DATE OF FILING 19.4.2010

BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI

Dated this the 15^th day of November, 2010

Present:

SRI.LAIJU RAMAKRISHNAN PRESIDENT

SMT.SHEELA JACOB MEMBER

SMT.BINDU SOMAN MEMBER

C.C No.70/2010

Between

Complainant : V.V. Sunny,

Valankuzhiyil House,

Arakkulam P.O.,

Moolamattom, Idukki District.

(By Adv: K.M. Sanu)

And

Opposite Parties : 1. Soni Thomas,

Kumminiyil House,

Guardian Control Road,

Vengalloor P.O.,

Thodupuzha, Idukki District.

(By Adv: P.M. Johny)

2. The Manager,

Bajaj Alliance Life Insurance Company Ltd.,

Sundaram Tower, Temple Byepass Road,

Thodupuzha P.O., Idukki District.

(By Advs: Babichen V. George

& Naiju Ravindranath)

O R D E R

SRI. LAIJU RAMAKRISHNAN (PRESIDENT)

The complainant is a practising lawyer in Idukki district. 1^st opposite party who is an agent of the 2^nd opposite party approached the complainant for canvassing him in the investment policy marketed by the 2^nd opposite party. As per the explanation of the 1^st opposite party, Rs.10,000/- to be paid as yearly premium for 3 years. After 3 years, the policy will mature with an amount of Rs.45,000/-. The complainant told to the 1^st opposite party that he never interested in long term policies. The 1^st opposite party several times approached the complainant for the same, and the 1^st opposite party was a classmate of the complainant and so the complainant joined in the policy on 7.2.2007, by paying a premium of Rs.10,000/-. The 1^st opposite party himself filled up the proposal form in front of the complainant and the complainant duly signed in the places shown by the 1^st opposite party. Life insurance coverage also assured by the opposite party at that time. After that the complainant paid the premium for the next 2 years and received the policy certificate in 2007 itself. The complainant never perused the policy certificate because it was explained by the 1^st opposite party about the details of the policy and believed the words of the class mate of the complainant. As per the 1^st opposite party, the policy would mature on 7^th February, 2010 and the complainant is entitled to get an amount of Rs.45,000/-. So the complainant approached the opposite party office on 8.2.2010 and claimed for the amount. But it was informed from the 2^nd opposite party office that the policy will mature only in the year 2022. It was also revealed that the balance in the account of the complainant is only Rs.11,510.62. The 1^st opposite party never supplied the policy as per the description given by him. In order to get hike commission from the policy, the 1^st opposite party issued a long term scheme investment policy to the complainant. The 2^nd opposite party also colluded with the 1^st opposite party with the same. Without getting the consent of the complainant, the opposite party issued the policy of long term investment to the complainant after assuring that this policy is for short term deposit. And so the amount has been reduced to Rs.11,510.62. It was assured by the 1^st opposite party that after investing the premium in the share market, the amount will be delivered as Rs.45,000/- after 3 years. So this petition is filed for getting back the assured amount of Rs.45,000/- from the opposite parties and also for compensation.

2. As per the written version filed by the 1^st opposite party, it is stated that the 1^st opposite party is not an agent of the 2^nd opposite party and the opposite party never approached the complainant for canvassing any insurance policy. The complainant never entrusted any amount to the 1^st opposite party for payment of the premium on 7.2.2007. The 1^st opposite party never filled up the proposal form as alleged by the petitioner. The complainant never put his signature as per the direction of this opposite party in the proposal form. The complainant who is a practising lawyer is not expected to be put his signature on the places shown by others and without understanding the things in its proper perspective. This opposite party is not aware of the amount remitted by the complainant as Rs.10,000/-. The 2^nd opposite party is a limited company, which is regulated by the rules and regulations of the Reserve Bank of India and the Insurance Act, 1938. Further more the complainant is not an ordinary man to think that the offers of an insurance agent will have an overriding effect on the conditions of the policy. Moreover it is known that the policy certificate offers a 15 days free look period by which the policy holder is at liberty to get back the premium amount, if disagree with the terms and conditions of the policy. On enquiry it is clear that on the top of the proposal form of the 2^nd opposite party, it is stated that “in this policy, the investment risk in investment portfolio is born by the policy holder”. On perusing this, the 1^st opposite party thinks that the complainant's policy is not yet matured. It may be a non conventional policy. It may be a unit linked one. The maturity value of this type of policy will be depend upon various factors like share market, recession, political stability, war, oil price and even terrorist attack. His fund value may be less than the premium amount due to the recession which affected almost all the economies in the world. There is no principal, agent relationship with the 2^nd opposite party. This opposite party did not give any offer, assurance or promise with regard to the policy of the complainant. The complainant is trying to impose the cost of his ignorance to the shoulder of somebody else. So there is no unfair trade practice from the part of this opposite party.

3. As per the written version filed by the 2^nd opposite party, the complainant purchased policy for a sum assured of Rs.3 lakhs for a term of 15 years from the 1^st opposite party, on 7.2.2007. The annual premium is Rs.10,000/-. The name of the product is “New Unit Gain” a (ULIP) Unit Linked Insurance Plan which is linked share market. The amount paid as premium of the policy may increase or decrease according to growth or recession in stock market. The minimum period for the premium period is 3 years which is the minimum lock-in period deciding that point of time as permitted by the Insurance Regulatory and Development Authority of India (IRDA). But as the term agreed upon in the policy is 15 years, the complainant can pay the premium to that period. But in this case, he opted to pay only for 3 years. Here the 'fund' opted by the complainant is “Bajaj Allianz Enquiry growth fund” which has a direct access with the stock market. The fund allocation and all the charges of this particular policy go as per the terms and conditions of “New Unit Gain”. The first year premium paid by the complainant is Rs.10,000/- on 7.2.2007 out of this Rs.2,850/-, 28.5% was allocated to Enquiry Growth fund which purchased 218.5750 units each having Net Asset Value (NAV) per unit of Rs.13.0390. The second year premium was paid on 7.2.2008 which has 93% allocation which fetched 612.0434 units having a NAV of Rs.15.1950 at that time the total units owned by the complainant on that day is 830.6184. All the charges from the date of issue of policy are deducted from the above fund in terms of units. The charges include, Insurance Coverage charges, agents commission, Stationary and establishment charges of company, mortality charges, rider premium charges, education cess, service tax, policy administration charges etc., are deducted on periods as mentioned in the policy terms of units. The 3^rd year premium due date is 7.2.2009 which has additional 30 days grace period. The 3^rd instalment was not paid in time which has additional 30 days grace period. The 3^rd instalment was not paid in time which lead to the lapse of the said policy by this time 370.3321 units were deducted from the fund for different charges and remaining number of units was 460.2863 having an NAV 7.84 and the fund value is 3612.79. Complainant paid the 3^rd premium on 29.9.2009 after 7 months from due date, 94% fund was allocated which fetched 66.0873 units of NAV 14.2190 and the policy was revived. But the policy which was lapsed on march 2009 which had a fund value of Rs.3612.79 fetched only 254.0819 units since NAV of units was Rs.14.2190 at the time of revival. The total number of units at that time was 915.1692 to the balance units of 764.6013 having NAV per unit of Rs.15.1385 forming a fund value of Rs.11574.92 as on 19.6.2010. The drastic increase in NAV per units at the time of revival of policy resulted in the lowering of number of units at the time of purchase which brought down the total fund value considerably. The growth and recession in the stock market are not within the control of this opposite party. This depends upon various economic and non-economic factors of the nation. Complainant like any other investor are bound to accept the ups and downs in the stock market to which his policy is linked. The decrease in fund value is a inevitable and natural result of the “Economic recession” faced by our country at large which cannot controlled by this opposite party. This opposite party has applied only the various charges as stipulated in the policy which is duly approved by Insurance Regulatory and Development Authority. The 1^st sentence in the policy document of Bajaj Allianz New Unit gain reads in capital letters like this, “in this policy, the investment risk in investment portfolio is borne by the policy holder”. The complainant availed a policy from the 1^st opposite party who is a close friend and class mate of the complainant. All the allegation in the complaint are raised after much after thought for the sake of the complainant. It is unbelievable that the complainant did not go through the details of his own personal life insurance policy. Being an advocate of long practice and experience one can expect a prudency of very high degree from the complainant. The opposite parties only bound to the complainant as per the terms and conditions which are in the policy and there is no deficiency from the part of the opposite party.

4. The point for consideration is whether there was any deficiency in service on the part of the opposite parties, and if so, for what relief the complainant is entitled to ?

5. The evidence consists of the oral testimony of PWs 1 and 2 and Exts.P1 to P3 marked on the side of the complainant and the oral testimony of DWs 1 and 2 and Exts.R1 to R4 marked on the side of the opposite parties.

6. The POINT :- The complaint is filed for getting the insurance amount of the complainant's investment insurance policy, in which the complainant paid a premium of Rs.10,000/- each for 3 years. The complainant produced evidence as PW1. PW1 availed an insurance policy from the 2^nd opposite party through the 1^st opposite party by paying an amount of Rs.10,000/- as premium. At the time of joining, the 1^st opposite party assured and convinced that the policy will mature after 3 years and the complainant will be get an amount of Rs.45,000/- after the maturity period, if the complainant pays the premium for 3 years as Rs.10,000/- each. But after 3 years, when the complainant approached the 2^nd opposite party for getting the amount, they replied that there is an amount of Rs.11,510.62 in the account of the complainant. As the policy is a long term one, it will mature only in the year 2022. PW1 joined in the policy only because of the assurance given by the 1^st opposite party who is the agent of the 2^nd opposite party and the class mate of the complainant. Ext.P1 is the receipt supplied by the opposite party at the time of paying the premium. Ext.P2 is the statement of account as on 15.2.2010 showing that the balance amount in the complainant's account is only Rs.11,510.62. On cross examination of the learned counsel for 2^nd opposite party, PW1 deposed that the proposal form and other documents were signed by PW1 without reading the same. PW1 is not aware of the details of the policy. PW1 joined in the policy in order to help the 1^st opposite party, who was a friend of PW1. Towards it, the premium was paid by PW1 at the office at Thodupuzha and never discussed about the policy conditions at that time. Nothing was written about the policy conditions in the receipt issued by them. The complainant never read the policy conditions because he believed the 1^st opposite party. The 1^st opposite party approached PW1 stating that he is an agent of the 2^nd opposite party. As per the cross examination of the 1^st opposite party, PW1 deposed that the 1^st opposite party was in a financial crisis and in order to help him, he availed the policy. PW2 is the friend of PW1, who also availed the same policy. PW2 deposed that the 1^st opposite party is the friend of PW2. Ext.P3 is the receipt issued by the opposite party for paying the premium of Rs.10,000/- dated 9.3.2010. PW1 requested PW2 to help the 1^st opposite party and so the 1^st opposite party approached PW2. The 1^st opposite party told that Rs.45,000/- would get after 3 years after paying an amount of Rs.30,000/-. On cross examination of learned counsel for the 1^st opposite party, PW2 deposed that Ext.P3 is the 4^th premium receipt and when policy certificate received, it revealed that the policy is a long term one and again it is continuing. Another intimation also received from the 2^nd opposite party about the same. The 1^st opposite party deposed as DW1. As per DW1, he is not a sub agent of the 2^nd opposite party. He never supplied the policy to the complainant and never received commission for the same. The blank proposal form of the 2^nd opposite party is marked as Ext.R1. DW1 deposed that the complainant and he were friends, they were class mates and there is no relationship between the 2^nd opposite party and 1^st opposite party. The 1^st opposite party never marketed any of the policy of the 2^nd opposite party. He was working in RMP company. PW2 is also a class mate of DW1. DW2 is the branch manager of the 2^nd opposite party. Ext.R2 is the policy schedule copy. All the terms and conditions of the policy are written in Ext.R3. In Ext.R3, it is written as “in this policy, the investment risk in investment portfolio is borne by the policy holder”. All the details of the statement of the complainant's account is marked as Ext.R4. 3^rd investment was paid by the complainant after 8 months, after the lapse of the policy. On cross examination of learned counsel for the 1^st opposite party, DW2 deposed that there is no evidence produced by the 2^nd opposite party to show that there is any relationship between the 1^st and 2^nd opposite parties. DW2 is not able to produce any document for the same. The commissions were distributed as per the conditions of the IRDA only. There is no such investment planning with the 2^nd opposite party which matures after 3 years.

As per the complainant, the 1^st opposite party approached the complainant and explained about the details of the policy and assured that the policy would mature after 3 years and the complainant will get Rs.45,000/- after 3 years when the complainant pays Rs.30,000/- as the premium for 3 years. The policy proposal was filled by the 1^st opposite party in front of the complainant and the complainant signed in it as per the directions of the 1^st opposite party without reading the proposal. The policy certificate was received in 2007 itself. But the details were not perused by the complainant. But there is no evidence produced by the complainant to show that the policy will mature after 3 years. As per Ext.P1, the receipts issued by the opposite party on 16.2.2008 and 26.9.2009, it is written that DOC is 7.2.2007 and DOM is 7.2.2022, product as Bajaj Allianz New Unit Gain. The term - 15 years. The premium due date - 7.2.2009. So in the receipt itself, it is written that the date of commencement is 7.2.2007 and the date of maturity is 7.2.2022. In the back side of the receipt it is written that the whole life protection with only 10/15 years of premium contributions. The provision for full and partial withdrawals: full withdrawals allowed after full 3 year's premiums have been paid at bid value of the units. Partial withdrawals allowed only after all the premiums have been paid (10 year term or 15 year term) subject to a minimum of Rs.1000/- and a balance of Rs.10,000/- of the bid value of the units to be maintained. Maturity Benefit: On the life assured attaining age 100, the bid value of units in the fund will be paid out and the policy will terminate. It is very clear that the terms of the policy is 15 years and in Ext.P3 receipt produced by PW2 in which also it is written that DOC is 24.3.2007 and DOM is 24.3.2022. In Ext.R2, copy of the policy schedule in 2^nd page, in the heading itself, it is written that, “in this policy, the investment risk in investment portfolio is borne by the policy holder” and it is also written that the sum assured is Rs.3 lakhs. UL accident death benefit Rs.3 lakhs, policy term 15 years, maturity date 7.2.2022. In Ext.R3 also these details are written and the details of the deposit in share marketing are also written. As per PW1, the policy proposal form was filled by the 1^st opposite party and it was signed by PW1 as per the directions of the 1^st opposite party, without reading the same. But the 1^st opposite party denied that he never filled up the application for proposal of the policy. But the complainant never tried to produce the proposal form in order to verify the hand writing of the 1^st opposite party. Even cross examination, when the opposite party asked that whether the complainant is ready to bring the proposal form before the Forum, the complainant denied the same. PW1 also deposed that the policy conditions are not written in Ext.P1. But it is very clear that in Ext.P1 receipt, the policy period and date of commencement and date of maturity are written, on perusing the same. PW1 also deposed that the policy was a unit linked one and the deposit was done in share marketing. The value will change as per the share market fluctuations. These factors were aware to the complainant at the time of availing the policy. Complainant who is a senior practising advocate, who has not read the conditions of the policy, even never perused the receipt of the policy, only believed the words of the 1^st opposite party and signed in the proposal form, at the places shown by the 1^st opposite party for joining the policy. PW1 never perused the policy conditions till now. An ordinary prudent man will read the terms and sum assured of the policy after receiving the policy conditions and policy receipt. But PW1 who is a practising lawyer, never perused the policy conditions or policy receipt, only believed the words of the 1^st opposite party, even after the dispute filed, he never perused the conditions of the policy. So the words of PW1 is not at all believable because he never tried to perceive the handwriting of the 1^st opposite party if the proposal form was filled up by the 1^st opposite party in front of the complainant to show that the 1^st opposite party is the agent of the 2^nd opposite party, who supplied the policy to the complainant and received the premium from him. PW2 who understood that the policy is a long term one and still continuing the policy by paying the premium. As per DW1, he never supplied the policy to the complainant, never acted as an insurance agent of the 2^nd opposite party. There is no business relationship between 1^st opposite party and 2^nd opposite party. The 1^st opposite party never approached the complainant to supply the policy, and never gave any assurance to the complainant. The 2^nd opposite party also not produced any document to show that the 1^st opposite party is an agent of the 2^nd opposite party. It is admitted by the 1^st opposite party that he is a class mate of the complainant, he never supplied any policy to the complainant. As per 2^nd opposite party, 1^st opposite party is a sub agent of the 2^nd opposite party. The policies of the 2^nd opposite party are marketing by the Corporate Agency named Earnestive Company Pvt. Ltd.. Earnestive Company Pvt. Ltd., is engaged in net work marketing with the company named RMP and the RMP is having sub agent for promoting the product of DW2. The 1^st opposite party is working in RMP and so he is a sub agent of the 2^nd opposite party. But no evidence produced by the 2^nd opposite party to show the same. DW2 deposed that he cannot produce any evidence to show that the 1^st opposite party is an agent of the 2^nd opposite party. There is indirect relationship between 1^st opposite party and 2^nd opposite party.

So we think that the complainant never proved that the 1^st opposite party issued Insurance Policy to the complainant, even he never tried to produce the proposal form which is signed by the complainant, which was duly filled up by the 1^st opposite party. The 2^nd opposite party also never proved that the 1^st opposite party is the agent of the 2^nd opposite party. In the policy schedule and receipt of the premium itself it is written that the policy is for a term of 15 years and its maturity period is in 2022. There is no evidence to show that the 1^st opposite party assured and supplied the policy having a period of 3 years and Rs.45,000/- will be disbursed after 3 years. So we think that the complainant who is a practising lawyer, who is not aware of any of the conditions of the policy even he never perused the receipt for the amount paid by him as Rs.10,000/- in thrice. Even if the agent of the opposite party canvassed and convinced that the policy is for 3 years, the complainant ought to have perused even the receipt received from the opposite party for the policy even before the payment of the last premium. As per the policy conditions, the customer should have applied within 15 days for cancelling of policy for getting back the amount of premium paid. So the complainant never acted upon that. The opposite party invested the premium amount in share market because it is an investment policy and the complainant also aware of the fact that it is an investment policy and the investment has done in the share marketing. As per the opposite party, there is only Rs.11,510.62 in the account of the complainant and the statement of the account also produced for the same. So there is no deficiency has been proved against the opposite party.

Hence the petition dismissed. No cost is ordered against the complainant.

Pronounced in the Open Forum on this the 15^th day of November, 2010

Sd/-

SRI. LAIJU RAMAKRISHANAN (PRESIDENT)

Sd/-

SMT. SHEELA JACOB (MEMBER)

Sd/-

SMT. BINDHU SOMAN (MEMBER)

APPENDIX

Depositions :

On the side of the Complainant :

PW1 - V.V. Sunny

PW2 - Thomas Joseph

On the side of the Opposite Parties :

DW1 - Soni Thomas

DW2 - James Luis

Exhibits :

On the side of the Complainant :

Ext.P1 - Receipt supplied by the opposite party at the time of paying the premium – 2 Nos.

Ext.P2 - Statement of account as on 15.2.2010 issued by the opposite party.

Ext.P3 - Receipt issued by the opposite party dated 9.3.2010.

On the side of the Opposite Party :

Ext.R1 - Blank proposal form for the Life Insurance.

Ext.R2 - Copy of the policy schedule.

Ext.R3 - Terms and conditions of the policy.

Ext.R4 - Statement of account of the complainant as on 19.6.2010.