DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi- 110016

Case No.42/2022

Shri Nand Kishore Prasad                                       .…Complainant

R/o H.No.421, Chirag Delhi

New Delhi-110017.

                                                 VERSUS

M/s Canara HSBC Oriental Bank of Commerce

Life Insurance Company Ltd.

Through Mansingh Director & Chief Executive Officer

Having its registered office at:

Unit No.208, 2^nd Floor Kanchanjunga Building

18, Barakhamba Road

New Delhi-110001.                                                      ….Opposite Party

Coram:

Ms. Monika A Srivastava, President

Ms. Kiran Kaushal, Member

Present:    Adv. Praveen Singhai along with complainant.

Present:    None for OP-1.

                  Adv. Vyomika Mutreja proxy counsel on behalf of Adv. Anurag Jain for OP-2 with due authority.

ORDER

Date of Institution:12.02.2022

Date of Order       :30.07.2024

President: Ms. Monika A Srivastava

Complainant has filed the present complaint seeking cancellation of policy No.0090944112 and refund of Rs.50,000/- along with 24% interest per annum from the date of issuance of policy; Rs.30,000/- towards mental and physical harassment; Rs.20,000/- as financial damages and cost of litigation of Rs.20,000/-.  OP-1 is Punjab National Bank and OP-2 is Canara HSBC Oriental Bank of Commerce, Life Insurance Co. Ltd.

1.  Complainant states that he is a senior citizen and is also poor suffering from various ailments, hardly literate and residing with his married daughter.  Copy of the Aadhar Card of the complainant as well as his medical prescription are annexed as annexure C-1 (colly).

2. It is stated that he received Rs.2,10,000/-  in his savings bank account in the OP -1 Branch on 13.03.2019  and he wanted to transfer the said amount to the bank account of his daughter however, he was informed by the official of OP-1 that since he did not have the PAN Card, transfer of the said of the amount would not be possible.

3. It is further stated that one Smt. Lily Agarwal having code No.10927 who was the serving employee at the branch of OP-1 impressed on the complainant that she could transfer a sum of Rs.1,60,000/- to the account of his daughter through NEFT and the balance amount of Rs.50,000/- would be transferred within 4-5 days.

4. It is further stated that complainant had no reason to disbelieve the bank official and the said Smt. Lily Agarwal obtained signatures of the complainant on some forms on the pretext of transferring the amount through NEFT.

5. When after 3-4 days the remaining amount could not be transferred to the complainant’s daughter’s account, complainant inquired and was assured to be transferred within 2-3 days.  It is further stated that after some time complainant came to know of the unlawful designs of the official of OP-1 and that the said official had got insurance for a sum of Rs.50,000/- in the name of his daughter without his consent. 

6. As the complainant was not keeping well, he approached OP-1 for the cancellation of the insurance policy which had been sold by fraud and misrepresentation.  In this regard, complainant approached OP-2 vide his complaint dated 18.11.2019 seeking cancellation of the above said policy.  The copy of the letter is annexed as annexure C-3.  Complainant has made other representations to OP-2 which are annexed as annexure C-3 (Colly).

7. It is stated by the complainant that OPs have played fraud upon him and have acted contrary to good faith and their act is unlawful and contrary to the directions of IRDA.  It is stated that the act of the OP comes within the purview of unfair trade practice under section 2(47) of the CPA 2019.   It is reiterated by the complainant that he has not consented to the issuance of the policy and that his signatures have been obtained by fraud and misrepresentations of facts.

8. Complainant has also placed reliance on the email dated 08.09.2020 of OP-2 wherein a request was made to resolve his complaint on priority basis and that he was in need of money for his treatment. As per the internal communication annexed as annexure C-4 it is stated

“Customer Mamta Devi has raised the concern that her father Mr. Nand Kishor Prasad had received the funds from a different sources but PAN card was not available with him that time to deposit the amount in bank. However bank took the signature on document and issued the policy in her daughter name with a premium of Rs.50000/-.  Also, her father Nand Kishor Prasad’s health condition is not good from last year hence she didn’t approach us earlier on time.  Customer did confirm that she received VC call and given her consent basis agent instructions.  Further, customer Mamta Devi is jobless currently and having the financial problem due lockdown under Covid-19 Pandemic.  So customer needs money and wants to cancel the policy”.

It further records that the policy was delivered on 05.04.2019 and that the annual premium was Rs.48433.78 and the sum assured was Rs.6,12,777/- and that the proposal login date is 15.03.2019 and policy issue date is 31.03.2019.  If further records the policy status as ‘lapsed’ and payment mode ‘annually’. 

9. Complainant also sent a legal notice dated 18.03.2021 and another notice was issued on 30.06.2021.  Legal notices are annexed as annexure C-5 and annexure C-6 respectively.

10. Complainant relying on the principle of restitution in integrum is entitled to get appropriate compensation in lieu of the financial loss suffered on account of non-cancellation of policy.

11. In their reply, OP-2 have stated that the allegations of the complainants are contrary and inconsistent and made with malafide and dishonest intention.  It is stated that complainant after completely understanding the terms and conditions of the product ‘Canara HSBC Oriental Bank of Commerce Life Insurance Guaranteed Savings Plan’ opted for a policy term of 20 years and premium paying term of 10 years vide proposal form bearing No.9100515576 dated 15.03.2019.  Accordingly, policy bearing No.0090944112 was issued to the complainant with risk commencement date of 31.03.2019. Copy of the policy documents along with proposal form and addendum is annexed as annexure R-1. 

12. It is further stated that no prudent person would sign any document without understanding the intricacies of the same.  It is also stated that as per the terms and conditions of the policy, the complainant was provided a free look period of 15 days from the date of receipt of the same to cancel the policy in case there is any discrepancy in the policy. In this case, the policy was received by the complainant on 05.04.2019 and the complainant failed to approach OP-2 within the free look period implying that the terms and conditions of the policy were agreed to by the complainant.

13. In this regard, OP has placed reliance on the judgments passed by the Hon’ble NCDRC in Mohan Lal Benal Vs. ICICI Prudential Life Insurance Co. Ltd. and Harish Kumar Chadha Vs. Bajaj Allianz Life Insurance Co. Ltd. and Shrikant Murlidhar Apte Vs. LIC RP No.634/12.

14. It is further stated that the payment for renewal premium was due on 31.03.2020 and a reminder letter was sent to the complainant, however, in spite of sufficient reminder, complainant failed to pay the same and then OP-2 sent a letter date 04.05.2020 informing that the said policy had lapsed w.e.f. 31.03.2020 as per the terms and conditions. Copy of the letter dated 04.05.2020 is annexed as annexure R-2.

15. It is further stated that when the complaint was received from the complainant in November 2019 and Feb.2020 evaluation of the complainant’s grievance was done and it was realized that the complainant had signed his consent on the policy application form etc. hence complainant’s request for cancelling the policy and refunding the premium could not be acceded to. 

16. It is further stated that the legal notices were duly replied to by the OPs and the same are annexed as annexure R-4 (colly). It is further stated that as per the terms of the policy, complainant is not entitled for any amount under the policy as he has paid only one premium.  It is stated that the policy is a legal contract between the parties and have to be strictly construed. In this regard, OP-2 has placed reliance on the judgment of the Hon’ble Supreme Court in Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United Indian Insurance Co. Ltd. (2010) SCC 567.  It is stated that OP-2 has acted in accordance with IRDA guidelines. 

17. OP-1, in their reply have stated that the complaint has been filed on mere conjectures and surmises and is wholly misconceived vexatious.  It is stated that there is no deficiency of service on part of OP-1.  It is stated that OP-1 has acted strictly in accordance with rules and regulations and as per the normal course of banking transactions.  It is stated that oP-1 was only acting as a liaisoning agent between complainant and OP-2 and the complainant is not a consumer qua OP-1.

18. It is stated that the present complaint is without any cause of action against OP-1 and OP-1 is not guilty of any deficiency in service as alleged by the complainant. 

19. It is stated by OP-1 that in March 2019, complainant along with his daughter, Smt. Mamta Devi approached OP-1 to purchase life insurance Policy mentioned above for an annual premium of Rs.49,499.56.  It is stated that on 16.03.2019 at 10.50 AM a validation call was made by OP-1 to Smt. Mamta Devi and her address and other details including plan details were confirmed from her.   She was also advised about the sum assured and premium amount and advised to go through the terms and conditions of the policy.

20. It is further stated that a declaration letter dated 22.03.2019 was received from the complainant stating that he had applied the policy for tax saving and create a legacy for his daughter and requested OP-1 to process the policy. Thereafter, another declaration letter dated 31.03.2019 was received from Smt. Mamta Devi stating that her husband did not have any life insurance policy and requested the OP to process the policy.

21. It is further stated that in accordance with the application made by the complainant and his daughter, policy was processed and issued on 31.03.2019 and delivered to complainant on 05.04.2019.  It is stated that as per the terms and conditions of the policy, the lock in period has expired on 20.04.2019 and during that time neither the complainant nor his daughter approached the OPs for cancellation of the policy.

22. It is reiterated by OP-1 that it neither promotes nor endorses any such insurance policies/schemes and it merely acts as an intermediary and has no connection with other OPs.  It is denied that the complainant approached OP-1 for cancellation of insurance policy or that OP-1 has played any fraud on the complainant. 

23. OP-2, in their reply has stated that the complainant after completely understanding the terms and conditions of the product i.e the policy opted for a term of 20 years with a premium paying of 10 years vide proposal form bearing No.9100515576 dated 15.03.2019 and has provided all the relevant details in the said proposal form. 

24. It is stated that upon receipt of the duly signed proposal form/addendum along with the initial premium, OP-2 evaluated and processed the proposal form and issued policy No.0090944112 with risk commencement date of 31.03.2019.  Copy of the policy documents are annexed as annexure R-1.

25. It is stated by OP-2 that as per the proposal from, complainant had opted for a premium paying term of 10 years and since the complainant has not disputed that he had filled the proposal form and signed the addendum, it is an admission on the part of the complainant that he was well aware about the policy being issued for an yearly premium of 10 years.

26. It is further stated that proposal form was filled electronically, the applicant had signed the addendum dated 15.03.2019 to the proposal form after being explained about the contents of such proposal form.  It is further stated that as per the terms and conditions of the policy complainant was provided free look period of 15 days from the date of policy to cancel the policy in case there is any discrepancy in the policy but the complainant failed to approach OP-2 within free look period therefore the complainant is bound by the policy contract. In this regard, OP has placed reliance on the judgments passed by the Hon’ble NCDRC in Mohan Lal Benal Vs. ICICI Prudential Life Insurance Co. Ltd. and Harish Kumar Chadha Vs. Bajaj Allianz Life Insurance Co. Ltd. and Shrikant Murlidhar Apte Vs. LIC RP No.634/12.

27. It is further stated that as on date the complainant had paid only one annual premium under the policy whereas he is required to pay yearly premium for 10 years.  OP-2 sent a letter dated 04.05.2020 informing the complainant that the said policy had lapsed w.e.f. 31.03.2020.  Copy of the letter dated 04.05.2020 is annexed as annexure R-2.

28. It is further stated that OP-2 was in receipt of grievance of the complainant in the month of November of 2019 and Feb. 2020 and after evaluation complainant was informed vide communication dated 22.11.2019, 19.02.2020 and 08.09.2020 that the complainant had understood the details of the policy and OP-2 cannot accede to his request to cancelling the policy and paying the premium thereunder. Copy of the said letters are annexed as annexure R-3 (colly).

29. It is further stated that as per the terms of the policy, complainant is not entitled for any amount under the policy as he has paid only one premium.  It is stated that the policy is a legal contract between the parties and have to be strictly construed. In this regard, OP-2 has placed reliance on the judgment of the Hon’ble Supreme Court in Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United Indian Insurance Co. Ltd. (2010) SCC 567, Reliance Life Insurance Co. Ltd. Vs. Madhavarcharya RP No.211/09.

30. In his rejoinder to OP-1, complainant has reiterated his averments against OP-1 that OP-1 along with OP-2 had cheated the complainant otherwise there is no reason that when the complainant had gone to bank for opening an account he would be given an insurance policy by getting blank documents signed as the documents account opening form and transfer his hard earned money towards premium of an unrequired insurance policy.

31. In his rejoinder to OP-2, complainant reiterates that the employee of OP-1 had impressed upon the complainant that she could transfer a sum of Rs.1,60,000/- to the account of his daughter through NEFT and balance of Rs.50,000/- would be transferred within 4-5 days.  It is reiterated that the complainant had no reason to disbelieve a bank official however, when after 3-4 days the remaining amount could not be transferred in the account of his daughter and on enquiring the bank officials failed to respond and it was only after some time that it was revealed that he was given an insurance for a sum of Rs.50,000/- in the name of his daughter without his consent.

32. It is stated that OP-2 has failed to appreciate that the contract of insurance being uberrima fides, faith is missing in this case as complainant was sold the insurance by misrepresentation of facts and therefore contract of insurance is not binding upon the complainant.  It is stated that consensus ad idem was missing and the contract of insurance is vitiated by fraud and misrepresentation.

33. It is further stated that the official of OP-1 has misrepresented the fact and obtained the signatures of the complainant on some papers on the pretext of transferring the funds through NEFT in the account of his daughter .  It is stated that complainant is an old, indigent and hardly literate person and complainant put the signatures as per the directions of official of OP-1 with the object to have the fund transferred.

34.  Both the complainant as well as OP-2 have filed their respective evidence affidavits and OP-2 has filed its written arguments.  OP-1 after filing reply did not appear and was proceeded ex-parte.  This Commission has gone through the entire material on record.  OP-2 has placed on record the proposal form along with the policy document, information letter dated 04.05.2020, copy of replies dated 22.11.2022, 19.02.2020 and 08.09.2020 and reply to the legal notice. It is also seen that though OP 2 has stated that they have sent reminders of premium to the complainant but no proof of dispatch of these reminders have been placed on record.

35.  It is seen from the proposal form placed on record that it was filled electronically but it does not bear the electronic signature of the complainant. OP-2 has also placed on record sales illustration attached along with proposal form and which ends with “IMPORTANT DISCLOSURE REQUIREMENT” wherein the official of OP-1 Ms. Lily Agarwal has stated

“I have been briefed on the benefits and features of Canara HSBC Oriental Bank of Commerce Life Insurance Guarantee Saving Plan.  I have understood the information and risks associated with this plan.  I confirm that my selection of the above policy is in keeping with my life insurance/ investment objectives.

I have briefed Nand Kishor Prasad in English language on the benefits and features of this insurance plan.”

       It is seen from the complaint filed on record which is supported by an affidavit and all other documents filed by the complainant that the complainant had signed in Hindi.  It is stated by the complainant that he is hardly literate yet the declaration as mentioned by the official of OP-1 states that the benefits of the policy were explained to him in English.  It is also seen that both the OPs have not claimed that the complainant visited OP-1 seeking an insurance policy from either of them.

It is stated by the complainant that he is a person of limited means and was never in a capacity to pay the premium of Rs.50,000/- per year as premium towards the policy.  This fact has also not been denied by either of the OPs. 

36. The Commission also wonders the need of having an addendum signed by the daughter of the complainant on 15.03.2019 whereas on 15.03.2019 it is the case of all the parties that the complainant visited OP-1 alone, not accompanied by his daughter.  It is also not clear as to why a person who is hardly literate would be explained the benefits and features of an insurance policy in English language. It is not the case of OP-2 that the complainant was explained the benefits of the policy in a language that the complainant understood.  Therefore, this Commission is of the view that there was no consensus ad idem at the time of contract of insurance.  In fact, the policy was sold by misrepresentation and by misleading the complainant in buying a policy which was of no good to the complainant. 

The argument of OPs that complainant and his daughter required the money during Covid because of her losing the job cannot be upheld as the first letter written by the complainant for cancellation of policy to the OP is dated 19.02.2020 which is pre- Covid. 

This a case where a poor hapless consumer was taken for a ride by both the OPs and therefore both the OPs are liable to compensate the complainant.  OP 1 has nowhere denied that the said official was not their employee, OP-1 is liable for the acts of its official and is directed to pay a sum of Rs.50,000/- to the complainant as compensation for the misdeed of its official.

Further, OP-2 is directed to refund sum of Rs.47,638/- excluding taxes along with interest @7% per annum from the date of receiving of premium from the complainant till realization.  OP-2 is also liable to compensate the complainant for a sum of Rs.25,000/-. These payments are to be made within three months from the date of pronouncement of the order failing which amount of Rs.47,638/- excluding taxes would carry an interest of 9% per annum from the date of receiving of premium till realization.

Copy of the order be given to the parties as per rules. File be consigned to the record room. order be uploaded on the website.