Andhra Pradesh

Chittoor-II at triputi

CC/58/2014

Gonu Swamidass Sudhakar, S/o. Late Swamydass, Lab Technician - Complainant(s)

Versus

Reliance Life Insurance Co. Ltd., rep. by its Chief Executive Officer - Opp.Party(s)

G.Ramaiah Pillai

30 Sep 2015

ORDER

Filing Date:21.10.2014

Order Date: 30.09.2015

 

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

CHITTOOR AT TIRUPATI

 

 

      PRESENT: Sri.M.Ramakrishnaiah, President ,

        Smt. T.Anitha, Member

 

 

WEDNESDAY THE THIRTIETH DAY OF SEPTEMBER, TWO THOUSAND AND FIFTEEN

 

 

C.C.No.58/2014

 

Between

 

Gonu Swamydass Sudhakar,

S/o. late. Swamydass,

Hindu, aged 36 years, Lab Technician,

D.No.15-2, Panchali Nagar,

Renigunta,

Chittoor District,

Andhra Pradesh.                                                                                           … Complainant

 

 

And

 

1.         Reliance Life Insurance Co.Ltd.,

            Rep. by its Chief Executive Officer,

            Corporate office at 9^th & 10^th floor, Building No.2,

            R-Tech Park, Nirlong Compound, next to Hub Mall,

            Behind 1-Flex Building,

            Goregaon,

            East Mumbai – 400 063.

 

2.         Reliance Life Insurance Co. Ltd.,

            By its Authorised Signatory,

            D.No.10-14-575/A3, Surya Sai Plaza,

            V.V.Mahal Road,

            Tirupati,

            Chittoor District,

            Andhra Pradesh.                                                                   …  Opposite parties..

 

 

            This complaint coming on before us for final hearing on 16.09.15 and upon perusing the complaint, written version and other relevant material papers on record and on hearing Sri.G.Ramaiah Pillai, counsel for the complainant, and Sri.C.S.Chandra Sekar, counsel for the opposite parties, and having stood over till this day for consideration, this Forum makes the following:-

 

ORDER

DELIVERYED BY SRI. M.RAMAKRISHNAIAH, PRESIDENT

ON BEHALF OF THE BENCH

           

            This complaint is filed under Sections-12 and 14 of C.P.Act 1986 by the complainant for the following reliefs 1) to direct the opposite parties 1 and 2 to refund the fund value of Rs.1,32,110.68 as on 03.05.2013 on which date the complainant wanted to surrender the policy, 2) to direct the opposite parties 1 and 2 to pay compensation of Rs.1,00,000/- for the deficiency in service on the part of opposite parties and 3) to direct the opposite parties 1 and 2 to pay Rs.2,000/- towards costs of the litigation.

            2.  The averments of the complaint in brief are:-   that the complainant being the father of the minor,  in the interest of his son G.Rakesh Raj, aged about one year, has purchased the unit linked policy under policy No.11129217, with regular premium and waiver of benefit from the opposite parties, with an agreement to pay him benefits under “Reliance Secure Child Plan”. The term of the policy is 18 years commencing from 27.12.2007 with annual premium of Rs.25,000/-. The sum assured is Rs.2,25,000/-. The complainant has paid three annual installments, totaling Rs.75,000/- by 23.01.2010. As he desired to know the fund value, he approached opposite party No.2, Branch Office at Tirupati and obtained a statement of account on 09.09.2010. It is mentioned in the said statement of account that the fund value is at Rs.80,338.37. It is seen again on 18.02.2012 the fund value is at Rs.80,959.06. As per the statement issued by opposite party No.2, again on 22.02.2012 the fund value is shown as Rs.81,269.04 and the fund value on 17.04.2012 shown as Rs.56,102.08, on 23.06.2012 the fund value is shown as Rs.55,240.21. Thus the fund value is reduced from time to time. Therefore, the complainant has withdrawn similar polices bearing No.11119072 on 28.09.2012 for the fund value of Rs.1,57,635.60, for which he subscribed three annual installments at Rs.50,000/- each. Similarly, another policy bearing No.11134320 for Rs.1,58,586/- for which he subscribed three annual installments at Rs.50,000/- each and the said amounts were paid without any loss. On 15.09.2012 the fund value under policy No.11129217 was shown as Rs.61,165.83 and on 19.09.2012 it is shown as Rs.1,04,477.34. The complainant represented to opposite party No.2 on 18.09.2012 with regard to fluctuations in the fund value from time to time.

            3.  Opposite party No.1 by its letter dt:15.12.2012 stated that the account statement for the month of February 2012 was incorrect and expressed apology for the typographical error. It is again seen in the statement of account dt:20.09.2012 that the fund value was shown as Rs.60,331.50, as against the fund value of Rs.1,04,477.34 as on 19.09.2012. So, the complainant finding much variation within one day in the fund value made a complaint to opposite party No.2 on 09.10.2012 for reduction in the value from Rs.1,04,477.34 as on 19.09.2012 to Rs.60,331.50 as on 20.09.2012 with a difference of Rs.44,145.84. Opposite party No.1 by its letter dt:15.12.2012 expressing apology for the incorrect unit statement. Thus, there occurred severe fluctuations in the fund value. Again, it is seen in the statement of account dt:07.02.2013 that the fund value as Rs.65,818.99. On verification in the statement of account dt:09.03.2013, the fund value is shown as Rs.79,782.09. Therefore, the complainant gave complaint to the customer care on 3^rd occasion on 02.04.2013 expressing his agony for not giving correct fund value in the statement of account. The customer care at Navi Mumbai by its letter No.4923/4-4-2013 stated that his complaint has been resolved. By another letter dt:03.05.2013 from Customer Care, Mumbai, sent accounts statement through email showing the total value of units is at Rs.1,3,110.68. On the next day, the complainant approached opposite party No.2 to surrender his policy for payment of the said amount of Rs.1,32,110.68 as on 03.05.2013. Surprisingly, the opposite party No.2 revealed that the fund value is at Rs.67,821.71. Thus, the complainant received statements of account with severe fluctuations reducing the fund value to half of the fund value within one day difference. On 11.10.2013 Amitva Sharma from Mumbai, sent statement of account as on 11.12.2013 showing the total value of units at Rs.65,702.05. Subsequently, the complainant received letter dt:30.12.2013 stating that the policy bearing No.11129217 (which was taken in the name of his minor son) has been terminated due to non-payment of renewal premium within the revival grace period and that the complainant is eligible for surrender value without specifying the amount. Finally, the complainant received surrender statement under the policy No.11129217 dt:26.03.2014 with surrender value of Rs.66,577.82, which is nearly half of the amount as on 03.05.2013.

            4.  Thus, the opposite parties were giving statement of accounts with severe fluctuations reducing the fund value into half of the amount from time to time, for which he also sent notice to opposite parties 1 and 2 on 05.07.2014 complaining that opposite parties are not rendering proper accounts to the customers, thereby causing loss to the insured. Hence the complaint.

            5.  Opposite parties 1 and 2 filed common written version contending that the complaint is baseless, devoid of merits, false, frivolous and vexatious and is gross misuse of process of law, that there is no deficiency in service on the part of opposite parties 1 and 2. The complainant did not approach the Forum with clean hands. They cited number of decisions in their written version. They further contended that in accordance with Clause-6(2) of the Insurance Regulatory and Development Authority (protection of policy holder’s interests) Regulations 2002, every policy document sent by, it is accompanied by a welcome letter, which clearly mentions that in case policy holder is not satisfied with the features or the terms and conditions of the policy he / she can withdraw / return the policy under the “Free Look Period” but the complainant did not do so. They have admitted that the complainant has paid              3 installments for the policy bearing No.11129217. As per the policy terms, the said policy was foreclosed on 27.12.2013 and the complainant is only entitled to an amount of Rs.66,577.82 as the surrender value of the subject policy. The same has been duly conveyed to the complainant vide 05.05.2014. The opposite parties have denied parawise allegations in the complaint. They further contended that in this policy, the investments risk in the investment portfolio is borne by the policy holder. The fund value of the policy may increase or decrease as per market fluctuations and the opposite parties are not responsible for the volatility of the market. Thus, the complainant is now estopped from disowning the said risk. For every paragraph, there answer is that the policy being a unit linked policy, the fund value of the policy may increase or decrease as per market fluctuations and the opposite parties are not responsible for the same. Thus, whatever the amount entitled by the complainant was conveyed to the complainant, as per the policy terms and conditions and nothing beyond it. Thus, the complainant is not entitled to any interest, cost or compensation from the opposite parties with respect to the said policy and prays the Forum to dismiss the complaint with exemplary costs.

            6.  Both the complainant and opposite parties filed their respective chief affidavits and written arguments. Exs.A1 to A33 for the complainant and Exs.B1 to B5 for the opposite parties were marked. The learned counsels for both parties have advanced their oral arguments.

            7.  Now the points for consideration are:-

            (i).  Whether there is any deficiency in service on the part of opposite parties?

            (ii).  Whether the complainant is entitled to the fund value of Rs.1,32,11.68 and

                   for the compensation of Rs.1,00,000/-?           

            (iii). To what relief?

            8.  Point No.(i):-  in order to answer this point, it is pertinent to define the word deficiency. As per Section-2(1)(g) of the C.P.Act 1986, the word “deficiency” means:

“deficiency” means any fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service

           

It is also necessary to define the word Service. According to Section-2(1)(o) of the C.P.Act 1986, the word “Service” means:

“Service” means service of any description which is made available to potential [users and include but not limited to, the provision of] facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both [housing construction] entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

 

            The opposite parties being the Insurance Company, they will come within the purview of the word “Service”. In order to establish deficiency in service on the part of opposite parties, the word deficiency specifies any fault, imperfection, short coming or inadequacy in the quality, nature and manner of performance which is required to be maintained. In the case on hand, it can be accepted that there may be some fluctuations in the fund value of the policy, depending on the market value, so far as the unit linked polices are concerned. If such fluctuations are only because of reduction or increase in the market value, then the defence set-up by the opposite parties can be accepted. By virtue of the letters given by the opposite parties under Ex.A12 dt:15.12.2012 and another letter under Ex.A14 dt:03.01.2013 sent by Customer Care Team of opposite party No.1 and another letter under Ex.A19  dt:04.04.2013 sent by Customer Care Team, Navy Mumbai, are to be perused. In Ex.A12, the subject itself is mentioned as apology for incorrect unit statement. In this letter, it is mentioned that “with reference to your letter received dt:14.12.2012, we would like to clarify the statement of unit received by you in the month of February 2012, is showing incorrect unit balance due to typographical error and further stated that please accept our sincere apologies for the error that appeared in account statement”. Similarly, Ex.A14 shows that the complainant has sent his grievances letter to the Customer Care Team, Navy Mumbai. They asked the complainant to address his grievances within 8 weeks from the date of receipt of Ex.A14 to Mr.Tarit Kumar, Head-Customer Care and also furnished the email ID. Ex.A19 shows that the opposite parties confirmed that the complaint lodged by the complainant No.0015534712/1 dt:04.04.2013 has been resolved from their end and also informed the complainant to address his grievance letter to Mr.Tarit Kumar, Head-Customer Care and given the email ID also. As per Ex.A20 dt:03.05.2013, the total value of the units is Rs.1,32,110.68. According to the complainant, he has surrendered his policy on 04.05.2013 i.e. next day to 03.05.2013 on which date, the opposite parties have sent letter under Ex.A20 showing the fund value as on 03.05.2013 at Rs.1,32,110.68.

            9.  It is apparent on record and also admitted fact that the complainant has paid only 3 installments at Rs.25,000/- each totaling a sum of Rs.75,000/- and the last payment was made on 23.01.2010, thereafter no premiums were paid by the complainant. The opposite parties has sent letter under Ex.A12 stating that the account statement furnished to the complainant in the month of February 2012 is incorrect due to typographical error. So, there are some latches on the part of opposite parties also. Apart from other lapses on the part of opposite parties, though the complainant has not paid any premium from 2010 onwards, the policy was in existence till 27.12.2013. In Ex.B3 it is mentioned that “we regret to inform you that due to non-payment of renewal premiums within the revival grace period, your policy has been terminated effective (w.e.f) 27.12.2013”. When the policy premium was not paid, policy ought to have terminated subsequent to the grace period given, but the policy was kept in force till 27.12.2013. In the meanwhile, the statement of account obtained by the complainant as on 03.05.2013, amount shown as Rs.1,32,110.68, by giving this statement, they created some hope for the complainant that he can get a sum of Rs.1,32,110.68 but all of a sudden, by virtue of Ex.B3 dt:28.12.2013 it was informed to the complainant that his policy was terminated with effect from 27.12.2013. According to the complainant, he has surrendered the policy on 04.05.2013 but Ex.B4 shows the policy was surrendered on 30.12.2013. It appears that the complainant has surrendered the policy on receiving the letter from opposite parties under Ex.B3. So, lapses are finding on the part of both complainant and opposite parties. Accordingly this point is answered.

            10.  Point No.(ii):-  in order to answer this point, I am to state that the complainant has paid only 3 installments @ Rs.25,000/- each, totaling a sum of Rs.75,000/- and last payment was made on 23.01.2010 (as per complaint), thereafter no premium is paid. Thus the complainant became defaulter, as such in our opinion, he is not entitled to fund value of Rs.1,32,110.68, which was the fund value as on 03.05.2013, by which date the complainant already became defaulter about two years preceding the date 03.05.2013. If the complainant pays the premiums continuously up to 2013, then only he will be entitled for the fund value depending on the market value prevailing as on 03.05.2013. The complainant being a defaulter cannot claim compensation also. However, in our view, the complainant is entitled to the paid-up value of Rs.75,000/- instead of Rs.66,577.82 as offered by the opposite parties. Accordingly, the complaint is to be allowed.

            11.  Point No.(iii):- In view of our holding on points 1 and 2, we are of the considered opinion that the complainant is entitled only for the paid-up fund value of Rs.75,000/-. Since the policy bearing No.11129217 being the unit linked policy, he is entitled to the fund value depending on the market value but not to the compensation as claimed by him. In the facts and circumstances of the case, since the opposite parties kept the policy pending till 27.12.2013, we are of the opinion that the complainant is entitled to interest over the paid-up value of Rs.75,000/- from the last date of payment i.e. 23.01.2010 till the termination of policy on 27.12.2013 and he is entitled to the relief to that effect only.

            In the result, the complaint is partly allowed holding that the complainant is entitled to the paid-up value of Rs.75,000/-  with interest at 9% p.a. from the last date of payment i.e. 23.01.2010, till the date of termination of policy i.e. 27.12.2013. The opposite parties 1 and 2 are jointly and severally directed to pay the paid-up value of Rs.75,000/- (Rupees seventy five thousand only) with interest at 9% p.a. from the last date of payment i.e. the 3^rd premium on 23.01.2010, till termination of policy on 27.12.2013. Both the opposite parties are also directed to pay a sum of Rs.2,000/- (Rupees two thousand only) towards costs of the litigation and rest of the claim is not considered. Both the opposite parties 1 and 2 are directed to comply with the order within six (6) weeks from the date of receipt of copy of this order, failing which the said amount of paid-up value of Rs.75,000/- shall also carry interest at 9% p.a. from the date or order, till realization.                       

Dictated to the stenographer, transcribed and typed by him, corrected and pronounced by me in the Open Forum this the 30^th day of September, 2015.

       Sd/-                                                                                                                      Sd/-                                                                                          

Lady Member                                                                                                      President

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED ON BOTH SIDES

PW-1: Gonu Swamydass Sudhakar (Chief/ Evidence Affidavit filed).

RW-1:  Mr. R. Mohan (Chief Affidavit filed).

 

              EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/S

 

Exhibits (Ex-A)	Description of Documents
	A Photo Copy of letter from Opposite Party to the complainant enclosing the policy under Reliance secure child bearing No.11129217 for assured sum of Rs.2, 25,000/-. Dt: 27.12.2007.
	A Photo Copy of statement of account in respect of policy No.11129217 showing the total value of units at Rs.80, 338.37 as on Dt: 09.09.2010.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of the units at Rs.80, 959.06 as on 18.02.2012.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units at Rs.81, 269.04 as on 22.02.2012.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units at Rs.56, 102.87 as on 17.04.2012.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units at Rs.55, 240.21 as on 23.06.2012. Dt: 07.08.2012.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units at Rs.61, 165.83 as on 14.09.2012. Dt: 15.09.2012.
	A True Copy of complaint to Opposite Party No.2. Branch office at Tirupati about variation of fund value in the statement of account. Dt: 18.09.2012.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units at Rs.1, 04,477.34 as on 19.09.2012. Dt: 20.09.2012.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units at Rs.60, 331.50 as on 19.09.2012. Dt: 20.09.2012.
	A Photo Copy of complainant to Opposite Party No.2. Branch office at Tirupati about variation of fund value under policy No.1112927 in the statement of account. Dt: 09.10.2012.
	Apology letter(True copy) from the Opposite Party No.1 Navi Mumbai for incorrect unit statement under policy No.11129217 showing total value of units at Rs. 63,992.37 as on 15.12.2012.
	A Photo Copy of complaint to Opposite Party No.2. Branch office at Tirupati for showing variation of fund value in the statement of account.  Dt: 03.01.2013.
	Letter from customer care Team of Opposite Party No.1 in respect of complaint regarding dispute of statement of account as resolved.              Dt: 03.01.2013.
	A Photo Copy of statement of account under policy No.11129217 showing the total value of units as on 06.02.2013 at Rs.65, 818.99. Dt: 07.02.2013.
	A Photo Copy of statement of account under policy No.11129217 showing the total value of units as on 09.03.2013 at Rs.79, 782.09.
	Copy of complaint to Opposite Party No.2. Branch office at Tirupati regarding dispute about fund value in the statement of account.                 Dt: 09.03.2013.
	Copy of complaint to Head, Customer care, Navi Mumbai through email seeking clarification from 27.12.2007 about fund value. Dt: 02.04.2013.
	Letter from customer care Team Navi Mumbai stating that the dispute regarding statement of account as resolved. Dt: 04.04.2013.
	Letter from customer care Team Navi Mumbai, through the mail enclosing the copy of statement of account under policy No.11129217 at              Rs.1, 32,110.68 as on 03.05.2013.
	Oral information from Opposite Party No.2. regarding fund value at         Rs. 67,821.71. Dt: 04.05.2013.
	A Photo Copy of statement of account under policy No. 11129217 showing the total value of units as on 22.06.2013 at Rs.63, 921.61.
	A Photo Copy of Complaint by email through customer care of Opposite Party No.1 about statement of account Dt.03.05.2013 for Rs.1,32,110.68 for which the fund value said to be at Rs.63,291.61 by Opposite Party No.2.   Dt: 16.07.2013.
	A Photo Copy of letter from Amitva Sharma with reference to email letter Dt:16.07.2013 by the complainant with copy of statement of account showing the value of units at Rs.65,702.05 as on 11.10.2013.
	Letter to the complainant from Head, Customer Care of Opposite Party No.1. terminating the policy No. 11129217 with effect from                      30.12.2013. Dt: 30.12.2013.
	A Photo copy of letter from Customer service of Opposite Party No.1. showing the surrender value at Rs. 66,577.82 as on 30.12.2013. Dt: 26.03.2014.
	Office copy of legal notice to Opposite Parties No.1 and 2 enclosing original policy along with postal acknowledgement from Opposite Party No.2. Dt: 05.07.2014.
	Returned un-delivered regd. Cover addressed to Opposite Party No.1. with postal endorsement as LEFT. Dt: 11.07.2014.
	A Photo Copy of legal notice Dt. 05.07.2014 sent to Corporate office of Opposite Party No.1 with the copy of policy document No.11129217.       Dt: 16.07.2014.
	Office copy of letter addressed to Superintendent of Post Office, Tirupati regarding non delivery of notice sent on 16.07.2014. Dt: 01.09.2014.
	Interim reply from Postal Superintendent of Post Office, Tirupati.            Dt: 02.09.2014.
	Letter from Post Master of post office, stating that the regd. Letter sent on 16.07.2014 was delivered to the addressee on 21.07.2014. Dt: 08.09.2014.
	ABSTRACT showing the Tax payment of surrender value in respect of similar policies 11119072 and 11134320 by its Opposite Parties.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/S

 

Exhibits   (Ex-B)	Description of Documents
1.	Photo Copy of Proposal Form. Dt: 17.11.2007.
2.	Photo Copy of Policy Document. Dt: 27.12.2007.
3.	Letter to Complainant. Dt: 28.12.2013.
4.	A Photo Copy of Letter Dt: 05.05.2014.
5.	Letter of Authority. Dt: 20.11.2014.

 

 

                                                                                                                                    Sd/-

                                                                                                                President

             // TRUE COPY //

// BY ORDER //

 

 

Head Clerk/Sheristadar,

             Dist. Consumer Forum-II, Tirupati.

            

 

 

 Copies to:-    1. The Complainant.

                       2. The opposite parties 1 and 2.