DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, LUCKNOW
CASE No.913 of 2009
Smt. Radha Rani Rathi,
W/o Sri Mahesh Chandra Rathi,
R/o 1-A Sagar Square,
Moti Jheel Colony, Lucknow.
……Complainant
Versus
1. M/s SBI Life Insurance LTd.,
Central Processing Centre,
Kapas Bhavan, Plot No.3A,
Sector No.10, CSD Belapur,
Navi Mumbai-400614.
2. SBI Life Insurance Co. Ltd.,
1st, SBI Local Head Office,
Moti Mahal Marg,,
Lucknow-226001.
.......Opp. Parties
Present:-
Sri Vijai Varma, President.
Smt. Anju Awasthy, Member.
JUDGMENT
This complaint has been filed by the Complainant against the OPs for directing the OP to cancel the policy bond and for payment of insurance premium of Rs.1,00,000/- with 18% interest, compensation of Rs.15,000.00 and cost of suit of Rs.2,000.00.
The case in brief of the Complainant is that she had purchased unit linked insurance policy from OP No.1 in October, 2007, the copy of which was furnished by the OPs to the Complainant on 15.12.2007. At the time of sale, the OPs’ Lucknow Unit Manager Sri Amit Singh advised and informed the Complainant that the risk cover of said policy was 10 times to the annual premium charged. It is mandatory to pay first
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three premiums of said policy each bearing annual premium of Rs.1,00,000/- and after the payment of first three premiums the policy would run for whole 20 years irrespective of the fact whether further premium is paid or not and if the policy holder desired, then in the 4th year the policy holder could withdraw whole amount except first premium. Under such condition the insurance coverage remains intact for full tenure and at the time of maturity the principal amount alongwith 15% interest shall be refunded. Upon receiving the policy bond on 15.12.1997, the Complainant was shocked to find that there was no mention of any of such conditions which was informed and promised to the Complainant at the time of sale. Within a period of 15 days from the date of receipt of said policy bond, the Complainant through registered post on 24.12.2007 lodged her vehement protest and sought clarification in this respect. In spite of lodging of protest, neither any clarification was given to the Complainant nor the OPs got in touch with the Complainant to clarify the issues. The Complainant regularly sent several letters to the OPs but all in vain, hence the Complainant requested the OPs to cancel the said policy bond and refund the deposited premium with interest on 18.11.2008. In response to the cancellation letter of Complainant, the OPs on 25.11.2008 sent a letter to the Complainant whereby the OPs requested the Complainant to furnish original policy document and first premium receipt for the cancellation of policy bond. In compliance of the said letter the Complainant sent the aforesaid documents on 06.12.2008 for the cancellation of policy document and refund of deposited insurance premium. Till date neither the OPs have cancelled the policy document nor refunded the deposited amount of Complainant. The OPs are guilty of deficiency in service and unfair trade practice, hence this complaint.
The OPs have filed the WS wherein it is mainly submitted that the policy document which is the point of
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dispute bearing policy No.24028618704 was issued in November 2007. This complaint was filed in 2010, after a gap of almost 3 years, thus the complaint is barred by limitation within the meaning of Section-24A of the Consumer Protection Act, 1986 and the Complainant has not filed any application for condonation in the delay of filing the complaint, hence it should be dismissed on this ground alone. The proposal form is the basis of assessment of risk and the policy will be issued based on the proposal form. The OPs have issued the policy based on the proposal form which was duly signed by the Complainant, hence there is no deficiency in service on the part of OPs. A person who signs a document is totally responsible for the contents contained in the document and he/she cannot plead ignorance of the same. The declaration was signed by the Complainant herself. He/she cannot take a plea that they submitted the proposal on the basis of false or misleading information. Issuing a policy based on the options exercised by the Complainant does not amount to deficiency and the Complainant has failed to produce any cogent evidence to prove any deficiency on the part of the OPs. In the instant case, in the proposal form, the Complainant has opted for yearly mode of payment of premium of a term of 20 years. As per the terms and conditions of the policy, the policy holder has a period of 15 days from the date of the receipt of the policy document to review the terms and conditions of the policy and where the insured disagrees to any of those terms or conditions, he/she has the option to return the policy stating the reasons for her objection. The Complainant did not exercise such an option within the stipulated period. The present complaint does not come under the purview of the Section 2 (1) (g) and Section 2 (1) (c) of the Consumer Protection Act, 1986. The Complainant had submitted a proposal form for Unit Plus II Regular Plan dated 11.09.2007 alongwith an initial proposal deposit of Rs.1,00,000/- for a
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term of 20 years. The frequency of payment of premium was yearly. Accordingly relying on the details furnished in the proposal form, the policy was issued and date of commencement as 01.11.2007 for a sum assured of Rs.10,00,000/- which is 10 times of the annualized premium. The Complainant clearly marked the mode of payment of premium as yearly for a term of 20 years under question No.4.1 of the proposal form. The OPs have received a letter dated 24.12.2007 from the Complainant asking clarification about the terms and conditions of the policy and the OPs have replied the same on 17.01.2008. The OPs have received a letter from the Complainant on 22.11.2008 asking for cancellation of policy and refund of premium and the same was replied by the OPs on 25.11.2008 asking the Complainant to provide the original policy document and the first premium receipt. The OPs received another cancellation request letter dated 06.12.2008 from the Complainant alongwith the original policy document and first premium receipt. But the free look cancellation request was rejected by the OPs as the free look period was over and the same was intimated to the Complainant on 11.12.2008. The OPs have received a legal notice dated 16.03.2009 and the same was replied by the OPs on 30.03.2009. The date of commencement of the policy was 01.11.2007 and the Complainant can surrender her policy after 01.11.2010 and if she surrenders her policy, she will get the surrender value after deducting applicable surrender charges as per the terms and conditions of the policy. There is no negligence, unfair trade practice and deficiency in service on the part of the OPs. The Complainant is not at all entitled to any compensation or any other amount. The Complainant has already enjoyed the risk cover for almost three years and the demand of cancellation of policy and refund of premium is not at all maintainable. The complaint deserves to be dismissed with costs.
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The Complainant has filed her affidavit with 5 annexures. The OPs have filed an affidavit of Sri V. Srinivas, Authorized Representative, SBI Life Insurance Co. Ltd. and annexures A to J5 with the WS.
Heard Counsel for the parties and perused the entire record.
In this case, there is no dispute that the Complainant had taken a Unit Linked Insurance Policy from the OPs which was sent to her on 15.12.2007. The disputed point according to the Complainant is that when she received the policy bond then she found that there was no mention of any condition as informed to the Complainant by the unit Manager of the OPs, hence she sent letters lodging her protest and seeking clarification in that regard but when no clarification was given then she requested the OPs to cancel the said policy bond and refund the deposit premium alongwith interest but the OPs did not do so, therefore they have committed deficiency in service whereas according to the OPs the Complainant was issued a policy as per the proposal form and that the Complainant had not exercised her option of returning the policy under free look period, hence there is no deficiency on the part of the OPs in rejecting the request of the Complainant to cancel the policy bond and refunding the premium. The OPs have also taken the stand that this complaint is barred by limitation.
Now, it is to be seen as to whether this complaint is barred by limitation or not and it is also to be seen as to whether the OPs have committed any deficiency in service in refusing the request of the Complainant to cancel the policy bond and to refund the amount of premium with interest or not.
First of all, we take up the point as to whether this complaint is barred by time or not? The contention of the OPs in this regard is that the policy document was issued in November, 2007 whereas this complaint has been filed in 2010 after a gap of almost 3 years, therefore this complaint is barred
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by time as the complaint has been filed after 2 years of arising of cause of action but from the record it transpires that when the Complainant sought clarification through letters then the OPs issued letter on 25.11.2008 asking for certain information/documents and that on 11.12.2008 the OPs again sent a letter seeking certain information from the Complainant. It is only after getting these informations that the request of the Complainant was rejected. So, when the matter was still under consideration by the OPs in the year 2008 and it is only when they rejected the request of the Complainant subsequent to the date of 25.11.2008 that the Complainant after sending a legal notice filed this case which is very much well within the limitation period of two years from the date of arising of the cause of action in the year 2008 as the case has been filed in this Forum on 02.09.2009. Therefore, there is no substance in the contention of the OPs that this case is time barred, as the cause of action has arisen only when the request of the Complainant was not exceeded to after supplying the information to the OPs who demanded it on by letter dated 25.11.2008. Therefore, it is concluded that the complaint is well within time.
Now we come to main issue as to whether the OPs have committed any deficiency in service in refusing the request of the Complainant to cancel the policy bond and to refund the amount of premium with interest or not. In this regard, it is to be noted that the Complainant had taken a policy in October, 2007 by filling up a proposal form and the policy bond was furnished by the OPs to the Complainant on 15.12.2007. According to the Complainant the Unit Manager of OP No.1 was told that the risk cover of the policy was 10 times to the annual premium charged and it is mandatory to pay first three premiums of the said policy each bearing annual premium of Rs.1.00 lakh and after the payment of first three premiums the policy would run for whole 20 years irrespective of the fact
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whether further premium was paid or not and if the policy holder so desires that in the fourth year the policy holder could withdraw whole amount except first premium but when she saw the policy bond on 24.12.2007 sent to her through registered post then she found that there was no mention of any condition promised to the Complainant by the representative of OPs at the time of sale of that policy. She protested within 15 days of the receipt of the policy and she sent a letter on 24.12.2007 itself regarding the discrepancies in the policy document and sought certain clarification from the OPs. She has filed a copy of the letter which is annexure No.1 with her complaint wherein the aforesaid fact is mentioned. She had again sent a letter on 18.11.2008 a copy of which is filed as annexure 2 in this letter of 18.11.2008 the Complainant had requested for cancelling the policy and to refund the amount when no action was taken on her letters of clarification. The Complainant had received a letter a copy of which is filed as annexure F by the OPs asking for the Complainant to furnish certain information/documents so that the matter with regard to cancellation of the policy be taken up and again a letter was sent on 10.12.2008 whereby the Complainant sent original policy document and first premium receipt then she received a letter on 11.12.2008 a copy of which is filed as annexure H by the OPs that the OPs are unable to process the request for cancelling of the policy because the free look period was over. Now, here according to the Counsel for the OPs the request for cancelling of the policy taken by the Complainant was rejected as the Complainant had not exercised the option of returning the policy bond within 15 days of its receipt. But here an important point is lost that the Complainant immediately after getting the policy bond sent a letter to the OPs to clarify the discrepancies in the policy bond as the promises made by the Unit Manager of the OPs were not there in the policy bond. The OPs did not respond to this letter
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so the Complainant did exercise her protest regarding the policy bond with the OPs in the right earnest i.e. on the date the policy bond was received by her. Therefore, the Complainant did exercise her option of not accepting the policy bond as the conditions promised to her were not there in the bond, but the OPs chose to remain silent to this protest by the Complainant. It is only after the Complainant kept harping on the point that the OPs sent a letter dated 25.11.2008 asking for certain documents such as original policy document and the first premium receipt which were duly supplied by the Complainant as per her letter dated 06.12.2008 but thereafter the OPs rejected the request of cancelling the policy bond by letter dated 11.12.2008. The Complainant is protesting regarding the conditions of the policy from day one of receipt of the policy bond i.e. 24.12.2007 and it is ridiculous on the part of the OPs, after lapse of about 11 months to ask for the original policy bond and also first premium receipt and thereafter rejecting the request of the Complainant on the ground of the free look period of the policy being over, as when the Complainant is giving the policy number in her very first letter of 24.12.2007 wherein it is specifically mentioned that she, on receiving the policy bond, found that the conditions promised to her by the Unit Manager were not there in the policy then it is abundantly clear that she had already received the policy bond on 24.12.2007 and therefore obviously the free look period was over when the OPs ask for the documents by letter dated 25.11.2008. If the OPs could have checked their record just by looking into the document of the insurance policy then they could have discerned the fact that the policy bond was sent way back in December, 2007 which was duly received by the Complainant on 15.12.2007 and there was no question for the OPs to ask for the policy document and thereafter receiving the document, rejecting the request of the Complainant on the ground of free look period
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being over. The fact is that they should have while objecting in their letter dated 25.11.2008 mentioned the fact of free look period elapsed as also one of the grounds for rejecting the request instead of asking for the information regarding original documents and the first premium receipt. Ironically, when the Complainant provides the aforesaid documents then they come out with the ground of free look period being over for rejecting the request of cancelling of policy bond by the OPs. Therefore, it is clear that the Complainant basically had objected to the terms of the policy bond in the right earnest and therefore it is wrong on the part of the OPs to reject the request of the Complainant to cancel the policy bond under the circumstances of this case. Besides in the instant case when we look at the proposal form and also the conditions of the policy in question then we find that in 4.1 basic plan detail there is the mention of, open to avail automatic life cover maintenance (in case of any paid premium after first three policy years for regular premium plans only that this conditions appears to be consonance with what the Complainant got the alleged promise from the Unit Manager of the OPs that in case first three premiums are paid then the policy was to run to 20 years irrespective of the other premiums paid or not and that in the fourth year the policy holder could withdraw the whole amount except first premium and the mention of the fact in point 4.1 of the proposal form may have lead to the Complainant to believe the alleged promises of the Unit Manager of the OPs that if the Complainant fails to pay after three years then too she would get the amount paid in fourth year except the first premium paid. Besides if we look the policy conditions where the condition No.10 of the policy schedule 2 wherein it is mentioned as under:-
“(a) The policy acquires a Surrender Value provided at least one entire policy years’ premiums have been paid….(ii) When premiums have not been paid regularly for three consecutive
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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 applicable Surrender Charges.” As per this provision if the proposer does not pay all three consecutive years following the date of commencement of the policy then the surrender value was payable at the end of the third year following the date of the commencement of the policy, therefore there was reason for the Complainant to believe the alleged promises of the Unit Manager of the OPs. The crux of the matter is that there were reasons for the Complainant to believe the promises made by the Unit Manager of the OPs but when she got the policy bond then she did not find mention of these conditions and therefore she protested regarding the policy bond. On the basis of the discussions made above it is clear that the Complainant was wrongly lead to go for the policy by the representative of the OPs and that when she got the policy bond and found that there was no mention of alleged promises she raised the objection and OPs instead of clarifying the matter rejected the request of the Complainant for cancelling the policy bond and to refund the premium paid by her. It is also noticeable that the OPs even while rejecting the request of the Complainant, has the audacity to urge the Complainant to review her decision of cancelling the policy unless of course there was a pressing need which shows their utter reluctance to cancel the policy bond to the detriment of the Complainant. Therefore, it is clear that the OPs have committed unfair trade practice as also deficiency in service in first issuing a policy bond devoid of promises made at the time of its sale and thereafter not cancelling it even when the Complainant protested against it in the right earnest. The Complainant therefore is entitled to get the policy in question cancelled and to get back the refund with interest from the
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OPs. As the Complainant has also been harassed in this regard, hence she is entitled to compensation as also cost of the litigation.
ORDER
The complaint is partly allowed. The OPs are jointly and severally directed to cancel the policy bond of the Complainant and to pay the amount of Rs.1,00,000.00 (Rupees One Lakh Only) with 9% interest from the date of filing of the case till the final payment is made to the Complainant.
The OPs are also directed to pay Rs.5,000.00 (Rupees Five Thousand Only) as compensation and Rs.3,000.00 (Rupees Three Thousand only) as the cost of the litigation to the Complainant. The compliance of the order is to be made within a month.
(Anju Awasthy) (Vijai Varma)
Member President
Dated: 3 August, 2015
