Chandigarh

DF-I

CC/400/2014

Daljit Singh Sandhu - Complainant(s)

Versus

M/s Kotak Mahindra Prime Ltd. - Opp.Party(s)

Sandeep Bhardwaj

05 Nov 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

========

 

                                     

Consumer Complaint No.	:	CC/400/2014
Date of Institution	:	13/06/2014
Date of Decision	:	05/11/2015

 

Daljit Singh Sandhu resident of House No.138, Sector 35, Chandigarh.

…..Complainant

V E R S U S

1.      M/s Kotak Mahindra Insurance Co. Ltd., SCO No.141/145, 2nd Floor, Sector 9-C, Chandigarh through its manager/Authorised representative.

2.     M/s Kotak Mahindra Insurance Co. Ltd., Corporate and Regd. Office :- 4th Floor, Vinay Bhavya Complex, 159-A, CST Road, Kalina, Santacruz (East) Mumbai-400098, India.

……Opposite Parties

 

QUORUM:	P.L.AHUJA	PRESIDENT
	MRS.SURJEET KAUR	MEMBER
	SURESH KUMAR SARDANA	MEMBER

                                               

                                                                       

ARGUED BY	:	Sh. Sandeep Bhardwaj, Counsel for complainant
	:	Sh. Mrigank Sharma, Counsel for OPs

                       

                 

PER P.L.AHUJA, PRESIDENT

1.         Sh. Daljit Singh Sandhu, complainant has filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against M/s Kotak Mahindra Insurance Co. Ltd., Opposite Parties (hereinafter called the OPs), alleging that in the year 2003, he had taken one policy bearing No.00039792 having annual premium of Rs.10,330/- and term of 10 years. Upon maturity of the policy, the complainant approached the OPs and filled the surrender form dated 19.3.2013 (Annexure C-1). 

According to the complainant, he was told that 1/3^rd of the amount was (shall be?) paid through ECS with delay (?) in his account and the OPs assured to send the 2/3^rd amount of the maturity amount so that he could purchase annuity from the Life Insurance Corporation of India. The OPs informed that the cheque amounting to Rs.77,314.98 had been sent to the address of the complainant, but, he did not receive 2/3^rd of the maturity amount.  On 25.6.2013, the complainant was told to give the surrender form again alongwith more documents after which he approached the OPs and completed all the formalities.  However, the OPs even after receiving the entire documents failed to send the 2/3^rd amount of maturity to the complainant. The complainant also sent a letter dated 26.11.2013 and a legal notice dated 15.2.2014 to the OPs, but, to no avail.  Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainant has filed the instant complaint. 

2.         In their joint written statement, OPs have taken a number of preliminary objections including that the complainant is not a consumer as the policy had been purchased for profit making purpose.  It has been admitted that the complainant purchased the policy in question. It has been averred that the OPs vide letter dated 5.2.2013 intimated the complainant that the subject policy had completed its full policy term and got matured on 28.1.2013 and also enclosed a cheque of Rs.38,665.19 as one third of the maturity proceeds of the policy.  The OPs also requested the complainant to intimate in writing about the choice of insurance company which he wished to select in order to purchase annuity from the balance two third portion.  It has been stated that the OPs received a maturity form dated 25.6.2013 under which he had opted for two-third payout of the maturity proceeds in favour of LIC of India towards purchase of annuity.  It has been averred that the balance two third of the maturity proceeds amounting to Rs.77,341.98 was released in favour of LIC of India under letter dated 29.6.2013 on the basis of the maturity form submitted by him and as per his choice, but, the same was not encashed.  It has been contended that upon receipt of information regarding non-receipt of annuity payment, the OPs forthwith created the fresh cheque.  Pleading that there is no deficiency in service or unfair trade practice on their part, OPs have prayed for dismissal of the complaint.
3.         In his rejoinder, the complainant has controverted the stand of the OPs and reiterated his own. It has been contended that the complainant is legally entitled to the amount as the OPs have to send the amount either to him or to the LIC immediately after receiving the option. 
4.         The parties led evidence in support of their contentions.
5.         We have appraised the entire evidence, written arguments submitted by both sides and heard the arguments addressed by the learned Counsel for the parties. 
6.         Admittedly, the complainant obtained one Kotak Retirement Income Plan bearing No.000000039792 (Annexure R-1) from the OPs on 5.2.2013 with annual premium amounting to Rs.10,330/- and policy term was 10 years.  Under the distribution and benefit Section of the policy document and as per the policy terms and conditions, it was stipulated as under :-

“If the life insured survives till the retirement date opted for, the policyholder may take the relevant Retirement Benefit, in the following manner :

- Up to one third of the benefit amount may be taken in cash. The balance of the benefit amount will be used to buy an annuity, either from the Company (depending upon the annuity choice available at that time) or from any other registered life insurer. The policyholder must indicate in writing, the manner in which he/she wishes to take the relevant Retirement Benefit within the time limits hereinabove stated.

On retirement, the policy will cease and all benefits will fall away.”

The said policy of the complainant matured on 28.1.2013 and the OPs sent a letter dated 5.2.2013 (Annexure R-3) to him whereby a cheque of Rs.38,665.19 as 1/3^rd of the maturity proceeds of the policy was enclosed.  The complainant was informed that the balance 2/3^rd portion will have to be utilized to purchase an annuity from any other insurer of his choice.  The complainant was asked to intimate the OPs in writing about the choice of insurance company from whom he wished to purchase the annuity.  A list of 12 such companies was given to the complainant.  The 1/3^rd maturity amount of Rs.38,665.19 was later on transferred in the account of the complainant vide NEFT on 12.2.2013.  There is no undue delay in the release of 1/3^rd of the maturity proceeds to the complainant because the policy got matured on 28.1.2013 only.  The real dispute is in respect of the payment of the maturity amount towards the purchase of annuity to the complainant for which the complainant has alleged that he submitted the surrender form (Annexure C-1) on 19.3.2013. 

7.         The first objection of the OPs is that the policy in question is a market linked insurance policy with incidental life cover and was purchased for profit making purpose and, therefore, the complainant is not covered under the definition of ‘consumer’ as defined in the Consumer Protection Act? However, a bare perusal of the copy of the proposal form attached with the insurance policy (Annexure R-1) nowhere shows that it is a unit linked or market linked insurance policy. A perusal of the clause 5 of the proposal form relating to the allocation of premiums to investment portfolios shows that the columns relating to money market fund, gift fund, growth fund and balanced fund are all lying blank which point out that the money was not invested in the market.  It is also significant to note that even in the policy (Annexure R-1) as well as the forwarding letter, it is nowhere mentioned that the said insurance policy is a unit linked insurance policy and the investment shall be made through share market/speculative transactions and it shall be subject to different risk factors. Accordingly, we do not feel that the insurance policy (Annexure R-1) is in any way market linked policy for profit making purpose. We do not find any force in this contention of the OPs that the complainant does not fall under the purview of ‘consumer’ as defined in Section 2(1)(d) of the Consumer Protection Act. On the other hand, we feel that since the complainant hired the services of the OPs by paying the annual premium of Rs.10,330/-, therefore, he is very well covered under the definition of ‘consumer’.
8.         Now we advert to the most material question i.e. the release of 2/3^rd of the maturity amount i.e. Rs.77,341.98 by the OPs towards the purchase of annuity to the complainant from the LIC of India.  It has been urged by the learned counsel for the complainant that the OPs have failed to pay the amount of Rs.77,341.98 either to the complainant or to the LIC.  He has contended that it has not been proved that the amount was actually debited from the account of the OPs and credited in the account of the LIC or the complainant. He has contended that the OPs have withheld the amount of Rs.77,341.98 illegally for a period of more than two years and they cannot be allowed to take benefit of their own wrong. He has argued that since the OPs have themselves violated the terms and conditions of the contract by not utilizing the 2/3^rd amount for purchasing the annuity by sending the same to the LIC in the year 2013, therefore, they are liable to refund the amount of Rs.77,341.98 alongwith interest and compensation to the complainant.
9.         On the other hand, the learned counsel for the OPs has urged that the complainant gave a maturity form [Annexure R-6 (colly.)] on 25.6.2013 wherein he expressed choice that annuity payout be deposited with LIC of India and according to his wish a letter dated 29.6.2013 (Annexure R-5) was sent to the LIC at the address of the complainant alongwith a cheque of Rs.77,341.98 towards 2/3^rd annuity as payout in favour of LIC of India. The complainant was asked to contact LIC of India for the purchase of required annuity plan.  The learned counsel for the OPs has vehemently argued that the maturity amount was sent to LIC as per the instructions of the complainant, but, the said cheque has still not been encashed till date.  He has further argued that upon receipt of information regarding non-receipt of the annuity payment, a fresh cheque (Annexure R-7) was created and it was tried to deliver by hand which was not accepted by the complainant.  The learned counsel for the OPs has strenuously argued that the 2/3^rd amount of the maturity proceeds can be released in favour of LIC only as per terms and conditions of the policy.  He has submitted that the insurance contract must be given paramount importance and interpreted as expressed without any addition, deletion or substitution and the complainant cannot turn back from the same and at this stage the payment of the amount cannot be made to him. 
10.         We have given our thoughtful consideration to the rival contentions. After scanning the entire evidence, we find gross deficiency in service on the part of the OPs.  In the first place, the complainant has specifically pleaded in para 4 of the complaint that he approached the OPs on maturity of the policy and filled the surrender form dated 19.3.2013 (Annexure C-1). In that surrender form (Annexure C-1) the complainant has clearly indicated that he has ticked against the name of LIC of India for annuity payout.  The allegations of the complainant in respect of the surrender form dated 19.3.2013 have not been specifically denied by the OPs in para 4 of the written statement, therefore, the same would be deemed to have been admitted.  The OPs were required to send the 2/3^rd maturity amount towards the purchase of annuity to the LIC immediately after 19.3.2013. However, the allegations of the complainant further show that on 25.6.2013 he was again asked to give the surrender form (Annexure R-6) and he gave again a surrender form (which is in fact a maturity form) in which again annuity payout has been chosen to be given to LIC of India on 25.6.2013.  The OPs allegedly sent a cheque of Rs.77,341.98 in favour of LIC vide forwarding letter dated 29.6.2013 (Annexure R-5).  However, the said letter shows that the same is addressed to LIC of India, but, the address mentioned thereon is of the complainant.  The tone and tenor of the letter shows that it is addressed to the complainant. However, the complainant has denied the receipt of this letter. The OPs have failed to produce any documentary evidence of receipt of this letter either by the complainant or by the LIC of India.  The matter does not end here. The complainant again sent a letter dated 26.11.2013 (Annexure C-3) wherein he mentioned that he had surrendered his pension policy on maturity in March 2013 and for annuity he exercised his option for deposit with LIC and he gave option in the Panchkula office twice as branch of the OPs in Chandigarh was under renovation.  The last time on which the documents were surrendered was on 25.6.2013 and even after lapse of five months nothing was heard from the side of the OPs.  Unfortunately, though this letter was duly received by the OPs, yet, no reply to this letter was ever given by the OPs that they had already sent the cheque of Rs.77,341.98 in favour of LIC of India for the purpose of required annuity plan on 29.6.2013. Ultimately, the complainant had to send a legal notice dated 15.2.2014 (Annexure C-4), reply of which was given by the OPs on 27.3.2014 (Annexure C-5) wherein it was mentioned that the balance 2/3^rd amounting to Rs.77,341.98 had been utilized towards the purchase of annuity from the LIC as per the policy terms and conditions and the cheque for the aforesaid 2/3^rd amount was deposited in favour of LIC of India and after payment of the above mentioned amount, nothing was payable to the complainant by the company.  Unfortunately, the OPs did not think it proper to verify from their record whether the payment of Rs.77,341.98 was actually made to the LIC or not.  Now it is the admitted case of the OPs that cheque No.573807 of the amount of Rs.77,341.98 was not encashed.  The contention of the learned counsel for the OPs that efforts were made to deliver a fresh cheque dated 28.1.2015 (Annexure R-7) by hand failed is also not supported by any documentary evidence. The evidence on record shows that from March 2013 onwards, the complainant has been requesting the OPs for payment of his 2/3^rd maturity amount towards annuity, but, nothing concrete has been done by the OPs. The deficiency in rendering services on the part of the OPs is writ large in this case. 
11.         The only question that survives for determination is whether the amount of Rs.77,341.98 is to be released to LIC as per terms of the policy or to the complainant.  We are of the view that if the OPs have violated the terms and conditions of the policy, the complainant can very well be compensated for the deficiency in service and causing mental and physical harassment to him.  However, the terms of the policy are in the nature of a contract and they are to be strictly construed without any addition, deletion or substitution. Since, as per terms and conditions of the policy, 2/3^rd of the maturity amount is to be used to buy annuity and the complainant has also given his option for paying that amount to LIC, therefore, that amount is liable to be paid to LIC of India. However, the complainant is definitely entitled to get interest on that amount alongwith compensation and litigation expenses from the OPs.
12.         For the reasons recorded above, we find merit in the complaint and the same is partly allowed. The OPs are directed :-

(i)     To send the cheque of 2/3^rd of the maturity amount i.e. Rs.77,341.98 towards purchase of annuity plan in favour of LIC of India to the complainant.

(ii)    To make payment of interest @ 9% per annum to the complainant on the amount of Rs.77,341.98 from the date of exercising option i.e. 19.3.2013 by him till the issuance of fresh cheque in favour of LIC.

(iii)   To make payment of an amount of Rs.20,000/- to the complainant as compensation for physical and mental harassment and deficiency in service.

(iv)   To also pay Rs.10,000/- to the complainant as litigation expenses.

13.         This order be complied with by OPs within one month from the date of receipt of its certified copy, failing which they shall make the payment of the amounts mentioned at Sr.No.(ii) & (iii) above, with interest @ 12% per annum from the date of filing of the present complaint till realization, apart from compliance of directions at Sr.No.(i) and (iv) above.
14.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

	Sd/-	Sd/-	Sd/-
05/11/2015	[Suresh Kumar Sardana]	[Surjeet Kaur]	[P. L. Ahuja]
hg	Member	Member	President