Delhi

StateCommission

A/781/2014

AVIVA LIFE INSURANCE CO. INDIA PVT. LTD. - Complainant(s)

Versus

MS. MADHULIKA SOOD & ANR. - Opp.Party(s)

26 May 2017

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

 

Date of Decision:26.05.2017

 

 

First Appeal- 781/2014

(Arising out of the order dated 29.05.2014 passed in Complaint Case No. 2004/2011 by the District Consumer Disputes Redressal Forum (VI), Vikas Bhawan, New Delhi)

 

 

Aviva Life Insurance Co. India Pvt. Ltd.,

Registered Office:

2^nd Floor, Prakashdeep Building,

7, Tolstoy Marg, New Delhi-110 001.

 

Head Office:

M/s. Aviva Life Insurance Co. India Pvt. Ltd.,

Opposite Golf Course DLF, Phase-V,                                                

Sector-5, Gurgaon, Haryana.

…..Appellant

 

Versus

 

1. Mrs. Madhulika Sud

 

2. Mr. Sanjay Kumar Sud

 

R/o S-415, First Floor, G.K-II,

New Delhi-110048.

.….Respondents

 

 

 

CORAM

 

Justice Veena Birbal, President

Salma Noor, Member

 

 

1.      Whether reporters of local newspaper be allowed to see the judgment?

2.     To be referred to the reporter or not?

 

 

 

 

Justice Veena Birbal, President

 

1. This is an appeal under Section 15 of the Consumer Protection Act (in short, “the Act”) wherein challenge is made to order dated 29.05.2014 passed by the District Consumer Dispute Redressal Forum (VI), Vikas Bhawan, New Delhi (in short, the “District Forum”) in CC No. 2004/11 whereby the aforesaid complaint  has been allowed and appellant/OP has been directed as under:

 

“We therefore find OP guilty of unfair trade practice and deficient in service and direct OP to pay Rs.1,50,000/- for deficiency in service and Rs.1,50,000/- for harassment, mental agony, physical discomfort and litigation.

 

The order shall be complied within 30 days of the receipt of the copy of the order; otherwise action can be taken under Section 25/27 of the Consumer Protection Act.”

 

 

2. Briefly the facts relevant for the disposal of the present appeal are that a complaint under Section 12 of the Act was filed by the respondent herein i.e. complainant before the District Forum stating therein that she and her husband i.e. respondent-2/complainant-2 had subscribed to seven insurance policies of appellant/OP during the period commencing from 31.07.2009 to 23.11.2009 and had paid a total annual premium amount of Rs.12,10,000/-.            It was alleged that the respondents/complainants had signed blank proposal forms and handed over the same to relationship manager of the appellant/OP.  The proposal forms of the aforesaid policies were filled-in by appellant’s/OP’s agents, namely, S/Shri Kuldip Singh, Lokesh Pandey and Jatin Chadha with calculated falsehood to make policies acceptable to appellant/OP. It was alleged that the aforesaid agents/employees had given false particulars in the complaint in terms of professional and income details of respondents/complainants. It was alleged that fictitious details of income and forged signatures of respondents/complainants were put on the proposal forms by appellant/OP to liquidate commission for agents and for their career promotions.  It was alleged that respondent-1/complainant-1 is a housewife, however, she was shown a working woman with monthly income of Rs.50,000/-.  A fictitious company “Overseas Pvt. Ltd.” was shown at respondent’s/complainant’s address by tampering address as S-415-B, G.K.II when no such address of the fictitious company ever existed anywhere. It was alleged that same was done to show that respondent-1/complainant-1 could pay the insurance premium from her business income.  It was alleged that respondent-2/complainant-2 at the relevant time was an NRI, working in Zambia, Africa as a Metallurgist.  To make him eligible, he was shown in the proposal form as a Manager in “Overseas Pvt. Ltd.” a fictitious firm created at his wife’s residential address.  It was alleged that at the time of payment of second premium, the respondents/complainants noticed the discrepancies in the proposal form and were shocked to see the same. The respondents/complainants wrote a letter dated 10.9.10 requesting the appellant/OP to cancel all the seven policies as the same were based on misrepresentation and manipulation done by the aforesaid agents/employees of appellant/OP and to refund the premium paid on them.  The appellant/OP asked the respondents/complainants to submit all documents relating to aforesaid seven policies to consider the request for cancellation.  The necessary documents i.e. copies of passports, appointment letter of respondent No.2/complainant No.2 & bank account statements were provided to appellant/OP.  On 14.01.2011, the appellant/OP cancelled four policies and refunded Rs.6.5 lacs being the annual premium for the said policies.  The respondents/complainants sent a reminder for refund of premium of remaining three policies.  It was alleged that the respondents/complainants had supplied all necessary documents to the appellant/OP but the investigator appointed by appellant/OP kept dragging and respondent-2/complainant-2 was forced to come to India from Zambia to produce his original passport. Ultimately, on 12.09.2011, remaining three policies were also cancelled and remaining premium of Rs.5.6 lacs was refunded to respondents/complainants.
3. On 19.10.2011, the respondents/complainants sent a notice to appellant/OP by registered post wherein it was stated that to secure the cancellation of aforesaid policies, the respondents/complainants suffered mental torture and harassment and demanded Rs.3,29,700/- as compensation. However, no action was taken by the appellant/OP.  Therefore, the respondents/complainants approached the District Forum by filing the complaint wherein they demanded interest @ 18% on their money which remained with appellant/OP by way of premium for the said policies and also travelling expenses incurred by respondent-2/complainant-2 in coming to India in connection with the investigation carried out by appellant/OP and also prayed for compensation for harassment and litigation cost.
4. The claim was opposed by appellant/OP by filing written statement wherein it was admitted that the respondents/complainants had taken aforesaid seven policies and also that the premium as alleged in complaint was received from respondents/complainants.  It was alleged that on complaint being received from respondents/complainants, the matter was promptly investigated and upon conclusion of investigation, as a policy decision and goodwill gesture and in an effort at being a customer centric approach, appellant/OP cancelled the subject policies and refunded the entire premium amount paid by the respondents/complainants.  It was further submitted that the company took the commercial loss upon itself and refunded the entire amount i.e. Rs.12.1 lacs to the respondents/complainants.  It was alleged that there was no deficiency in service on their part.  It was alleged that the   complaint was devoid of merits and was liable to be dismissed.
5. Rejoinder was filed by the respondents/complainants reiterating the averments made in the complaint.
6. Both the parties had filed evidence in the form of affidavits.
7. We may mention that during the pendency of the complaint, the appellant/OP also paid 12% interest on the premium amount refunded to the respondents/complainants for the period the amount was retained by it.
8. After hearing the parties, Ld. District Forum held that the appellant/OP had failed to substantiate their stand in the matter and had also remained negligent in returning the premium after prolonged delay.  It was held that there was unethical behaviour of appellant/OP due to which the respondents/complainants suffered mental agony and financial difficulty and appellant/OP was guilty of unfair trade practice and deficiency in service and directed the appellant/OP to pay Rs.1,50,000/- for deficiency in service and Rs.1,50,000/- for harassment and litigation.
9. Aggrieved with the aforesaid order, present appeal is filed.
10. Ld. Counsel for the appellant/OP has contended that there was no delay in refunding the amount as the investigation for the refund took time.  It is contended that some delay had occurred but it was not deliberate.  It is contended that appellant/OP had made every effort to redress the grievances of respondents/complainants and in fact had redressed the same.  It is further submitted that even during the complaint, a sum of Rs.2,30,138/- towards interest on the premium amount was paid as such the respondents/complainants were adequately compensated. It is further contended that the respondents/complainants did not cancel the policies in free look period and despite that the appellant/OP has refunded the full amount and has also paid interest thereon.  It is contended that in the facts and circumstances of the case, the District Forum was not right in awarding compensation for harassment and towards deficiency in service. Ld. Counsel for the appellant/OP has submitted that there is no deficiency in service on their part.  Ld. Counsel for the appellant/OP has submitted that policies were cancelled after thorough investigation in respect of alleged manipulations and misrepresentations made in the proposal form. 
11. On the other hand, Ld. Counsel for respondents/complainants has contended that the respondents/complainants were harassed for about more than one year and respondent-1/complainant-1 had to go to the office of appellant/OP number of times for knowing the progress of the case as certain queries were being raised by appellant/OP during investigation.  Even the respondent-2/complainant-2, who was working in Zambia at relevant time, had to come to Delhi personally in connection with investigation.  It is submitted that considering the nature of manipulations done by the agents/employees of appellant/OP and its consequential effect on the policies, the appellant/OP ought to have directed to pay interest @ 18% for commercial use of money for two years in their business.
12.  We have considered the submission made and perused the material on record.
13. It is admitted position that the respondents/complainants had taken seven policies, the details of which have been given in the complaint. On being pointed out by the respondents/complainants about the manipulations in the proposal form of the said policies, as per stand of appellant/OP in the written statement, a thorough investigation had been done by the appellant/OP and thereafter all the seven policies were cancelled.  It is not the stand of appellant/OP that alleged manipulations/fictitious details were not found.
14. It is a matter of common knowledge that the proposal form is a basic document for the validity of any insurance policy.  The manipulations and fictitious details as stated in the preceding paras were found in the proposal forms and after thorough investigation, the appellant/OP had cancelled the policies.  The manipulations done are of serious nature.  No doubt the premium amount along with interest had been refunded to the respondents/complainants.  The premium amount for four policies i.e. Rs.6.5 lacs was paid on 14.01.2011 i.e. after 4 months of making complaint and for remaining three policies was paid on 12.09.2011 i.e. after one year of making complaint.  The interest was paid during the pendency of the complaint.  It has also come on record that appellant/OP made investigations and upon conclusion of investigation cancelled the subject policies.  Meaning thereby whatever was alleged by respondents/complainants was found correct. Nothing has been stated in the written statement or in the appeal as to what action was taken against the agents/employees of the appellant/OP who had done the manipulations/misrepresentations in the proposal forms of respondents/complainants. Had the respondents/complainants continued with the policies and paid the premiums for 20 years, at a later date appellant/OP could have invalidated the policy and would have given no amount on its maturity.
15. It is settled law that the contracts of insurance are based on utmost good faith and that obligation of good faith is equally applicable to appellant/OP and which has been badly abused by appellant’s/OP’s agents. The respondents/complainants have suffered for more than one year at the hands of appellant/OP as investigation continued for about one year after lodging the complaint.  Further, number of letters were also written by respondents/complainants to appellant/OP. Even respondent-2/complainant-2 had come from Zambia for joining the investigation.  The act done by the agents/employees of appellant/OP is very serious in nature which has caused lot of mental tension and harassment to respondents/complainants apart from wastage of time and blocking their money for more than one year.
16. In these circumstances, we find no reason to interfere with the impugned order passed by the Ld. District Forum.  Ld. District Forum has rightly awarded Rs.1,50,000/- for deficiency in service and Rs.1,50,000/- for harassment and litigation.  Appeal stands dismissed with costs of Rs.20,000/-.
17. A copy of this order as per the statutory requirements be forwarded to the parties free of charge.  The record of the District Forum be also sent back forthwith.  Thereafter the file be consigned to record room.

 

 

(Justice Veena Birbal)​

President

 

 

(Salma Noor)

Member