Delhi

North East

CC/213/2017

Pawan Kumar Jain - Complainant(s)

Versus

Reliance Life Insurance Co. Ltd. - Opp.Party(s)

24 Feb 2020

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No.  213/17

 

In the matter of:

 

	Shri Pawan Kumar Jain S/o Late Sh. Salek Chand Jain R/o- House No. T-21, Gali No.-8 Gautam Puri, New Seelampur Bhajanpura, North East Delhi-110053	Complainant
	Versus
	The Branch Manager Reliance Life Insurance Co. Ltd. SF-3, 1st  Floor, CBD Ground, Aditya Mall Near Karkardooma Court New Delhi-110092   Also at:- Reliance Nippon Life Insurance Co. Ltd. Regd. Off:- H Block, 1st Floor Dhirubhai Ambani Knowledge City, Kopar Khairne Navi Mumbai-400710	Opposite Party

 

DATE OF INSTITUTION:      JUDGMENT RESERVED ON:               DATE OF DECISION      :

04.07.2017 24.02.2020 24.02.2020

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

 

Order passed by Ms. Sonica Mehrotra, Member

ORDER

1. Case of the complainant in the present complaint is that in 2015, he was approached by agent of OP who persuaded him to invest money in a fund called PF RDA which is in the nature of pension policy for income in post retirement old age. The complainant was asked to take a policy of Rs. 11 Lakhs from OP to avail of the said pension benefit which shall accrue ninety days after paper work completion. Induced by the representation made by OP’s agent, complainant got two DDs bearing no 509636 and 509637 drawn on PNB dated 11.08.2015 for Rs. 49,999/- each and another DD bearing no. 208536 of Rs. 2 Lakhs dated 22.08.2015 drawn on ICICI bank in favour of OP and handed over the said DDs totaling  Rs. 2,99,998/- to the agent of OP. However, post encashment of the said DDs, complainant acquired knowledge for the first time in October 2016 that the OP’s agent had issued two new policies for the total amount of Rs. 2,99,998/- in the name of one Vipin Jain and Ram Pratap Yadav whereas the complainant had never authorized OP to issue policy in name of some other persons out of his own money paid toward PFRDA. The complainant vide written representation and reminders dated 06.10.2016, 24.11.2016 and 10.01.2017 to OP demanded refund of the amount in question but the letters were unheeded to till late January 2017 when OP credited the amount back into the complainant’s Syndicate Bank account no. 90782010086142 on 23.01.2017 and 24.01.2017 in tranches of Rs. 99,998/- and Rs. 2 Lakhs vide covering letter dated 01.02.2017. However, OP had not paid any interest which had accrued on the said amounts for the period of August 2015 to January 2017. During which period, the OP would have earned interest on giving benefit to the two policy holders in whose name the policy were wrongly issued. OP vide representation dated 20.02.2017 and legal notice dated 05.04.2017 demanded interest on the said sum for one and half years alongwith compensation but OP paid no heed to the request for the same to such demand. Therefore, feeling aggrieved at the deficiency of service and wrongful act of OP for having credited the amount received from complainant into account of some other beneficiaries without complainant’s consent and later on repaying the said amount without interest, the complainant was constrained to file the present complaint against the OP praying for issuance of direction against the OP to pay the interest @ 30% on the sum of Rs. 2,99,998/- for one and half years also compensation for mental agony, harassment and cost of litigation.
2. Complainant has attached copy of DDs got made by complainant in favour of OP for Rs. 2,99,998/- in August 2015, copy of letters dated 04.10.2016 and 05.10.2016 issued by ICICI bank and PNB respectively certifying DDs made by them from accounts of Pawan Kumar Jain for Rs. 2 Lakhs and Rs. 99,998/- on 11.08.2016 and 22.08.2016, copy of complaints dated 06.10.2016, 24.11.2016 and 10.01.2017 by complainant to OP asking for refund, copy of letter dated 01.07.2016 by OP to complainant refunding the amounts on 23.01.2017 and 24.01.2017, copy of letter dated 22.02.2017 and legal notice dated 05.04.2017 by complainant to OP demanding interest on the said sum with postal receipt and return endorsement dated 10.04.2017 as “refused”.
3. Notice was issued to the OP on 20.07.2017. OP entered appearance and filed its written statement taking preliminary objection that the present complaint has been filed as abuse of process of law and submitted that OP is not liable for acts of frauds played by the agents which even otherwise the complainant has failed to substantiate by way of any documentary evidence. OP took the defence that it does not authorize any agent to offer false promise or benefits to its customers which are at variance with product features and therefore not vicariously liable for any such promises made as beyond the scope of insurance agents authority. The OP opposed the complainant for non-joinder of the party in as much as the complainant had not arraigned Sridhar Insurance Broker Pvt. Ltd. through which the subject policy was sourced and objected to complainant having given DDs of such huge amount to an agent and yet not impleading it as a party and not even noting the name, number or ID proof of any such agent. OP submitted that even as per complainant’s own letters placed on record he had only asked for refund simplicitor of the said amount without any request for interest or other damages and the OP dually refunded the amount vide letter dated 01.02.2017 and only post credit the said sum, the complainant started demanding interest @ 18% on the said amount for a period of One and half years as an afterthought without having any relationship with OP as all his allegations are against the agent who allegedly duped the complainant but still complainant took no police action against it. OP submitted that the complainant had failed to validate any of his allegations of money having been paid for issuance of PFRDA pension scheme or any other policy as alleged and that OP was not privy to any such conversation / transaction which had taken place between complainant and agent. OP admitted to having issued two policies in the name of Vipin Jain and Ram Pratap Yadav number 52337257 and 52341987 but submitted that the said policies were cancelled from inception and amount was credited back into complainant’s account on 23.01.2017 and 24.01.2017 in good faith even though it was wrongly credited in account of other beneficiaries by OPs. OP submitted that no interest has accrued on the said sum of Rs. 2,99,998/- and therefore not payable as demanded by complainant as an afterthought. Therefore, OP prayed for dismissal of the complaint for no cause of action.
4. Rejoinder in rebuttal to defence taken by OP was filed by complainant vide which the complainant stated that the OP had wrongly benefited by using his money for insuring some other persons without paying any interest on the said sum and when asked to pay the same vide legal notice sent by complainant’s counsel, OP refused to accept the same. Therefore, on one hand the OP after investigation preferred to refund the said sum but on the other hand refuse to pay interest thereon when demanded by taking all kinds of unscrupulous objections to deprive the complainant of his legal dues over which the OP was liable to pay interest for having used complainant money for insuring someone else at complainant’s expense. Complainant further submitted that the OP by refunding the said sum clearly admitted connection between agent and itself and also to his acts and omissions and thus cannot take the defence of no connection between them or no privity of contract between itself and its against otherwise OP would have not preferred to refund the amount receive from the complainant after a considerable period. Therefore refund itself shows close proximity of function between OP and its agent and the present complaint therefore is not a case of mis-joinder of party also because it is not the case of OP that the DDs were misused by the said agent or were not enchased by OP in its account. Complainant urged that the act of OP of having refunded the amount establishes relationship between OP and its agent for which OP owed up to the acts of its agent and was now trying to cover up by stating no connection between them. Complainant alleged that the OP refunded the money on discovering their mistake and negligence and the onus was it to prove its defence as it is not the case of OP that it refunded the amount without enquiry after almost two years on realizing their mistake which was a clear cut deficiency in service on the part of OP. the complainant admitted to have handed over the DDs of the said sum to an agent reposing trust in him but submitted in this regard that the DDs were in the name of OP and no in the name of agent which clearly shows that the complainant had faith in the OP rather than in its agent otherwise complainant would have handed over a blank cheque to the agent for him to fill the amount. The complainant asserted that the DDs were handed over to OP’s agent owing to trust in its agent which DDs were duly encashed by OP in their account since once the DDs were handed over to the agent, there was not occasion for complainant to note down the name and contact number of agent since the DDs were made in the name of OP and there was no question of they being misused. In so far as the claim of interest is concerned, complainant justified its complaint on grounds that he had demanded the same only when the principal amount was credited by OP in his account without interest for the period the said sum was utilized by OP and more so when OP itself admitted to have wrongly used the money of the complainant for benefit of some other persons. Lastly, complainant submitted that the OP has failed to produce any documents to show that the policies issued in the name of two strangers to the complainant were cancelled from the date of inception and has also failed to explain why the OP kept the said sum in its possession for almost two years and refunded it only when the complainant demanded the said sum. Therefore complainant prayed for relief claim.
5. Evidence by way of affidavit was filed by the complainant and exhibited documents relied upon as exhibit CW1/1 CW1/8.
6. Evidence by way of affidavit was filed by the OP sworn by a Senior Territory Manager.
7. Written arguments were filed by both the parties in reassertion / reiteration of their respective grievance / defence arguments heard and record perused. Undisputedly, the amount of Rs. 2,99,998/- was received by OP through its agent from the complainant in August 2015 but was utilized for issuing two policies in the name of unknown persons by OP and on complainant demanding the said sum on acquiring knowledge of the wrongfully issued policies between October 2016 and January 2017, OP refunded the said sum in January 2017 but after one an half years of having retained the said sum. The complainant therefore is demanding interest for on the said amount from the time it was paid till the time it was refunded.
8. “Interest” as defined in Black’s Law Dictionary is the compensation fixed by agreement or allowed by law for the use or detention of money, or for the loss of money by one who is entitled to its use. In Secy Irrigation Department, Government of Orissa Vs. G.C. Roy 1992 (1) SCC 508, Constitution Bench of Hon'ble Supreme Court opined that a person deprived of use of money to which he is legitimately entitled has a right to be compensated for the deprivation. It may be called interest, compensation and damages. Hon’ble Apex Court in Sham Lal Narula (Dr.) Vs. CIT 1964 (7) SCR 668 held that interest it paid for the deprivation of the money.  Let us examine the criterion followed by the court of the law in grant of interest. The Hon'ble Supreme Court in Alok Shanker Pandey Vs. Union Shanker (2007) II CPJ (SC) held that there is no hard and fast rule about how much interest should be granted in a particular and it all depends on fact and circumstances of each case. It further held that interest is not a penalty or punishment at all but it is the normal accretion on capital. For example if A had to pay B a certain amount, say ten years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount which had A paid the amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept the amount with himself and earned interest on it for the said period. Hence, equity demands that A should not only pay back the principal amount but also the interest thereon to B. the Hon'ble Supreme Court in Sovintorg (India) Ltd. Vs. State Bank of India, New Delhi (1999) 6 SCC 406 dealt with the power of Consumer Forum to award interest in lieu of compensation as provided u/s 14 of Consumer Protection Act 1986 and held that on justice, equity and good conscience, consumer courts are authorized to grant interest according to circumstances of each case and also on equitable ground as held by the Hon’ble Apex Court in Satinder Singh Vs. Umrao Singh (1961) 3 SCR 676. In so far as the date from which such interest should be awarded, Hon'ble Supreme Court in Ghaziabad Development Authority Vs. Balbir Singh (2004) 5 SCC 65 held that normally in cases of refund interest will be payable from the date of monies were deposited with the body till they are returned either by payment to that party or deposited in a court. The interest must be based on the current rate of interest. The Hon'ble National Commission in Guranna Vs. Jiterndra I (2013) CPJ 249 (NC) summarized the position on interest in lieu of compensation inter alia as factors governing awarding of the same (nature, extend and kind of deficiency of service), commensurate to loss or injury suffered due to defects in goods or deficiency of service prevalent rate of interest, interest in lieu of compensation from date of cause of action which component of interest must be just and reasonable.
9. Having exhaustively dealt with the facts of the case and settled law on interest and apply on both each other, we hold OP guilty of deficiency of service in having wrongfully utilized the amount of  Rs. 2,99,998/- paid by complainant to it in August 2015 by issuing policies to third persons and thereafter refunded the said sum in January 2017 after one an half years only when complainant demanded the same in October 2016 and that too without paying interest thereon. We therefore direct OP to pay interest @ 7% p.a. on the said of Rs. 2,99,998/-  accruing during one an half years from August 2015 to January 2017 amounting to Rs. 31,500/- to the complainant. We further direct OP to pay a sum of Rs. 3,500/- to the complainant as compensation for mental harassment inclusive of litigation charges.  Let the order be complied with by OP within 30 days from the date of receipt of copy of this order.
10.  Let a copy of this order be sent to each party free of cost as per Regulation 21 of the Consumer Protection Regulations, 2005.
11.   File be consigned to record room.
12.   Announced on  24.02.2020.

 

(N.K. Sharma)     President

(Sonica Mehrotra)  Member