BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 07^TH DAY OF SEPTEMBER 2022

ORDER

SRI.K.S.BILAGI, PRESIDENT

1.         This complaint has been filed through Power of attorney holder of the complainant under section 35 of C.P.Act 2019 (herein after referred as “Act”) against the OPs for the following reliefs.

1. Direct the OP to pay to the complainant a sum of Rs.15,74,579/- along with interest at the rate of 24% per annum.
2. Direct the OP to pay a sum of Rs.1,00,000/- towards mental agony, damage.
3. Award cost and grant such other reliefs.

2. The brief case of the complaint is as follows:

The complainant wanted to took policy for self from the OP from his retirement benefit.  But due to the age factor of more than 60 years at the instance of the OP2 and 3 he took insurance policies from the OP1 in the name of his grand children Mast. Jay Pradhan S and Kum.Swashikaa for limited period of five years by paying Rs.5,00,000/-.  The complainant paid the same agreed for this payment for five years as onetime payment.  But the OPs directed the complainant to pay second year premium of Rs.5,00,000/- that complainant was supposed to pay Rs.5,00,000/- for a period of ten years.

3.     It is further case of the complainant that once again he has paid in all Rs.15,64,578/- prior to September 2020 and OPs have also collected Rs.10,000/- as ECS charges.  The complainant has already paid premium of Rs.15,64,579/- for 12 policies for a period of three years.  But OPs failed to repay the same despite expiry of three years period inspite of legal notice dated 11.12.2020.  The act of OPs amounts to mis-statement and deficiency of service.  Hence this complaint.

4.     In response to the notice OP1 and 2 only appeared and filed version. Despite receipt of notice by OP3, failed to appear before this Commission.  Therefore OP3 has been placed exparte.

5.     The OP1 and 2 file a version stating that the complaint is barred by limitation, as complaint filed in the year 2022 on the basis of policies issued in the year 2018.  The complaint suffers from malafide and dishonest intention.

6.     The OP admits issuance of the policy on payment of premium. But denies that the complainant was misrepresented. The complainant was entitled to withdraw/return the policies within 15 days of policy in the “free look period”. The seven policies were received by Geetha as on 03.07.2018 and three policies have been received by Geetha on 11.07.2018.  The complainant failed to exercises free look period provision within 15 days from the date of issuance of the policy.

7.     The OPs neither misrepresented to the complainant nor deficiency of service.  The policies acquired surrender the value after payment of full premium for three policies.  Therefore OP1 and 2 requested this commission to dismiss the complaint.

8.     The complainant files affidavit evidence and relied on 1 document consisting page No.13 to 436.  OP1 and 2 have filed affidavit evidence of their authorized signatory and relied on 2 documents. Heard the arguments and perused the records.

9.     The points that would arise for our consideration are as under:-

1. Whether the complainant proves deficiency of service on the part of the OPs?
2. Whether the complainant is entitled to reliefs mentioned in the complaint?
3. What  order?

10. Our answer to the above points are as under:

       Point No.1 :- Affirmative in part

      Point No.2 :- Affirmative in part

       Point No.3:- As per the final order.

                                REASONS

11. Point No.1 and 2:     

Even though complainant sets up a theory that only Rs.5,00,000/- as onetime payment for a total period of five years was payable and accordingly he paid it.  Admittedly the first payment of Rs.5,00,000/- was made in June 2018.  But complainant has paid further premium of 2019 and 2020 in respect of all 12 policies.  Therefore, the first theory set up by the complainant that he was induced to pay sum of Rs.5,00,000/- for a total period of five years as one time payment is not correct.

12.   The OP1 and 2 contend that the complaint is barred by limitation.  The entire record of the complainant at page 13 to 436 is marked as Ex.P1.  This file indicates that the complainant received all 12 policies on 29.06.2018 and paid premium of R.5,00,000/- for every year in the year 2018, 2019 and 2020 as could be seen from the policy deposit receipts.  The complaint is filed within two years from the date of last payment.  More over the complainant issued a letter dated 09.07.2021 calling the OPs to repay his policies and refund the already paid amount of R.15,64,579/- along with ECS cheque amount of Rs.10,000/.  The complaint has been filed within two years from 09.07.2021.  Therefore, the OP1 and 2 are not right in saying that complaint is barred by limitation.

13.   It is one of the contention of the OPs that a letter was addressed to the complainant giving an option to use free look up period of 15 years and the respective letter have been received by one M. Geetha, resident of the complaint.  The OP has produced letter of 29.06.2018 calling the complainant if the complainant wants to make use of free look up period and he can exercise this option.  But the complainant has not exercised a look up period within 15 days from the date of receipt.  More over the complainant has paid premium for second year and third years  Therefore, the period of lock up period is not applicable to the present case on hand.

14.   The OP1 and 2 refer two decisions of the Hon’ble National Commission and Gezettee notification

1. ICICI prudential life insurance Co. Ltd., in Revision Petition No.2870/2012 dated 16.10.2012.
2. The order of the Hon’ble National commission in Revision petition No.303/2016 in the matter between Tarem Singh –vs- PNB Metlife India Insurance Company ltd., dated 5^th September 2016
3. Clause No.10(1) of Insurance Regulatory and Development Authority of India Regulation 2017.

15.        They speak about pre look up cancellation of life insurance policies.  The complainant failed to use free look up cancellation within 15 days from the date of receipt of intimation and the complainant made further payment of second and third year premium.  Therefore thee two decisions and above provisions are not applicable to the present case on hand.

16.        It is admitted by the OPs that in case of payment of premium for three years wherein payment of premium period is either 10 years or more than 10 years the insured/beneficiary can exercise the benefit of surrender of value.

17.        As indicated above the complainant by issuing letter dated 09.07.2021 and legal notice dated 11.12.2020 called upon the OPs to refund his amount.  OP has issued reply dated 17.01.2021 stating that the complainant failed to exercise right under regulation 8.1 and 10.1 about free look up period provision.  As indicated above the free look up period benefit is not applicable to the complainant as complainant paid premium of second and third year.

18.        Complainant rightly argues that after payment of premium for continuous payment of three years, complainant has exercise his option calling the OP to pay surrender value.  Despite request of the complainant the OPs failed to pay the surrender value.  The OP 2 and 3 are the officials/agent of OP1.  OP2 and 3 are not personally liable. The payment of Rs.15,74,579/- by the complainant to OP is not in dispute.  Despite request made by the complainant, the OP1 failed to pay this amount.  This act of the OP1 amounts to deficiency of service.

19.        The complainant claims interest at 24% p.a., and compensation of R.1,00,000/- which are exorbitant.  It is a fit case to award interest at the rate of 9% p.a., from the date forpayment i.e., from 09.07.2021 till realization on R.15,74,579/- as a compensation.  The cost of litigation requires to be awarded as Rs.15,000/-.   Accordingly we answer point NO.1 and 2.

20.        POINT NO.3: In view of the discussion referred above, the OP1 alone is liable to pay Rs.15,74,579/- with interest at 9% p.a., from 09.07.2021 to till realization and liable to pay Rs.15,000/- towards cost of litigation.  The complaint requires to be allowed in part against the OP1 and complaint requires to be dismissed against OP2 and 3. In the result, we proceed to pass the following;

O R D E R

1. Complaint is allowed in part against OP1.  Complaint against OP2 and 3 is dismissed.
2. OP1 shall pay Rs.15,74,579/- to the complainant with interest at 9% p.a., as compensation from 09.07.2021 to till realization and pay Rs.15,000/- towards cost of litigation.
3. OP1 shall comply this order within 60 days from this date and failing which the OP1 shall pay interest at 12% p.a., on R.15,74,579/- after expiry of 60 days till realization.
4. Furnish the copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 07^TH day of September, 2022)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite party – R.W.1 :

HAV*