KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL No.392/2013

JUDGEMENT DATED: 05.06.2023

(Against the Order in C.C.No.681/2011 of CDRC, Ernakulam)

PRESENT:

APPELLANTS:

(by Adv. Sreevaraham G. Satheesh)

Vs.

RESPONDENT:

JUDGEMENT

HON’BLE JUSTICE SRI. K. SURENDRA MOHAN : PRESIDENT

The appellants herein are the opposite parties in C.C.No.681/2011 of the Consumer Disputes Redressal Forum, Ernakulam (District Forum for short).  They are aggrieved by the final order dated 30.01.2013 of the District Forum, partly allowing the complaint.  As per the order under appeal, the opposite parties have been directed jointly and severally to refund the insurance premia of Rs.10,000/-(Rupees Ten Thousand) and Rs.1,00,000/-(Rupees One Lakh) respectively, paid by the complainant with interest @12% per annum from the date of receipt of a copy of the order.  The respondent herein is the complainant before the District Forum.  The parties shall be referred to herein in accordance with their status before the District Forum.

2.       The complainant is a small-scale business man.  According to him, the agent of the opposite parties offered him a single premium policy which would mature in five years.  He was told that, he would have to pay only one premium for the entire policy period.  The complainant joined two policies one with a single premium of Rs.10,000/-(Rupees Ten Thousand) and the other with a single premium of Rs.1,00,000/-(Rupees One Lakh).  The signatures were obtained on printed unfilled forms at the time of joining the policies.  The opposite parties assured to pay Rs.1,00,000/-(Rupees One Lakh) and Rs.5,00,000/-(Rupees Five Lakhs) in respect of the policies upon their maturity in 2011.  However, when the complainant requested them to pay him the maturity amount, they replied that they were unable to do so since the policy had lapsed.  According to the complainant, the opposite parties have adopted unfair trade practice by canvassing the policies and collecting premia.  The complainant therefore claimed that he was entitled to recover the maturity amount and a compensation of Rs.25,000/-(Rupees Twenty Five Thousand) from the opposite parties.

3.       Though notices were received by both the opposite parties, only the 2^nd opposite party appeared and contested the complaint.  According to the 2^nd opposite party, the complainant had taken two Bajaj Allianz policies which are unit linked insurance policies.  They are investment plans as well as insurance policies.  In such policies, investment is made in equity market and the risk of investment is borne solely by the policy holder as per the policy terms approved by the Insurance Regulatory Development Authority.  The date of commencement of the first policy is 28.03.2006 with an annual premium of Rs.1,00,000/-(Rupees One Lakh) and the sum assured is Rs.5,00,000/-(Rupees Five Lakhs) with a premium term being twenty five years.  At the time of his joining the policy, the complainant was informed about the terms and conditions thereof.  The complainant agreed to remit premium for at least the first three years and also agreed that on default, no benefit shall be paid to him.  The complainant duly signed the proposal form accepting the terms and conditions.  Due to non-payment of the second and third premia, the policies lapsed.  As per the agreed terms and conditions, though the complainant was called upon to pay the subsequent premium there was no response.  Therefore, there was no deficiency in service or unfair trade practice on the part of the opposite parties.

4.       Both parties went to trial on the above pleadings.  The complainant was examined as PW1 and Exhibits A1 to A6 documents were marked on his side.  One witness was examined on the side of the opposite parties as DW1 and Exhibits B1 and B2 documents were marked on their side.  After close of evidence the matter was heard by the District Forum.  On an appreciation of the contentions of the parties in the light of the evidence on record the District Forum held that, the complainant was entitled to succeed in part.  Accordingly, the opposite parties have been directed to refund the amounts of premium paid by him.  It is aggrieved by the said order that this appeal is filed. 

5.       According to the counsel for the appellant, since the complainant had remitted only one premium in each of the policies, when as per the terms of the policies he should have remitted premium for three years, the policies have lapsed.  As a consequence, the amounts of premium paid by him are liable to be forfeited.  It was without noticing the above policy terms that the District Forum had ordered return of the amounts paid by him.  It is contended that the complainant had enjoyed the coverage of the policies during the period and therefore there was no justification in directing the return of the premium paid.  The interest charged is also on the higher side, according to the counsel. 

6.       The counsel for the respondent responds to the above contentions pointing out that, he had been canvassed by the agent of the opposite parties representing that it would be necessary for him to pay only one premium in each of the policies.  No communication calling for payment of any subsequent premium was ever issued by the opposite party to the complainant during the policy period.  The policy document produced by the appellant also does not support their contention that subsequent premia had to be paid.  It is contended that, the hard earned money of the complainant has been remaining with the opposite parties from 2006 onwards and that they have been taking advantage of the amounts all these years.  In view of the above, the interest ordered to be paid can only be considered as reasonable.  The counsel therefore seeks dismissal of the appeal. 

6.       The specific case of the complainant is that, he had been persuaded to join the policies by making him believe that it would be sufficient for him to pay only one premium in respect of each of the policies.  The letters Exhibits A3 and A4 issued by him to the opposite parties after the policies matured probabilise the fact that he had been under an impression that it was necessary for him to pay only one premium in each of the policies.  Dissatisfied with the reply received, which are Exhibits A5 and A6, he immediately filed the complaint.  The proposal forms Exhibits B1 and B2 produced by the opposite parties do not offer any clear indication as to whether payments of premia for three years were contemplated or not.  Therefore, we are left to draw our conclusions on the basis of the attendant circumstances.

7.       The response of the 2^nd opposite party in Exhibit A5 to the allegation of the complainant in Exhibits A3 and A4 that he had been persuaded to join the policy by the agent Mr. Bobby Sebastian has only been to inform that he had been terminated from the system.  The same response is seen in Exhibit A6 with respect to the other agent Mr. Chandradas.  The 2^nd opposite party has no case that the allegation of the complainant against the agent was false or that the same was without basis.  In addition, no premium notice had been issued to the complainant seeking payment of premium for the second and third years.  No communication that he had defaulted payment of the premia is seen issued to the complainant, warning him that his policies would lapse for such non-payment of premia.  No intimation that his policies had lapsed was also issued to the complainant at any time.  The conduct of the 2^nd opposite party in maintaining a studied silence even in the face of alleged default in the payment of premia by the complainant also lead us to the conclusion that the case put forward by the complainant is more probable.  In the absence of any clear indication regarding the terms of the policy as understood by the complainant, the District Forum cannot be found fault with, for disallowing his prayer for payment of the maturity amount.  However, since the conduct of the opposite parties cannot be accepted as proper, in the circumstance of this case, the District Forum was fully justified in ordering refund of the premium amounts paid.  Since the amounts have been retained by the opposite parties all these years, gainfully utilising the same in their business, the order directing payment of the interest @12% per annum also cannot be found fault with.

For the above reasons, we find no grounds to interfere with the order of the District Forum or to set aside the same.  This appeal fails and is accordingly dismissed.  No costs.

SL