Punjab

StateCommission

FA/13/76

SBI Life Insurance Company Ltd. - Complainant(s)

Versus

Pritam Singh - Opp.Party(s)

Rajneesh Malhotra

11 Mar 2015

ORDER

First Additional Bench

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,

DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.

 

First Appeal No.76 of 2013 

 

                                              Date of institution: 23.01.2013.                                                            Date of Decision:   11.03.2015.

 

SBI Life Insurance Company Limited, through its Regional Manager, SCO No.109-110, First Floor, Sector 17-B, Chandigarh.

(Through Sri.V.Srinivas, s/o Late V.M.Somayajulu, aged 50 years, having office at, SBI Life Insurance Company, 1^st Floor, Kapas Bhawan, Central Processing Unit (CPC), CBD, Belapur, Navi Mumbai-400614)

                                                      .….Appellant/Opposite party No.1.

 

                                      Versus

 

1. Pritam Singh son of Sh.Mal Singh r/o Village Mehumuana, Tehsil and District Faridkot.

…..…Respondent/Complainant.

 

2. State Bank of India, through its Branch ADB Faridkot Road, Kotkapura.

  …..…Respondent/Opposite party No.2.

 

Before:-

 

                Shri J.S.Klar, Presiding Judicial Member

                Shri Vinod Kumar Gupta, Member.

 

Present:-

                For the appellant    :  Sh.Rajneesh Malhotra, Advocate

                   For respondent No.1: Sh.Ashish Gupta, Advocate

For respondent No.2: Sh.N.S.Jagdeva, Advocate

 

                                   AND

 

First Appeal No.186 of 2013 

 

                                              Date of institution: 20.02.2013.                                                             Date of decision  : 11.03.2015.

 

State Bank of India, through its Branch ADB Faridkot Road, Kotkapura through Manmohan Kumar Arora Branch Manager SBI ADB Kotkapura.

                                                      .….Appellant/Opposite party No.2.

 

                                      Versus

 

1. Pritam Singh son of Sh.Mal Singh r/o Village Mehumuana, Tehsil and District Faridkot.

…..…Respondent/Complainant.

2.      SBI Life Insurance Company Limited, through its Regional Manager, SCO No.109-110, First Floor, Sector 17-B, Chandigarh.

 

  …..…Respondent/Opposite party No.2.

 

First Appeal against order dated 04.12.2012 of District Consumer Disputes Redressal Forum, Faridkot.

Before:-

 

                Shri J.S.Klar, Presiding Judicial Member

                Shri Vinod Kumar Gupta, Member.

 

Present:-

                For the appellant    :    Sh.N.S.Jagdeva, Advocate                    For respondent No.1:   Sh.Ashish Gupta, Advocate

For respondent No.2:  Sh.Rajneesh Malhotra,Advocate

 

Vinod Kumar Gupta, Member

 

                    Since the points of common controversy and law are involved in the above referred two appeals, hence we propose to decide them together by means of this common order, which shall be passed in First Appeal No.76 of 2013. The complainant Pritam Singh filed the Complaint No.68 of 2012 before the District Forum, Faridkot and it was partly accepted on 04.12.2012.  Both the OPs in the complaint filed two above referred separate appeals against the order of the District Forum, partly accepting the complaint of the complainant.  The above referred two appeals have been preferred before us by the opposite parties, now, appellants and First Appeal No.76 of 2013 has been filed by SBI Life Insurance Company Limited and second appeal No.186 of 2013 has been filed by State Bank of  India against the order of the District Forum.

2.                The brief facts of the complaint are that Sh.Pritam Singh complainant deposited amount of Rs.5,36,000/- in his saving account on 30.07.2007 and concerned bank official told him to deposit this amount in the fixed deposit of SBI Life Insurance Company Limited as he would get good interest over his amount.  It was pleaded by the complainant that the said employee got the signature of the complainant on some blank papers and assured him after three years, he might withdraw the said amount with interest thereon.  It was further alleged in the complaint that the concerened employee neither disclosed anything to him nor read over and explained the contents of the said papers to the complainant.  On 18.10.2007, the complainant was given a receipt of bank official, which revealed that OPs withdrew an amount of Rs.1,50,000/- from the saving account of the complainant on the same day i.e. 30.07.2007 the date, on which the complainant deposited the above amount.  He approached the OP No.2 in the month of November, 2010 and found that amount was not deposited in his account.  On 11.11.2010, he again visited the Branch Office of the OP No.2 and withdrew the amount at that time.  He came to know that instead of Rs.1,50,000/- with interest @ 12% thereon, OP deposited the amount of 1,03,137/- in his account only.  He was asked by Mr.S.K.Kaloria, the employee of the bank that his amount was going to be deposited in a SBI Life Insurance Scheme of Fixed deposit and he would be having good return therefrom.  It was further alleged in the complaint that only Rs.1,03,137/- was deposited in his account.  It was further alleged that no policy was sent by the OP to him and hence, he could not ascertain about it, in which of the scheme the amount of Rs.1,50,000/- has been invested.  The bank official of the OP No.1, SBI Life Insurance verbally disclosed that the complainant was issued some SBI Life Insurance Policy Unit +2 Single bearing No.25008181901 and such policy was market related.  The complainant suffered a loss of huge amount by the above misrepresentation and the act of the OPs is unfair trade practice and of deficiency in service by them.  The complainant filed the complaint seeking direction to the OPs to pay Rs.46,863/- to the complainant alongwith interest @ 12% p.a. and to pay compensation of Rs.50,000/- and Rs.5500/- as litigation expenses.

3.                The complaint was contested by the opposite parties.  Opposite party No.1 filed separate written reply contending that the main crux of the complaint is against OP No.2 only and OP No.1 is  not a necessary party and hence, it should be dismissed against it for its misjoinder.  The complainant took the policy in October, 2007 and filed the complaint in the year of 2012 after a lapse of four years and hence, the complaint is time barred.  The complainant has revealed the allegations in the complainant that he never received the policy bond on the ground that he never approached the OP No.1 regarding the non receipt of the policy bond, rather he surrendered his policy by submitting his original policy bond.  It was further submitted that main grievance of the complainant is directed against OP No.2 and OP No.1 did not know as to what actually transpired between complainant and OP No.2.  OP No.1 issued policy to him on the basis of the information furnished in the proposal form by the complainant.  The complainant never raised any objection regarding the terms and conditions of the policy.  The complainant surrendered his policy after three years and as per rules, the surrender value was to be paid to him.  It was further pleaded that OP No.1&2 are the sister concerns belonging to the same SBI Group, but, in fact, they are separate legal entities.  It was further submitted in the written reply that OP No.1 paid the surrender value to the complainant, as per the terms of the policy.  There was no deficiency in service on the part of the OP No.1 and dismissal of the complaint was accordingly prayed for by it.

4.                The OP No.2 filed its separate written reply raising the preliminary objections that the complaint was not maintainable and the complainant has no cause of action against the OP No.2.  The complainant is alleged to have not come to the Forum with clean hands.  The complaint is also time barred.  The complainant had filed this false complaint.  On merits, it was replied by OP No.2 that the complainant himself invested his amount of Rs.1,50,000/- in SBI Life Insurance Policy Unit + 2 plan after going through the terms and conditions of the policy and has also declared that he understood and agreed to the net asset value per unit of the investment funds which might increase or decrease, as per performance of the financial market and others.  The complainant himself signed the declaration and proposal form in English thereof and he was duly aware about the net asset value of the fund.  The other allegations contained in the complaint were vehemently denied by the OP No.2.  It was further submitted that there was a clause of free look period in the policy and as per the above clause, policy holder would be given a period of 15 days from the date of receipt of the policy document to refuse the terms and conditions of the policy and where the insured disagreed to the terms and conditions, he had option to return the policy, stating the reason for his objection and he would be entitled to a refund of the amount.  The complainant has not opted for free look period for the  cancellation of the policy and instead filed the complaint after four years period therefrom. The other allegations of the complaint were denied by the OP No.2 and the dismissal of the complaint was prayed for by it.

4.                The complainant tendered in evidence his affidavit Ex.C-1, copy of passbook Ex.C-2, copy of notice Ex.C-3, postal receipt Ex.C-4 & C-5, copy of reply Ex.C-6, acknowledgment Ex.C-7, copy of first premium receipt Ex.C-8 and closed the evidence.  The opposite party No.1 also tendered in evidence affidavit of Sh.B.Sri Niwas, Ex.R-2, copy of proposal form Ex.R-3, copy of original policy Ex.R-4, copy of surrender application form Ex.R-5, copy of units statement Ex.R-6, copy of reply Ex.R-7 and closed the evidence.  OP No.2 tendered in evidence affidavit of Sh.M.K.Arora, Branch Manager ADB, Kotkapura Ex.R-1 and then, closed the evidence on behalf of the OP No.2.  On conclusion of evidence and arguments, the District Forum Faridkot partly accepted the complaint of the complainant directing the OPs to pay the amount of Rs.40,863/-(1,44000-1,03,137/-) alongwith interest @ 9% p.a. thereon and to further pay Rs.5000/- as cost of litigation.  Dissatisfied with the order of the District Forum Faridkot,two separate appeals have been preferred against the same by the OPs now the appellants.

5.                We have heard learned counsel for the parties and have gone though the record of the case also.

6.                As per the version of the complainant,  OP invested his amount of Rs.1,50,000/- in some market related policy and after obtaining his signature on some papers, OP deposited only Rs.1,03, 137/- in his account.  Instead of any interest on 1,50,000/-, the complainant received much lesser amount than his principal amount, which was deposited.  On the other hand, OP No.2 repelled the aforesaid contention of the complainant on the ground that he was fully aware that his amount was being invested in SBI Life Unit Plus II Plans and after going through the pros and cons of the policy, he put his signature on the policy document voluntarily.  It was made clear to the complainant when he entered into the above contract of insurance, that the Net Asset Value of the investment might increase or decrease as per the performance of the financial market.

7.                Perusal of the proposal form Ex.R-3 shows that the complainant invested in SBI Life Unit Plus 2 single premium plan bearing No.25602877 dated 30.07.2007 after paying Rs.1,50,000/-.  On the  basis of the  proposal form, the appellant/opposite party No.1 issued the policy No.25008181901 dated 18.10.2007, which is proved on record vide Ex.R-4.  The complainant had alleged the non receipt of the policy bond, but this version is not acceptable because he had submitted the surrender application form, which has been received in the office of the opposite party No.1 alongwith policy documents on the basis of which, the surrender value under the policy was processed.  As per the surrender application form Ex.R-5 dated 29.10.2010, it is evident that the complainant surrendered his policy to the OPs.  We have perused the payment voucher for ULIP Surrender Ex.R-6, in which, the fund detail is mentioned.  It reads as under :-

Fund Name	No. of Units	NAV	Amount (Rs.)
SBI Life Growth Fund	2152.8743	22.4932	48425.03
SBI Life Equity Fund	1352.72	41.2158	55753.44
SBI Life Balanced Fund	0.0	0.0	0.00
SBI Life Bond Fund	0.0	0.0	0.00
SBI Life Equity Optimizer Fund	0.0	0.0	0.00
Total Investment Value			104178.47
Less: Surrender Charges			1041.78
Less: Mortality Charges (incl. of Service Tax)			0.00
Net Surrender Value			103136.69
Add. Policy Deposit refund			0.00
Net Amount payable			103136.69

 

The surrender value of Rs.1,03,137/- was credited to the account No.11432056075 on 04.11.2010, which is proved on record, vide Ex.C-2.  If the complainant was not satisfied with the terms and conditions of the policy, he has the option to cancel the same under Free Look Clause, but the complainant had not opted for this exercise during this free look period.  The District Forum relied upon the observation of Insurance Regulatory and investment authority in final order in the matter of "M/s Kotak Mahindra Old Mutual Life Insurance Company Ltd.", where it advised the insurance company in the matter of free look cancellation.  The District Forum relying upon the above Regulation (6) (2) IRDA Regulation 2002 held that complainants are entitled to get the premium value after deducting 6% as per IRDA Rules.  But, the District Forum did not properly appreciate this fact as the judgment of Hon’ble National Commission in case "Max New York Life Insurance Co. Ltd. Vs. Ms.Reena Singh and others", in Revision Petition No.2394 of 2013, decided on 07.08.2014 has laid down that  Regulation 1(2) of the Notification, which reads as under :-

“(2)      They shall come into force on the date of their publication in the Official Gazette and shall apply to all products of linked life insurance cleared by the Authority thereafter.”

8.                Thus, it becomes clear that this notification is applicable to the policy cleared by authority after 01.07.2010 whereas, the policy issued in favour of the complainant pertains prior to 01.07.2010. In such circumstances, this notification was not applicable and the District Forum committed error in allowing complaints on the notification dated 01.07.2010.   So, the order of the District Forum cannot be sustained was so observed by the Hon'ble National Commission.  In the instant case, the policy Ex.R-3 was taken on 30.07.2007 much earlier to 01.07.2010 and as such, the notification is not applicable in the instant case to the policy in question.  The District Forum placed misreliance of this notification.  Free look period option was not exercised in this case by the complainant and hence, the District Forum failed to appreciate the import of the matter in this case.  The order of the District Forum under challenge in this case is not sustainable.

9.                Sequel to the above discussions, both the appeals filed by the OP No.1&2, as appellants in F.A.No.76 of 2013 and First Appeal No.186 of 2013, are hereby accepted and the order of the District Forum dated 04.12.2012 is set-aside.  Complaint of the complainant is stands dismissed.

10.              The appellants/OP No.1&2 has deposited an amount of Rs.25,000/- respectively with this commission at the time of filing the appeal.  The amount of Rs.25,000/- with interest accrued, if any, be remitted by registry to the appellants/OP No.1&2 by way of a crossed cheque/demand draft after the expiry of 45 days.

11.           The arguments in this appeal were heard on 03.03.2015 and the order was reserved. Now the order be communicated to the parties. The appeal could not be decided within the statutory period due to heavy pendency of court cases.

15.           Copy of this order be placed in First Appeal No.186 of 2013.

                                                                  (J.S.Klar)

                                                    Presiding Judicial Member

 

 

March  11, 2015                                     (Vinod Kumar Gupta)

Lb/-                                                              Member