Chandigarh

DF-II

CC/435/2021

Harsh Kumar Aggarwal - Complainant(s)

Versus

M/s Reliance Nippon Life Insurance Co. Ltd. - Opp.Party(s)

Harsh Kumar Aggarwal Adv.

19 Jan 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

U.T. CHANDIGARH

 

 

Consumer Complaint No.	:	435/2021
Date of Institution	:	13.07.2021
Date of Decision	:	19.01.2023

 

                     

            

                             

1.  Harsh Kumar Aggarwal son of Late Ram Swarup r/o # 192-A, Sector 4, MDC, Panchkula Haryana -134114.

2.  Lakshya Aggarwal son of Harsh Kumar Aggarwal r/o # 192-A, Sector 4, MDC, Panchkula Haryana -134114.

    ...  Complainants.

 

Versus

 

1. M/s Reliance Nippon Life Insurance Co. Ltd., through its City Head, Branch Office, SCO 123-124, 3^rd Floor, Sector 17-C, Chandigarh.
2. M/s Reliance Nippon Life Insurance Co. Ltd., Registered office: H Block, 1^st Floor, Dhirubhai Ambai Knowledge City, Navi Mumbai, Maharashtra through its City Head, Branch Office, SCO 123-124, 3^rd Floor, Sector 17-C, Chandigarh.

…. Opposite Parties.

BEFORE:
	SHRI AMRINDER SINGH SIDHU,	PRESIDENT
	SMT.PRITI MALHOTRA,	MEMBER
Present:-
	Sh.Harsh Kumar Aggarwal-Complainant No.1 in person & Counsel of complainant No.2 Sh.Gaurav Bhardwaj, Counsel of the OPs.

 

 

 

 

 

ORDER BY AMRINDER SINGH SIDHU, M.A.(Eng.),LLM, PRESIDENT:-

1.     By dint of this common order, we propose to dispose of two (2) connected consumer complaints in which common questions of law and fact are involved.

Sr. No.	Case No.	Parties Name	Policy No. and Details of Amounts deposited
I	435/2021	Harsh Kumar Aggarwal and Anr. Vs. M/s Reliance Nippon Life Insurance Co. Ltd.	Policy No.53232721 Cheque for Rs.3,00,000/- vide dated 26.05.2018 (Annx.C-4) Cheques for Rs.2,91,500/- dated 06.05.2019 (Annx.C-8). Cheque for Rs.2,93,544/- vide dated 31.05.2020 (Annx.C-9) Total Amount Rs.8,85,044/-
II	436/2021	Samidha Aggarwal and Anr. Vs. M/s Reliance Nippon Life Insurance Co. Ltd.	Policy No.53168800 Cheque for Rs.2,00,000/- vide dated 19.03.2018 (Annx.C-3) Cheques for Rs.1,00,700/- & Rs.95000/- both dated 20.03.2019 (Annx.C-7). Cheque for Rs.1,95,500/- vide dated 21.05.2020 +200 cash (Annx.C-8) Total Amount Rs.5,91,400/-

2.     The facts are gathered from C.C.No.435/2021- Harsh Kumar Aggarwal and Another Vs. M/s Reliance Nippon Life Insurance Co. Ltd. and Another.
3.     The complainants have filed the present complaint under Section 35 of the Consumer Protection Act, 2019 alleging therein that representatives of the OPs namely Sh.Puneet Arora and Sh.Piyush Aggarwal allured them by stating that the OPs are paying fixed regular additions (percentage of annualized premium) @ 8% for the first year, @ 9% for the second year and @ 10% for the third year  onwards, which are key features of the “Reliance Nippon Life Fixed Saving Policy”, which was to be issued for five years and the same could be surrendered after three years with fixed regular additions.  After verifying the facts, the complainants issued cheque of Rs.3.00 lakhs dated 26.05.2018 against receipt to them. It has been averred that proposal form and the particulars of the cheque were filled by the OPs and the complainant only signed the cheque filled by them. At page No.9 of the alleged policy, the income of the insured-Lakshya Aggarwal was shown to be Rs.60 lacs p.a. where he was only a student and just completed his B.Com whereas the income of the proper Harsh Aggarwal was shown to be Rs.2.50 crores whereas his total income for the FY 2017-18 was only Rs.31,53,400/-. The copy of the policy No.53232721 was delivered after a month’s time which in fact turned out to be a blur and not legible copy.   The complainant paid three premiums through cheques in the sum of Rs.3,00,000/- dt. 26.05.2018, Rs.2,91,500/- dt. 06.05.2019 and Rs.2,93,544/- dt. 31.05.2020 (Annexures C-4, C-8 and C-9) respectively.  It has been averred that the OPs have played unfair trade practice and made mis-representations and drew up a unilateral unfair contract/policy and as such he made complaint dated 06.06.2020 (Annexure C-10) in this regard to the OPs. After completion of three years, the complainant approached the OPs for redemption and the OPs offered to pay redemption value of Rs.4,30,371/- against the three premiums of Rs.8,85,044/- instead of Rs.10,39,000/- as promised. It has been averred that the OPs have played unfair trade practice with the complainant and adopted deceptive practice. Finally, the complainant served a legal notice dated 18.06.2021  (Annexure C-11) upon the OPs through OP No.1 personally and also made complaint through e-mail (Annexure C-12) but to no effect.   Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OPs, the complainants have prayed that the OPs be directed to refund the entire total premium as deposited in three installments along with interest amount as promised i.e. Rs.10,39,000/- along with interest, compensation for mental agony and harassment etc. 
4.     In their written version, the OPs have stated that based on the answers, statements, premium amount, premium paying term opted and declarations made in the proposed form duly executed and submitted by the LA/proposer, the OPs have issued the policy No.53232721 to the proposed/LA @ annual premium of Rs.3.00 lakhs with policy term of 12 years, premium term of 10 years for sum assured of Rs.21,63,654/-. The policy was dispatched to the complainant through registered post (Annexure C-7).  The complainant had also signed declaration and authorized contained in the e-proposal form meaning thereby that the LA/proposer was explained all the terms and conditions of the policy and only after his satisfaction, he provided the details in the proposal form in English language after accepting the terms and conditions mentioned therein. It has further been stated that the complainant had received the policy document and all the applicable charges, premium paying terms, benefits etc. are duly mentioned in the policy and as such he was fully aware about the terms and conditions of the policy.  It  has further been stated that the policy schedule filed by the complainant/LA itself states that the premium paying term under the policy was of “10 years” and as such they were fully aware of the minimum premium paying term and also about the premium payment being regular in nature. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service on their part, the OPs prayed for dismissal of the complaint.

4.     The complainants filed replication to the written reply of the Opposite Parties controverting their stand and reiterating their own.
5.     The parties filed their respective affidavits and documents in support of their case.
6.     We have heard the learned counsel for the parties and gone through the record on file.  
7.     It is observed that the learned counsel for the OPs did not file the power to attorney on behalf of the OPs despite providing opportunities for the same. He has filed one memo of appearance. In order to find out the legal consequences of filing the written statement and other proceedings without having competent authority to do so, the judgment of the Hon'ble Supreme Court of India in the case reported as (2011)II Supreme Court Cases 524 titled as “State Bank of Travancore Vs. Kingston Computers India Pvt. Ltd.” is important. In para no.11 of the judgment,  it has been held as under:-

“the plaint was not instituted by an authorized person. On the plea that one authority letter dated 02.01.2003 was issued by Sh. R.K.Shukla in favour of Sh. A.K.Shukla. Further plaint failed to place on record its memorandum/articles to show that Sh. R.k.Shukla has been vested with the powers or had been given a general power of attorney on behalf of the Company to sign, verify and institute the suit on behalf of the Company.”

        Similar proposition came before the Hon’ble Delhi High Court in “Nibro Ltd. Vs. National Insurance Co. Ltd.”, 2 (2005) SCC 30 that the

“bare authority is not recognized under law and ultimately, it was held that the plaint was not instituted by an authorized person. Here also appellant has not placed on record any resolution passed by any Board of Director in favour of Mr. Soonwon Kwon and that he was further authorised to delegate his power in favour of any other person. Further there is no memorandum/articles of the Company to show that Mr. Soonwon Kwon is one of the Director of the Company. In the absence of that evidence on record we cannot say that the special power of attorney given by Director Soonwon Kwon is a competent power of attorney issued in favour of Sh. Bhupinder Singh. In the absence of any resolution of the Company or any memorandum/articles of the Company to show that Sh. Soonwon Kwon is Director and that he was further authorised to issue power of attorney in favour of Sh. Bhupinder Singh.”

8.     In the present case, the OPs-company did not file the written version and other legal proceedings by an authorized person. There is nothing on record that the OPs-company issued any authorization in favour of any person. The OPs failed to place on record its memorandum/articles to show that any person has been vested with the powers or had been given any power of attorney on behalf of the company to sign, verify and file the written version on behalf of the company. The OPs has not placed on record any resolution passed by any Board of Directors in favour of any person. So written version filed by an unauthorized person has no legal effect. The Hon’ble State Commission, Punjab Chandigarh in FAO No.1235 of 2015 decided on 25.01.2017 in case titled as L.G. Electronics India Private Limited Vs. Sita Ram Chaudhary also held that the plaint instituted by an unauthorized person has no legal effect. Hence, it can safely be concluded that the written version and the documents placed by an unauthorized person have no legal value.
9.     Even for the sake of arguments, if the complaint is decided on merits. It is clear that the complainants are consumers qua the OPs as they availed the services of the OPs for consideration. The complainants have made specific allegations against the representatives of the OPs namely Sh.Puneet Arora and Sh.Piyush Aggarwal that they allured them by stating that the OPs are paying fixed regular additions (percentage of annualized premium) @ 8% for the first year, @ 9% for the second year and @ 10% for the third year  onwards, which are key features of the “Reliance Nippon Life Fixed Saving Policy”, which was to be issued for five years and the same could be surrendered after three years with fixed regular additions.  Believing their versions to be true and after verifying the facts, the complainants issued cheque of Rs.3.00 lakhs dated 26.05.2018 against receipt. It has been alleged that the proposal form and the particulars of the cheque were filled by the OPs and the complainants only signed the cheques filled by the representatives of the OPs. The complainants have further alleged that at page No.9 of the alleged policy, the income of the insured-Lakshya Aggarwal was shown to be Rs.60 lacs p.a. whereas he was only a student and just completed his B.Com whereas the income of the proper Harsh Aggarwal was shown to be Rs.2.50 crores whereas his total income for the FY 2017-18 was only Rs.31,53,400/-. To rebut these allegations, the OPs did not place on record the affidavits of the concerned representatives to falsify the claim of the complainants. Further the complainants have alleged that a copy of the policy in question was delivered after a month’s time and the size of font of that copy is very small, blur and not legible.  To prove these allegations, the complainants have placed on record a copy of the policy which is Annexure C-7 containing very small size of alphabets in font and the same is also blur and not legible. The complainants have proved that they had paid the premiums towards the policy in question through three cheques in the sum of Rs.3,00,000/- dated 26.05.2018, Rs.2,91,500/- dated 06.05.2019 and Rs.2,93,544/- dated 31.05.2020, which are duly placed on record as Annexures C-4, C-8 and C-9 respectively.  The complainants have made specific allegations that the OPs have played unfair trade practice and made mis-representations & drew up a unilateral unfair contract/policy and as such the complainants made the complaint dated 06.06.2020 (Annexure C-10) in this regard to the OPs. It has further been alleged that after completion of three years, the complainants approached the OPs for redemption value and the OPs offered to pay redemption value of Rs.4,30,371/- instead of Rs.10,39,000/- as promised against the three premiums of Rs.8,85,044/- and, therefore, the OPs have committed unfair trade practice with the complainants.
10.     It is observed that the policy which is Annexure C-7 provided to the complainants bears very small size of letters & blur and hence, the same is not completely legible. When the OPs have provided the such copy to the complainants then it cannot be said that the complainants are able to read and understand the same. Hence, the terms and conditions of the insurance policy especially the exclusion clause are not binding upon the complainants.  Otherwise also, the complainants are bona fide consumers of the OPs,  but the representatives of the OPs did not disclose the actual terms and conditions of the insurance policy but sold out the policy in a deceptive manner which not only amounts to unfair trade practice but also deceptive trade practice. Hence, the OPs are liable for the acts and conducts of their representatives/agents. 
11.     It is further observed that several complaints from different consumers having different backgrounds and residing at different parts of the country are making similar allegations  that the representatives/agents of the insurance companies are not disclosing the actual terms and conditions of the insurance policies but sell out the policies in a deceptive manner. Hence, the persons from different walks of life cannot make similar allegations, who are residing in the different parts of the country, having different backgrounds without element of truth in the above said pleadings that agents sell out the policy in deceptive manner in order to achieve the target or for the sake of their commissions.
12.      A similar view is taken in Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. (2000) 2 SCC 734, “(8) It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties know. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since the obligation of good faith applies to both equally.”
13.     It is usual with the insurance company to show all types of green pastures to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sort of excuses to deny the claim. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.  It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts the Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 went on to hold as under:-

“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy. The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich”.

14.     In the present case, the representatives of the OPs have sold the policy in question to the complainants in a very deceitful manner without disclosing the real facts of the policy and made them  to sign on the dotted lines by assuring that they will take care of the rest but when after three years as promised by the representatives of the OPs, the complainants went to the OPs for getting the redemption amount, they were surprised to see that the OPs were offered to pay the redemption value of Rs.4,30,371/-instead of Rs.10,39,000/- as promised against the three premiums of Rs.8,85,044/-.
15.     Similar facts have been pleaded in another connected complaint titled as C.C.No.436/2021- Samidha Aggarwal and Another Vs. M/s Reliance Nippon Life Insurance Co. Ltd. and Another and similar evidence has been led in them.  Therefore, in both these cases, deficiency in service as well as unfair trade practice on the part of the OPs is proved.
16.     Resultantly, we allow the consumer complaint of the complainants. The Opposite Parties are jointly or severally directed to refund the deposited amounts i.e. Rs.8,85,044/- to the complainants alongwith interest @ 9% per annum from the date of its respective deposits till its actual realization.  The Opposite Parties are also directed to pay the lump sum compensation to the complainant to the tune of Rs.15,000/-. 

II.      C.C.No.436/2021- Samidha Aggarwal and Another Vs. M/s Reliance Nippon Life Insurance Co. Ltd. and Another

17.     This complaint is also allowed. The Opposite Parties are jointly or severally directed to refund the deposited amounts i.e. Rs.5,91,400/- to the complainants alongwith interest @ 9% per annum from the date of its respective deposits till its actual realization.  The Opposite Parties are also directed to pay the lump sum compensation to the complainant to the tune of Rs.15,000/- (fifteen thousands only). 
18.     This order be complied with by the OP(s), within 60 days from the date of receipt of its certified copy, failing which the complainants shall be at liberty to get the order enforced through the indulgence of this Commission.
19.     Certified copies of this order be sent to the parties as per rules. The file be consigned.

Announced

19.01.2023                                     

Sd/-

(AMRINDER SINGH SIDHU)

PRESIDENT

 

 

Sd/-

(PRITI MALHOTRA)

MEMBER