Consumer Disputes Redressal Forum alleging deficiency in service and unfair trade practice on the part of the appellant herein. In the circumstances, we are inclined to allow this appeal and set aside the order passed by the District Consumer Disputes Redressal Forum, Mumbai Suburban District, Bandra in Complaint No. 681/2007. Hence the following order :
O R D E R
i) Appeal is allowed
ii) Impugned judgement/order passed by the District Consumer
Disputes Redressal Forum, Mumbai Suburban District, Bandra
in Complaint No. 681/2007 is set aside and complaint of Respondent
stands dismissed.
iii) Inform to the parties accordingly.
Pronounced dated 19th May 2011.
