DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA
CC.No.336 of 15-07-2011
Decided on 27-02-2012
Inderjit Garg S/o Sh. Janak Raj, Resident of near Post Office, Ward No.4, Bhucho Mandi sole Prop. of M/s Janak Trading Co., Grain Market, Bhucho Mandi, Tehsil and District Bathinda, aged about 26 years. .......Complainant
Versus
Oriental Bank of Commerce, Bhucho Mandi, through its Branch Manager.
The Regional Manager, Oriental Bank of Commerce, Civil Lines, Bathinda.
Chief Operating Officer, Canara, HSBC, Oriental Bank of Commerce, Life Insurance Company Limited Centrum Plaza, 5th Floor, Tower-B Sector 53, Gold Course Road, Gurgaon-122002, Haryana. ......Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986
QUORUM
Smt. Vikramjit Kaur Soni, President
Sh. Amarjeet Paul, Member
Smt. Sukhwinder Kaur, Member
Present:-
For the Complainant: Sh. Sohan Lal Goyal/Sh. Raj Kumar Goyal, counsels for the complainant
For Opposite parties: Sh. Rajneesh Rampal, counsel for opposite party Nos.1&2
Sh. J.D.Nayyar, counsel for opposite party No.3
ORDER
Vikramjit Kaur Soni, President:-
1. The present complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 as amended up-to-date (Here-in-after referred to as an 'Act'). The brief facts of the complaint are that the complainant firm was having CC Limit of the opposite party No.1. Thereafter, he had applied for increasing the limit for Rs.7-8 Lacs on 08.09.2009. The complainant has alleged that the opposite party No.1 compelled him to purchase insurance policy for Rs.1,25,000/- for which he has to pay Rs.25,000/- each for five years. The opposite party No.1 has also threatened him that in case, the policy is not purchased, the CC Limit will be cancelled and told the complainant that it is mandatory for every CC customer to purchase this policy. The complainant has further alleged that there is no such provision for this purpose, he purchased the insurance policy which he never wanted to purchase. The policy has been issued forcibly to the complainant for which he never consented. Hence, the complainant has filed the present complaint for seeking directions of this Forum to return Rs.25,000/- along with interest, cost and compensation.
2. Notice was issued to the opposite parties. The opposite parties after appearing before this Forum, have filed their written statements. The opposite party Nos.1&2 have filed their separate joint written statement and pleaded that earlier, the complainant had filed an application u/s 22-C of Legal Services Authority before the Hon'ble Permanent Lok Adalat but later on, the same was dismissed as withdrawn by the complainant. The opposite party Nos.1&2 have admitted that the complainant had obtained the CC Limit from the opposite party Nos.1&2 and the same was got enhanced by the complainant on 08.09.2009 as per his requirement. The opposite party Nos.1&2 have further pleaded that the complainant was never forced to obtain any such insurance policy of Rs.1,25,000/- rather he voluntarily purchased the said policy with his free and disposing mind; he has concocted a false story in order to get the same cancelled and there is no reason for the bank to pressurize its customers including the complainant to purchase any such insurance policy. The complainant was never threatened to cancel his CC Limit rather the same has been enhanced as per rules and regulations of the bank after getting the requisite formalities completed from the complainant. The opposite party Nos.1&2 have denied that the policy in question has been issued against the wishes of the complainant rather the same has been purchased by him with his free will.
3. The opposite party No.3 has filed its separate written statement and pleaded that the complainant had submitted a duly signed Proposal Form No.2000090793 to Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd for issuance of the policy under Canara HSBC Life Unit Linked Whole Life Plan. Thereafter, believing the information provided by the complainant in good faith, the Insurance Company had issued a policy No.0007317518 to the complainant. The complainant had signed the proposal Form along with declaration. All the charges applicable to the policy had been rightly communicated to the complainant. The opposite party No.3 has further pleaded that as per the existing regulation, the company provides a free look period of 15 days from the date of receipt of the policy, according to which, the customer can return the policy on disagreement of any of the policy terms and conditions and can seek a refund subject to deduction, proportionate risk charges, medical test charges, if any and the appropriate stamp duty but the opposite party No.3 has not received any such cancellation request from the complainant within free look period. The opposite party No.3 has already communicated its stand to decline the cancellation of the policy vide its letters dated 18.08.2010, 14.09.2010 and through reply to the legal notice dated 06.10.2010.
4. Parties have led their evidence in support of their respective pleadings.
5. Arguments heard. Record along with written submissions submitted by the parties perused.
6. The complainant has taken CC Limit from the opposite party No.1. Thereafter, he applied for increasing of limit for a sum of Rs.7-8 Lacs on 08.09.2009. The CC Limit was increased accordingly. The main allegations of the complainant is that the opposite party No.1 compelled the complainant to purchase Insurance Policy. Under forced circumstances, he had purchased the Insurance Policy No.0007317518 for Rs.1,25,000/-. The premium of Rs.25,000/- for five years was payable. The Bank Manager of the opposite party No.1 told the complainant that it is mandatory for every CC customer to purchase insurance policy but the complainant never wanted to purchase the insurance policy nor there is any rule regarding the purchase of such policy. The complainant has paid Rs.25,000/- as first premium.
7. The opposite party Nos.1&2 have submitted that the complainant had obtained CC Limit and it was enhanced by the opposite parties on 08.09.2009 on the request of the complainant. The complainant was never forced to purchase any such insurance policy of Rs.1,25,000/- rather he has voluntarily purchased the said policy with his free mind and has concocted a false story in order to get the same cancelled. There is no reason for the bank to pressurize its customers including the complainant to purchase any such insurance policy, no such threat has been given by the opposite parties to the complainant to cancel his CC Limit rather the same has been enhanced as per rules and regulations of the bank after getting the requisite formalities completed from the complainant.
8. The opposite party No.3 has submitted that the complainant had sent a duly signed Proposal Form No.2000090793 to Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd for issuance of the policy under Canara HSBC Life Unit Linked Whole Life Plan and believing the information given by the complainant in good faith, the Company has issued the Insurance Policy No.0007317518 to the complainant. The complainant had signed the proposal Form and has given declaration:-
“I/we do hereby declare that the answers and the statements made by me/us in this proposal form have been made by me/us after understanding the questions and the said answers and statements are true accurate and complete in every particular and that I/we have not with held any information......”
The company provides a free look period of 15 days from the date of receipt of the policy wherein it has been mentioned that the customer can return the policy on disagreement of any of the policy terms and conditions and can seek a refund subject to deduction, proportionate risk charges, medical test charges, if any and the appropriate stamp duty but the opposite party No.3 has not received any such cancellation request from the complainant the within free look period. The opposite parties have already communicated the decline of the request for cancellation of the policy vide its letters dated 18.08.2010, 14.09.2010 and also in reply to the legal notice dated 06.10.2010. The complainant has earlier filed an application u/s 22-C of Legal Services Authority and has withdrawn the same.
9. The Statement of Account dated 20.03.2010 Ex.C-2 shows that the Sum Assured was of Rs.1,25,000/-, Annual Premium was of Rs.25,000/- and the policy commencement date is 19.09.2009. A perusal of Ex.C-2 shows that the policy so issued by to the complainant, was life Unit Linked Whole Life Plan policy.
10. The date of purchase of the policy is 19.09.2009, the complainant had paid the first premium of Rs.25,000/-. Thereafter, he sent a legal notice to the opposite parties Ex.C-3 dated 08.09.2010 i.e. after one year. In this notice, he has requested in para No.2 that the said policy has been issued to him against his wishes by Canara HSBC Life Insurance, Gurgaon for which he never consented and the same is liable to be cancelled. The said legal notice was duly replied by the opposite parties vide Ex.R-8 which is reproduced as under:-
“We have perused our records and investigated the matter, and at the very outset state that your letter is completely baseless and we deny all and any contentions/averments made therein save as expressly admitted hereunder. It is evident from your letter that your client has not conveyed the correct factual position to you. We deny averments to the contrary contained in your notice.
Your client had submitted a duly signed proposal No.2000090793 to Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.(“Company”) for issuance of a policy under Canara HSBC Life Unit Linked Whole Life Plan and thereafter, believing the information provided by you in good faith the company has issued a policy No.0007317518 to your client.
Your client has signed the proposal form along with the declaration that “I/we do hereby declare that the answers and the statements made by me/us in this proposal form have been made by me/us after understanding the questions and the said answers and statements are true accurate and complete in every particular and that I/we have not with held any information......” All the charges applicable to the policy were rightly communicated to you at the time of selling the policy and the same is evident from the benefit illustration signed by you along with proposal form.
In view of above your client's averment of having been sold the policy by force, without consent or falsehood is vehemently denied and your client is put to strict proof of the same.
We would further mention that as per the existing regulation, the company provides a free look period of 15 days from the date of receipt of the policy wherein the customer can return the policy on disagreement of any of the policy terms and conditions and can seek a refund subject to deduction, proportionate risk charges, medical test charges, if any and the appropriate stamp duty. However, the company has not received any such cancellation request from your client within the free look period.
The company has already communicated its stand to decline the cancellation of the policy vide its letters dated August 18, 2010 and September 14, 2010.”
11. A perusal of documents placed on file shows that the policy has not been sent to the complainant, no terms and conditions along with free look period option has been sent to the complainant as neither the complainant nor the opposite parties placed on file the terms and conditions, policy documents or application for free look period except Proposal Form and Ex.R-7. Ex. R-7 is part of terms and conditions Reg.6 containing single page. It cannot be presumed that these terms and conditions are of the same policy, which is issued to the complainant. No copy of dispatch register has been placed on file by the opposite parties to show that the policy along with terms and conditions have ever been sent to the complainant. The policy terms and conditions were the documents that can give the clear position regarding surrender/fund value of the policy which has not been placed on file by the opposite parties. In case, the complainant is unsatisfied with the policy or he wants to surrender it, whether he is entitled for the refund or not; he will be governed by which condition ? The opposite parties themselves have submitted that the complainant should have availed the Free Look Period but how this can be expected from the complainant, when no such communication regarding the 'free look period' has been done with the complainant. In the absence of any such document, it is gross deficiency in service on the part of the opposite parties. The policy is Unit Linked Insurance Policy. The opposite parties have not produced the detailed terms and conditions on file with regard to the said policy. In the absence of any terms and conditions submitted on the part of the opposite parties, the support can be taken from IRDA rules which are applicable on all the Life Insurance policies. Regulation No. 8 i.e. Surrender Charges of IRDA (Insurance Regulatory and Development Authority) (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies)Regulations, 2010, is reproduced hereunder:-
“It is observed that insurers apply different surrender charges while paying the surrender value to the Insured. After due consideration of various practices, the Authority orders that the surrender charges (as percentage of fund value) shall not exceed the limits specified below:-
Year Policy period
Less than 10 years More than 10 years
------------- ----------------------- -----------------------
Ist year 12.50% 15%
2nd year 10.00% 12.50%
3rd year 7.50% 10%
4th year 5.00% 7.50%
5th year 2.50% 5%
6th year Nil 2.50%
7th year & onward Nil Nil
12. A perusal of Ex. C-2 shows that the premium was of Rs.25,000/- that has been paid only once and the policy lapsed in the second year whereas the policy was for 5 years. Hence, the applicable period on this policy, is 2nd year i.e. 10% deduction will be done.
13. Therefore, in view of what has been discussed above, this Forum is of the considered view that there is deficiency in service on the part of the opposite parties. Hence, this complaint is partly accepted with Rs.2,000/- as cost and the opposite parties are directed to refund the premium amount after deducting 10% i.e. Rs. 25,000/- minus 10% (2500/-) = Rs. 22,500/-. Compliance of this order be done within 45 days from the date of receipt of copy of this order. In case of non-compliance, interest @ 9% will yield on the amount of Rs.22,500/- till realization.
A copy of this order be sent to the parties concerned free of cost and file be consigned for record. '
Pronounced in open Forum
27-02-2012
(Vikramjit Kaur Soni)
President
(Amarjeet Paul)
Member
(Sukhwinder Kaur)
Member
