Andhra Pradesh

Chittoor-II at triputi

CC/25/2014

Ravi Kumar Karuri S/o. Nagooraiah - Complainant(s)

Versus

M/S.ICICI Prudential life Insurance Co., Ltd., rep by its Managing Director - Opp.Party(s)

T.T.M.Ramaiah

12 Feb 2015

ORDER

Filing Date:11.06.2014

Order Date: 12.02.2015

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

TIRUPATI

 

      PRESENT: Sri.M.Ramakrishnaiah, President ,

        Smt. T.Anitha, Member

 

THURSDAY THE TWELFTH DAY OF FEBRUARY, TWO THOUSAND AND FIFTEEN

 

C.C.No.25/2014

 

Between

 

Ravikumar Karuri,

S/o. Nagooraiah,

H.No.1-19-73, Big Mosque Street,

Jayaramarao Street,

Srikalahasti,

Chittoor District.                                                                              … Complainant

 

 

And

 

1.         M/s. ICICI Prudential Life Insurance Co. Ltd.,

            Rep. by its Managing Director,

            Communication Office,

            Vinod Silk Mill Compound,

            Chakravarthi Ashok Nagar,

            Ashok Road Kandivali (E),

            MUMBAI – 400 101.

 

2.         M/s. India Infoline Insurance Services Ltd.,

            (Corporate Agent of ICICI Prudential),

            Rep. by its Manager,

            Ground Floor,

Harini Towers,

Besides Head Post Office,

Near Tataiahgunta Gangamma Temple,

TATA Nagar,

Tirupati,

Chittoor District.                                                                  …  Opposite parties.

 

 

            This complaint coming on before us for final hearing on 06.02.15 and upon perusing the complaint, written version and other relevant material papers on record and on hearing Sri.T.T.M.Ramaiah, counsel for the complainant, and Sri.C.S.Chandra Sekhar, counsel for the opposite party No.1, Sri.Galla Sudarsana Rao, counsel for the opposite party No.2, and  having stood over till this day for consideration, this Forum makes the following:-

 

ORDER

DELIVERYED BY SRI. M.RAMAKRISHNAIAH, PRESIDENT

ON BEHALF OF THE BENCH

 

            This complaint is filed under Section-12 of C.P.Act 1986, by the complainant against the opposite parties 1 and 2 for the following reliefs 1) to direct the opposite parties 1 and 2 to pay Rs.60,000/- towards paid-up value of the premiums with interest at 24% p.a. from 13.04.2013 date of last payment, till realization 2) to direct the opposite parties to pay Rs.10,000/- towards compensation for loss and mental agony.

2.  The brief averments in the complaint are:- That the complainant has insured his life under “ICICI PRU ASSURE WEALTH PLUS” issued by opposite party No.1 and paid the 1^st premium of Rs.15,000/- on 17.03.2010 in the office of opposite party No.2 at Tirupati. The opposite party No.2 is the Corporate Agent of opposite party No.1. The policy certificate was issued to the complainant by opposite party No.1 with effect from 20.03.2010. The complainant paid the 2^nd premium on 14.03.2011, 3^rd premium on 10.03.2012 and 4^th premium on 13.04.2013 within the grace period of 30 days as incorporated in the policy certificate, in the office of opposite party No.2 at Tirupati. Thus he paid a total sum of Rs.60,000/- under the said policy. That the complainant received a letter from opposite party No.1 on 21.03.2014 stating that the policy was lapsed and fore-closed with effect from 20.03.2014 and a cheque for Rs.14,442-03/- was enclosed showing that it is the payable amount to the complainant. The complainant issued notice on 10.05.2014 narrating all facts and requesting the opposite parties to refund the amount paid by him. That the opposite parties neither gave reply nor paid the amount. His policy number is 13613228. The sum assured is Rs.1,00,000/- with yearly premium of non-medical category. The term of policy is for whole life and date of commencement is from 20.03.2010. On 14.03.2013 opposite party No.1 issued a letter stating that the policy is lapsed due to non-payment of premium and demanded to pay Rs.30,000/- for revival of the policy. The complainant paid the 4^th premium under challan No.3885650 dt:13.04.2013 to opposite party No.2. It was not realized by opposite party No.1 from opposite party No.2. He paid the 2^nd premium of Rs.15,000/- on 14.03.2011 vide receipt No.R-0126806 as per the demand letter dt:19.02.2011, paid the 3^rd premium of Rs.15,000/- on 10.03.2012 vide receipt No.390266 dt:10.03.2012 vide receipt No.390266 dt:10.03.2012 not realized by opposite party No.1 and he paid the 4^th premium of Rs.15,000/- on 13.04.2013 within the grace period of 30 days vide challan No.3885650 dt:13.04.2013 in the office of opposite party No.2. Though the amounts were paid by the complainant, for his surprise he received letter from opposite party No.1 that his policy was lapsed. The acts of the opposite parties amount to negligence and deficiency in service. In view of the above contents, he claimed Rs.86,320/- against opposite parties 1 and 2 severally and jointly. Hence the complaint.

3.  The opposite parties 1 and 2 have filed their respective written versions separately.

4.  The opposite party No.1 in his written version contended that the dispute is not a consumer dispute and complainant is not a consumer within the meaning of the Act. The complaint is liable to be dismissed on the said grounds. That the Forum has no jurisdiction to entertain the case. The policy is a unit linked policy. The complaint is not maintainable. The complainant failed to make-out a case of deficiency of service on the part of the opposite parties and that they have violated the terms and conditions of the policy contract. In accordance with the provisions 4(1) and 6(2) of the Insurance Regulatory and Development Authority (Protection of Policy holder’s Interest) Rules, the opposite party No.1 sent the policy documents at the communication address of the complainant. The policy document along with the copy of proposal form was dispatched to complainant on 24.03.2010. The question No.27A of the proposal form duly filled by the complainant. It is a regular premium single premium. Opposite party No.1 sent several premium payment reminders through SMS to registered mobile number of the complainant, but he did not approach opposite party No.1 on the alleged grievances. The opposite party No.1 received only two premiums, which were paid on 17.03.2010 and 14.03.2011. The premium due from 20.03.2012 remained unpaid. As the complainant failed to make payment of premiums due, his policy was fore-closed in accordance with Clause 3.2 of the policy terms and conditions. The insurance being a contract between the policyholder and the company both parties are governed by the terms and conditions of the policy. Refund of premium is permissible only within the free look period of 15 days from receipt of the policy document. Complainant is entitled to surrender value as it stood at the time of termination of the policy. The amount is dependant on and varies with the value of units upon which investment is made. As the complainant failed to pay the premiums due from 20.03.2012 inspite of several demands his policy was fore-closed. That the present complaint is arising out of an investment policy taken by the complainant for speculative gain.

5.  The opposite party No.1 further contended that the agent / insurance broker is an independent person / entity licensed by Insurance Regulatory and Development Authority (IRDA), who advises their customer on the insurance needs and thereafter arrange insurance policies from the insurance company as per their own judgment and customer choice. The insurance company does not have any administrative control over the agent / insurance broker. All insurance brokers are governed by the provisions of IRDA regulations 2002 issued by IRDA from time to time. Thus, for any act of the agent / insurance broker, the insurance company cannot be made liable or accountable in any manner. Under the above circumstances, the complainant is not entitled to the reliefs sought for and prays the Forum to dismiss the complaint.

6.  The opposite party No.2, in his written version admitting the payment of 1^st and 2^nd premiums by the complainant but further stated that opposite party No.2 is not aware of the 3^rd and 4^th payments dt:10.03.2012 and 13.04.2013 respectively. The 2^nd opposite party further contended that their previous managers have collected the premiums from the policy holders and mis-appropriate the amounts without remitting the said amounts with opposite party No.1. In that regard their senior manager N.Ramakrishna, lodged report to East Police Station against the previous managers in Crime No.327/2014 on 02.08.2014 under Section-403, 408, 420, 464 and 149 IPC R/W Section-156(3) Cr.P.C. and the same is pending before the II Additional Judicial Magistrate of I Class, Tirupati. The 2^nd opposite party is ready to pay the policy premiums principal amount as per the record of opposite party No.2 and prays the Forum to dismiss the case against the opposite party No.2.

7.  Heard the counsel for both parties. Exs.A1 to A12 are marked for the complainant and no documents were marked on behalf of opposite parties 1 and 2.

8.  Now the points for consideration are:-

(i)  Whether the complainant is a consumer within the meaning of the

      provisions of C.P.Act 1986?           

(ii) Whether the opposite parties 1 and 2 are liable to be pay the amount paid

      by the complainant and the claim made thereon?

(iii) To what relief?

9.  Point No.(i):-  In order to answer this point, we have to refer Section-2(1)(d) of the Act, which defines:

“consumer” means any person who – (i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose.   (ii)  [hires or avails of] an services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for an commercial purpose]

 

            It is also pertinent to note the word “service” defined under Section-2(1)(o) of the C.P.Act as follows:

“service” means service of any description which is made available to potential [users and includes but not limited to, the provision of] facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy board or lodging or both [“housing construction”] entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

 

Here the service offered by the insurance company will also come under the purview of service under Section-2(1)(o) of the Act. When the dispute raised by a consumer against the opposite parties, if such allegation made by the complainant / consumer are denied by the opposite parties, such dispute will be called as a consumer dispute.

10.  The opposite party No.1 in its written version, chief affidavit as well as in written arguments contended that the policy in question is a unit linked policy. The complaint is rising out of an investment policy taken by the complainant for speculative gain. In order to prove this contention, the policy copy along with terms and conditions there-of were not filed by the opposite parties. Ex.A3 is the policy kit supplied to the complainant by opposite party No.1, which contains the head-note ICICI Prudential Life Insurance, plan is ICICI Pru Assure Wealth. There is no such mentioning in that as it is a “unit linked policy”. It is evident on the face of Ex.A3, it is only a life insurance policy but not a unit linked policy. The policyholder of a life insurance is a consumer and the services of insurance company that were assured for the policyholder is within the scope of “service” as contemplated under Section-2(1)(o) of the C.P.Act 1986. The dispute between the insurance company and policyholder is a consumer dispute.

Under the above circumstances, we are of the opinion that the complainant is a consumer within the meaning of Section-2(i)(d) of the C.P.Act and the dispute between the complainant and opposite parties is a consumer dispute. Accordingly this point is answered.       

11.  Point No.(ii):-  The case of the complainant is that he has taken life insurance policy with the opposite parties 1 and 2 under the insurance policy No.13613228 admittedly. The premiums are yearly premiums, that he has paid 4 premiums in total @ Rs.15,000/- per each premium. Thus the amount comes to Rs.60,000/- in total. Under Ex.A2 dt:17.03.2010, Ex.A4 dt:14.03.2011, Ex.A5 dt:10.03.2012 and Ex.A6 dt:13.04.2013. Receipts under Exs.A2 and A6 were issued by opposite party No.2, whereas receipt under Exs.A4 and A5 were issued by India Infoline Insurance Brokers Limited. Admittedly, opposite party No.2 is the agent of opposite party No.1, having its branch office at Tirupati. The India Infoline or its branches are working under opposite party No.2. Another question is opposite party No.1 contending that the 1^st opposite party and M/s.India Infoline Insurance Brokers Ltd (opposite party No.2) are two separate entities, that the agent / insurance broker is an independent person / entity licenced by Insurance Regulatory and Development Authority and that the insurance company does not have any administrative control over the agent / insurance broker and all the insurance brokers are governed by the provisions of IRDA Regulations 2002, that, for any act on the part of the agent / insurance broker, the insurance company cannot be made liable or accountable in any manner. We are coming across many such cases, where the insurance companies are accepting the agency for securing the policy holders and to develop / promote their business and they are collecting the premiums through such agents and passing on receipts. When such agents involved in any mis-appropriation of funds so collected by them from the policy holders, the insurance companies disowning their responsibility and liabilities stating that the agents are separate and the insurance company has no administrative control over the agents / insurance brokers. This type of practice should be curtailed. It is known to every prudent person that the acts of the agent are acts of the master. The agent and master relationship should be a legal precedent and obligatory, as such for the acts of the agent, the master is liable as well as the agent. Having received the policy holders through the agents and having collected the premiums through the agents, the insurance company i.e. opposite party No.1 is not suppose to disown its liability when its agents vanish along with the premium amounts they collected. On the other hand, opposite party No.2 clearly admitting that some of its managers have collected the premiums from the policyholders and mis-appropraited the amounts without crediting the same to opposite party No.1 and a criminal case in Crime No.327/2014 was registered on 02.08.2014 under Sections-403, 408, 420, 464 and 149 IPC and the same is pending before II Additional Judicial Magistrate of I Class, Tirupati, having accepted the latches on the part of the opposite parties, though opposite part No.2 is the branch office of opposite party No.1, the opposite party No.1 is not admitting atleast the admissions made by opposite party No.2. It itself shows that the opposite party No.1 is trying its level best to escape from its liability. Exs.A5 and A6 shows 3^rd and 4^th payments made by the complainant. The opposite parties 1 and 2 not denying the contention of the complainant that there is grace period of 30 days from the due date for payment of premium. When such facility is provided to the complainant to pay the premiums by the due date or within the grace period of 30 days from the due date and the complainant has made the payments within the grace period, all the 4 payments are to be considered, receipts issued by the agents of opposite party No.1 can be considered / treated as receipts issued by opposite party No.1. If the agents of the opposite party No.1mis-appropriated the amounts, the opposite party No.1 being the master / insurance company is liable to the acts of their agents and they are liable to pay the amounts paid by the policyholders such as the complainant herein. When the amounts are paid within the due dates and within the grace period after the due date, such payments also to be considered that were made within the period prescribed. As against the documentary evidence that was filed by the complainant, the opposite parties have not filed any document to disprove the evidence of complainant. Under the above circumstances, we are of the opinion that the complainant has made payment of 4 premiums on 17.03.2010, 14.03.2011, 10.03.2012 and 13.04.2013 under proper receipts. There is no dispute with regard to payment of 1^st premium on 17.03.2010 and 2^nd premium on 14.03.2011. The 3^rd premium of Rs.15,000/- was made on 10.03.2012 under receipt No.390266 dt:10.03.2012 and 4^th premium of Rs.15,000/- was paid on 13.04.2013 vide application No.38585650 dt:13.04.2013. Thus payments under 3^rd and 4^th premiums were mis-appropriated by the agents of the opposite parties as fairly conceded by 2^nd opposite party. Therefore, the opposite parties are liable to pay the paid-up amount of Rs.60,000/- under the above referred 4 premiums under Exs.A2, A4, A5 and A6 with interest at 9% p.a. from the date of last payment i.e. 13.04.2013, till realization and the opposite parties also liable to pay compensation of Rs.5,000/- to the complainant towards mental agony caused to the complainant by fore-closing the policy. Accordingly, this point is answered. 

12.  Point No.(iii):- In view of our holding on points 1 and 2, we are of the opinion that the complainant being a consumer has paid 4 premiums to the opposite parties under Exs.A2, A4, A5 and A6 @ Rs.15,000/- under each premium, totaling a sum of Rs.60,000/-. The contention of opposite party No.1 is, that they have not received the premiums 3 and 4 and due to the acts of agent, the insurance company cannot be made liable is negatived and opposite parties 1 and 2 are jointly and severally liable to pay the paid-up value of Rs.60,000/- along with interest at 9% p.a. from 13.04.2013, till realization, that both the opposite parties 1 and 2 are jointly and severally liable to pay compensation of Rs.5,000/- to the complainant for causing mental agony to him by fore-closing his policy under the guise of lapse of policy for non-payment of premiums. The complainant did not claim costs of the complaint. Accordingly the complaint is to be allowed.

In the result, the complaint is allowed directing the opposite parties 1 and 2 jointly and severally to pay a sum of Rs.60,000/- (Rupees sixty thousand only) with interest at 9% p.a. from the date of last payment i.e. 13.04.2013, till realization and also both opposite parties 1 and 2 are directed to pay compensation of Rs.5,000/- (Rupees five thousand only) to the complainant. Both the opposite parties are directed to comply with the order within six (6) weeks from the date of receipt of copy of the order.       

Typed to dictation by the stenographer, corrected by me and pronounced in the Open Forum this the 12^th day of February, 2015.   

 

       Sd/-                                                                                                                      Sd/-                                                  

Lady Member                                                                                                      President

 

 

APPENDIX OF EVIDENCE

WITNESS EXAMINED ON BOTH SIDES

 

 

 

 PW-1: Sri Ravikumar Karuri S/o. Nagooraiah (Chief Affidavit filed).

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/S

 

Exhibits	Date	Description of Documents
Ex.A1.		Letter Dt: 17-03-2010 issued by Opposite Party.No.2- Original.
2.		Cash receipt Dt: 17-03-2010 issued by Opposite Party.No.2. for Rs.15,000/- Original.
3.		Policy certificate No. 13613228 issued by the Opposite Party No.1Company-Original.
4.		Cash receipt Dt: 14-03-2011 issued by the Opposite Party No.2 for Rs.15,000/- Original.
5.		Cash receipt Dt: 10-03-2012 issued by Opposite Party No.2 for Rs.15,000/- original.
6.		Cash receipt Dt: 13-04-2013 issued by Opposite Party No.2 for Rs.15,000/- original.
7.		Letter Dt: 03-09-2011 from Opposite Party No.1 company – original
8.		Letter  Dt: 21-03-2014 from Opposite Party No.1 company – original
9.		Cheque No. 493381 Dt: 20-3-2014 issued by ICICI Bank, Mumbai for Rs.14,442-03-original.
10.		Legal notice Dt: 09-05-2014 issued to Opposite Parties 1 and 2- Office copy.
11.		Postal receipt Dt: 10-05-2014 for the issue of notice  to Opposite Party No.1and delivery note- Original.
12.		Postal receipt Dt. 10-05-2014 for the issue of the notice to Opposite Party No.2 and delivery note- Original.

 

 

                                                                                                                                                                  Sd/-             

                                                                                                                President

// TRUE COPY //

// BY ORDER //

 

 

Head Clerk/Sheristadar,

            Dist. Consumer Forum-II, Tirupati.

 

 

Copies to:-     1. The Complainant.

                        2. The opposite parties.