BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, MYSORE-570023

CONSUMER COMPLAINT NO.170/2021

DATED ON THIS THE 19^th January 2023

Present:        1) Sri. B.Narayanappa

M.A., LL.B., - PRESIDENT  

                     2) Smt.Lalitha.M.K.,

M.A., B.A.L., LL.B., - MEMBER  

                        3) Sri Maruthi Vaddar,

                                                B.A., LLB (Special)  - MEMBER

Sri B.NARAYANAPPA,

PRESIDENT

1. The complainant T.N.Hemanth, resident of Mysuru has filed this complaint against the OP No.1 – SBI Life Insurance Co.Ltd., Mysuru and OP No.2 – SBI Life Insurance Co.Ltd., Navi Mumbai praying to direct the OPs to refund the entire policy amount of Rs.17,06,550/- with interest at Rs.3,57,631/- and damages for mental agony Rs.5,00,000/- and legal notice charges of Rs.10,000/- and cost of ligation at Rs.50,000/- and grant such other reliefs as this Commission deems fit grant. 
2. The briefs facts are that:-

      The complainant is a renowned businessman and developer under the brand name “ENCON” and is a loyal account holder and a Super High Networth Individual Customer of SBI having regular business transaction.  The OPs are Insurance company and provider of life insurance products.  Deliberation were held by the complainant along with his wife with OPs and the OP No.1 convinced the complainant and wife of complainant to purchase life insurance policy namely SBI Life Saral Pension.  The complainant agreed to purchase the same.  In this regard, the contract of insurance was concluded between the complainant and OP No.2 through OP No.1 on 28.11.2018.  The complainant was ready to transfer the funds through SBI for purchase of insurance policy.  Accordingly, the complainant purchased insurance policy No. 1E775560502 dated 30.11.2018. The representation made by the OP No.1, was an amount of Rs.10,00,000/- every year to be paid as premium with the tenure being optional either for five years or ten years and the policy was coupled with a monthly pension of Rs.57,460/-, in case of payment was made for 5 years and the monthly pension is of Rs.96,576/-, in case if premium is paid for a period of 10 years and it was projected in the policy that the 2^nd annuitant could be the son or daughter of the policy holder and promised that the same amount would be payable to the 2^nd annuitant after the completion of the tenure.  Same was confirmed through a letter dated 19.12.2018 issued by OPs and the premium for 2^nd installment was fell due on 13.12.2019 and an amount of Rs.9,80,386/- was cleared through ECS.  The OPs prompted the complainant to purchase one more policy of SBI Life Saral Pension.  Accordingly, another policy No.1E688583906 has been purchased by the complainant on 30.12.2019 on payment of Rs.10,12,185/- and both the polices were to be renewed in the month of November and December 2020.  Accordingly, the complainant had paid a total sum of Rs.29,94,532/- towards said two policies to the OPs.  In the meanwhile, on 19.12.2020 an E-mail was sent by OPs stating denial of promised terms and discrimination between two policies.  Hence, it is contended that the OPs have no such right to latent denial and the scheme cannot be varying from one policy to another policy issued by the OPs.  Therefore, it is alleged that the OPs to have unjust enrichment and by adopting unfair trade practice, issued an E-mail dated 19.12.2020 denying the promised terms and discrimination between the two policies.  The policies so purchased at the behest of the representation made by OP No.1 though promised huge, but turns out to be miniscule and never be reached by the complainant.  Therefore, on 18.03.2021, a legal notice was caused to OPs to reissue of policy note as promised failing which called upon to repay the amount invested under the policies with interest at 21% p.a. The OPs replied the notice on 04.05.2021.  However, before the reply dated 04.05.2021, on 30.04.2021 the complainant received a letter from the OPs.  In the said letter, the OPs were willing to refund premium paid along with interest with regard to policy No.1E775560502.  Therefore, on 31.05.2021 the complainant received a refund of Rs.21,16,409.81 from the OPs.  The complainant had paid total premium of Rs.19,82,347/- in respect of policy No.1E775560502 which would yield interest of Rs.8,28,427/- until 31.05.2021 at 21% p.a.  Thus, the OPs have paid due amount by leaving deficit of Rs.6,94,364.19. Therefore, it is alleged that the OPs caused mental agony to the complainant due to unexpected turn of deprival of expected returns and pension plans and imposition of insecurity.  Hence, it is contended that the complainant is entitled to refund of principal amount of Rs.10,12,185/- paid towards premium for policy No.1E688583906 and also the deficit amount of Rs.6,94,365/- totally Rs.17,06,550/- with interest at Rs.3,51,631/- and the legal notice charges of Rs.10,000/- and cost of Rs.50,000/- total Rs.26,24,181/-.  Hence, this complaint.

3. After registration of this complaint, notices were ordered to be issued to OPs.  In response to notices, the OPs appeared before this Commission and have filed written statement contending that the complaint is not maintainable since the same is barred by limitation.  Hence, the same is liable to be dismissed and admitted the contents of para Nos.7, 8 and 9 to the extent that the company received duly filled and signed proposal forms bearing Nos.1EYA543800 and 1EYB473673 dated 28.11.2018 and 30.12.2019 along with initial deposit of Rs.10,01,961/- and Rs.10,12,185/- and on the basis of the same, the OPs issued SBI Life Saral Pension Policies bearing Nos.1E775560502 and 1E688583906 on 29.11.2018 and 15.01.2020 and premium paying term of 10 years, payable on 29.11 and 15.01 respectively every year and denied the contents of para Nos.10(1 to 3) and 11 and 12 that the company projected that policy holder’s son or daughter are the 2^nd annuitant under the policies.  The basic feature of the product is to save systematically and to build retirement corpus for policy holders and the policy has not acquired any surrender value as policy holder has not paid 3 years premiums and admitted the contents of para 12+1 to the extent that first renewal premium/2^nd premium was received under policy bearing No.1E775560502.  The policy bond is the evidence of Contract of Insurance and both the insurer and the insured are bound by the terms and conditions of the contract as approved by IRDAI.  The OPs have received 2 premiums under the policy No.1E775560502 and premium was due on 29.11.2020.  Thereafter, not received premium by the company and the OPs have received initial premium under policy No.1E688583906 and premium was due on 15.01.2021, but the renewal premium was not received.  Both the parties have separate and different contracts.  The policy holders have paid premium for 2 years under policy No.1E775560502 and one premium under policy No.1E688583906 and seeking all the benefits under the policy which is unjust and ultra virus under the terms and conditions of the policy.  In the instant case, the policy has not acquired any surrender value as policy holder not paid 3 years premiums.  The OPs are denied the averments made in para 30 of complaint, the OPs have refunded the premium amount of Rs.19,82,344/- + interest at 3.5% p.a. total Rs.21,16,410/- on 31.05.2021 under policy No.1E775560502 towards cancellation of policy and nothing more is payable and contended there is no deficiency or unfair practice on the part of OPs and they have no hidden agenda and deceptive modes by the OPs and OPs have not caused mental agony or trauma to the policy holder, if the policy holder was not satisfied in the terms and conditions, he did not do.  Therefore, the complainant is not entitled to refund Rs.10,12,185/- or deficit amount of Rs.6,94,365/- with interest at Rs.3,57,631/- and the complainant is also not entitled to damages expenses and cost to the tune of Rs.26,24,181/- and denied all other averments made in the remaining paras.  Hence, prays to dismiss the complaint. 
4. The complainant has filed his affidavit by way of examination in chief and the same was taken as P.W.1 and got marked documents as Ex.P.1 to Ex.P.24.  On the other hand, the OPs have filed affidavit by way of examination in chief and the same was taken as R.W.1 and got marked documents as Ex.R.1 to Ex.R.4.
5. The complainant has filed written arguments.  The OPs and their counsel remained absent and not addressed arguments.   
6. The points that would arise for our consideration are as under

1. Whether the complainant proves that the alleged deficiency in service on the part of the opposite parties and thereby he is entitled to the reliefs as sought for?
2.  What order?

7. Our findings on the aforesaid points are as follows:

      Point No.1 :- Partly in the affirmative.

      Point No.2 :- As per final order for the following

REASONS

8. Point No.1:- It is not in dispute that the complainant had obtained two policies (pension) bearing Nos.1E775560502 and 1E688583906 on 2711.2018 and 15.01.2020 respectively and paid initial deposit of Rs.10,01,961/- and Rs.10,12,185/- respectively towards the said two policies namely SBI Life Saral Pension policies and the policy No.1E775560502 was due for payment of yearly premium on 29.11.2019 and the policy No.1E688583906 was due for payment of yearly premium on 15.01.2021. The OPs have received two premium under policy bearing No.1E775560502 and the premium was due on 29.11.2020 and onwards premium not received by the company.  The OPs company have received only initial premium under policy No.1E688583906 and the premium was due on 15.01.2021 but the same has not been received by the OPs company.  Therefore, the OPs have contended that only two premium under the policy No.1E775560502 has been received by the OPs company and only initial premium under the policy No.1E688583906 has been received by the OPs.  The complainant had paid premium for 2 years in respect of policy No.1E775560502 and only one premium in respect of policy No.1E688583906 and the policy has not acquired any surrender value as policy holder has not paid 3 years premium.  Thus nothing is payable as of now under the policy and contends that the action of the OPs is as per the terms and conditions of the policies.  Hence, there is no deficiency in service or unfair trade practice on the part of OPs.  However, the OPs have refunded the premium amount of Rs.19,82,344/- + interest at 3.5% p.a. i.e total Rs.21,16,410/- by cancelling the policy bearing No.1E775560502 on 31.05.2021. Hence, contends that the complainant is not entitled to refund Rs.10,12,185/- and deficit amount of Rs.6,94,365/- with interest at Rs.3,57,631/-, Rs.5,00,00/- towards mental agony and trauma and Rs.10,000/- as legal expenses and Rs.50,000/- towards litigation expenses totally Rs.26,24,181/-.   The complainant has produced insurance policies bearing Nos.1E775560502 and 1E688583906 and also produced premium paid receipts in respect of said two policies.  On the other hand, the OPs have also produced said insurance policies and its terms and conditions. 
9. According to OPs, as per the terms and conditions of the policies, as the complainant has not paid 3 premiums in respect of said two insurance policies.  The policies even does not have surrender/cancellation value and refund of premium.  Therefore, according to the OPs, the complainant is not entitled for any reliefs as sought for by the complainant.
10. Admittedly, the complainant had paid two premiums towards policy No.1E775560502 Rs.10,01,961/- and Rs.9,80,386/- respectively and admittedly the complainant also paid single premium of Rs.10,12,185/- in respect of policy bearing No.1E688583906 totally the complainant had paid Rs.29,94,532/- towards the said two policies which is not in dispute that the OPs have also admitted the payment of Rs.29,94,532/- made by the complainant to OPs in respect of said two insurance policies.  The complainant has purchased the said two insurance policies only with an intention to safe guard his life and to get pension from the said policies. As per the terms and conditions of the policies, if an amount of Rs.10,00,000/- every year is paid towards premium with tenure for a period of 5 years, then the complainant is entitled for monthly pension of Rs.57,460/- and if premium is paid for a period of 10 years, then the complainant would entitled to monthly pension for Rs.96,576/- and the same has been promised by the OPs to the complainant and the 2^nd annuitant could be son or daughter of the complainant as policy holder and after completion of the tenure of the 2^nd annuitant, the amount so paid along with accrued bonus would be payable to nominee of the 2^nd annuitant.  It is further clear contention of the complainant that when the said two policies had attained the age of renewal in November and December 2020. The officers of OP No.1 orally submitted that terms and conditions assured is not applicable to the complainant though the policy is the same.  Therefore, dissatisfied with the oral submission of OP No.1 officials.  The complainant decided not to continue with the policies in question, called upon the OPs to refund the premium with interest at 21% p.a.  The submission of OP No.1 officials made the complainant to suffer mentally due to unexpected turn of deprival of expected returns and pension plan and imposition of in-security from the sudden deprival of amount so lawfully entitled by the complainant.  Therefore, the complainant has come up with the present complaint with a prayer that he is entitled to refund of principal amount to the tune of Rs.17,06,550/- with interest and damages etc., 
11. As per the terms and conditions of the policies, according to the OPs since the complainant has not paid 3 premiums towards the said two policies, the complainant is not even for surrender value, therefore, the OPs contends that the complainant is not entitled to any reliefs as sought in the complaint.  The said contention of the OPs cannot be accepted in view of the huge investment of Rs.29,94,532/- has been made by the complainant to purchase the above said two pension insurance policies and the OPs cannot withheld the said amount without paying the same to the complainant and as we have stated above, the complainant decided not to continue the said policies only because of the OPs turned down their terms and conditions assured at the time of purchasing the policies by the complainant. However, the OPs have refunded two premium of Rs.19,82,344/- + interest at 3.5% p.a. i.e. total amount of Rs.21,16,410 on 31.05.2021 under the policy No.1E775560502. The OPs should have paid interest at 10% p.a. on two premiums of Rs.19,82,344/- paid in respect of policy No.1E775560502 but paid interest at 3.5% p.a. which is unjust.  Therefore, we are of the opinion that the OPs are liable to pay balance interest at 6.5% p.a. on Rs.19,82,344- and the OPs shall not withheld the single premium of Rs.10,12,185/- paid towards policy No.1E688583906 and they also liable to refund premium of Rs.10,12,185/- paid in respect of policy No.1E688583906 with interest at 10% p.a. from the date of its receipt and damages of Rs.1,50,000/- along with legal expenses.    The oral submission of OP No.1 officials stating that the terms and conditions assured under the policy is not applicable to the complainant which itself is nothing but deficiency in service and unfair trade practice on the part of OPs. Hence, we answer point No.1 partly in the affirmative.
12.   Point No.2:- For the aforesaid reasons, we proceed to pass the following

:: ORDER ::

1. The complaint of the complainant is hereby allowed in part.
2. The opposite party Nos.1 and 2 are jointly and severally liable to pay balance interest at 6.5% p.a. on Rs.19,82,344/- from 31.05.2021 and refund premium of Rs.10,12,185/- to the complainant with interest at 10% p.a. from the date of receipt of said premium amount from the complainant within 2 months from the date of this order till payment.
3. Further opposite party Nos.1 and 2 are liable to pay compensation of Rs.1,50,000/- and Rs.5,000/- towards cost of the litigation to the complainant within 2 months from the date of this order.  Failing which, compensation of Rs.1,50,000/- + cost of litigation Rs.5,000/- totally Rs.1,55,000/- shall carry interest at 10% p.a. till payment.
4. The complainant is at liberty to take action against the opposite party under Section 72 of the C.P.Act, 2019 for non-compliance of this order.
5. Furnish the copy of order to both parties at free of cost.

(Dictated to the Stenographer transcribed, typed by her, corrected by us and then pronounced in open Commission on this the 19^th January 2023)