Punjab

Ludhiana

CC/15/555

Sukhdev Singh - Complainant(s)

Versus

Reliance Life Ins.Co. - Opp.Party(s)

M.S.Sethi Adv.

20 Feb 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

 

Consumer Complaint No. 555 of 18.09.2015

Date of Decision          :   20.02.2017

 

Mr. Sukhdev Singh S/o Ramrakha Singh R/o 2A, Lal Bagh, Tehsil Ludhiana West, Village Tharike, Distt. Ludhiana.

….. Complainant

Versus 

 

1. Reliance Life Insurance Company Limited, 9th & 10th Floor, Bldg. No. 2, P-Tech Park, Nirlon Compound, Next to Hub Mall, Behind I-Flex Bldg., Goregaon(East) Mumbai-400063 through authorized signatory.

 

2. Reliance Life Insurance Company Limited, 3rd Floor, SCO-41, Feroze Gandhi Market, Above GE Money, Ludhiana-141001, Punjab through authorized signatory.

 

3. Mrs. Sunita Sharma, 273, DDA Flats, Mansarover Park, Shahdara, Delhi-110032...…

Opposite parties

 

 

 (COMPLAINT U/S 12 OF THE CONSUMER PROTECTION ACT, 1986)

 

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.PARAM JIT SINGH BEWLI, MEMBER

 

COUNSEL FOR THE PARTIES:

 

For Complainant                     :         Sh.M.S.Sethi, Advocate

For OP1 and OP2          :         Sh.Rajesh Kumar, Advocate

For OP3                         :         Ex-parte.

 

PER G.K DHIR, PRESIDENT

 

1.                          Shorn of unnecessary details, the case of the complainant is that     OP3, agent of Op1 & OP2, approached him and being impressed by the schemes and promises made by the agent to the effect that complainant is liable to pay one time investment and will get amount of its investments with bonus in 3/2013,              he signed the blank two proposal forms and also submitted his income           returns for the year 2012-13 and paid a sum of Rs. 2,68,877/- for two policies from his saving of the previous years. Thereafter, the complainant received the policies having Nos. 50439678 and 50439644 dated 29.10.2012. On 25.12.2012 in the name of the complainant and his son namely Balwinder Singh Sidhu. On receiving the policy No. 50439678, the complainant acknowledged the facts that promise as made by the agent of the OPs was not fulfilled and that they succeeded in getting the amount form the complainant by way of mis-representation because as per the policy, the complainant was liable to pay premium of Rs.2,68,877/- per year for a period of 5 years against the policy tenure of 20 years.  It was not                 possible for the complainant to pay yearly premium of Rs. 2,68,877/- because the annual income of the complainant was less than Rs.3 lacs. However, the Ops  failed to give its proper response and they postponed the matter on various excuses.   Then ultimately the complainant lodged its protest in writing on 3.5.2013 stating that he was mis-represented and mis-guided by their agent. The act of the Ops amounted to unfair trade practice and deficiency in services. Moreover, they have not followed the notification of IRDA dated 1.7.2010 and has not paid the fund value according to the notification. Hence, the complaint was filed against the Ops with a direction to them to cancel the policy No. 50439678 dated 29.10.2012 and refund the basic premium of Rs.2,68,877/- after deducting the charges as per the notification dated 1.7.2010 along with interest @ 9% p.a. and also pay Rs.50,000/- as compensation and Rs.11,000/- as litigation expenses.

2.                In written statement filed by OP1 and OP2 jointly, they took  preliminary objection that the complaint being frivolous and vexatious liable to be dismissed under Section 26 of the Consumer Protection Act(hereinafter in short referred to as “Act”); the District Forum had no territorial jurisdiction to try and decide the complaint as the policy was issued by Delhi office; complainant has suppressed the material facts; allegations of tampering the proposal form levelled  and as such in view of requirement of elaborate evidence, matter can be decided by Civil Court only. Besides, it is claimed that terms and conditions of policy are binding and the complaint is filed for getting undue advantage and unjustified money. Nexus between the claimed and suffered damages even not set up. OPs entitled to special cost of Rs.25,000/- from the complainant. There was no negligence or deficiency in service on the part of the Ops. A welcome letter with policies was sent to the complainant. In case the terms and conditions of the policy were not suitable to complainant, he had a right to cancel the same within 15 days free look period, but he did not opt to cancel it within the free look period and now the parties to be governed by the terms and conditions of the policy. The complainant after duly knowing and understanding the terms and conditions of the Reliance Life Guaranteed Money Back Plan purchased the policies. Proposal forms were signed by the complainant after knowing the terms and conditions of policies. Complainant after receipt of policy documents and Welcome letter became aware of the terms and conditions of policies including the tenure and premium schedule. On merits, it is submitted that the complainant received the policies in October, 2012 and not 25^th December 2012. Letter dated 3.5.2013 for cancellation of the policy was sent after the lapse of free look period. Now at belated stage, a false story concocted regarding sale of policies by misrepresentation. Policy of the complainant is a Regular Traditional Policy and is not a Unit Linked Income Plan. There was no unfair trade practice or deficiency in service on  the part of Ops. Each and every other allegation of the complaint denied by praying for dismissal of the complaint.

3.                OP3 is ex-parte in this case.

4.                Complainant to prove his case tendered in evidence his affidavit Ex.CA1 along with documents Ex. C1 to Ex.C4 and thereafter, his counsel closed the evidence.

5.                On the other hand, counsel for OP1 and OP2 tendered in evidence affidavit Ex.RA of Sh.Vineet Ahuja, authorized signatory of OP2 along with document Ex.OP1 and thereafter, closed the evidence.

6.                          After hearing arguments, earlier vide orders dated 30.05.2014, complaint was dismissed by giving liberty to the complainant to approach Civil Court. However, on appeal being preferred against those orders, Second Additional Bench of Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh, vide order dated 14.8.2015 passed in First Appeal No.1408 of 2014 set aside those orders and directed this Forum to decide the complaint on merits.

7.                After remand of this case to this Forum and appearance of the parties through counsels, arguments of appearing counsel for the parties heard and records gone through.

8.                Even if allegations of tampering may have been levelled, but despite that complaint cannot be decided without going into those allegations because further allegations levelled in the complaint are that on allurement of the agent, complainant invested the amount of Rs.2,68,877/- from his saving amount in the policy in hope that life of complainant and his son Balwinder Singh will be assured. It is claimed that after receipt of the policy only the complainant got knowledge as if agent has not fulfilled the promise because he misrepresented the material facts. After receipt of the policy documents, complainant got knowledge as if the policy tenure is 20 years on payment of premium of Rs.2,68,877/- for five years per annum. However, income of the complainant is less than 3 lac including pension and interest income and as such, complainant submitted protest in writing dated 3.5.2013. That writing is produced on record as Ex.C3. After going through Ex.C3, it is made out that the complainant reported the matter to the Manager, Reliance Life Insurance Corporation Limited, Ludhiana for claiming that signatures of his son and daughter on the policies are forged because they were not present at the time of signing of these documents. Neither son and nor daughter of complainant has been produced as witnesses and nor their affidavits tendered and as such, allegations of forgery not proved, particularly when report regarding comparison of the disputed and admitted signatures from handwriting expert even not obtained for placing the same on record. Even if that be the position, despite that contents of Ex.C3 absolutely are correct that the complainant not in a position to pay the premium amount and that is why he is not to continue with the policies. Rather, through Ex.C3, complainant claimed as if agent disclosed that complainant will get back the money in March 2013 with bonus and principal amount of Rs.5,01,000/-. Through Ex.C3, complainant claimed that neither bonus and nor the money received back by him and as such, due to his inability to pay the money, he is not to continue with the policies. Capacity of the complainant to pay the premium of the policy annually certainly was not there at the time of filling the proposal form itself as revealed by the contents of proposal form annexed with the policy document Ex.Op1. After going through the said proposal form, it is made out that the complainant represented as if his annual income is Rs.2,77,336/- from the business. In para no.2 of the proposal form in the column of Personal Details, it is mentioned that purpose of procuring the insurance is of saving and investment. In view of this disclosure of purpose of insurance, it is obvious that the complainant at the time of payment of premium of Rs.2,31,919.51P contemplated to invest the paid amount in saving. How a person can invest two premium amounts of Rs.2,31,919.51P and of Rs.2,68,877/- in two policies, when he is having the annual income of Rs.2,77,336/- only and as such, submissions advanced by counsel for the complainant has force that the complainant was  mislead qua the investment,terms and tenure.Even if the complainant may be an educated person, despite that he may have been mislead owing to above pointed contents of proposal form. Rather, contents of proposal form itself discloses that purpose of paying the alleged premium amount was to invest in saving. Letter Ex.C4 there on the record to show that three other policies of the complainant were cancelled after review. That is why through letter Ex.C4 dated 18.5.2013, the complainant was required to submit the original policy documents and cancel the cheque. Another complaint bearing No.556 of 18.09.2015 titled as Sukhdev Singh vs. Reliance Life Insurance Company and others also is going to be decided today. After going through the contents of that complaint, it is made out as if premium amount of Rs.2,68,877.27P even was accepted for issue of similar policy on 29.10.2012. So, when two premium amounts of the policies in question in this complaint as well as in the other complaint bearing No.556 of 18.9.2015 taken into consideration, then this means that an amount of Rs.5,01,000/- approximately was got invested from the complainant in October 2012 itself. No one will invest such huge amount in policies on which, premium payable annually for five years, particularly when such person disclosing his income as Rs.2,77,336/- through filled proposal form. In view of this, submissions advanced by counsel for complainant has force that virtually the complainant was misrepresented qua the tenure and terms of investment of Rs.2,68,877/- and Rs.2,31,919.51P. As and when the contract is arrived at on account of mis-representation, then the contract certainly is voidable at the option of the person shown to be mis-represented, which is the complainant of this case. So, contract of insurance being voidable at the instance of the complainant is liable to be rescinded after sending letter Ex.C3 by the complainant to the Manager of Ops at Ludhiana. As option of rescission of the voidable contract exercised by the complainant through letter Ex.C3 dated 3.5.2013 and as such, this rescission of the contract to take place w.e.f.3.5.2013 only and not before that.

9.                It is vehemently contended by counsel for OP1 and OP2 that the complainant himself declared through Ex.C2 that he has read the sales literature   of the proposed plan and has fully understood the terms and conditions and as such,  now the complainant estopped from claiming that he is not aware of the terms and conditions of the policy in question. Perusal of Ex.C2 reveals that terms and conditions like the referred one incorporated in print, which is legible after much stress only and as such, in view of this submissions advanced by counsel for the complainant has force that as the print of Ex.C2 was not legible and as such, complainant could not know the declarations of Ex.C2 in entirety, even though he may have put his signatures on it. This submission also has force in view of circumstances that person having income of Rs.2,77,336/- per annum will not invest Rs.5,01,000/- in premium of two policies for period of five years. Besides, the purpose of insurance was to invest in saving as disclosed by the contents of proposal form and as such, virtually the complainant opted for investment of the premium amount in saving, but without understanding the terms and conditions of policy. Even if clause of free look period of 15 days may be there as reflected by contents of letter dated 9.10.2012 placed on record as Ex.OP1, but one does not understand the clauses in the first instance and as such, complainant after receipt of letter Ex.OP1, would have preferred to discontinue the policy only after knowing exactly as to for what purpose the amount accepted from him. As the purpose of paying the premium amount was to invest in saving as disclosed by the contents of proposal form and as such, submissions advanced by counsel for complainant has force that the complainant on account of mis-understanding created by the assertion of agent, paid the amount in question and signed on the printed forms in the hope that amount will remain invested in saving.

10.              After going through letter Ex.OP1, it is made out that in case, the policy to be discontinued by exercise of option within 15 days of the free look period, then refund of amount to the equal paid premium will be made, but after deducting the proportionate risk premium for the period of cover less expenses incurred by the insurance company on medical examination, if any and stamp duty charges. So, in term of letter Ex.OP1, complainant entitled for refund of the paid premium amount of Rs.2,31,919.51P as disclosed by contents of Ex.C1, but subject to deductions of proportionate risk premium for the period of cover less expenses incurred by the company on medical examination(if any) of the complainant and stamp duty charges. These deductions liable to be made, in case, disagreement with the policy terms and conditions made within 15 days as per contents of Ex.OP1. As the contract in question being voidable was rescinded by the complainant by writing letter Ex.C3 on 3.5.2013 and as such, OP1 and OP2 by treating the policy as cancelled w.e.f.3.5.2013, will work out the due payable amount and then pay the same to the complainant within 30 days from the date of receipt of copy of this order. In case, such payment not made within 30 days, then complainant will be entitled to interest @8% per annum on the outstanding due amount thereafter till receipt of payment. On account of mental harassment suffered by the complainant, he is entitled for the compensation and even to litigation expenses. These quantum of litigation expenses to be assessed by keeping in view the fact that the complainant had to file appeal before the Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh against the earlier orders of this Forum by paying fee to the counsel.

11.              OP3 is an agent of OP1 and OP2 and contract was arrived at between the complainant and OP1 and OP2 and as such, liability of OP3 is not there on rescission of the contract. Rather, liability to remain of principal and as such, complaint against OP3 merits dismissal.

12.              Therefore, as a sequel of the above discussion, complaint is dismissed against OP3, but the same is allowed against OP1 and OP2 with directions to them to treat the policy in question as cancelled w.e.f.3.5.2013, the date of issue of letter Ex.C3. After treating the policy as cancelled, the entire due amount be reimbursed by OP1 and OP2 to the complainant within 30 days from the date of receipt of copy of this order, failing which, complainant will be entitled to interest @8% per annum on the outstanding due amount thereafter (i.e.30 days after receipt of copy of this order) till receipt of the payment. Compensation for mental harassment of Rs.15,000/- and litigation expenses of Rs.10,000/- more allowed in favour of complainant and against Op1 and OP2. These amounts of compensation and litigation expenses be also paid by OP1 and OP2 to the complainant within 30 days from the date of receipt of copy of this order. Liability of OP1 and OP2 will be joint and several. Copies of order be supplied to the parties free of costs as per rules.

13.                        File be indexed and consigned to record room.

 

                      (Param Jit Singh Bewli)                      (G.K.Dhir)

                       Member                                                 President

Announced in Open Forum

Dated:20.02.2017

Gurpreet Sharma.