Haryana

Yamunanagar

CC/252/2012

Gurnam Singh S/o Gopal Singh - Complainant(s)

Versus

SBI Insurance Company Ltd. - Opp.Party(s)

Bhupinder Chauhan

01 Jul 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, YAMUNA   NAGAR

                                                                                    Complaint No.252 of 2012.

                                                                                    Date of institution: 7.3.2012.

                                                                                    Date of decision: 01.07.2016.

 

Gurnam Singh aged 65 years s/o Sh. Gopal Singh, resident of H.No.2362, Shiv Dayal Puri-B, Yamuna Nagar 135001.

                                                                                                                                                …Complainant.

                                                     Versus

1        Branch Manager, SBI Life Insurance Company Ltd. SCO 109-110, 1^st Floor, Sector-17, Jagadhri, District Yamuna Nagar.

2        Country Head SBI Life Insurance Company Ltd. Ground floor, Turner Morrison Building, G.N.Vaidya Marg, Fort Mumbai 400023, Maharashtra.

                                                                                                                                                … Respondents.

BEFORE:         SH. ASHOK KUMAR GARG, PRESIDENT

                        SH. S.C.SHARMA, MEMBER.

Present:   None for Complainant     

                Sh. Brijesh Chauhan, Advocate, counsel for OPs.

 

ORDER

 

1.                     The complainant has filed this complaint under Section 12 of the Consumer Protection Act, 1986 praying therein that respondents (herein after referred as Ops-Insurance Company) be directed to refund the amount of Rs.25000/- deposited on account of premium and also to pay compensation and litigation expenses  

2.                     Brief facts of the present complaint, as alleged by the complainant, are that the complainant was approached by Harmit Kaur and Inderpreet Singh in the month of December-2007 and explained to him that they were officers of the company and company is having a scheme which promises good returns besides providing insurance to the investor and further explained to him that if the complainant makes one time investment, he would get 25% growth on investment and besides this insurance cover of ten time of money invested will also be provided to the complainant.  The complainant was also told that he can withdraw the invested money along with returns after three years of investment.  Believing on the version, the complainant invested a sum of Rs.25000/- hoping that he would get good returns and a policy bearing No.24033153103 dated 06-12-2007 was issued to him.  In September-2011, complainant was in need of money and therefore he approached the Op no.1 for withdrawal of the amount invested but the officials of OP No.1 told him that he could not get the amount as he has not deposited the invested amount of Rs.25000/- continuously for five years and due to non deposit of the amount his policy has lapsed. Upon which, the complainant told to the officials that at the time of giving policy to the complainant it was told to him that he has to make only one time investment and after making one time investment he would be entitled to withdraw the amount of investment besides premium after three years of policy and requested to refund the amount but all in vein.  The official of the OP No.1 allured the complainant to invest in their company by saying wrong facts and cheated the complainant in connivance with the ops. If the official would have told the complainant that he would have to pay invested money every year he would not have taken the policy and as such complainant has been induced to purchase the said policy by fraudulent means.  The complainant was required to deposit the invested amount every year and since he has deposited invested amount only once and as such his policy has been lapsed and he is not entitled to receive any amount.  The complainant made complaints to the OP No.1 but did not get any satisfactory reply, which constitute deficiency, negligence in service and fraud on the part of the Ops.  Hence, this complaint. 

3.                     To prove the case, counsel for the complainant tendered into evidence short affidavit of complainant as Annexure C.X and document such as Original First Premium Receipt along with policy as Annexure C.1.

4.                     Upon notice, OPs appeared and filed its written statement by taking some preliminary objections such as complainant is disputing the terms and conditions of the policy which was issued in December 2007, hence, the cause of action arisen in December 2007 and the present complaint has been filed after a gap of more than 4 years i.e. on 07-03-2012 and the same is barred by limitation; the complaint involves large issue which are to be thoroughly investigated and enquired into;  Only civil courts are competent to handle such cases because the proceedings before the District Consumer Forum are summary in nature; the crux of the complaint is against the agent who has sourced this policy, Ops are not privy to what transpired between the complainant and the agent who has sourced the policy and hence Ops are not responsible for the same; in the life insurance contracts the proposal form is the basis of the contract and is a very vital document.  There is no dispute about the fact that the complainant had signed the proposal form and in this case there is no overwriting/manipulation in the proposal, so as to given raise to any suspicion about the content of the proposal form. If the insurer relies on the information furnished in the proposal and acts based on such information, it cannot be terms as a deficiency in service on the part of the insurer.  It is the proponent who signs and submits the proposal and he should be held responsible. The SBI Life has accepted the proposal basis on the principle of Utmost Good faith believing that the contents in the proposal form to be true and accurate.  The insurer cannot be made liable for the unauthorized actions of the third party, whoever it may be.  The agent should abide by the regulations of the IRDA governing the agents. It is the IRDA who prescribes the DO’s and DON’T’S for the agent and obviously the liability of the answering OPs is only pay the remuneration to the agent for the business completed by him.  The relief as prayed for is not at all maintainable.  The complainant had already enjoyed the insurance cover for the period for which the premium has been paid.  Premium is consideration of contract for which he has enjoyed the risk cover.  The complainant has not complained the terms and conditions of the policy on receipt of the policy document in free look period of 15 days.  Hence, the question of refunding premium or payment of compensation, interest, costs does not arise at all.

On merits, it has been submitted that a proposal bearing no.245849418 dated 06.12.2007 within an initial proposal deposit of Rs.25000/- for a basic sum assured of Rs.125000/- was submitted by the complainant.  The frequency of premium was clearly opted as yearly under question no.4 in the proposal form.  The complainant has declared in the proposal form “I hereby declare that the foregoing statements and answers have been given by me after fully understanding the questions and the same are true and complete in every manner and that I have not withheld to give any information.  Further, I have not provided false information in reply to any question. I understand and agree that the statements in this proposal constitute warranties. I do hereby agree and declare that these statements and this declaration shall be the basis of the contract of assurance between me and the SBI Life Insurance Co. Ltd. I understand and agree to the Net Asset Value per unit of the investment fund may increase or decrease as per the performance of the financial market and other risks”. Believing the information furnished in the proposal form to be true and correct the policy no.24033153103 was issued with date of commencement as 27-12-2007 for a term of 5 years as per the proposal form with a yearly mode of premium of Rs.25000/- The complainant had not made any payment towards renewal premium after the initial premium.  As per schedule II, Point No.2(b) if, within, the first three years following the date of commencement of the policy the premium is not paid within grace period, all insurance cover will automatically lapse and in the present case the policy in lapsed condition w.e.f.27.12.2008 due to non payment of renewal premium.  It has been further stated if the complainant was not satisfied with the terms and conditions of the policy then he could have cancelled the policy as per free look period of 15 days as per schedule-II, Point no.22.  But in this case, the complainant has not done so.  Lastly, prayed for dismissal of complaint. 

5.                     To prove the version of the written statement the learned counsel for the Ops tendered into evidence detailed affidavit as Annexure RW/A and documents such as Attested Copy of application form as Annexure R-1, Print of judgments as  Annexure R.-2 to R.-8, Print out of transaction cum unit statement as Annexure R-9, Print out of policy schedule as Annexure R-10, Attested copy of maturity claim information letter as Annexure R-11, Attested copy of transaction cum unit statement as Annexure R-12 and closed the evidence on behalf of OPs.

6                      We have heard the counsel for OPs insurance Company and have gone through the pleading of the parties and documents placed on file carefully and minutely.  

7.                     As per the case of the complainant, he was told by the agents of the Ops that the policy was onetime payment of premium of Rs.25000/- and thereafter no installment was to be paid and further it was explained to him that if the complainant makes one time investment, he would get 25% growth on investment and besides this insurance cover of ten time of money invested will also be provided to the complainant.  The complainant was also told that he can withdraw the invested money along with returns after three years of investment.  Believing on the version, the complainant invested a sum of Rs.25000/- hoping that he would get good returns and a policy bearing No.24033153103 dated 27-12-2007 was issued to him.  In September-2011 complainant was in need of money and therefore he approached the Op no.1 for withdrawal of the amount invested but the officials of OP No.1 told him that he could not get the amount as he has not deposited the invested amount of Rs.25000/- continuously for five years and due to non deposit of the amount his policy has lapsed. He was never intimated regarding further payment of installment.  On the other hand the learned counsel of the OPs argued at length that the terms and conditions of the policy were duly explained to the complainant in presence of witness and the same were also provided in proposal form (Annexure R-1), first premium receipt alongwith insurance policy (Annexure R-2).  Therefore, intimation regarding further installment was not required. All other allegations have also been denied being wrong and manipulated. Ld. Counsel for the ops also draws our attentions towards law/citations referred in the written statement and requested for dismissal of the complaint.

8.                     Complainant has not disputed the fact that Ops had issued insurance policy bearing no.24033153103 (Unit Plus-II Regular) on 27.12.2007 and premium of Rs.25000/- was deposited by him.  Before issuance of the policy the complainant submitted the proposal form, copy of which is Annexure R-1 in clause 4 to 6 of the proposal form details terms of the policy and premium were filled up. The term of the policy was filed up as five (5) years and the premium frequency was mentioned as annual and premium of Rs.25000/-.Proposal form was duly signed by the complainant.  Complainant is an educated person and put his signatures in English, the burden shifted upon the complainant to prove that proposal form was not read over to him or he signed the same under any undue influence or coercion of fraud played upon him.  But neither there is any such definite pleading nor there any such cogent evidence.  Moreover, the complainant can cancel the policy and seek refund of the premium deposited by him within free look period of 15 days from the date of receipt of policy.  However, he did not cancel the policy within free look period.  After expiry of the free look period he could not cancel the policy and could not seek refund of the amount of first premium deposited by him, because such refund was not permissible as per terms and conditions of the policy.  The complainant as well as OPs are bound by the terms and conditions of the insurance policy. 

9.                     Although, no fraud has been committed by the officials of the ops, even then we have noticed some terms and conditions in the policy in question (Annexure C-2/Annexure R-2) which is reproduced herein as under :-

 At page no.5 of policy under clause 10 Surrender:-

a.         This policy acquires a Surrender Value provided at least one entire policy years’ premium has been paid.  The Surrender Value will be paid in the following manner:

i.          Where premiums have been paid regularly for at least three consecutive years following the Date of Commencement of Policy, the Policyholder may surrender this policy for the Surrender Value at any time;

ii.          Where premium have not been paid regularly for three consecutive years following the Date of Commencement of Policy, the Surrender Value, will only be payable at the end of the third year following the Date of Commencement of Policy.

The Surrender Value will be equal to the Fund Value after deducting applicant Surrender Charges (Please refer to Annexure-charges)

b.         On surrender, the units of each fund will be liquidated at the NAV as follows:

If the surrender request is received before 3.00 p.m. of any day,- the closing NAV of the same day will be applicable.

If the surrender request received after 3.00 P.M. of any day, the Closing NAV of the next working day will be applicable.

Annexure-Charges

If the fund value falls below Rs.10000/- at the time of deduction of the charges, the policy will immediately terminate and the fund value without deduction of any charges will be paid to the policy holder and all rights and benefits under the policy will be automatically cease.

10.                   From the perusal of above noted two clauses (a) (ii) and annexure charges, It is clear that if fund value falls below Rs.10000/- at the time of deductions of charges, policy will immediately terminated and fund value without taking any charges will be paid to the policy holder and all rights and benefits under the policy will automatically cease.  Meaning thereby that policy in question might have some fund value at least Rs.10000/- however, it may be on higher side.

11                    But in the present case, ops has totally failed to pay any amount to the complainant despite of the terms and conditions mentioned as above. However, during the proceedings when the case was fixed for arguments on 24.08.2015 learned counsel for the OPs submitted written submission on the file in which the OPs have admitted that policy in question matured on 27.12.2012 and as per its terms and conditions, the maturity value of the policy in question was Rs. 12007/- on its maturity date i.e. 27.12.2012 and OPs Insurance Company is ready to pay the same to the complainant subject to submission of necessary documents. Meaning thereby that complainant was entitled to get the amount of Rs. 12007/- as on 27.12.2012 from the OPs Insurance Company which has not been paid by the OPs Insurance Company. Even, the OPs have not moved any application before this Forum seeking direction to execute the documents from the complainant and have not produced the maturity value of Rs. 12007/- before this Forum. Meaning thereby, that the maturity amount of Rs. 12007/- in respect of policy in question has been illegally withheld by the OPs Insurance Company till date whereas, the present complaint is pending since its filing i.e. 07.03.2012. So, the act and conduct of the OP Insurance Company constitute deficiency in service and the complainant is entitled to get relief.

12                    Under the afore discussed facts and circumstances, we have no hesitation in observing that insurance company has not acted in accordance with the terms and conditions of the policy. The law referred in the written statement by the ops is not disputed but not helpful in the present case. In the interest of justice and equity the Ops-insurance company is liable to refund the fund value of the policy in question i.e. Rs. 12007/- to the complainant.   

13.                   Resultantly, we partly allow the complaint of the complainant and direct the OPs-Insurance Company to pay maturity fund value of Rs. 12007/- which was as on 27.12.2012 in respect of the insurance policy bearing no.24033153103 (Unit Plus-II Regular)  alongwith interest at the rate of 9% per annum from the date of its maturity i.e. 27.12.2012 till its realization and further the OPs are also directed to pay Rs. 5,000/- as compensation for mental agony, harassment etc and also to pay Rs.2000/- as litigation expenses. Order be complied within 30 days after preparation of copy of this order failing which complainant shall be entitled to invoke the jurisdiction of this Forum as per law. Copies of this order be sent to the parties concerned free of costs as per rules. File be consigned to the record room after due compliance.

Announced in open court.01.07.2016.

                                                                                                (ASHOK KUMAR GARG)

                                                                                           PRESIDENT

 

 

                                                                                          (S.C.SHARMA)

                                                                                           MEMBER