Punjab

StateCommission

FA/13/225

M/s Future Generali India Life Insurance Co. Limited - Complainant(s)

Versus

Shally Mittal & another - Opp.Party(s)

Rakesh Kumar Garg

09 Feb 2015

ORDER

2^nd Additional Bench

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB

DAKSHIN MARG, SECTOR 37-A, CHANDIGARH

 

First Appeal No. 225 of 2013

                                                           

                                    Date of institution: 28.2.2013 

                             Date of Decision:    9.2.2015

 

Future Generali India, Life insurance Company Ltd., 6^th Floor, Indiabulls Finance Center, Tower-3, Senapati Bapat Marg, Elphinstonbe (W) Mumbai-400013 through its authorized signatory Mr. Madan Gopal Jalan, Sr. Vice President, Legal & Compliance.

                                                                                                                                                                                  …Appellant

                                                Versus

1.       Shally Mittal w/o Sh. Majot Gupta Daughter of Sharan Kumar Gupta through attorney Sharan Gupta son of Devi Chand Gupta r/o House No. 21, FF, HIG Flats, Rajguru Nagar, Ludhiana.

2.       Sharan Gupta son of Devi Chand Gupta resident of House No. 21, First Floor, HIG Flats, Rajguru Nagar, Ludhiana.

…..Respondents/Opposite Parties

 

First Appeal against the order dated 29.11.2012 passed by the District Consumer Disputes Redressal Forum, Ludhiana.

 

Quorum:-

 

              Shri Gurcharan Singh Saran, Presiding Judicial Member

              Shri Jasbir Singh Gill, Member

 

Present:-

 

          For the appellant             :         Sh. Mukesh Garg, Advocate

          For the respondents        :         Sh. Deepak Goyal, Advocate for

                                                          Sh. P.M. Goyal, Advocate

 

Gurcharan Singh Saran, Presiding Judicial Member

ORDER

The appellant/opposite party (hereinafter referred as “the OP”) has filed the present appeal against the order dated 29.11.2012 passed by the District Consumer Disputes Redressal Forum, Ludhiana(hereinafter referred as “the District Forum”) in consumer complaint No. 608 dated 19.7.2012 vide which the complaint filed by the respondents/complainants(hereinafter referred as ‘the complainants’) was allowed with a direction to the Op to refund the premium amount after deducting the amount as provided by IRDA in notification dated 1.7.2010 and also pay Rs. 5,000/- as compensation and Rs. 2,000/- as litigation expenses.  

2.                The complaint was filed by the complainants under the Consumer Protection Act, 1986 (in short ‘the Act’) against the OP  on the allegations that she is policy holder of Life Insurance Policy bearing No. 00860495 dated 13.8.2011 and complainant No. 2 is her nominee. The respondent had managed to sell to the complainants the policy by using unfair trade practice and by giving false representations through their Broker, namely, Endeavour Insurance Broking Limited. Complainant No. 2 is retired from Haryana Vidyut Prasaran Nigam Ltd. and is 71 years old and was having insurance policy in Metlife. On 6.8.2011, complainant No. 2 received calls from the person, who introduced himself as Suresh Jain, M.B.A., Investment and from Customer Service Department IRDA and he pointed out some drawbacks in the Metlife policy. He further assured that he could get the existing plan cancelled and can help complainant No. 2 in getting back amount of Rs. 2,09,410.13p and Government is launching an IPO of Coal India Advantage Fund and he can get allotment of the said fund @ Rs. 6.27 for complainant No. 2 and that the said fund will reach to Rs. 21/- within two months and the difference of the rate will be paid to complainant No. 2 in the month of October, 2011 and that all the investment made by him will be one time investment and accordingly, complainant No. 2 agreed to purchase 17 policies, total amounting to Rs. 12,47,312/- in the name of his daughters, namely, Renu Gupta and Shally Mittal and 15 policies were in the name of complainant No. 2 and in two policies Prem Gupta was the policy holder. He has further advised to answer the inquiry from the different insurance companies so as to get smooth investment. For some time, Suresh Jain remained in touch with complainant No. 2 and after that he stopped attending his calls. However, when the complainant became suspicious of the conduct of Suresh Jain then she probed the matter and came to know that she will have to pay the premium of all the policies to the dune of Rs. 12,00,000/- per year and that the Broker had received upto 50% to 60% commission and the policies were of the tenure of 10 to 20 years, therefore, these policies were given by playing fraud with the complainant. Legal notice was served but no response. Hence, the complaint was filed against the Ops to pay back the premium paid by the complainant to the tune of Rs. 75,310/- alongwith interest @ 24% p.a., to pay litigation expenses of Rs. 11,000/- and compensation of Rs. 1 lac.

3.                Notice was given to the OP. The OP was served but none appeared on behalf of the Op, therefore, OP was proceeded ex-parte vide order dated 5.11.2012.

4.                The complainant was allowed by the learned District Forum to tender her ex-parte evidence.

5.                In support of his allegations, the complainant had tendered into evidence affidavit of Sharan Gupta Ex. CA, Schedule of Future General India Ex. C-1, legal  notice  with  postal receipt dt. 12.7.12 Exs. C-2 & 3, special power of attorney Ex. C-4, copy of I-card Ex. C-5, income tax return copy Exs. C-6, 7, 8, 9, 10, Form No. 16 Ex. C-11, 12, 13, schedule of Future Generali India Ex. C-14, first premium certificate Ex. C-15, first premium receipt of Kotak Life Ins. Ex. C-16, receipts of Reliance Ins. Exs. C-17 & 18, policy particulars of Aegon Religare Exs. C-19, 20, receipt of Birla Sun Life Ex. C-21, receipt of Bajaj Allianz Ex. C-22.

6.                After going through the allegations in the complaint and evidence and documents brought on the record and relying upon the notification dated 1.7.2010 issued by IRDA, the OP was directed to refund the premium amount after deducting the deduction charges as admissible under notification dated 1.7.2010 issued by IRDA. 

7.                In the grounds of appeal, it has been contended by the appellant that the order so passed by the learned District Forum is perverse, illegal and unjustified on the face of it. The learned District Forum has relied upon IRDA Notification, 2010, which relates to Dis-continued Linked Insurance Policies and not to the traditional plans. The policy in question was not a Unit Linked Policy but it was traditional plan, therefore, that notification has been wrongly applied to the case in hand. The complainant had not got the policy cancelled within the “Free Look Period” and after that the parties are to be governed by the terms and conditions of the policy.

8.                There is no dispute with regard to the fact that the complainant did not exercise his option to cancel the policy within the “Free Look Period” in case the terms and conditions were not conducive or as made understood to them by the Broker. Even the Broker is not exclusive agent of the Insurance Company, he is a common person of both the parties. It has been so provided under Regulation 2(1) IRDA, 2002, which reads as under:-

“(i)     “insurance broker” means a person for the time being licensed by the Authority under Regulation 11, who for a remuneration arranges insurance contracts with insurance Companies and/or reinsurance companies on behalf of his clients.

Explanation.—The term “insurance broker” wherever it appears in these regulations shall be deemed to mean a direct broker, a reinsurance broker or a composite broker, as the case may be, unless expressly stated to the contrary;”

9.                Now the main question is whether the IRDA notification, 2010, which was relied upon by the learned District Forum is applicable to the present case. In case we go to the complaint, he had opted for Future General Saral Anand Policies Ex. C-1 and it does not speak of any ULIP Plan. The terms and conditions of Future Saral Anand Plan has been placed on the record in the appeal, although these terms and conditions were not placed on the record by any of the party before the District Forum, therefore, to properly appreciate the matter the perusal of the terms and conditions was necessary. Therefore, these were allowed to be brought on the record. According to Clause 7, there was a grace period of 30 days to pay the premium and in case the policy lapsed, it will have no fund value except as provided under the “Non-Forfeiture Provisions” under Clause 10, which read as under:-

“10.   Non-Forfeiture Provisions:

Your Policy acquires Surrender Value after the premiums have been paid for at least three consecutive years from the commencement date.

If you do not pay the premium within the Grace Period, auto cover will be provided as specified in Section 8 of this policy. Provided however, that if the Policy has acquired Surrender Value, the following non-forfeiture options would be available to you.”

10.              According to this Clause, the surrender value will acquire only after three consecutive premiums but in the present case three consecutive premiums were not paid, therefore, it will not acquire to surrender value. So far as notification dated 1.7.2010, its title will be clear that it is applicable to the Discontinued Linked Insurance Policies short title is reproduced as under:-

“Short title and commencement

1.      (1)     These regulations may be called the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010.”

11.              Since the policy in question is not linked insurance policy, therefore, the said notification as relied upon by the learned District Forum will not be applicable to the facts and circumstances of this policy. In case the notification is not applicable to the present policy then the order so passed by the learned District Forum is not legally sustainable and is liable to be set-aside.

12.              Since only one premium was paid, therefore, it had not acquired any surrender value, therefore, the complainant will not be entitled to any amount.

13.              In view of the above discussion, we accept the appeal. Impugned order is set-aside, consequently, the complaint filed by the complainant is also dismissed.

14.              The appellant had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal and Rs. 56,062/- in compliance with the order dated 6.5.2013. These amounts with interest accrued thereon, if any, be remitted by the registry to the appellant by way of a crossed cheque/demand draft after the expiry of 45 days, subject to stay, if any, by the higher Fora/Court.

15.              The arguments in this appeal were heard on 28.1.2015 and the order was reserved. Now the order be communicated to the parties as per rules.

16.              The appeal could not be decided within the statutory period due to heavy pendency of Court cases.

 

 (Gurcharan Singh Saran)

Presiding Judicial Member

 

February  9, 2015.                                                                                                                                                (Jasbir Singh Gill)

as                                                                                                                                                                                 Member