Tamil Nadu

South Chennai

Cc/357/2013

V.Vijay Kumar - Complainant(s)

Versus

M/s. Shriram Chits Tamil Nadu Pvt Ltd., - Opp.Party(s)

P.Babu

05 Jan 2017

ORDER

                                                                        Date of Filing :   29.10.2013

                                                                        Date of Order :   05.01.2017

DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI (SOUTH)

     2^nd Floor, Frazer Bridge Road, V.O.C. Nagar, Park Town, Chennai-3

 

PRESENT: THIRU. S. PANDIAN, B.Sc., L.L.M.                       : PRESIDENT            

                  TMT. K.AMALA, M.A. L.L.B.,                                 : MEMBER I

            

C.C.NO. 357/2013

THURSDAY THIS  5^th DAY OF JANUARY 2017

V. Viajayakumar,

No.8, Brindavan 1^st Cross Street,

West Mambalam,

Chennai 600 033.                                        .. Complainant.

 

                        ..Vs..

1.M/s. Shriram Chits Tamil Nadu (P) Ltd.,

Rep. by its Branch Manager,

No.20, Dr.Natesan Road,

Ashok Nagar,

Chennai 600 083.

 

2. M/s. Shriram Life Insurance Company Limited,

Rep. by its Divisional Manager,

No.194, Katchery Road,

Mylapore, Chennai 600 004.                                    ..Opposite parties.

 

Counsel for the Complainant           : M/s. P. Babu & other

Counsel for the opposite party-1     : M/s. K.V.Ananthakrushnan & other

Counsel for the opposite party-2     :  M/s. N. Jayakumar.

 

ORDER

THIRU. S. PANDIAN, PRESIDENT

          This complaint has been filed by the complainant against the opposite parties under section 12 of the Consumer Protection Act 1986 seeking direction to pay a sum of Rs.1.13.421/- towards loss caused to premature closure of Life Insurance policy with interest and also to pay a sum of Rs.5242/- being the excess amount from the 1^st opposite party  with interest and also to pay sum of Rs.1,00,000/- towards compensation for the physical strain and mental agony and also to pay cost of the complaint.

1. The averment of the complaint are brief as follows:

         The complainant joined with the 1^st opposite party in the Chit Series No.53044, Ticket No.23 for the value of Rs.1,00,000/- payable at the rate of Rs.2,500/- every month for the period of 40 months.  That on 21.6.2010 he participated in the chit auction conducted by the 1^st opposite party and he became the successful bidder and he bid prized the chit for Rs.20,000/- and he was entitled to receive Rs.80,000/- from the 1^st opposite party.    In order to get the aforesaid sum of Rs.80,000/- from the 1^st opposite party, the 1^st opposite party insisted him to give three government servant as surety / guarantor.  As he could not give Government servant as guarantor / surety as expected by the 1^st opposite party, the 1^st opposite party colluding with the 2^nd opposite party and acting as an agent of the 2^nd of opposite party obtained Life Insurance Policy (Shriram Vishram-II) in the name of the complainant vide policy No.LN031000086283 on 7.7.2010 and transferred Rs.50,000/- as first premium out of the aforesaid Chit Bid amount of Rs.80,000/- and kept the said original Life Insurance Policy issued by the 2^nd opposite party and paid only the balance.   They have not handed over the original policy as well as the policy booklet which is also illegal.

2.     Then the 2^nd opposite party demanded 2^nd premium amount of Rs.50,000/- for the aforesaid policy No.LN031000086283 and he paid the same on 29.7.2011.   The complainant states that originally he paid 10 months subscription at the rate of Rs.2,500/- to the 1^st opposite party and after bidding he started to pay monthly subscription at the rate of R.2,215/- till 23.11.2011 amounting to Rs.67,500/- and could not pay the subsequent installment amounting to Rs.32,500/-.   The 1^st opposite party issued a legal notice dated 5.6.2012 demanding him to pay a sum of i) Rs.37,250/- towards principal and ii) Rs.4,550/- towards interest and iii) Rs.200/- towards cost of legal notice.   The complainant state that after issuing the aforesaid legal notice, the 1^st opposite party filed case / claim on 20.7.2012 before the District Registrar of Chits, Chennai Central vide ARC No.431 of 2012.  The 1^st opposite party had not informed as to its intention to encash the aforesaid Life Insurance Policy issued by the 2^nd opposite party either in the Legal notice dated 5.6.2012 or in the court proceedings.   

3.     The 1^st opposite party in its case in ARC No.431/2012 before the Registrar of Chits  had claimed the total sum of Rs.37,700/- from the complainant which included the sum of i) Rs.32,500/- towards principal and 2) Rs.5,200/- towards interest from November 2011 to June 2012 and the complainant appeared before the District Registrar of Chits, Chennai Central and gave his proposal of settlement.  Thereafter, on 18.3.2013 the 1^st opposite party agreed to restrict its claim to Rs.31,450/- and agreed to receive the same by way of 6 equated monthly installments at the rate of Rs.5,241.66/- per installment rounded to Rs.5,242/-.    In pursuance of the aforesaid agreement, he paid the 1^st installment of Rs.5242/- on 13.5.2013 before the District Registrar Chit, Chennai Central and the same was received by the 1^st opposite party and printed receipt was issued on 18.5.2013 and thereafter when he tender the 2^nd installment of Rs.5251/- on 17.6.2013, to his shock and surprise the 1^st opposite party informed him that they have already encashed the claim amount by closing the Life Insurance Policy issued by the 2^nd opposite party without his consent and knowledge and hurriedly withdrew the case in ARC No.431/2012 on 22.6.2013.   The opposite parties wrongfully closed the Life Insurance policy and misappropriated the amount and thereby caused loss to the tune of Rs.1,13,421/- which both the opposite parties are liable to compensate.    The act of the opposite parties amounts to deficiency in service and also unfair trade practice.  Hence the complaint is filed.

4. Written Version of  1^st opposite party is in briefly as follows:

        The 1^st opposite party denies all the allegations and averments contained in the complaint as false except those are admitted herein.  The issue of policy by the 2^nd opposite party is within the knowledge of the 2^nd opposite party and the 1^st opposite party has not role to play in issuance of the same.  The allegation that the 1^st opposite party colluded with the 2^nd opposite party is totally false.   When the complainant prized the chit, as per the Chit Fund Act, the complainant is duty bound to produce securities for the due repayment of the future installments.  The complainant could not produce the sureties, but on the other hand, offered to take a policy with the 2^nd opposite party at his own volition.  

5.       There was no agreement to receive a lesser amount than the amount claimed in the arbitration proceedings.   The complainant agreed to pay the entire amount claimed in the arbitral proceedings.   But paid only a sum of Rs.5242/-.  The arbitration proceedings was initiated during 2012.  The matter was pending for one year.   The complainant was given sufficient opportunities to discharge his liability, but the evaded and took advantage of the pending proceedings.  Since the complainant abused the process of law, on lapse of the Life Insurance Policy the surrender value was adjusted towards his chit liability.   According to the complainant, he has paid a sum of Rs.1 lakh towards insurance.  By paying the surrender value towards the chit liability, the claim of interest ceases.  Due to the non-payment of premium amount and on the consequential auto surrender as per the terms of the policy, the amount payable under the policy was only Rs.41,444/-.  The 1^st opposite party has not committed any deficiency in service, but acted only in accordance with law.  

6          The 1^st opposite party did not act as an agent of the 2^nd  opposite party as alleged in the complaint.   The investment made by the complainant is on his own accord.   Neither the 1^st opposite party nor the 2^nd opposite party induced the complainant to join the insurance.   Had the complainant furnished surety as  prescribed by the law, he would have received the prize money.    The 1^st opposite party has not committed any deficiency to compensate the complainant and the complaint is liable to be dismissed.

7. Written Version of  2^nd opposite party is in brief as follows:

       The 2^nd opposite party denies all the allegations contained in the complaint as false, frivolous and vexatious.  The complainant is not a consumer as defined under section 2(d) of the C.P. Act 1986 and therefore the complaint is liable to be rejected inlimine.   The 2^nd opposite party has released the policy amount only on the instructions given by the complainant, which can never be termed as either unfair trade practice or deficiency in service.  On  this very ground itself the complaint is liable to be rejected.

8.             There was no collusion between the opposite parties as alleged by the complainant.  In fact the complainant, who benefited out of the prize chit, has suitable opt for availing insurance policy and proposed the same to the opposite party.   Only based on the above proposal this opposite party has granted the policy to the complainant.  Further, the complainant has defaulted the payment of chit installments and ensued by such default, the complainant was subjected to legal proceedings.   The 2^nd opposite party submits that it is not a party to the arbitration initiated before the District Registrar of Chits and the subsequent agreements alleged in para 9 and 10 and therefore the complainant is put to strict proof of such allegations.

9.     The 2^nd opposite party  submits that  only on the instruction given by the complainant under the assignment letter, the policy amount was released to the 1^st opposite party and there was no collusion or secrecy or action in detrimental to the interest of the complainant exists  between the opposite parties as alleged by the complainant.  Payment of the policy amount as per the assignment letter given by the complainant can never be termed as misappropriation.    Hence there is no deficiency of service or unfair trade practice is made out by the complainant against the opposite party and the complaint is liable to be dismissed as devoid of merits.    

10.    In order to prove the averments of the complaint, the complainant has filed proof affidavit along with for evidence and documents Ex.A1 to Ex.A12 marked.  Proof affidavit of opposite parties filed and Ex.B1 to Ex.B5 marked on the side of the opposite parties.

11.   At this juncture, the point for the consideration before this

        Forum is:  

 

 

1.  Whether there is any deficiency of service on the part of the 

     Opposite parties as alleged in the complaint?

 

2. Whether the complainant is entitled to any relief as prayed for?

12. Point No.1

          It is admitted case that the complainant joined with the 1^st opposite party in the Chit series No.53044, Ticket No.23, for the value of Rs.1,00,000/- payable at the rate of Rs.2,500/- every month for the period of 40 months and on 21.6.2010 the complainant participated in the Chit Auction conducted by the 1^st opposite party and he succeeded by bid prized the chit for Rs.20,000/- and thereby he was entitled to receive Rs.80,000/- from the 1^st opposite party.   It is further learnt that from the evidence adduced on both side by the complainant and the opposite party-1 that in order to get the chit amount of Rs.80,000/- the complainant insisted to give three Government Servants as surety / Guarantor.   But due to inadvertency the complainant could not produce such Government servants as a surety.  In such circumstances on the advice of the 1^st opposite party the complainant has taken Life Insurance Policy named Shriram Vishram-II vide policy No.LM031000086283 on 7.7.2010 for the premium of the said policy the 1^st opposite party deducted the 1^st premium of Rs.50,000/- from the chit amount already entitled to get from the opposite party-1 on 7.7.2010.   The copy of the policy is marked as Ex.A1.  The receipt given by the opposite party-2 is marked as Ex.A2 and after issuance of policy by opposite party-2, the said original Life Insurance Policy was kept with opposite party-1 and not handed over the original policy as well as the policy booklet to the complainant.   Further it is admitted fact that the complainant has paid the 2^nd premium amount of Rs.50,000/- towards the said Life Insurance Policy.   

13.    It is further learnt that the complainant after biding the chit the complainant has totally paid the monthly subscription till 23.11.2011 amounting to Rs.67,500/- and he could not pay the subsequent installment amounting to Rs.32,500/-.   At this time the 1^st opposite party had issued legal notice Ex.A3, dated 5.6.2012 demanding the complainant to pay a sum of Rs.37,250/- towards principal and Rs.4,550/- towards interest and Rs.200/- towards cost of legal notice and thereafter the 1^st opposite party has filed the claim application Ex.A4 before the District Registrar of Chits, Chennai Central on 20.7.2012 in ARC No.431/2012 for claiming a total sum of Rs.37,700/- along with interest from November 2011 to June 2012.  In this connection the complainant received the notice from the District Registrar of Chits, Chennai Central which is marked as Ex.A5.   The receipt of notice the complainant appeared before the District Registrar, an application for undertaking to pay the claim amount by six equated monthly  installments at the rate of Rs.5,242.p.m on 18.3.2013 and on the same day he has paid the 1^st installment and to that effect the counsel for Disputant who is Shriram Chits Tamil Nadu Private Limited has filed settlement letter before the District Registrar, Central Chennai by stating that to dismiss the ARC as withdrawn, since the matter has been settled in out of court and the settlement of accounts given by opposite party Ex.A6.  The undertaking letter is marked as Ex.A7.   The receipt of payment of the 1^st installment Ex.A8 and   Settlement letter which is marked Ex.A9.   On payment of 1^st premium amount of Rs.50,000/- as yearly premium policy issued by the 2^nd opposite party.

14.    Such being so, when the complainant tender the 2^nd installment of Rs.5,251/- on 17.6.2013 it is shock and surprise that the 1^st opposite party informed him that they have already encashed the claim amount by closing the Life Insurance Policy issued by the 2^nd opposite party and withdraw the case in ARC No.431/2012  on 22.6.2013 without the consent and knowledge of the complainant.   Therefore the complainant had issued a legal notice to the opposite parties  1 & 2 which is marked as Ex.A10 and acknowledged for the receipt for the same by the opposite parties 1 & 2 which are marked as Ex.A11 and Ex.A12.  

15.    At this juncture, on careful perusal of the evidence of the  opposite party-2, it is learnt that the complainant has voluntarily proposed to avail   “Shriram Vishram-II policy on 28.6.2010 and submitted the proposal form Ex.B1 and issued the policy unit allocation statement which is marked as Ex.B2.   The ULIP policy schedule is marked as Ex.B3.   The first premium receipt which is marked as Ex.B4.    It is further stated by the opposite party-2 that after taking policy the complainant has assigned the policy to Shriram Chits Tamil Nadu Pvt. Ltd for the amount paid to him by opposite party-1, in consequence of prize chit number 53044/23 and the said letter is marked as Ex.B5.  Under the assignment letter Ex.B5, dated 5.8.2010 the complainant has enabled the above said Shriram Chits Tamil Nadu Pvt. Limited to receive the deposited sum of Rs.50,000/- in the above policy and all other monies, benefits, claims resulting or accruing under the policy.  

16.      At this point of time, on going through the evidence of opposite party-1 it is stated that the when the complainant failed to pay the chit installments and thereby accumulating Rs.38,840/-and hence the arbitration was filed in ARC No.431/2012 and during pending of such proceedings the complainant has offered settlement proposal to close the case and on that basis the complainant has paid Rs.5242/- being the 1^st installment amount on 18.5.2013.  It is further stated that mean while the policy lapsed auto surrendered due to failure in paying the third premium amount and the surrender amount of Rs.41,444/- was issued in the name of the 1^st opposite party on 25.7.2013 on assignment already made by the complainant, out of this amount the pending claim of Rs.31,821/- was adjusted to the said chit and when the opposite party-1 offered to pay the balance amount of Rs.8963/-,  the complainant refused to receive the same.

17.      At this juncture, this forum has to consider whether it is correct to say that the act of the 1^st opposite party to that out of the surrendered amount of Rs.41,444/-, a sum of Rs.31,821/- adjusted without any information to the complainant and without his knowledge while settlement proposal already offered and accepted by the opposite party-2 to pay the claim amount in six equal monthly installment. 

18.       In this circumstances, as already discussed above that there  is no dispute about the filing of  ARC No.431/2012 by the opposite party-1 against the complainant before the District Registrar of Chits, Chennai Central on 20.7.2012.   Similarly there was a settlement proposal offered by the complainant to close the said case on the basis that the complainant paid a sum of Rs.5242/- being the 1^st installment amount on 18.5.2013 and the same was duly accepted by the 1^st opposite party.  In the mean time, before the expiry of the accepted period to pay the installment towards the claim amount pending in ARC No.431/2012 the 1^st opposite party hurriedly without consent knowledge of the complainant utilized the surrender amount of Rs.41,444/- of Ex.B1 policy lapsed and the assignment letter Ex.B5, deducted the amount of Rs.31,821/-.   For this the reason stated by the 1^st opposite party in his proof affidavit  that the arbitration proceedings pending during 2012, though the complainant given sufficient opportunity to discharge his liability, and the complainant agreed to pay the entire amount claimed in the arbitrator proceedings to, paid only a sum of Rs.5242/- is fully contra to his earlier settlement given in the proof affidavit of opposite party-1 itself in para-5 as that on basis the complainant paid a sum of Rs.5242/- being the 1^st installment amount on 18.5.2013.  Therefore the opposite party-1 himself contradict from the earlier which clearly reveals the fact that the intension of opposite party-1 and also the plea taken by the complainant that the opposite parties 1 & 2 are being the group of  same concerned and they are concluded with each other, without giving any opportunity to the complainant, the opposite parties 1 & 2 wrongfully closed the Life Insurance Policy and adjusted the claim amount is highly unreasonable and committed deficiency of service holds good.

19.     In such circumstances though the assignment letter was given by the complainant in respect of the Life Insurance policy and agreed for terms and conditions of the policy schedule while the settlement proposal was offered by the complainant and accepted by the opposite parties before the District Registrar of Chits, Chennai Central, there is no need to proceed with the assignment letter Ex.B5, against the complainant without his consent knowledge.  Such act of the opposite parties cannot be acceptable.   Therefore, it is crystal clear that there is deficiency of service on the part of the opposite parties 1 & 2 and the same has been proved by the complainant with acceptable and consistent evidence.   Thus the point No.1 is answered accordingly.

20.  POINT NO.2.

        It is seen from evidence of the complainant that he has paid a sum of Rs.5242/- towards the claim pending before the District Registrar of Chits, Chennai Central in ARC No.431/2012 as first installment and thereby  as per Ex.A6 settlement given by the opposite party-1 the total balance as on 28.3.2013, for Rs.31,821/- and the said amount was adjusted with the surrender amount on 25.7.2013 as per the evidence of opposite party-1.  Therefore, it is crystal clear that the payment of Rs.5242/- is under excess amount and therefore as prayed for, the complainant is entitled for refund of the same from the opposite party-1.  Further as per decision arrived in point No.1 the complainant is entitled to get reasonable compensation with cost.  Thus point No.2 is also answered accordingly.

       In the result, the complaint is allowed in part.   Accordingly the complainant is entitled for the refund amount of Rs.5242/- (Rupees Five thousand two hundred and forty two only) and the same is to be paid by the opposite party-1 with interest at the rate of 9.5.% p.a. from the date of filing of this complaint i.e 29.10.2013 to till the date of this order (5.1.2017) and opposite parties 1 and 2 are jointly and severally directed to pay a sum of Rs.25,000/- (Rupees Twenty Five thousand only) towards compensation for causing mental agony and hardship due to the deficiency of service on the part of them and with cost of Rs.5000/- (Rupees Five thousand only) towards litigation charges to the complainant.   Regarding the other reliefs, this complaint is dismissed.

      The above amounts shall be payable within six weeks from the date of receipt of the copy of the order, failing which, the said amounts shall carry interest at the rate of 9% p.a to till the date of payment. 

         Dictated by the President to the Assistant, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the  5^th  day  of  January 2017.

 

MEMBER-I                                                                        PRESIDENT.

Complainant’s side documents:

Ex.A1- 7.7.2010    - Copy of Insurance Unit allocation statement of 2^nd opposite

                               Party.

Ex.A2- 29.7.2011  -  Copy of 2^nd premium paid receipt issued by 2^nd opposite

                               Party.

Ex.A3- 5.6.2012    -  Copy of legal notice issued by the 1^st opposite party.

Ex.A4-         -       -  Copy of claim application filed by the 1^st opposite party

                                In ARC No.431/2012

Ex.A5- 30.8.2012  - Copy of Notice for appearance of complainant in ARC

                               No.431/2012.

Ex.A6-         -       - Copy of Statement of accounts given by the 1^st opposite

                              Party.

Ex.A7- 18.3.2013  - Copy of settlement proposal submitted by the complainant

                               In ARC No.431/2012.

Ex.A8- 18.5.2013  - Copy of receipt for Rs.5242/- issued by the 1^st opposite

                              Party.

Ex.A9- 22.6.2013  - Copy of settlement letter issued by the 1^st opposite party.

Ex.A10- 23.8.2013 – Copy of legal notice issued by the complainant.

Ex.A11- 24.8.2013 – Copy of Postal Ack. card from 1^st opposite party.

Ex.A12-       -       -  Copy of Postal ack. card from 2^nd opposite party.

Opposite parties’ side document: -

Ex.B1- 3.7.2010    - Copy of Proposal form for availing insurance.

Ex.B2- 14.7.2010  - Copy of Unit allocation statement.

Ex.B3- 7.7.2010    - Copy of Policy schedule.

Ex.B4- 7.7.2010    - Copy of First premium receipt.

Ex.B5- 5.8.2010    - Copy of Form of Assignment of Insurance policy.

 

 

MEMBER-I                                                                  PRESIDENT.