Haryana

Panchkula

CC/152/2015

KAILASH KUMAR SHOREE. - Complainant(s)

Versus

SBI LIFE INSURANCE COMPANY LTD. - Opp.Party(s)

DEEPAK AGGARWAL.

15 Mar 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PANCHKULA.                                               

Consumer Complaint No	:	152 of 2015
Date of Institution	:	18.08.2015
Date of Decision	:	15.03.2016

Mr.Kailash Kumar Shoree s/o late Sh.Kanwar Lal Shoree, R/o H.No.267, Sector 12, Panchkula-134112 (Haryana).

                                                                                      ….Complainant

Versus

1. SBI Life Insurance Company Ltd. Registered and Corporate Office, Natraj, M.G. Road and Western Express High Way Junction, Andheri (East) Mumbai-400069 through its Director.
2. Regional Director, SBI Life Insurance, SCO 127-128, 3^rd floor, Sec-17-C, ^3rd Floor Chandigarh.
3. Branch Manager, Serving Branch, SBI Life Insurance Company Limited, SCO No.304, 2^nd Floor, Sector-9, Panchkula, Haryana-134109.
4. Umesh Bali (Agent) of SBI Life Insurance Company Ltd., SCO No.304, 2^nd Floor, Sector-9, Panchkula, Haryana-134109.

                                                                    ….Opposite Parties

 

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

 

Before:                 Mr.Dharam Pal, President.

              Mrs.Anita Kapoor, Member.

              Mr.S.P.Attri, Member.

 

For the Parties:     Mr.Deepak Aggarwal, Advocate for complainant.

Mr. Rajneesh Malhotra, Advocate for Ops No.1 to 3.

Mr.Krishan Gopal, Advocate for OP No.4.        

 

ORDER

(Anita Kapoor, Member)

 

1.                          Kailash Kumar-complainant has filed the complaint against the Ops with the averments that Ops No.3 & 4 made a telephonic   call to complainant and apprised salient features of insurance plan by saying that it would be a single premium policy with Lock-in period of 3 years from the date of commencement and the complainant would be entitled to mature value of the policy on the commencement of fourth policy year. It was also narrated to the complainant that the surrender charges would be Nil from the commencement of 6^th policy year onwards irrespective of the product whether it is single premium policy or with the annual frequency i.e. regular premium payment plan etc. The policy could not be terminated within the Lock-in period in order to get refund/surrender value.  On believing the projections apprised by the Ops on 19^th August, 2010 the complainant invested Rs.11,00,000/- in the scheme i.e. SBI Life Unit Plus III Pension. The Ops issued policy No.38007157706 to the complainant without explaining its terms and conditions. Thereafter the policy in question was converted for investment in Govt.Securities through bond fund on 28.10.2011 by the Ops and consequently the policy no longer remained United Linked Policy.  On 23.08.2014 the complainant received a SMS whereby he was asked to collect a sum of Rs.11.1 lacs as proceeds of the termination of pension plan. The complainant requested the Ops to know the reasons of refund and the basis of calculation of the proceeds of the policy plan but it yielded no response. On 04.10.2013 the complainant submitted request for surrender/refund of the policy after the Lock-in period of three years and also completed the process of refund. The Ops No.3 & 4 have not mentioned any condition or requirement to pay any extra premium during the next two years i.e. till the commencement of the 6^th Policy year in their letter dated 08.10.2013. but the action of Ops qua deducting of surrender charges @ 15 % and service tax of 12.36 % is arbitrary, illegal and termination of the policy in question by taking refuge of revival clause meant for Life Insurance Cover amounts to unfair trade practice.  The complainant made representation regarding this but the Ops replied that We would like to inform you that if policy is not revived during the revival period (3 years from the date of first unpaid premium) then the policy shall terminate and surrender value, if any, shall become payable at the end of the revival period. Such surrender value would be the Fund value of the policy less surrender charges applicable at the time of first unpaid premium. Kindly refer policy schedule supplied with policy booklet for details of terms and conditions associated with it. Under these circumstances we sincerely regret our inability to accede to your request.  The Ops totally ignored the KYC Norms while issuing the policy in question and further that despite of being aware of low source of regular income of the complainant, yet had issued policy in question knowing fully well that he would not be able to pay heavy amounts of premiums of Rs.11 lac on regular annual basis.  The complainant requested the Ops to look into the matter and on this assurance was also given but the Ops failed to answer the quarries of the complainant satisfactorily.  The act of the Ops in not disclosing and making aware him regarding terms and conditions reflects that they are deficient in providing services besides negligent in doing their duties and even they also indulged in unfair trade practice.  As per guidelines of IRDA the Ops can put a maximum absolute cap of Rs.6,000/- in case a policy is discontinued in the first year and the charges are capped at Rs.2000/- in the fourth year whereas its refund has been effected after the commencement of the fifth policy year.  The Ops have miserably failed to follow the instructions issued by the IRDA. Hence, the complaint.

2.                          The Ops appeared and filed their separate written statements.  It is submitted that the Ops no.1 & 2 are at Chandigarh and Navi Mumbai respectively while the case is filed at Panchkula,  hence the Hon’ble Forum may dismiss the complaint against the Ops no. 2 & 3 for want of territorial jurisdiction. The Ho’ble National Commission while disposing of the First Appeal No. 428 of 2008 (in New India Assurance Co. Ltd. Vs. Gopal Gupta & Others) in their order dated 03.09.2013 clearly laid down the rules for determining the territorial jurisdiction.  The ratio of this judgment is squarely applicable to the instant case.  It is submitted that the policy was issued in August, 2010 and the complaint has been filed after a gap of 4 years, therefore, the present complaint is time barred.  It has been further submitted that the complainant does not come within the preview of Consumer.  The OPs had issued policy bearing No.38007157706 to the complainant  with date of commencement as 20.08.2010 for a premium paying term of 10 years installment with premium of Rs.11,00,000/- as opted by him on annual basis.  The policy in question is a market linked plan wherein the premium paid by the policy holder are invested in the capital market. The said policy has a provision of cancellation of policy under free look period but the complainant did not exercise this option within stipulated period and continued the same. The Ops No.1 to 3 had received only initial premium under the policy and the policy lapsed due to non receipt of premium on 20.08.2011.The complainant did not pay the premium within grace period also.   The complainant was requested to revive his policy and it was informed to him that if the policy is not revived within the revival period from the date of first unpaid period, then the policy contract would be terminated at the end of revival period and surrender value would be paid as full and final settlement under the policy. Since the complainant failed to revive the policy, therefore, the surrender value is payable after deduction of surrender charges and Rs.11,100,27/- have already been paid to him on 28.10.2014.  The complainant has no locus standi to raise any issue about the policy in question because the letters sent by the complainant have already been replied. The Ops have acted as per the terms and conditions of the policy and prevailing laws and it cannot be termed as arbitrary, illegally or unlawful deductions. It has been denied that Ops have violated the RBI/IRDA’s KYC norms as alleged by the complainant.   

3.                                   OP No.4 in its separate written statement has submitted that the present complaint has been filed by concealing the material facts from this Forum, therefore, the present complaint is liable to hit by the provisions of Principle of Estoppel. The complainant himself is a banker and after retirement is an insurance agent of ICICI prudential and as such ignorance of having not read the terms and conditions of the policy document is not believable. The complainant had purchased Eight different type of Policies from SBI Life Insurance from 25.08.2010 to 02.11.2010 in which he has been benefited. All the Ops have controverted the other allegations made by the complainant and submitted that there is no deficiency in service or unfair trade practice on their part. Lastly, prayer for the dismissal of the complaint has been made.

4.                          In support of his case, complainant has tendered into evidence by way of affidavit Annexure C-A alongwith documents Annexure C-1 to C-11, C11A, C12 to C15 and closed the evidence. On the other hand, the counsel for the Ops has tendered into evidence by way of affidavits Annexure R1/A, Annexure R4/A, alongwith documents Annexure R1/1  to Annexure R1/11 and closed the evidence.

5.                          We have heard complainant and counsel for Ops and have carefully gone through the record including the pleadings of the parties and the documentation tendered into evidence by them.

6.                          The core topic of controversy requiring adjudication at the hands of this Forum to the validity or otherwise of the deduction made by Ops on the basis of a unilateral termination (to borrow an expression used by complainant) of the impugned policy. The initial relief sought is for the refund of that amount with claimed interest. The other reliefs are consequential flow thereof which include the compensation for harassment and mental agony faced by the complainant as also for the Ops having addressed a letter dated 08.10.2013 which the complainant describes to be ‘misleading’. A claim for the award of litigation expenditure too was made.

7.                          The pure and simple plea made by the Ops is that the impugned termination is in accord with the terms and conditions of the relevant policy which (policy) categorically provided that the impugned charges shall be made in case of an arbitration in the observance of discipline with regard to the payment of installment of premium amount.

8.                          The cue to the controversy is to be found from the contents of Annexure C-1, a letter dated 08.10.2013 addressed by OP No.1 to the complainant informing the former that “the surrender charges would be Nil from 6^th Policy year onwards irrespective of  no. of year premium paid even if the policy is a regular premium payment plan”. The contents of this letter, it was argued on behalf of the complainant, disentitle the Ops from levying the surrender charges.

9.                          We find ourselves in agreement with the grievance of the complainant, particularly when the plea made by him is buttressed by the contents of Annexure C-1 dated 08.10.2013.

10.                        The effort made by the Ops to wriggle out of the contents of Annexure C-1 by averring that the complainant is bound by the terms and conditions of the impugned policy is neither here nor there. Annexure C-1 had concededly been issued by the OP No.1. This letter, which purports to be dated 24.10.2014, was posted on 24.01.2015 and was received by the complainant in the second week of February, 2015. The corresponding para of the written statement filed by Ops No.1, 2 and 3 only states that the letter “was sent as a matter of routine in bulk through ordinary post”. That averment is not acceptable on the touchstone of official routine.  One may expect a letter to be cleared through dispatch within 2/3 days time. Any further delay is open to the charge of intention in the relevant behalf.

11.                                 It is, even otherwise, a matter of common observation that it is not possible for a private party to go through the entire documentation before appending signature whereto. A number of cases have come up before the Consumer Dispensation, at various hierarchical levels, wherein the grievance of the complainant in each case (to the effect that the documentation was not allowed to be gone through and is, thus, not binding upon him/her) has been upheld in a fairly large number of cases. While it is to state the obvious that each case has to be adjudicated upon on the basis of its own peculiar facts and circumstances, it too cannot be controverted that the number of cases wherein the above indicated factual scenario emerged is quite large, if we go by the number of reported cases on the topic.

12.                                 There is, further, a precise averment in the course of Para-20 of the complaint that the impugned deduction is not in accord with the IRDA Regulations issued by the insurance regulatory and development authority which provides for the capping of the charges leviable in case of discontinuation of the policy in the first year or further thereafter. That para further contains an averment that an identical matter was adjudicated upon by the Consumer Forum, Mohali in a decision dated 10.01.2011. Reliance was placed upon the reasoning adopted in the course thereof. A copy of that order has been placed on record as Annexure C-15. The concurrence of our jurisdictional contours notwithstanding, we adopt and reiterate the reasoning recorded in the course thereof. It was not even argued during the course of hearing that the order aforementioned had been invalidated by any Hon’ble Consumer Dispensation, higher in hierarchy. The formulation aforementioned having come about at the hands of a competent authority, the Ops cannot wriggle out of the liability to be governed thereby.

13.                                 While, thus, relying upon Annexure C-1, the IRDA regulations providing for the capping of leviable charge as also the reasoning recorded in the course of Annexure C-15, we would allow this complaint and order:-

a)       that the Ops shall refund the charges levied in violation of Annexure C-1 and the IRDA regulations, alongwith interest @ 9% w.e.f. the date of deduction and till the payment thereof comes about:

b)      that the Ops shall pay a sum of Rs.10,000/- to the complainant as compensation for the mental harassment, agony and deficiency of service on their part: and

c)       that the Ops shall also pay a sum of Rs.5,000/- as cost of litigation.

14.                                  The Ops shall comply with this order within a period of one month from the date of communication to it comes about. A copy of this order shall be forwarded, free of cost, to the parties to the complaints.

Announced

15.03.2016         S.P.ATTRI        ANITA KAPOOR        DHARAM PAL

                           MEMBER        MEMBER                      PRESIDENT

 

 

Note: Each and every page of this order has been duly signed by me.

 

    

                                 

                                                         ANITA KAPOOR

                                                          MEMBER