Tamil Nadu

StateCommission

FA/84/2014

AVIVA LIFE INSURANCE COMPANY INDIA LTD., THE SENIOR MANAGER - Complainant(s)

Versus

P.N. PANNEER SELVAM - Opp.Party(s)

Elveera Ravindran-Applt

27 Jan 2023

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI – 600 003.

BEFORE        Thiru. S. KARUPPIAH                           PRESIDING JUDICIAL MEMBER

                      Thiru. R. VENKATESAPERUMAL        MEMBER

 

F.A. No.428/2013 & F.A. No.84/2014

(Against the Order dt.03.05.2013 in C.C. No.107/2011 on the file of the

D.C.D.R.C., Dharmapuri @ Krishnagiri)

 

DATED THE 27^th  DAY OF JANUARY 2023

 

F.A. No.428/2013

 

The Branch Manager,

DBS Bank India Ltd., (Amended as per

Order dt.15.11.2022 in CMP No.270/2022),

No.27- A, Vanniar Street,

Pennagaram – 636 810,

Dharmapuri District.                                                      .. Appellant  / 1^st Opposite party.

 

- Versus -

1. Mr. P. N. Panneer Selvam,

S/o. Mr. K.C. Natarajan,

D. No.8-E, Kaveri Road,

Pennagaram – 636 810,

Dharmapuri District.                                                      .. 1^st Respondent  / Complainant.

 

2. The Senior Manager,

Branch Operations,

Aviva Life Insurance Company India Ltd.,

Aviva Life Insurance Ashirwad Towers,

Plot No.2, Old No.182, 3^rd Floor,

Kodambakkam High Road,

Nungambakkam,

Chennai – 600 034.                                              .. 2^nd Respondent / 2^nd Opposite party.

 

Counsel for Appellant  / 1^st Opposite party         :  M/s. A.V. Radhakrishnan

Counsel for 1^st Respondent  / Complainant        :  M/s. P. Nethaji

Counsel for 2^nd Respondent / 2^nd Opposite party:  M/s. Elveera Ravindran

  

F.A. No.84/2014

The Senior Manager,

Branch Operations,

Aviva Life Insurance Company India Ltd.,

Aviva Life Insurance Ashirwad Towers,

Plot No.2, Old No.182, 3^rd Floor,

Kodambakkam High Road,

Nungambakkam,

Chennai – 600 034.                                                      .. Appellant  / 2^nd Opposite party.      

- Versus -

1. Mr. P. N. Panneer Selvam,

S/o. Mr. K.C. Natarajan,

D. No.8-E, Kaveri Road,

Pennagaram – 636 810,

Dharmapuri District.                                                      .. 1^st Respondent  / Complainant.+-

 

2. The Branch Manager,

DBS Bank India Ltd., (Amended as per

Order dt.15.11.2022 in CMP No.271/2022),

No.27- A, Vanniar Street,

Pennagaram – 636 810,

Dharmapuri District.                                               .. 2^nd Respondent / 1^st Opposite party.   

 

Counsel for Appellant  / 2^nd Opposite party        :  M/s. Elveera Ravindran

Counsel for 1^st Respondent  / Complainant        :  M/s. P. Nethaji

2^nd Respondent / 1^st Opposite party                   :  Served called absent

                                 

These two appeals came up before us for final hearing today on 24.01.2023 and on hearing the arguments of both parties and on perusing the material records, this Commission made the following order:-

COMMON ORDER

Thiru.S. KARUPPIAH, JUDICIAL MEMBER             

Both the appeals have been preferred by both the opposite parties against the award passed by the District Commission, Dharmapuri @ Krishnagiri in                     C.C. No.107/2011. 

1.       The factual background culminating  in to  appeal is as follows:-

The complainant was an Assistant in the Block Development Office.  He is a customer of the 1^st opposite party bank having his Savings Bank Account.   Both, the bank official and the 2^nd opposite party Insurance company officials met the complainant and requested him to take a Unit Linked Pension Policy.  The complainant informed them that he could not be able to pay the premium every year, but on the other hand, he is ready to pay a lump sum premium for one year.    The Subordinates of the 2^nd opposite party and the 1^st opposite party obtained signature of the complainant in blank proposal form on  06.02.2008.  To his surprise, later he found that the insurance policy was taken as an annual premium policy of 5 years.  When he questioned this fact, the official told that they have fulfilled for their own purpose and the complainant need not worry about it.   The insurance People also assured that this amount will be double in 5 years.   Hoping that his premium amount will be returned with some interest he paid the premium amount of Rs 1,00,000/-. Later he asked for refund of the premium amount in the month of June 2011. To his surprise, the 2^nd opposite party informed that the premium amount cannot be refunded.   Having received his amount, the refusal by the insurance company amounts to deficiency in service and hence, he filed the complaint seeking refund of his premium amount of Rs.1,00,000/- with compensation and cost.

2.         The 1^st opposite party in their counter admitted that the complainant was the customer of their bank.  They have also admitted having relationship with the 2^nd opposite party insurance company.  But they stoutly denied the consumer and service provider relationship with regard to the insurance policy except the DD was taken from the bank.  They did not provide any service with regard to the insurance premium or its claim and hence, they requested to dismiss the complaint.   The 2^nd opposite party in their written version took preliminary objections that this consumer complaint is not maintainable and there is no consumer and service provider relationship.    As per the policy conditions, the complainant is liable to pay atleast 3 years annual premiums failing which, his policy will be lapsed and he is not entitled to receive the premium amount or the assured sum.  The premium was invested in units.  If anything happened to the life assured then only the unit value at the time of prevailing will be given to the complainant.   Hence, they prayed to dismiss the complaint. The District Commission after perusing the proof affidavit and documents directed both the opposite parties to pay a sum of Rs.1,00,000/- with 12% interest along with Rs.25,000/- towards damages for mental agony and cost of Rs.5,000/-.

3.         Aggrieved over the said order, both the bank and insurance company filed separate appeals questioning the order of the District Commission that the order was erroneous and it was passed without ascertaining the correct facts, terms and conditions of the policy and requested this Commission to allow their appeal.   We heard the arguments of both sides.  

4.       Now, the point for consideration are:-

1. Whether the order of the District Commission is sustainable in law?
2. Whether the appeal has to be allowed?

5.       Point nos:  1 & 2:

It is an admitted fact that the complainant inclined to take the policy with the opposite party.  It is the case of the complainant that though he specifically informed the opposite parties about his inability to pay annual premium continuously for 5 years they  obtained  his signature in the blank proposal form.   It is his further case that the policy was taken as if he is willing to pay annual premium for 5 years- which is against his wish. He also alleged further that there was a misrepresentation by the opposite party that he need not pay any further premium except for one premium payment..   This fact was completely denied by the opposite party.   The opposite party clearly spelt out that willingly the complainant signed the proposal form and he knew the terms and conditions of the policy. So, the complainant alleged fraud in obtaining signature in blank form and it is his further allegation of misrepresentation made by the official that he need not pay any further premium.  

6.    Further it is the main contention of the complainant that, he was not properly explained about the terms and conditions. His signature was obtained in blank papers and the second opposite party strongly recommended to invest the amount with the first opposite party were all not admitted by other side. When coercion, mis-representation, fraud and forgery were alleged it involves voluminous oral evidence and documents. The Consumer Fora procedures are summary in nature and before this Commission those facts cannot be decided. As it was held by the, National Consumer Disputes Redressal,Commission in  Manisha Sohilkumar Chovatiya -Vs-Hdfc Bank Ltd. & Ors.     on 3 January, 2022 as follows

       "From the above judgments, it is brought out that complaint case where forgery and fraud has been alleged by one party against the other party and the same is denied by the other party cannot be decided in a summary procedure under the Consumer Protection Act, 1986 because it requires lot of voluminous evidence to be produced by both the parties in support of their assertions, which is not possible in the summary proceedings. Proper forum for adjudication of such complaints is only the Civil Court having proper jurisdiction.

7.   Based on the above discussion, this complaint cannot be decided under the summary procedure laid down in the Consumer Protection Act, 1986 as it would require voluminous evidence to be produced by both the parties in support of their assertions. The proper forum for the present complaint would be the civil court of appropriate jurisdiction"

Hence, on this score alone  the complaint is liable to be dismissed. As the complaint is not maintainable on the preliminary objection we need not go into the merits of the case. However, for better appreciation we delve into other objection also.

8.      The complainant is not a lay man, he worked as a Government Servant and the complainant himself admitted that he immediately knew the terms and about payment of premium regularly for 5 years.  In spite of knowing the fact he did not pay premium for subsequent years. In the case of United India Insurance Company Ltd., vs Harchand Rai Chandan Lal, the Honble Supreme Court has held that the terms and conditions of the contract entered into between the parties have to be strictly construed and no deviation can be made there from. Simillarly as per IRDA Regulations of 21.12.2005, Premium if not paid consecutively for 3 years from inception of the Policy cover, would result in deemed termination and foreclosure of the Policy in terms of clause 4 and 5 of IRDA Regulations. When the condition and contract did not give authorization of getting back the premium amount, then the complainant is not entitled to the same.

9.  The District Commission without considering the terms and conditions of the insurance contract held the insurance policy was obtained by playing fraud. The contract as it was obtained by fraud held as non est. Further The District Commission assumes the power to declare the contract as void which in fact it did not posses.  Hence, the  finding of the District commission by ignoring the contract between the parties forced us to interfere with the finding.   After all the insurance company is doing a business taking insurance normally, is not for any commercial- purpose.  But in this case, the complainant knows that his amount paid towards premium was invested in share market which we feel as for profit purpose.  So the purpose of investment commercial purpose and this Court lacks jurisdiction to decide the case.  The National Commission has held on this point in case "Ram Lal Aggarwalla Vs. Bajaj Allianz Life Insurance Co. Ltd. & Anr. reported in 2013(III) CPJ-203 (NC) as under:

"The investment made by the petitioner/complainant was to gain profit. Hence, it was invested for commercial purposes and, therefore, the petitioner/complainant is not a consumer under the opposite parties. The State Commission Odisha in First Appeal no.162 of 2010 in the case of Smt. Abanti Kumari Sahoo vs. Bajaj Allianz Life Insurance Company Ltd., have held that the money of the petitioner/complainant invested in the share market is no doubt a speculative gain and the speculative investment matter does not come under the Consumer Protection Act and accordingly, the State Commission dismissed the appeal." So the complaint itself is not maintainable on this score also.

10.     This Commission already had an opportunity to deal with a similar matter and also referred the judgment of The National Consumer Disputes Redressal Commission in Life Insurance Corporation Of ...  .vs.  Anil P. Tadkalkar on 8 November, 1995   Equivalent citations: 1 (1996) CPJ 159 NC which held as follows:

          "Moreover, we have not been able to understand how the Complainant can claim refund of all the premium paid by him during the period of the policies remained alive and the LIC had covered the risk. If during this period the Complainant had died (an event which did not occur) the insurer i.e. LIC would have had to pay the full amount due under the policies even though only some fraction of the premium would have been realized by that time by the insurer. "

 11.    As per the above verdict, we inferred that the Insurance company is not a bank and the premium paid to the policy is not amounted to any deposit. The opposite party is doing a business of insurance which covers some risk and contingencies. For example during the period of premium paid if the assured died then the Life Insurance Corporation is liable to pay the insured sum. Such a coverage and risk factor involved in the contract of insurance. But ordering the Insurance company to refund the premium paid in a lapsed policy would amount to treating the premiums paid in respect of a policy which lapsed by default, as fixed deposits repayable with a hefty rate of interest. Surely, the intention is not to reward defaulting policy holders. Moreover, the courts and Tribunals cannot rewrite contracts and direct payment contrary to the terms of the contract, that too to the defaulting party. Moreover the, Supreme Court in the case of, Vikram Greentech (I) Ltd..Vs. New India Assurance Co. Ltd.(2009) 5 SCC 599, while dealing with the contract of insurance held as under:-

      “An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberrima fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract. The four essentials of a contract of insurance are: (i) the definition of the risk, (ii) the duration of the risk, (iii) the premium, and (iv) the amount of insurance. Since upon issuance of the insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of the risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer.""The endeavour of the court must always be to interpret the words in which the contract is expressed by the parties. The court while construing the terms of policy is not expected to venture into extra liberalism that may result in rewriting the contract of substituting the terms which were not intended by the parties. The insured cannot claim anything more than what is covered by the insurance policy".

12.     But, without considering this aspect, the District Forum ordered to refund the premium amount which is liable to be set aside. After all Insurance Companies made profit only from the premiums received by it by the lapsed policies. As the District Commission without analyzing the above, wrongly decided and directed the opposite parties to pay the premium of Rs.1,00,000/- which is liable to be set aside.   On the above discussions, both appeals are to be allowed and the order of the District Commission is liable to be set aside.  Considering the facts and circumstances of the case, we did not want to impose cost.

13.       In the result,

F. A. No. 428/2013

1. The appeal is allowed.

2. The order passed by the Learned District Commission Krishnagiri in C.C. No.107/2011 dt. 03.05.2013 is set aside and the complaint is dismissed.  There is no order as to cost throughout.

3.  Registry is directed to discharge the mandatory deposit along with accrued interest in favour of the appellant.

14.     In the result,

F. A. No. 84/2014

1.   The appeal is allowed.

2.  The order passed by the Learned District Commission Krishnagiri in C.C. No.107/2011 dt. 03.05.2013 is set aside and the complaint is dismissed.  There is no order as to cost throughout.

3.   Registry is directed to discharge the mandatory deposit along with accrued interest in favour of the appellant. 

 

 

MEMBER                                                                               PRESIDING JUDL. MEMBER

    (RVP)                                                                                         (S.K.)