ORDER

SRI.H.R. SRINIVAS.  PRESIDENT

1.     This is the Complaint filed by the Complainant against the Opposite Party (herein referred to as OP) under section 35 of the Consumer Protection Act 2019 for the deficiency in service and unfair trade practice by mis-selling the insurance policy and for refund of Rs.2,00,000/- the premium paid along with interest at 24% per annum till the payment of entire amount by cancelling the Reliance Guaranteed Money Back Plan bearing policy No.53320713 dated 24.10.2018, and also for refund of the paid premium of Rs.50,000/- along with interest at 24% per annum by cancelling “Reliance Fixed Money Back Insurance Plan” bearing policy No.53330898 dated 31.10.2018  and to refund all the premium paid amount with interest, and Rs.2,00,000/- as compensation towards causing mental agony and also to pass an order awarding cost and other reliefs and for such other reliefs as the Hon’ble District Commission deems fit.

2.     The brief facts of the complaint are that; the complainant obtained from OP’s employee, in the year 2008 an insurance policy by name Reliance Automatic Investment plan(Tailor made plan) dated 15.03.2008 with an annual premium of Rs.10,000/- for a term of 20 years. He paid the premium for 10 years. During the month of June/July 2018 he received call from Ops office that the said policy has been discontinued and he can receive the amount and also requested him to visit the office. He requested OP to continue the policy for 20 complete years, as he was not in need of the amount at that time, and the said saving is for his son’s future requirement.  Taking undue advantage of the situation, OP’s employee lured the complainant without disclosing the true and real fact about the policy and made him to take, a policy called by name “Reliance Guaranteed Money Back Plan” for 15 years mentioning that it is a one time single premium paying policy and not recurring premium payable policy. Hence he drew the amount of Rs.2,00,000/- from his bank which was released by OP by closing earlier policy bearing No.11696633 dated 15.03.2008 on 16.10.2018 and the said amount was encashed and policy bearing 53320713 dated 24.10.2018 was given to him. To his shock and surprise he received an SMS during April 2020 stating that he has to pay the premium towards the said policy a sum of Rs.1,95,694/- annually. He immediately contacted the Ops branch office at MG Road and found that the previous employee who sold the policy had left the organization and sold the above policy by providing false information. The insurance policy sold by the said person is a term insurance policy for 15 years and the premium payable is for 10 years.

3.     It is further contended that he immediately met the Ops branch manager explained the issue and he advised him to raise the complaint. He also informed him that he is not financially strong to pay an yearly premium Rs.1,95,694/- every year for a period 10 years and the policy was sold to him by unfair means. His request to the higher authorities was rejected and the insurance policy was not cancelled by giving untenable reasons which increased his mental agony.  He had purchased one policy for a premium of Rs.25,000/- payable for 15 years on 31.10.2018 . and the premium payable for 10 years and he has paid Rs.50,000/- for the said insurance.

4.     It is further contended that due to the unfair trade practice and mis-selling of the insurance stating that the premium payable is one time, whereas, it is a annual payment of the premium for 10 years.  He has lost his faith with the OP.  It is against to the Circular No.032/IRDA/ACTL/Dec-2005 and other guidelines laid down by IRDA from time to time.  OP failed to follow the same and to verify the earning capacity of the complainant regarding the capacity of the complainant to pay the insurance premium.

5.     Due to the adamant attitude of the OP and mis-selling of the insurance policy by guiding him wrongly and misguiding him has caused severe mental agony and financial loss . Though he tried his level best to convince the OP regarding mis-selling of the insurance policy and return of the policy premium amount, the same has not been complied and issued legal notice on 22.10.2020 calling upon OP to cancel the policy and return the premium amount paid along with the interest. Inspite of receiving the same, OP neither complied the same nor replied the notice.  Hence he had to file the complaint and prayed to allow the same.

6.     Upon the service of notice, OP remained absent and hence placed the exparte.

7.     In order to prove the case, complainant filed his affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2)        Whether the complainant is entitled to the relief prayed for in the complaint?

8.     Our answers to the above points are:-

POINT NO.1 :   In the Affirmative.

POINT NO.2 :   Partly in the Affirmative.

                        For the following.

REASONS

POINT No.1 & 2:-

9.     The complainant has produced Ex P1, P2 and P3 to show that he had obtained an insurance policy bearing No.11696633, wherein it is in respect of “Reliance Automatic Investment plan” sum assured is Rs.2,00,000/- premium payable is Rs.10,000/- per annum on 15^th March of every year the end date for the premium payable is on 15.03.2027 and maturity is on 15.03.2028. Ex P4 is the bank statement of the complainant wherein on 16.10.2018 a sum of Rs.2,00,000/- has been paid through cheque to OP and Ex.P5 and P6 are the documents to show that complainant has purchased another insurance under the name “Reliance Guaranteed Money back policy” wherein a sum of Rs.2,00,000.46 is to be payable for a period of 10 years, payable frequency is yearly. 

10.   Ex P7and P8 in respect of the insurance he has obtained for the payment of Rs.25,000/- premium per year for the sum assured of Rs.2,13,281/-. There is no dispute in respect of the said policy and the premium amount. Whereas the dispute in respect of the policy obtained under “Reliance Guaranteed Money back” policy for Rs.2,00,046/- being the annual premium. The OP has rejected the prayer of the complainant for cancellation of the policy bearing No. 53320713.

11.   It is the contention of the complainant that the officials of the Insurance company informed him that and appraised him that the premium payable of Rs.2,00,000/- is for one time premium for the policy  period of 15 years and thereby he paid Rs.2,00,000/- as one time premium. Afterwards he received the SMS message during June/July 2020 requesting him to pay the annual premium for a period of 10 years at the rate of Rs.1,95,694/-. It is his further complaint that he has no income to pay the premium as demanded by the OP  and further the insurance company persons have not followed the guidelines of IRDA that they ought to have enquired regarding the capacity of the payment of the premium. They cannot burden the complainant with a huge premium without knowing the paying capacity from the complainant towards premium.  He has also relied the decisions:-

“(1) State Consumer Disputes Redressal Commission, Punjab Dakshin Marg Secto 37-A Chandigarh in Frist Appeal No.75/2012 – Chinder Singh Vs The Manager, Bajaj Allianz Life Insurance Company & others

(2) and In the case of Sh.Satya Veer Attri Vs. Bharti Axa Life Insurance Company Limited – it was held that if the policy is sold by  misrepresentation the insurance company is liable.”

12.   In view of this as OP remained absent even after notice from this commission, it is to be held that the Ops have not followed the guidelines the proposal has the capacity to pay the premium as per the proposal. The insurance company as well as its representative/agent to inform the real facts and the benefits pros and cons of the insurance policy that they are selling to the proposer.  In a bid to compeat with other insurance companies and to alleviate their business, the insurance companies as well as their agents and representatives without informing and updating the real facts and the problems and the benefits of the insurance, sell the same.  Though there is a free look period the policy holder seldom look into it to exercise their option. Though they are duty bound, and in case any discrepancies, they can bring to the knowledge of the insurance company, either for lack of knowledge or due to want of time they rarely exercise the said option.  Even then it is the duty of the insurance company to put the facts straight to the intended purchasers of the policy, the same has not been done in this case. In view of this, we are of the opinion that there is deficiency of service on the part of OP in selling the insurance policy and there is misrepresentation of the fact regarding the premium payable and one cannot expect the person of meager income to purchase a policy by paying a premium of Rs.2,00,000/- per year. Hence we answer POINT NO.1 IN THE AFFIRMATIVE holding that there is deficiency in service and unfair trade practice and mis-selling the insurance policy to the complainant.

13.   The complainant has sought for refund of the said amount as he is not in a position  to pay the annual insurance premium of Rs.2,00,000/- per year for a period of 10 years. As stated above, OP has not produced any material to show that the complainant has sufficient financial capability to pay annual premium of Rs.2,00,000/- per year in respect of the insurance policy obtained by him on 24.10.2018. Hence we are of the opinion that if OP is directed  and ordered to refund the same along with 12% per annum interest on the said amount till payment of the entire amount after 15 days from 24.10.2018 (free look period), would be just proper and reasonable. Further the act of OP in not refunding the amount made the complainant to undergo mental agony , hardship, strain and financial loss for which we deem it proper to direct the OP to pay a sum of Rs.15,000/- towards damages and Rs.5,000/- towards litigation expenses.

14.   Though the complainant has expressed that he has no faith in Op in respect of the second insurance obtained by him, since he has purchased the said policy for 15 years, by paying  the annual premium of Rs.25,000/-, we are of the opinion that there is no deficiency in service in respect of the said policy and hence refund of the said amount is not under the circumstances is required. Hence we answer POINT NO.2 PARTLY IN THE AFFIRMATIVE and pass the following:

ORDER

 1.  The complaint is allowed in part with cost.

2. OP i.e. M/s Reliance Nippon Life Insurance Company Limited represented by is Managing Director/Authorized representative is hereby directed to pay a sum of Rs.2,00,000/- to the complainant along with 12% per annum interest on the said amount till payment of the entire amount after 15 days from 24.10.2018 (free look period) would be just proper and reasonable in respect of policy No.53320713 by name Reliance Guaranteed Money Back Policy.

3. Further OP is hereby directed to pay to the complainant a sum of Rs.15,000/- towards damages for causing physical and mental strain and Rs.5,000/- towards cost of the litigation expenses.

4. OP is hereby directed to comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this commission within 15 days thereafter.

5. Send a copy of this order to both parties free of cost.

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this day the 09^th day of August 2021)

MEMBER                                PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1 to P3: Three insurance policies.

Ex P4: Account statement by Axis Bank

Ex. P5: Copy of another insurance policy

Ex P6: Copy of rejection letter.

Ex P7: Copy of policy details in respect of insurance policy NO.53330898.

Ex P8: Copy of premium certificate for the year 2018-19

Ex P9: Copy of Rejection letter

Ex P10: Copy of the legal notice.

Ex P11: Certificate U/s 65 of the Evidence Act.

 2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: - Nil-

Copies of Documents produced on behalf of Opposite Party/s

- Nil -

MEMBER                                PRESIDENT

RAK*