STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

1.M/s ICICI Prudential Life Insurance Company Limited, SCO No.9-10-11, 1^st

2.M/s ICICI Prudential Life Insurance Company Limited, ICICI Prulife Tower, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, through its Managing Director.

 ……Appellants/Opposite Parties.

Versus

Mrs. Upasana w/o CA S. P. Babuta, Age 43 years R/o H.No.240, Sector 21-A, Chandigarh.

…….Respondent/Complainant.

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

              SH. DEV RAJ, MEMBER.

Argued by:Sh.Gaurav Bhardwaj, Advocate for the appellant.

              Mrs. Upasana, respondent in person.

PER DEV RAJ, MEMBER

              This appeal is directed against the order dated 29.08.2013, passed by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which it accepted the complaint, filed by the complainant and directed the Opposite Parties (now appellants) as under:-

“13]             Resultantly, in view of the foregoings, entirety of the case and settled position of law on the subject matter, we are of the opinion that the complaint deserves to be allowed. Therefore, the same is accordingly allowed.  The OPs NO.1 & 2 are jointly & severally directed to refund Rs.1,94,000/- i.e. (Rs.2,00,000–Rs.6000/-) to the complainant. They are also directed to jointly & severally pay a sum of Rs.25,000/- as compensation to the complainant for causing her mental agony and physical harassment, apart from paying litigation cost of Rs.15,000/-.

       This order be complied with by the OPs NO.1 & 2 jointly & severally within a period of 30 days from the date of receipt of copy of this order, failing which they shall be jointly & severally liable to refund the above awarded amount along with interest @12% per annum from the date of filing this complaint i.e. 10.01.2013 till its actual payment, besides paying litigation cost, as aforesaid.” 

2.           The facts, in brief, are that in the month of July 2011, the complainant approached one Tanya, Sales Executive of the Opposite Parties, who apprised about the benefits of “ICICI Pru Pinnacle Super-LP Policy”. It was stated that the complainant purchased the said Policy by paying a single premium of Rs.2,00,000/- vide cheque No.098537 dated 22.7.2011 and Policy No.15774605 (Annexure C-3) was received by the complainant, in the month of August. It was further stated that in October 2012 i.e. after a lapse of one year and two months, the complainant received letter dated 10.10.2012 (Annexure C-4) from the Opposite Parties intimating therein discontinuation of the Policy, on the ground of non-payment of premium amount of the Policy. It was further stated that, in the said letter, it was also stated that the Premium Notice, Premium Overdue intimation and a warning letter were sent to the complainant, which was merely an afterthought of the Opposite Parties. It was further stated that the contents and purport of the letter were totally contrary to the assurances given by the Sales Executive, at the time of filling the proposal form. It was further stated that the officials of Opposite Party No.1 were informed that the complainant had purchased the single premium policy and not a regular policy.  They were further informed that their Sales Executive committed a fraud with the complainant by filling and ticking the regular plan column no.27A in the proposal form without her consent. It was further stated that the complainant also gave written complaint, acknowledged on 19.10.2012 (Annexure C-6). It was further stated that thereafter, on 26.10.2012, the complainant received detailed reply dated 26.10.2012 from the Opposite Parties stating therein that the Policy was issued as per the proposal form filled by the complainant. It was further stated that the stand of the Opposite Parties, was false, frivolous and vague. It was further stated that when nothing was done, by the Opposite Parties, the complainant issued a legal notice dated 17.12.2012, which was replied vide letter dated 30.11.2012. It was further stated that the complainant received a phone call, from an official of Opposite Party No.2 informing that, in case, the complainant surrendered the Policy, she would get only 20% of the said Policy and 80% would be deducted on account of surrender charges. It was further stated that deduction of 80% of the Policy amount, would be in total violation of Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations 2010. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence 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 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to refund Rs.2,00,000/-; pay Rs.50,000/- as compensation for mental agony and physical harassment; and Rs.21,000/- as cost of litigation.

3.           The Opposite Parties, in their written version, admitted the issuance of Policy, in question, as well as receipt of premium thereof. It was stated that the Policy Document was dispatched to the complainant on 30.7.2011 and she was having an ample opportunity to go through the proposal form and understand the terms and conditions of the subject Policy, including the premium paying terms and frequency. It was further stated that the complainant herself filled up all the details, in the proposal form. It was further stated that the Opposite Parties, issued the Policy, only when they received duly signed and filled up proposal form from the complainant. It was further stated that the premium payable under the Policy was ‘yearly’ and the mode of premium was ‘Regular’. It was further stated that neither the Opposite Parties, received any request during the free look period for cancellation of the Policy from the complainant nor she annexed any document to that effect, with her complaint. It was further stated that the complainant, thus, accepted the terms and conditions of the Policy Document. It was further stated that the complainant for the first time sent a complaint to the Opposite Parties on 19.10.2012 that the Policy was mis-sold to her, as a regular Policy instead of a single premium Policy. It was further stated that on investigation of the matter, the mis-selling was declined by the Company on the ground that the welcome kit was duly received, the complainant had an educated profile and she did not approach within free look period. It was further stated that again on 18.12.2012, the complainant sent letter stating that at the time of filling up the form, the agent told her to leave the premium payment column blank and when she received the Policy document, the agent herself filled it as regular premium and also produced application form where the column 27 was blank. It was further stated that on further investigation, the mis-selling could not be established as the blank page submitted could predict the allegation of mis-selling. It was further stated that in her first complaint, the complainant did not mention that she had not filled up the application form and when the Company declined her request, she made a second complaint alleging that she did not fill up the application form. It was further stated that there was no mis-selling of the Policy on the part of the Opposite Parties. It was further stated that under the Policy, the complainant was required to make the payment of the premium regularly on due dates or during the grace period.  It was further stated that the Policy lapsed due to non-payment of subsequent premiums by the complainant. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor did they indulge into unfair trade practice. The remaining averments, were denied, being wrong.

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

5.           After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, as stated above, in the opening para of the instant order. 

6.           Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties.

7.           We have heard the Counsel for the appellants/Opposite Parties, Respondent in person, and, have gone through the evidence, and record of the case, carefully. 

8.           The Counsel for the appellants/Opposite Parties submitted that since the respondent/complainant paid only one premium, the Policy stood lapsed and surrender value thereof, as per the terms of the Policy, could be paid after the completion of lock-in-period of five years. It was further submitted that after lock-in-period of five years, the respondent/complainant would be entitled to the surrender value alongwith 3.5% interest. It was submitted that the District Forum erred in relying upon Regulation 7 of Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations 2010, without considering Regulation 2(1)(viii) and terms of the Policy.

9.           The Counsel for the respondent/complainant submitted that the Sales Executive of the Appellants/Opposite Parties committed fraud with her by filling and ticking regular premium Column No.27 (2)(a) in the proposal form without her consent and she lodged complaint with the Appellants/Opposite Parties and also issued legal notice. It was further submitted that the aforesaid acts of the Appellants/Opposite Parties amounted to deficiency in rendering service on their part. 

10.         In the proposal form annexed with the Policy, under column 27(2)(a) relating to “Select Plan Type”, the respondent/complainant ticked “Regular Premium” option. The profile of the respondent/complainant is of an educated person and when the Policy Document was received, in case, she was not satisfied with the terms and conditions thereof, she by availing of the option during the free-look-period of 15 days, could surrender the Policy but she did not do so, and approached the Appellants/Opposite Parties, for the first time, only after a lapse of 1 year and 3 months, from the date of commencement of the same.

11.         Regulation 2(1)(viii) and “explanation” appended to Regulation 6(2) of Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations 2010, being relevant, are extracted below:-

“2(1)(viii). “Lock-in-period”

6.(2)Explanation:

(i)

12.         Clause 2.4 of the Policy Document (Exhibit R-3), being relevant, is also extracted below:-

“2.4. Surrender. i.

13.       From bare reading of afore-extracted clauses of Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations 2010, it is clear that the proceeds of the discontinued policies cannot be paid by the Insurer before the expiry of lock-in-period of five consecutive years from the date of commencement of the Policy. In the present case, the Policy, in question, commenced on 26.07.2011 and, as such, the lock-in-period of five consecutive years is to expire on 25.07.2016. Clearly, the respondent/complainant could not be paid the proceeds of the Policy, in question, which was discontinued, before 25.07.2016, as per the purport of the Regulations extracted above. It is only after expiry of the lock-in-period of five years that the complainant shall be entitled to the fund value as on the date the Policy was discontinued, after addition of interest computed at the minimum interest rate of 3.50% p.a. Thus, at this stage, the respondent/complainant is not entitled to the surrender value of the Policy, as has been erroneously allowed by the District Forum. It (District Forum) gravely erred in placing reliance upon Regulation 7 of Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations 2010 in isolation.

14.         In these circumstances, the complaint, filed by the respondent/complainant, before the District Forum was not maintainable being premature.

15.         No other point, was urged, by the Counsel for the appellants and the respondent in person.

16.         For the reasons recorded above, the appeal, filed by the appellants/Opposite Parties, is accepted, with no order as to costs, and the impugned order, rendered by the District Forum, is set aside. The complaint filed by the respondent/complainant, before the District Forum, is dismissed being premature.

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.

6^th

Sd/-

[JUSTICE SHAM SUNDER (RETD.)]

PRESIDENT

Sd/-

[DEV RAJ]

MEMBER

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STATE COMMISSION

(First Appeal No.458 of 2013)

Argued by:Sh.Gaurav Bhardwaj, Advocate for the appellant.

              Mrs. Upasana, respondent in person.

Dated the  6^th

ORDER

             Vide our detailed order of the even date, recorded separately, the appeal has been accepted, with no order as to costs. The order impugned, passed by the District Forum, has been set aside. The complaint filed by the respondent/complainant, before the District Forum, has been dismissed being premature.

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