MRS. NEENA SANDHU, MEMBER

1.     This is an appeal filed by the complainant against order dated 11.9.2008 passed by District Consumer Disputes Redressal Forum-II, UT, Chandigarh (for short hereinafter to be referred as District Forum) passed in complaint case No.21 of 2007.

2.            Briefly stated the facts of the case are that on 28.9.2006 the representative of the OP No.1 i.e. SBI Life Insurance Company Limited approached the complainant and offering him a single time investment plan and advised to part away with Rs.8 lacs, which includes life insurance cover of Rs.50 lacs for 99 years (for whole life) under Units Plus-II plans and Rs.8 lacs of the complainant would be invested for 15 years, out of which a single premium had been adjusted itself. It was submitted by the complainant that after filling up the proposal form, the OP No.2 took a cheque bearing No.364459 for Rs.8 lacs from the complainant for the purpose of investment and the said cheque was encashed on 4.10.2006 by the OP No.1 after accepting the proposal form and on 6.10.2006 the complainant was medically examined for official record. The complainant contacted OP No.2 to know how many units have been allotted to him, along with the receipt and policy but OP No.2 lingered on the matter. It was submitted by the complainant that after about 45 days of encashing the cheque i.e. on 21.11.2006, the OP No.1 further demanded from the complainant extra premium for the said insurance to the extent of Rs.1,63,600/- lacs @ Rs.32.72 on the basis of “Regular Health Extra” every year through letter dated 21.11.2006 whereas while accepting the proposal form, no such condition for extra premium was levied previously. The complainant served a legal notice dated 30.11.2006 to the OPs but till date no account, receipt and policy was issued to him. On the above said acts of OPs amounts to deficiency in service on the part of OPs. Hence, the complaint was filed.

3.         Reply was filed by the OP No.1 and pleaded that on the basis of information provided in the proposal form and after subjecting the individual to be insured to a medical examination (hereinafter referred to as the MER or Medical Examination Report), SBI Life decides as to whether the risk under the proposal was to be accepted or consideration of the proposal was to be declined and where it was decided to accept the risk under the proposal, as to whether such risk was to be accepted at the standard rate of premium or with an extra premium or subject to any exclusions.  It was pleaded by OP No.1 that the complainant was suffering from hyper-tension and diabetes and the complainant was undergoing treatment for the same. After seen the medical reports of the complainant, the company was decided to accept the proposal of the complainant with extra premium known as “Health Extra” on account of diabetes, hypertension, adverse cardiac findings etc. To this effect, the complainant was written letters dated 21.11.2006 & 28.12.2006 but neither the complainant deposited the required amount nor responded to the said letter and ultimately, the OP No.1 had refunded the whole amount vide demand draft No.198911 dated 15.1.2007, which was sent through speed post and pleaded that there was no deficiency in service on its part and prayed for dismissal of the complaint.

4.         Reply was filed by OP No.2 and pleaded that the complainant himself informed him that he was intending to take a loan of Rs.1.50 crore from ICICI Bank and for that purpose he wanted to obtain life cover insurance and this fact was disclosed by the complainant in his proposal form which was filled up by him.  It was pleaded that complainant visited its office, each and every aspect was brought to the notice of complainant and all the documents were supplied to him. The complainant being a literate person had gone through those documents and after that he made up his mind to take the policy. It was further pleaded that the OP No.1 had duly informed him to undergo certain medical tests, which were required to be fulfilled before the acceptance of the proposal form. The complainant had given undertaking that if the proposal was not accepted, the insurance company had right to recover administrative and medical expenses from him. All other allegations made by the complainant in the complaint were denied and prayed for dismissal of the complaint with exemplary costs.

5.         The parties led their evidence in support of their contentions.

6.         The District Forum dismissed the complaint as the complaint is baseless, frivolous and devoid of any merit.

7.         Aggrieved by the order passed by the learned District Forum, the present appeal has been filed by the complainant and submitted that the learned District Forum failed to appreciate that the respondents are silent on the subject of investment and what the respondents did with Rs.8 lacs collected from the complainant under “UNIT LINKED INVESTMENT PLAN” Unit Plus II Plan and the order passed by the learned District Forum on the basis of conjectures and surmises. The learned District Forum wrongly believed the respondents that Rs.8 lacs was sent to the appellant/complainant whereas there is nothing on record to prove that Rs.8 lacs was ever sent to the appellant by the respondents. The learned District Forum has wrongly and erroneously allowed the application dated 27.5.2008 of the respondents, that too without considering document C-6 placed on record by the appellant. The learned District Forum further ignored the fact that till date the respondents are getting huge profits/benefit, out of the invested amount of Rs.8 lacs since 4.10.2006 i.e. the date of encashment of the cheque in their ULIP account. The learned District Forum did not take into account the written arguments and citations placed on record by the appellant and were not discussed by the Forum. The learned District Forum has not considered the fact that the subsequent demand of the respondents towards extra additional premium, is otherwise bad as the respondents are demanding the consent of the appellant on the basis of Hypertension, Diabetes and Cardiac Findings whereas hypertension and diabetes had already been disclosed to the respondents in the column No.8(x) of the proposal form and so far as Cardiac findings are concerned, the learned District Forum failed to appreciate the fact that the respondents had not disclosed to the appellant on 21.11.2006 in their surprising letter C-3, that for which Cardiac findings the appellant is suffering from nor the report of the appellant was ever sent to him. The learned District Forum has wrongly ignored the certificate dated 9.10.2007 of the doctor, placed on record by the appellant which the appellant got from one of the most leading Cardiologist after getting his opinion over the report R-3 and the said changes are normal in the person, suffering from Hypertension, which the appellant had already disclosed to the respondents in column No. 8(x) of the proposal form. The learned District Forum has not rightly appreciated, Section 64 VB of the Insurance Act.

            Explanation part of Section 64 VB says

“Where the premium is tendered by postal money order or cheque sent by post, the risk may be assumed on the date on which the money order is booked or the cheque is posted, as the case may be.”

The learned District Forum failed to appreciate the fact that the demand for consent towards extra premium is not only unfair but also bad as it is not possible for the insured to decide and gave his consent towards extra premium when normal rates of premium already adjusted was not disclosed/concealed from the insured i.e. how much amount was invested and how much amount was already adjusted as normal rate of premium. Thus mislead the innocent investor. The learned District Forum failed to appreciate the fact the respondents are also not denying for the policy but they demand consent of the appellant towards adjustment of extra/additional premium from the units already allotted, that too without telling the normal rates of premium already assessed out of the units allotted under unit linked plan i.e. without giving any option to the appellant to decide towards extra/additional premium, which is highly unfair on the part of respondents. Hence, it is prayed that the appeal may kindly be allowed and the impugned order passed by the learned District Forum may kindly be set aside.

8.            Sh.Neeraj Sobti, Advocate has appeared on behalf of appellant and Sh.P.S.Batta, Advocate has appeared on behalf of respondent. We have heard both the learned counsel for the parties and carefully gone through the file.

9.         After hearing the learned counsel for the parties and perusal of the record, we have observed that the complainant had deposited a sum of Rs.8 lacs as premium under SBI Life Investment-cum-Insurance Plan Unit Plus II Plan with the OPs on 28.9.2006 for 99 years (whole life) with insurance cover of Rs.50 lacs.

            Due to the adverse medical history, the OPs intimated the complainant on 21.11.2006 to pay extra/additional premium on the basis of “Regular Health Extra”, which the complainant refused to pay on the ground that on 4.10.2006 after their full satisfaction on the basis of information supplied and previous medical reports of the appellant, the respondents encashed the cheque of Rs.8 lacs in their ULIP account from whom the respondents invest their funds in the market. Moreover, the learned counsel for the appellant argued that the insurance contract was concluded on the date and filing of the proposal form and tendering of the one time single premium of Rs.8 lacs on 28.3.2006 or at the most on 4.10.2006 when the respondents encashed the cheque of Rs.8 lacs and the said amount was credited in the ULIP Account of the respondents from where the respondents invested their funds in the market.

            On the other hand, the respondents contended that there was a requirement of consent for health extra premium and the same was not conveyed to the respondents as the consent was never conveyed by the respondents/OPs. Thus the contract remained unconcluded. For this reason, the amount to the tune of Rs.8 lacs was refunded vide draft No.198911 dated 15.1.2007 as there is no deficiency in service on the part of respondents. The learned District Forum has wrongly dismissed the complaint as baseless, frivolous and devoid of any merit.

10.       But after the perusal of the file, we have observed that  there is nothing on record to prove the fact that Rs.8 lacs was ever sent to the appellant as neither the original receipt issued towards alleged seed post nor its photocopy was placed on record. However, Annexure C-6 shows that the alleged speed post No. EE7708662071 N, was received by the postal authorities at Batala and thereafter the same was delivered at Amritsar on 14.5.2008 and not at Chandigarh. Moreover, keeping in view the submission made by the learned counsel for the complainant that the learned District Forum below has not dealt with the issue of refunding the said amount to the complainant with interest or otherwise. The State Commission vide its order dated 27.7.2009 put up this matter before the Lok Adalat for 17.8.2009. On 17.8.2009 both the parties firstly arrived at a compromise that the respondents/OPs will pay the said amount i.e. Rs.8 lacs along with interest @ 7% within a period of 10 days from today through cheque, which shall be handed over to the complainant on 27.8.2009 at 11 AM in the court itself. It is also adhere that Sh.Neeraj Sobti, Advocate for the appellant has stated at bar that the pay order bearing No. 198991 dated 15.1.2007 worth Rs.8 lacs sent by OP was never received by the complainant and the case be put up on 27.8.2009 for the purpose already fixed. At this stage Sh.Neeraj Sobti, learned counsel for the appellant states that the appellant is not satisfied with the rate of interest @ 7%. In view of this statement, let this matter be now put up on the date already fixed i.e. 27.8.2009 for consideration on this point. On 27.8.2009 the case was adjourned to 7.10.2009 for arguments as there was no amicable settlement between the parties.

11.       During the course of arguments, the learned counsel for the appellant contended that the appellant is ready to accept the amount of Rs.8 lacs but not with interest @ 7% . He humbly submits that the prevailing rate these days is @ 9% and requested the Bench to direct the respondents to refund the amount of Rs.8 lacs along with interest @ 9%. While considering the request made by the learned counsel for the appellant regarding the interest, as these days the prevailing rate of interest for fix deposit is @ 8%. Taking this fact in consideration, we are of the view that that appellant is entitled to the interest @ 8%. In this view of the matter, the appeal is allowed and we direct the respondents to refund a sum of Rs.8 lacs along with interest @ 8% from the date of deposit till realisation. The respondents are further directed to pay the costs of litigation to the tune of Rs.5,000/-The parties are left to bear their own costs. We further direct the respondents to refund this amount along with interest @ 8% within 30 days from the date of receipt of copy of this order, failing which interest @ 12%  shall accrue.

12.       Copies of this order be sent to the parties, free of charge. 

Pronounced.

1^st April, 2010.