Punjab

Ludhiana

CC/21/456

Simranjit Kaur - Complainant(s)

Versus

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

Parminder Kumar Adv

31 Jan 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:456 dated 06.10.2021.                                                         Date of decision: 31.01.2024.

 

Simranjit Kaur aged about 30 years daughter of Sh. Karnail Singh, Resident of Village Gurreh, Tehsil Jagraon, District Ludhiana.                                                                                                                                   ..…Complainant

                                                Versus

1. Reliance Nippon Life Insurance Company Limited (Earlier known as Reliance Life Insurance Co. Ltd.), Branch Office of Sherpur Chowk, Jagraon, District Ludhiana through its Branch Manager.
2. Reliance Nippon Life Insurance Company Limited (Earlier known as Reliance Life Insurance Co. Ltd.), Surya Kiran Complex, 5^th Floor, The Mall, Ludhiana through its authorized signatory.                                                                                                                 …..Opposite parties 

Complaint Under Section 35 of the Consumer Protection Act, 2019.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

SH. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Parminder Kumar Hans, Advocate.

For OPs                          :         Sh. Sudhir Gakhar, Advocate.

 

ORDER

PER MONIKA BHAGAT, MEMBER

1.                Briefly stated, the facts of the complaint are that the complainant was an unmarried village girl and dependent on her father, who is a daily wager and an illiterate villager. One Bikramjeet Singh, authorized agent of the OPs, who was known to the complainant, approached and influenced the complainant for insurance cover with onetime payment with good returns. The complainant obtained Reliance Increasing Income Insurance Plan Policy No.52372151 dated 18.09.2015 from the OPs and paid Rs.99,998.59P as onetime premium through Sh. Bikramjeet Singh, authorized agent. The complainant stated that the OPs had never explained nor supplied any terms and conditions of the policy except above disclosure. However, the OPs obtained her signatures on certain blank forms with passport size photographs. In the next year i.e. in 2016, the OPs again started calling the complainant to deposit further premium. The complainant requested the OPs that it is onetime premium policy and there is no need for any further premium. When the complainant approached the office of the OPs, she came to know that the OPs have mis-sold the policy to her as well as to many persons. The complainant requested the OPs to refund her premium by stating that she is unable to deposit the further huge premium amount. The complainant further stated that she had obtained the policy knowing that it is onetime premium policy with insurance cover and if she knew that it is a regular payment premium ten years policy then she would have refused the OPs at the initial stage. According to the complainant, on refusal of the OPs, she approached Insurance Ombudsman, Chandigarh on 14.03.2017 but the Insurance Ombudsman passed wrong order dated 11.10.2018 without going through actual facts of the case and without consent of the complainant. The complainant filed application under purview of Public Utility Service within the meaning of Section 22-A of Legal Service Authority Act before Permanent Lok Adalat, Ludhiana in case No.109/28.02.2019 in which the OPs filed application for dismissal of application. The complainant filed reply to the said application and the said application of the OPs was dismissed vide order dated 07.07.2021 but the Permanent Lok Adalat also dismissed the main application of the complainant with order “However, the applicant would be entitled to avail any other legally permissible remedy if he so desires and is advised, in accordance with law for redressal of his grievances.”  According to the complainant the orders of Insurance Ombudsman and Permanent Lok Adalat are not binding upon him. The complainant further stated that she is entitled to refund of the premium on the following grounds:-

i.        The respondents have not explained and supplied the terms and conditions to the illiterate complainant.

ii.       The respondents have mis-sold the policy.

iii.      The complainant is a simple person with meager income, so he cannot think to invest/deposit approximately Rs.10,00,000/- (Ten Lakhs) in ten years.

In the end, the complainant has prayed for issuing direction to the OPs to refund the premium amount of Rs.99,998.59 along with compensation of Rs.1,00,000/- and litigation expenses of Rs.11,000/-.

2.                Along with the complaint, the complainant also filed an application for condonation of delay stating therein that the time lost in the proceedings before the Insurance Ombudsman and Permanent Lok Adalat, Ludhiana be excluded and his complaint be treated as within limitation.

                   Upon notice, the OPs contested the application on the ground that there is no justification for such delay of more than two years and no reasonable explanation for condonation of delay on the part of the complainant and prayed for dismissal of the application.

                   The said application was allowed vide order dated 25.07.2022 and the delay in filing the complaint was condoned.

3.                The OPs filed written statement and in the preliminary objections stated that the complaint is barred by the principal of “Res judicata” as the complainant earlier filed a complaint No.CHD—036-1617-1733 before the Insurance Ombudsman, Chandigarh on same cause of action, which was disposed off by the Insurance Ombudsman vide order dated 11.10.2018 with the observations, which are reproduced as under:-

“18.   In view of the offer of insurer and consent of the complainant, the complaint is closed with a condition that the company shall comply with the offer and shall send a compliance report to this office within 30 days of the receipt of this order for information and record.”

The said order was not challenged by the complainant and became final. Therefore, the present complaint on similar cause of action is not legally maintainable. The OPs further stated that this Commission has got no jurisdiction to try & decide the present complaint as the complication question of law and facts are involved, which requires voluminous evidence i.e. examination and cross examination in the summary proceedings of Consumer Commission, therefore only the Civil Courts have the jurisdiction to try & decide the present complaint. The Permanent Lok Adalat vide order dated 07.07.2021 dismissed the application filed by the complainant. The OPs further stated that the Permanent Lok Adalat, Ludhiana also observed that detailed evidence is required, but the complainant instead of going to Civil Courts, filed the present complaint before this Commission.

                   The OPs further stated that the complainant has filed the present complaint in connivance with Bikramjit Singh (ex-Advisor, who is no longer with the company) in order to get undue benefits at the cost of the OPs. Moreover, the complaint is hopelessly time barred as the policy in question as proposed in September 2015 whereas the present complaint has been filed on 06.10.2021 i.e. after lapse of six years. Also the OPs assailed the maintainability of the complaint on the ground of suppression of material facts.

                   The OPs had also made preliminary submissions to the effect that on the basis of answers, statements, premium amount, premium paying term opted and declarations made in the proposal form duly executed and submitted by the complainant, they issued following policy to the complainant along with terms and conditions governing the policy and welcome letters. The detail of which is reproduced as under:-

Policy Name	Reliance Increasing Income Insurance
Policy Number	52372151
Policy Issue dated	18.09.2015
Proposer	Simranjit Kaur
Life Assured	Simranjit Kaur
Premium amount	Rs.99,999/-
Mode	Yearly Mode
Policy Term	20 years
Premium Term	10 Years
Advisor Name & Code	Bikramjit Singh (22092724)

 

The policy documents were duly sent to the complainant through registered post at her given address, which were duly received by the complainant. The complainant signed the declaration and authorization contained in the customer declaration form in support of her proposal form. It was also specificity mentioned that this is a regular/limited Premium Policy and complainant would need to pay premium for TEN years. The complainant was explained all the terms and conditions of the policy and only after her satisfaction, she provided the detail in the proposal form and signed the same after accepting the terms and conditions mentioned therein. According to the OPs, the complainant was fully aware of the minimum premium paying term under the policy as 10 years and that the premium payment being regular in nature. Even as per Section 6(2) of the Insurance Regulatory and Development Authority (Protection of Policyholders Interests) Regulations, 2002, the insured can avail free look cancelation or modifications within 15 days of the receipt of policy documents but the complainant did not opt for free-look cancelation after the receipt of policy.  As such, now the complainant is not entitled to claim any relief.         

                   On merits, the OPs reiterated the crux of averments made in the preliminary objections as well as factual submission. It was stated that the complainant signed the proposal form in English language and disclosed her educational qualification as Graduate. Further on 29.12.2016, the OPs received the request for cancelation of the policy but the same was received beyond the free look period of 15 days, so it was rejected on 04.01.2017.  The OPs further averred that the order passed by the Insurance Ombudsman, Chandigarh as well as Permanent Lok Adalat, Ludhiana are legal and binding upon the complainant. Moreover, the order passed by the Insurance Ombudsman, Chandigarh had attained finality as the complainant had not challenged the said order before higher court. The OPs have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

4.                In support of her claim, the complainant tendered her affidavit Ex. CA in which she reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of welcome letter, Ex. C2 is the copy of first premium receipt, Ex. C3 is the copy of policy schedule, Ex. C4 is the copy of agent/broker details, Ex. C5 is the copy of award dated 11.10.2018 of Insurance Ombudsman,  Ex. C6 is the copy of order dated 07.07.2021 of Permanent Lok Adalat regarding dismissal of application filed by the OPs, Ex. C7 is the copy of order dated 07.07.2021 of Permanent Lok Adalat, Ludhiana regarding dismissal of application of the complainant, Ex. C8 is the copy of Aadhar card of the complainant and closed the evidence.

5.                On the other hand, the counsel for the OPs tendered document Ex. R1 i.e. copy of policy documents and closed the evidence.

6.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written statement along with documents produced on record by both the parties.      

7.                Admittedly, the complainant obtained a Reliance Increasing Income Insurance Plan and paid premium of Rs.99,999/-. The details of the policy reads as under:-

Policy Name	Reliance Increasing Income Insurance
Policy Number	52372151
Policy Issue dated	18.09.2015
Proposer	Simranjit Kaur
Life Assured	Simranjit Kaur
Premium amount	Rs.99,999/-
Mode	Yearly Mode
Policy Term	20 years
Premium Term	10 Years
Advisor Name & Code	Bikramjit Singh (22092724)

 

The relevant sub clauses of clause 4 Part D of the policy terms and conditions reads as under:-

“4.1. Free Look: In the event you disagree with any of the terms and conditions of the Policy, you may return the Policy to the Company within 15 days (applicable for all distribution channels, except for Distance Marketing channel, which will have 30 days) of its receipt for cancellation, stating your objections, in which case, you shall be entitled to a refund of the premiums paid, subject only to a deduction of the proportionate risk premium for the period on cover and the expenses incurred by the insurer on medical examination of the Life Assured and stamp duty charges.

Distance Marketing includes every activity of solicitation (including lead generation) and sale of insurance products through the following modes: i. Voice mode, which includes telephone-calling ii. Short Messaging Services (SMS) iii. Electronic mode which includes e-mail, internet and interactive television (DTH) iv. Physical mode, which includes direct postal mail and newspaper & magazine inserts and v. Solicitation through any means of communication other than in person.”

4.3. Surrender Benefit: The policy shall acquire a Surrender Value:

• For Premium Payment Term less than 10 years: If premiums have been paid in full for at least two consecutive years.
• For Premium Payment Term greater than or equal to 10 years: if premiums have been paid in full for at least the first three consecutive years.

The Surrender Value payable is higher of the Guaranteed Surrender Value and Special Surrender Value.

4.4. Discontinuance of payment of premium: If the Policyholder discontinues the payment of premiums, the policy will be treated as lapsed or paid-up a. If any premium remains unpaid after the expiry of the grace period and the Policy has not acquired the surrender value, the policy status will be altered to lapse status, the Death Benefit and Rider Benefits, if any, will cease immediately.

b. No benefits will be paid when the policy is in lapsed status. c. If the Policy has acquired a surrender value and no future premiums are paid, the policy may continue as paid-up and the benefits would be reduced………

The complainant received cross check letter Ex. C1 and welcome letter Ex. C2. Perusal of letter Ex. C2 shows that a policy document kit comprising of first premium receipt, policy schedule, copy of filled up proposal form, benefit illustration, policy terms and conditions and other relevant documents (Ex. R1) were sent to the complainant. It has been specifically mentioned in bold letters that this is a yearly mode policy and your premium payment term is 10 years. Your next premium is due on 18.09.2016. Further this letter referred to Free Look Provisions of the policy and reminded the complainant that in case of disagreement with the terms, features and conditions stipulated in the policy documents, she may opt out of this plan by stating reason of disagreement in writing and return the policy to the company within 15 days. The complainant has also placed the copy of policy schedule Ex. C3 and broker/agent details Ex. C4. Therefore, it is evident that the complainant received all the policy documents through registered post and was free to exercise her free look period option by according specific disagreement to the terms and conditions of the policy. Even she could have sought the modification of the terms and conditions within stipulated period. Admittedly, the complainant did not exercise her valuable right and it amounts to acceptance of terms and conditions of the policy. Now it does not lie in the mouth of the complainant that the terms and conditions of the policy were not explained or supplied to her.

8.                The complainant, a Reliance Releasing Income Insurance Plan holder has raised a grievance by filing the present complaint and has prayed for refund of premium along with compensation and litigation expenses. The complainant has claimed the refund of premium mainly on following three grounds:-

i.        The respondents have not explained and supplied the terms and conditions to the illiterate complainant.

ii.       The respondents have mis-sold the policy.

iii.      The complainant is a simple person with meager income, so he cannot think to invest/deposit approximately Rs.10,00,000/- (Ten Lakhs) in ten years.

The complainant has repeatedly averred that she is an illiterate lady and was unable to understand the conduct of the officials of the OPs and her signatures were obtained on certain blank forms and the contents of the documents were not communicated to her. Perusal of the complaint, affidavit and vakalatnama shows that the complainant has appended her signatures in English language. Perusal of Common Proposal Form reveals the qualification of the complainant to be Graduate and her occupation to be of Parlour owner so she cannot say that she is an illiterate lady.

9.                In order to substantiate her claim with regard to mis-sold of policy by the OPs, Bikramjit Singh, the authorized agent who allegedly approached and influenced the complainant was required to be arrayed as a party in the complaint but for the reason best known to the complainant, said Bikramjit Singh was not joined in the complaint. The Ops have also taken a definite stand during the proceedings before Insurance Ombudsman, Chandigarh that the complaint has been initiated at the behest of Sh. Bikramjit Singh, Ex-advisor who is no longer associated with the company. So this Commission is of the view that said Bikramjit Singh was the best person who could have corroborated or rebutted the contentions of the complaint. So the bald allegations leveled by the complainant are not sufficient to conclude that the policy had been mis-sold.

10.              The complainant has represented herself to be a simple lady with meager income and the investing of approximately Rs.10,00,000/- in 10 years is not financially viable for her. Perusal of the common proposal form shows that an income of Rs.2,50,000/- was proposed and verified during the process of issuance of the insurance plan. Moreover, the complainant has invested the amount for augmenting her income which is also evident from the name of the policy itself.

11.              The counsel for the complainant has contended that the guidelines of The Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 are applicable and binding upon the OPs and as such, the complainant is entitled to the surrender value. The counsel for the complainant further relied upon 2018(1) CLT 340 in M/s. Kotak Mahindra Old Mutual Life Insurance Ltd. Vs Dr. Nishi Gupta and 2013(4) CPJ 128 in Reena Singh Vs Max New York Life Insurance Company Limited and others.

12.              Perusal of the policy documents shows that the policy is a non-linked, non-participating life insurance policy. The aforesaid guidelines of The Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 are applicable to the unit linked insurance plans and not to the a non-linked, non-participating life insurance policy. Clause 7.2 asserts primacy to the policy document. It provides that in the event of any inconsistency of conflict between the terms and conditions contained in the policy documents and the terms and conditions contained in any other document such as marketing material  or sales brochure, the terms and conditions contained in the policy document shall prevail over all other terms and conditions contained in various other documents. Admittedly, the complainant has paid only one premium and there is requirement of at least payment of two regular premiums for having 10 years term and payment of three regular premiums for having 20 years term. Since the complainant has paid just only one premium and as such, the policy in question has not acquired the surrender value as stipulated in the Clause 4.3 of the policy.

13.              There is another aspect of the case. Clause 7.5 of the policy terms and conditions deals with the procedure for filing complaint with the Insurance Ombudsman. As such, the complainant has invoked the jurisdiction of Insurance Ombudsman, Chandigarh and the Insurance Ombudsman vide order dated 11.10.2018 Ex. C5 disposed of the complaint of the complainant with the following observations:-

“18.   In view of the offer of insurer and consent of the complainant, the complaint is closed with a condition that the company shall comply with the offer and shall send a compliance report to this office within 30 days of the receipt of this order for information and record.”

 

But the complainant did not stick to her verbal commitment and backtracked.

14.              Thereafter, the complainant approached Permanent Lok Adalat, Ludhiana where the complaint of the complainant was dismissed by the Permanent Lok Adalat vide order dated 07.07.2021 Ex. C7, the operative part of the order reads as under:-

“6.    In case reference “M/s. Malibu Estate Private Limited Versus Permanent Lok Adalat and another 2017 AIR (Punjab)  143”, it has been observed that in cases where serious questions are involved and detailed evidence is required to be led, it is only the civil court and not Lok Adalat which have jurisdiction.

7.       In view of the ratio laid down in the above noted  case and the discussion made here-in-above, we are of the view that as the parties are required to lead detailed evidence, this forum ceases to have jurisdiction to decide the application. Sequally, the application preferred by the applicant stands dismissed. However, the applicant would be entitled to avail any other legally permissible remedy, if he so desires and is advised, in accordance with law for redressal of his grievance. File be consigned to the records.”

But the complainant, instead of approaching the Civil Court, had chosen to file the present complaint.

15.              The Consumer Protection Act, 2019 being a special enactment created an additional remedy in favour of the consumers to raise consumer disputes before the Consumer Commissions constituted under this Act. Section 100 of the Consumer Protection Act provides that the provision of this act shall be in addition to and not in derogation of provisions of any other law for the time being in force. However, as Three Judge Bench of the Hon’ble Supreme Court of India in Ireo Grace Realtech Pvt. Ltd. Vs Abhishek Khanna & another (2021) 3 SCC 241 has held that when two concurrent remedies are available to the aggrieved consumer, one under Consumer Protection Act and second under other laws, then aggrieved consumer has an independent option to elect which one out of two or more remedies, he wishes to exercise and if he elects one over the other, he loses the right to simultaneously exercise the other for the same cause of action. In the case in hand as well, the complainant had earlier opted remedy before Insurance Ombudsman, Chandigarh as well as Permanent Lok Adalat, Ludhiana, as such, now she is estopped from filing the present complaint by her act and conduct. So in view of the ratio of above cited laws, the complaint is not maintainable and deserves dismissal.

16.              As a sequel of above discussion, the complaint is hereby dismissed. However, there shall be no order as to costs. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.   

17.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)          (Jaswinder Singh)                   (Sanjeev Batra)                Member                     Member                                  President   

 

Announced in Open Commission.

Dated:31.01.2024.

Gobind Ram.