Haryana

Panchkula

CC/166/2019

MRS.RESHMA RANI SINGLA - Complainant(s)

Versus

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

VINOD MAHINDRU

18 Feb 2020

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,  PANCHKULA

                                                      

Consumer Complaint No	:	166 of 2019
Date of Institution	:	13.03.2019
Date of Decision	:	18.02.2020

 

1.     Mrs. Reshma Rani Singla wife of Shri Kashmiri Lal Singla, resident of House No.10, Sector-15, Panchkula(Haryana)

2.     Kashmiri Lal Singla son of Shri Banarsi Dass resident of House No.10, Sector-15, Panchkula(Haryana)

                ….Complainants

 

Versus

1.     SBI Life Insurance Company Limited, SCO No.304, 2^nd Floor, Above Hot Millions, Sector-9, Panchkula (Haryana) through its Manager.

2.     SBI Life Insurance Company Limited, Plot No.3/A, Sector-10, CBD Belapur, Navi Mumabi-400614 through its Managing Director/CEO.

….Opposite Parties

 

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

 

Before:              Sh. Satpal, President.

Dr. Pawan Kumar Saini, Member.

Dr. Sushma Garg, Member.

 

 

For the Parties:   Sh. Vinod Mahendru, Advocate for complainant.   

                        Sh. Rajnish Malhotra, Advocate for OPs.

ORDER

(Sh. Satpal, President)

1.     The brief facts of the present complaint are that the complainants purchased the following two SBI Life Smart Performer Policies in December, 2010 from SBI Life Insurance(the OP), after payment of single premium of Rs.60,000/- each policy, on persuasion of the agent Mr.Rajinder Kumar(CIF Code 16583763) of the Ops.

        a.     Mrs. Reshma  Rani Singla, Customer No.25685071, Policy No.440 08442 508, Product Name:SBILIFE-Smart Performer issued on 30.12.2010.

        b.     Mr.Kashmiri Lal Singla, Customer No.25679744, Policy No. 44008117906, Product Name:SBILIFE-Smart Performer issued on 29.12.2010.

As per terms and conditions of the said Life Insurance Policies,  the SBI Life Insurance was authorized and empowered to invest the premium amount in different funds on behalf of the complainants so that the complainants do get the maximum NAV on the policy amount and the OPs had used to charge from the policies NAV for Premium Allocation Charges, Policy Administrative Charges, Mortality Charges and Fund Management Charges from the complainants on daily/monthly basis as a percentage of the fund value which is reflected in the NAV of funds. After the issuance of SBI Life Insurance Policies, the OPs invested the premium amount of the complainants in the fund, namely, Daily Protect Fund III and Index Fund as mentioned in the Transaction cum Unit Statements, for the period June, 2012 to December,2012 sent by the OPs to the complainants and also as shown in the Transaction cum Unit Statements sent by the Ops to the complainants for the period December, 2012 to June, 2013, June, 2014 to December, 2014, December, 2014 to June, 2015 and June, 2015 to December, 2015. As per the terms and conditions of the SBI Life policies issued by the OPs in favour of the complainants, the complainants could surrender their said SBI Life Policies anytime after the minimum lock in period of 5 years and up to 10 years after purchase and get the NAV value of the policies as stood on the date of surrender. On 05.04.2017, when the minimum lock in period of 5 years for surrender of policies had since elapsed, the complainants noticed that the NAV of Daily Protect Fund III in which their SBI Life Smart Performer Policy fund was invested by the OPs as per Transaction cum Unit Statements received by them from the OPs, was Rs.18.9626 per unit. The above said NAV of Daily Protect Fund III as per unit rate of Rs.18.9626 had attracted the complainants and the same persuaded the complainants to surrender their policies for encashment. Accordingly, the complainants surrendered and got received both of their policies on 05.04.2017 to the OP No.1 in their office at Sector-9, Panchkula with the hope that they will get the amount of Rs.96,000/- against each policy on the then prevailing NAV of Daily Protect Fund III. The OPs after surrender of policies by the complainants had credited the amount of Rs.78,854/-in SBI Bank Account No.35980078299, IFS Code SBIN 0001509 on 12.04.2017 pertaining to the complainant no.1 Mrs.Reshma Rani Singla and also an amount of Rs.79,203/- in the SBI Account No.10847824760, IFS Code SBIN 0000628 pertaining to the complainant No.2 Mr. Kashmiri Lal Singla on 17.04.2017. The OPs have thus credited lesser amount to the tune of Rs.17,146/- against policy  of the complainant no.1 and Rs.16,797/- against policy of complainant no.2 because the OPs paid NAV of Daily Protect Fund and not NAV of Daily Protect Fund III. When the complainants received less amount, a number of e-mails  were exchanged  between the complainants and the OPs from 14.05.2017 to 04.08.2017 but the OPs despite admitting lapse on their part did not provide the requisite relief of payment at NAV of Daily protect fund III except begging apologies from the complainants repeatedly, the complainants filed a complaint through e-mail dated 05.08.2017 and with a consent form on 16.08.2017 against the OPs before the Hon’ble Insurance Ombudsman, Chandigarh and same was dismissed vide order dated 23.01.2019. Due to the act and conduct of the OPs, the complainant has suffered a great financial loss and mental agony, harassment. Hence, the present complaint.

2.     Upon notices, OPs No. 1 & 2 appeared through counsel and filed written statement raising preliminary objections qua complaint is not maintainable being false and baseless; no territorial jurisdiction; the complainant is not a consumer as defined under the Consumer Protection Act, 1986 being false and frivolous; no cause of action. On merits, OPs No.1 & 2 stated that the complainants applied for SBILIFE-Smart Performer Plan with “Secure and grow” plan option. This policy was a market linked plan where in the premium amount paid by the policyholder are invested in the capital market. In the proposal form on the top, it is clearly stated that “In this policy, the investment risk in investment portfolio is borne by the policyholder”.  It is clear from the proposal form that the complainant was aware of the investment risks involved in the policy and consented to the same after understanding the contents of the proposal form, which were explained to him in Hindi Language. The investments are always subject to market risks and hence the returns under the policy depend on the performance of the financial markets on the date of reckoning. The complainants were further aware that the various charges will also be deducted from the premium paid by them. The terms and conditions which were mention in the policy documents under point no.8 ‘The Funds’ were explained in para no.2 of written statement filed by the OPs. The Policies were unit linked plan having two investment options Secure Plan and Secure N Grow Plan with fund options i)Daily Protect Fund and ii) Index Fund. The complainants had chosen “Secure N Grow Plan” under the 4.1 Basic Plan details in the proposal forms. Under the “Secure N Grow Plan” out of entire premium(net of allocation charges) 80% would be allocated to Daily Protect Fund and the remaining 20% would be allocated to index  fund. Thus, after deduction of allocation charges the net investible portion was invested to Daily protection fund and Index Fund in 80:20 and proportionate units of each funds allotted.

44008117906- Kashmiri Lal Singla
Fund	Unit	NAV	Amount
Daily Protect Fund	4551.9368	10.2124	46486.20
Index Fund	1003.1147	11.5903	11626.40
Total			58112.60
44084428508-  Reshma Rani Singla
Fund	Unit	NAV	Amount
Daily Protect Fund	4511.4414	10.3046	46488.60
Index Fund	992.4798	11.7151	11627
Total			58115.60

       

        As risk cover has to be granted on the life of the policyholder, all the expenses and charges like Mortality charges, Premium Allocation charges, Fund Management charges are covered from these funds by cancelling the appropriate number of units from the fund value. In the instant case, the Fund value as on date of surrender paid to the policyholders which is as per the terms and conditions of the policies. The Surrender value Calculation is mentioned below:-

Policy No.44008442508

Fund Name	No of Units	NAV(as on 5/4/17)	Amount
Daily Protect Fund	4240.5207	15.7124	66628.76
Index Fund	683.1728	17.8943	12224.90
Gross Surrender Value			78853.66
Net Surrender Value			78853.66

 Policy No.44008117906

Fund Name	No of Units	NAV(as on 5/4/17)	Amount
Daily Protect Fund	4279.0526	15.7124	67234.19
Index Fund	668.8804	17.8943	11969.15
Gross Surrender Value			79203.33
Net Surrender Value			79203.33

 

As per surrender requests received, the policies were surrendered and amount of Rs.78,854/- under Policy no.44008442508 and Rs.79,203/- under policy no.44008117906 were transferred to policy holder’s State Bank of Account bearing no.35980078299 on 12.04.2017 and 10847824760 on 17.04.2017 respectively. The company informed regarding the settlement of surrender payments vide letters dated 17.04.2017 for policy no.44008442508 and dated 19.04.2017 for policy no.44008117906 respectively. The calculation of surrender value was made as per the terms and conditions of the policies. In the unit statement letters due to typographical error the name of the fund was mentioned as Daily Protect Fund III in place of Daily Protect Fund. Thus, there is no deficiency in service on the part of the OPs No.1 & 2 and prayed for dismissal of the present complaint.

3.     Replication to the written statements of the OPs No.1 & 2 was filed by the complainants reiterating the contents of the complaint while controverting the contentions of the OPs.

4.     The learned counsel for the complainants has tendered affidavits as Annexure C/A & C/B along with documents Annexure C-1 to C-20 in evidence and closed the evidence by making a separate statement. On the other hand, the learned counsel for OPs has tendered affidavit Annexure R/A alongwith Annexure R/1 to R/12 and close the evidence.  

5.     We have heard the learned counsels for complainant as well as OPs No.1 & 2. We have gone through the entire record including the written arguments filed by the learned counsels for the complainant as well as OPs available on record minutely and carefully.

6.     The complainants have no grievances against the OPs with regard to the investment of insurance premium amounting to Rs.60,000/- each policy  in the daily protect fund and index fund under the SBILIFE- Smart Performer Plan Secure N Grow Plan vide policy no. 44008442508 and policy no.44008117906 in favour of complainant no.1 and complainant no.2 respectively. Admittedly, the complainants opted to surrender the aforementioned policies on 05.04.2017 and there upon an amount of Rs.78,854/- and Rs. 79,203/- has been paid to the complainants as Net surrender value as per Net Asset Value(hereinafter referred to NAV) prevailing on 05.04.2017 of the Daily Protect Fund. The only grievance of the complainants is that they had not been paid the surrender value as admissible to them vide NAV of Daily Protect Fund III. It is the case of the complainants that they were allured to surrender the policy pre-maturely on the basis of representation vide various periodical transaction cum unit statements(Annexure C-3 to C-9) wherein it was shown that insurance premium was invested by OPs in Daily Protect Fund III. It is alleged that the complainants believing upon the contents of said transaction cum unit statements(Annexure C-3 to C-9)showing the investment in Daily Protect Fund III as also keeping in view the prevailing NAV of Daily Protect Fund III decided to surrender their said policies pre-maturely and thus it is claimed that they are entitled to the NAV of Daily Protect Fund III instead of Daily Protect Fund.

7.     Apart from disputing the assertions of the complainants on merits, the OPs have disputed the maintainability of the complaint inter-alia on the preliminary objections of territorial jurisdiction of this Forum and that of res-judicata.

8.     We take up the above objections as follows:-

        The objection disputing the territorial jurisdiction is rejected, in view of the fact that OPs have branch office at Panchkula, carries on business at Panchkula and corresponded with the complainants with their branch office at Panchkula as is evident from surrender request(Annexure R-6 & R-7). In so far as the ground of Res Judicata is concerned, it is not disputed that the insurance Ombudsman has passed the order vide reference no.CHD-L-041-1718-0755 dated 23.01.2019 (Annexure C-20/ (colly)) but principle of Res Judicata is not applicable in the present case as the remedy available under Section 3 of the Consumer Protection Act, 1986 is in addition to any other remedy available under any other law. The order passed by the Ombudsman does not restrict or curtail the jurisdiction of the Consumer Forum in any manner. Moreover, the Ombudsman vide letter dated 31.01.2019 (Annexure C-20(colly)) has conveyed that the complainants are at liberty to present their case before any other forum/court if there are not satisfied with his award. The said contents of the said letter are reproduced as under:-

                “In the eventuality of your disagreeing with the enclosed award, you may, however, if you deem fit proper, move a fresh application at any other forum/court that may be considered by you as appropriate, against the insurance company for its alleged deficiency of service, complained by you”.

9.     On merits, upon perusal of the proposal forum(Annexure R/2 & R/3) of the aforementioned policies in question(Annexure R/4(colly) & R/5 (colly)) have been issued in favour of the complainants, it has been revealed that the complainants had clearly proposed the investment of their premium amount in the Daily Protect Fund under the secure N grow plan instead of Daily Protect Fund III. The relevant part of the proposal forum no. 44697771(Annexure R-2) and proposal form no.44025344 (Annexure R-3) are reproduced as under:-

Proposal form no.44697771 of Mrs. Reshma Rani Singla(complainant No.1)

Plan Options

*  Secure Plan                Secure N Grow Plan *  Entire  premium(net of allocation charges) would be     allocated  towards  the Daily Protect Fund ** Out of the entire premium(net of allocation charges),     80% would be allocated  to Daily Protect Fund and      the remaining 20% would be allocated to Index fund.

 

Proposal form no.44025344 of Sh.Kashmiri Lal Singla(complainant no.2)

Plan Options

*Secure Plan                Secure N Grow Plan * Entire  premium(net of allocation charges) would be allocated  towards  the Daily Protect Fund ** Out of the entire premium(net of allocation  charges) 80% would be allocated  to Daily Protect Fund and the remaining 20% would be allocated to Index Fund.

 

10.    Moreover, the first premium receipt dated 29.12.2010(Annexure R-4(colly)) pertaining to the policy of Reshma Rani Singla(complainant No.1) and first premium receipt dated 27.12.2010(Annexure R/5(colly)) pertaining to Kashmiri Lal Singla(complainant No.2) clearly shows that the investible amount out of paid premium amount was to be invested in daily protect  fund and index fund in the ration of 80:20. The clause no.8.1 of the policy received by the complainants alongwith the welcome letters (Annexure R-4 and Annexure R-5), which deals with the investment of funds, clearly states that the amount was to be invested in Daily Protect Fund. The clause 8.1.8 speaks only about the daily protect fund III. The relevant clause is reproduced as under:

The guaranteed NAVs pertain only to the NAVs of the Daily Protect Fund recorded during NAV Built-up Phase.

11.    Further, the Clause no.8.3.1 also speaks about the daily protect fund. Even we agree with the contentions of the OPs that the fund, namely, daily protect fund III was not fund available under the secure N grow plan at the time of issuance of the policies to the complainants. Thus, it is crystal clear that premium amount was to be invested only in Daily Protect Fund and the same admittedly having been invested in Daily Protect Fund  as desired by the complainants, therefore, there was no deficiency on the part of complainants. Further, the surrender value has been paid strictly as per the terms and conditions of the policy documents, hence no lapse or deficiency can be attributed on the part of the OPs to the extent that the amount has been paid on surrender of the policies strictly as per the terms and conditions of the policy documents.  It is well settled law that terms and conditions of the insurance policies are binding upon both the policies and that none of the party to the agreement can travel beyond the terms and conditions stipulated therein. Since, the insurance policy is the contract between the complainants and OPs, hence, no lapse and deficiency can be attributed on the part of the OPs. At this stage, we may safely place reliance upon the law laid down by the Hon’ble Supreme Court in the case titled as M/s Suraj Mal Niwas Oil Mills(P) Ltd. Vs. United India Insurance Co. Ltd. & Anr. decided on 08.10.2010  wherein it has been observed as under:-

4.       Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount importance, and it is not open for the Court to add,  delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.

12.    Having stated so, now, we advert to periodical transaction cum unit statements(Annexure C-3 to C-9) sent by the OPs to the complainants from 27.12.2010 to 28.12.2015 and find that the same contains a clear recital showing that the amount was invested in daily protect fund III. The OPs while candidly admitting the error/mistake in conveying the transaction cum unit statements have stated that the error/mistake occurred due to the typographical mistake and that no benefit can be drawn by the complainants out of any typographical error which occurred due to inadvertance. It is vehemently contended that no benefit can be provided to the complainants beyond the explicit terms and conditions of the insurance contract. In support of his contentions, the learned counsel for the Ops has placed reliance upon the case laws as under:-

1.  Mohan Lal Benal Vs. ICICI Prudential Life Insurance Co. Ltd. IV(2012) CPJ 690(NC).
2.  LIC of India Vs. Anil Kumar Jain in order dated 11.02.2013 in Revision Petition No. 2802 of 2011 passed by the Hon’ble National Commission, New Delhi.
3.  Virupaxappa  I. Yaragatti Vs. Senior Branch Manager, LIC of India in order dated in Revision Petition No.3833 of 2011 passed by Hon’ble National Commission, New Delhi.
4.  A.Balakrishnan Vs. LIC Insurance Corporation of India decided on 08.01.2018 in complaint no.132/2017 passed by Consumer Disputes Redressal Forum Kalpetta.
5.  Life Insurance Corporation of India Vs. Anil P.Tadkalkar, I (1996) CPJ 159 (NC)
6.   Aviva Life Insurance Co. India Pvt. Ltd Vs. Shelly Sharma & Anr. in Revision Petition no.2356 of 2013 decided on 03.03.2014(NC)
7. Ms. Neha Shoree Vs. SBI Life Insurance Co. Ltd & Others in order dated  26.05.2016 in FA No. 328 & 359 of 2016 dated 26.05.2016 passed by the Hon’ble State Commission, Haryana.

 

13.    We do not agree with the aforementioned contentions of the Ops that no benefit can be taken out of error/mistake while conveying the transaction cum unit statements to the complainants because the sending of incorrect transaction cum unit statements with the mistake/errors was not a stray incident but it continued unabatedly for five years showing that amount had been invested in Daily Protect Fund III thereby placing the complainants under the bonafide belief and impression that the amount had been invested in daily protect fund III. The OPs never bothered to rectify its mistake even after the receipt of surrender request of the complainants. In our opinion it was the bounded duty of the Ops to apprise the complainants, before accepting their surrender request, that they were entitled to a specific amount under the daily protect fund. In view of the mis-match and contradiction between the policy documents (Annexure R-4 & R-5) vis-a-vis the transaction cum unit statements (Annexure C-3 to C-9) with regard to the investment of the premium amount as conveyed to the complainants, it was incumbent upon the OPs to inform the complainants about the actual/specific surrender value admissible to them under the daily protect fund but the OPs miserably failed to perform their part of duty. Hence, the OPs cannot be let to go scot free and are bound to compensate the complainants for their mistake/error.

14.    At this stage, we deem it appropriate to mention here that complainants were equally bound to seek the clarification from the OPs before opting to surrender the policies in question, in the light of contradictions/mis-match in the manner of investment as reflected in policy documents(Annexure R-4(colly) & Annexure R-5(colly) vis-à-vis the periodical transaction cum unit statements(Annexure C-3 to C-9). It is not the case of the complainants that terms and conditions of the policies (Annexure R-4(colly) & Annexure R-5(colly))were ever altered unilaterally at the instance of the OPs. Moreover, the lower part of periodical transaction cum unit statements (Annexure C-3 to C-9) shows that the amount was invested in Daily Protect Fund. For the sake of convenience, clarity and ready perusal the same is reproduced as under:-

Investment Value
Investment Value	Daily Protect Fund SFIN ULIF0200609100L YPRO1FND111			Index Fund SFIN ULIF015070110INDEXULFND111
In Rs.	Unit	NA	(%)	Unit	NAV	(%)
54688.86	4335.94	10.0618	81.78	965.70	11.4544	18.22

 

15.    In view of the aforementioned facts, we are of the view that the complainants have also failed to exercise due diligence, proper care and precaution which was expected from the prudent man placed in the similar situation/circumstances. In view of the peculiar facts and circumstances of the case, we conclude that it is a case of contributory negligence where both the parties acted in a negligent manner. Hence, both the parties are liable to share the responsibility in the matter in equal proportion.

16.    As a sequel to above discussion, we partly allow the present complaint with the following directions against the OPs No.1 & 2:-

i.      To refund a sum of Rs.16,746/-(i.e. half of the claim amount) to the complainants along with interest @ 9% per annum w.e.f. the date of filing of this complaint till realization

ii.      To pay a lump sum compensation of Rs.10,000/- to the complainants on account of mental agony, harassment and litigation charges                        

17.            The OPs shall comply with the directions/order within a period of 30 days from the date of communication of copy of this order to OP failing which the complainant shall be at liberty to approach this Forum for initiation of proceedings under Section 25 and 27 of CP Act, against the OPs. A copy of this order shall be forwarded, free of cost, to the parties to the complaint and file be consigned to record room after due compliance. 

Announced on: 18.02.2020

 

 

Dr.Sushma Garg          Dr. Pawan Kumar Saini         Satpal          

        Member                           Member                               President

 

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

 

                                        Satpal                                

        President