Dt. 05.10.2015

JAGANNATH BAG, MEMBER

          The present appeal is directed against the Order dated 03.04.14, passed by the Ld. District Consumer Disputes Redressal Forum , South 24 Parganas, in CC Case No. 373/2012, whereby the complaint has been allowed on contest with cost and compensation.

         The Complainant’s case, in brief, was as follows:

         The Complainant having retired from service on 31.05.2007 was approached by the OP No. 4 for investment under OPs 1 to 3 . OP No.4 produced eight policy proposal forms and the Complainant signed on those blanks forms and issued cheques for eight policies amounting to Rs.7,49,000/-. Thereafter, he came to know in  early 2011 that the deposits made by him were reducing due to non payment of yearly premium. He also learned that his policies were not for one time deposits,  rather the amounts were deposited in regular plan with yearly premium. The Complainant surrendered all those policies and received Rs.6,06,924/- with a loss of Rs.1,42,076/-. The Complainant sent a Lawyer’s notice on 16.01.2012 demanding the sum of Rs.1,42,076/- which was deducted unlawfully. The OPs rejected the demand and accordingly,  a consumer complaint was filed before the Ld. Forum below with prayer for direction upon the OPs to make payment of Rs.1,42,076/- which has been deducted from the principal amount and also for payment of  a sum of Rs. 5,00,000/- as compensation for the mental agony and tension, apart from payment of litigation cost.

      The complaint was contested by the OP Nos. 1 , 2, and 5  who denied all allegations and contended that the contract of insurance is based on the principle of utmost good faith. The proposal forms being duly filled in and executed by the Complainant , the insurer acting in good faith on the basis of the information given in the proposal form accepted the risk and the policies were issued. After receipt of the policy certificates, he had ample opportunity of going through the terms and conditions of the policies and he should have contacted the insurance company if he had any doubt.  He could have done so within 15 days from the date of receiving the policies as per IRDA guidelines.  It was the  responsibility of the insured to pay the yearly premium  which was not done. The Insurance Company has no liability whatsoever in respect of the act of the agent. The Complainant received the surrender amount towards his full and final satisfaction without disputing the same. There was no deficiency in service on their part and the complaint was liable to be dismissed against them.

      Ld. Forum below after having perused the evidence adduced by the contesting parties and upon hearing of the arguments advanced by the Ld. Advocates of the parties observed that no document was filed to show that notice was given to the insured for payment of premium after one year of investment. It was also observed that the Complainant received the surrender value on full and final settlement. However, if the payment is received indicating full satisfaction under coercion / unexpressed  dissatisfaction or pressure where there are valid grounds demanding justice for delayed claim , a customer has the right  to approach the Consumer Forum and in that view , the Complainant seemed to accept the surrender value perforce. Accordingly, Ld. Forum below allowed the complaint against the OPs with a cost of Rs. 10,000/-. The OPs except  OP No. 4 have been directed to pay that a lum sum amount of Rs. 50,000/- to the Complainant , apart from another sum of Rs. 20,000/- for harassment and mental agony of the Complainant.

    Being  aggrieved by and dissatisfied with the order of the Ld. Forum below, OP Nos. 1, 2, 3 and 5 in the petition of complaint have come up  before this Commission with prayer for direction to set aside the impugned order .

    The memorandum of appeal has been filed together with copies of the impugned judgment, the petition of complaint, proposal deposit receipts , surrender application  forms and the W.V. filed by the OP Nos. 1 , 2, and 5 before the Ld. Forum below among other documents .

   We have gone through the entire material on record and heard the Ld. Advocates appearing for the Appellants and the Respondent-1/Complainant and Respondent -2.

   Ld. Advocate appearing for the Appellants submitted that the policies issued to the Respondent /Complainant were unit linked  and mode of premium was annual which was clearly noted in the policy papers. There was no ambiguity in  that regard. The Respondent /Complainant was  required to deposit premium annually which he failed . Ld. Forum’s observation that notice for payment of premium was not issued after 1 year of purchase of the policies is not material in nature in so far as it is the responsibility of the insured to keep his policy valid by payment of regular premium.  Further, though there was an  option to cancel the policy within 15 days from the date of receipt of the policy documents, the Respondent / Complainant did not take care about that and  when he came to know that there was a reduction in his deposited amounts for nonpayment of yearly premium, he decided to surrender his policies. Accordingly,  the Respondent /Complainant surrendered his policies and received the surrender value as payable on the date of surrender . There was no coercion or force from the Appellants in regard to acceptance of the surrendered value of the policies  and no evidence would be shown in support of such observation of the Ld. Forum below.  The Respondent/Complainant was paid due amounts after full and final settlement. The Respondent/Complainant has no scope of demanding  the balance between the principal amount and the surrender value. Ld. Advocate cited orders of the Hon’ble National Consumer Disputes Redressal Commission as reported in II(2014) CPJ 190 (NC), II (2013) CPJ 586 (NC) , I (2014) CPJ 188 (NC) and I (2014) CPJ 326 (NC) .

    It was argued by the Ld. Advocate further that no deficiency in service on the part of the Appellants /OPs  was alleged in the petition of complaint .The market plus plan being a Unit Linked policy is subject to market variation and risk under the policy has to be borne by the insured. Ld. Forum’s order is arbitrary and against the policy terms and conditions. The same be dismissed.

  Ld. Advocate appearing for the Respondent/Complainant submitted that the Respondent was completely misguided by the agent of the SBI Life Insurance Company as well by the Unit Manager , State Bank of India,  Life Insurance Company Ltd., both of whom persuaded him to sign the blank proposal forms  without explaining to him in detail about the policy terms and conditions. The principal has to take responsibility of the acts of omission on the part of their employees or agents . In this case the Respondent/ Complainant has every right to get back the entire difference of the principal amount of Rs.7,49,000 minus Rs. 6,06,924/- i.e., Rs.1,42,076 /- with interest from the date of receipt of the surrender value.

   Ld. Advocate appearing for the Respondent No. 2 submitted that the Respondent/Complainant was made  aware of all the policy terms and conditions particularly he was under policy obligation to  make yearly premium for all his policies . The Respondent No. 2 had no malafide intention in securing the policies as desired by the Respondent/Complainant. There was no lapse or misguidance on the part of the Respondent No. 2.

    The point for consideration is whether the impugned order suffers from material irregularity, illegality or jurisdictional error.

                             Decision with Reasons:

          There is no dispute that the Respondent/Complainant purchased 8 policies all under SBI Life - Unit Plus II Plan. The policies were linked to value of units which is subject to fluctuations in the market. It was under policy condition that  the investment risk in investment port folio was to be borne by the policy holder.

          It appears from the proposal deposit receipts that the frequency of payment of premium was yearly in nature. The Respondent/Complainant had the option to agitate on payment of yearly premium or on any terms and conditions of the policy within a period of 15 days after receipt of the policy papers. He could have cancelled the policies if there was any ground for dissatisfaction . But he did not do so. Instead, after about 3 years he surrendered the policies and the insurer gave him the dues as per market value . The lapse in not paying the yearly premium is on the part of the Respondent /Complainant. It also appears that the Respondent /Complainant surrendered his policies voluntarily and there was no coercion or force which could be proved by him in accepting the surrender value. Hon’ble National Consumer Disputes Redressal Commission observed in their order reported in II (2013) CPJ 586 (NC) that once party accepts payment as full and final satisfaction without any protest, party cannot put forward claim before Consumer Forum.

          It is again important to note that the Ld. Forum below allowed a lump sum amount of Rs.50,000/- without giving any particular reason, though the Respondent/Complainant demanded Rs.1,42,076/- being the balance between his total deposit and the surrender value paid by the Appellants.

        The Respondent Complainant having accepted the sum of Rs. 6,06924/- towards his claim voluntarily and without any coercion exercised upon him, we are inclined to hold that his demand for the balance payment does not appear to be convincing . We are of the considered view that the impugned order suffers from material irregularity and jurisdictional error . In the result,  the appeal succeeds.  Hence,

                                               Ordered

That the appeal be and the same is allowed on contest . The impugned order is set aside. The complaint stands dismissed. There shall be no order as to cost.