Date of filing: 28.06.2013.
Date of disposal: 12.03.2014.
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - II:
VIJAYAWADA, KRISHNA DISTRICT
Present: Sri A. M. L. Narasimha Rao, B.Sc., B. L., President
Smt N. Tripura Sundari, B. Com., B. L., Member
Sri S. Sreeram, B.A., B.Com., B.L., Member
Wednesday, the 12th day of March, 2014
C.C.No.115 of 2013
Between:
M/s Leela Tyres, Rep: by its Authorized Person Sri K.S. Muralidhan Nair, D.No.54-13/5-1A, Srinivas Nagar, Bank Colony, Opp: SBH, Mahanadu Road, Vijayawada - 8.
….. Complainant
And
1. Sriram Chit Funds Private Limited, Rep: by its Branch Manager Mr. Kishore Kumar, 1st Floor, Golden Towers, Beside: Durga Mahal, Patamata, Vijayawada – 10.
2. M/s Sriram Life Insurance Co., Limited, Rep: by its Div. Manager, Near Benz Circle, Sai Nagar, Vijayawada – 10.
. … Opposite Parties.
This complaint coming on before the Forum for final hearing on 26.02.2014, in the presence Sri Shabeer S. Ahamed, advocate for complainant; Sri D. Rajasekhar, advocate opposite party no.1; Smt S. Aurna, advocate for opposite party no.2 and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble President Sri A. M. L. Narasimha Rao,)
1. This complaint is filed under Section 12 of Consumer Protection Act, 1986 for a direction to the opposite parties 1 and 2 to refund the amount of Rs.50,000/- towards policy premium, to pay Rs.1,00,000/- towards compensation for mental agony, to desist from resorting to unfair trade practice and to award costs.
2. The averments of the complaint in brief are as follows:
The complainant had joined as member of a chit run by the 1st opposite party in chit No.LMP-13/29 for a chit value of Rs.5,00,000/- with monthly subscription of Rs.12,500/-, chit period being 40 months. The complainant was successful bidder of the chit in the month of February, 2013 for a prize money of Rs.3,90,000/-. The 1st opposite party deducted a sum of Rs.50,000/- towards on insurance policy from the 2nd opposite party. The complainant was not interest to take policy. He informed the same to the 1st opposite party. Then the 1st opposite party told that the complainant could cancel the policy within the free look period of 15 days. The 1st opposite party had delivered the policy to the complainant on 10.4.2013 while the policy started from 28.2.2013. By the date of receiving the policy the 15 days free look period was over. Then the complainant approached the 1st opposite party and handed over a letter dated 16.4.2013 informing that the complainant received policy on 10.4.2013 and requested to take surrender of the policy and refund the policy amount of Rs.50,000/-. The 1st opposite party informed the complainant that the policy cannot be cancelled though the delay was caused by the 1st opposite party. The 1st opposite party did not pay the amount. Then the complainant got issued legal notice dated 17.5.2013 to both the opposite parties calling upon them to cancel the insurance policy and return the premium amount of Rs.50,000/- with interest. The 1st opposite party received the notice. Acknowledgement was not received from the 2nd opposite party. The opposite parties did not comply with the demand. Therefore the present complaint is filed.
3. The opposite parties 1 and 2 filed their separate written statements on the same lines with the following relevant contentions.
The complaint is barred by limitation. This Forum has no territorial jurisdiction. The complainant is not a consumer and has no locus standi to file this complaint. This Forum cannot entertain the complaint in view of Arbitration clause in the terms and conditions of chit. The complaint is not maintainable against the 2nd opposite party which is neither a proper party nor a necessary party. The complaint is filed by M/s Leela Tyres, represented by Authorized Signatory while the policy was issued in favour of K.S. Muralidharan Nair in his individual capacity, with 15 years term and the amount of Rs.50,000/- was paid towards 1st premium. K.S. Muralidharan Nair submitted the policy after stipulated time and so it was returned by the 2nd opposite party as it was not submitted with free look period. There is no deficiency in service on the part of the opposite parties. The complainant is not entitled to the reliefs prayed.
4. K.S. Muralidharan Nair, Authorized Person of the complainant’s firm filed his affidavit as deposition of PW.1. Ch. Kishore Kumar an employee of the 1st opposite party filed affidavit as deposition of DW.1. K. Revathi an employee of the 2nd opposite party filed affidavit as deposition of DW.2. Exs.A1 to A10 are marked on behalf of the complainants and Exs.B1 to B3 are marked on behalf of the opposite parties.
5. Heard the arguments advanced by both the parties.
6. The points that fall for determination are:
- Whether this complaint is maintainable?
- Whether there is deficiency in service on the part of the opposite parties?
- Whether the complainant is entitled to the reliefs prayed for?
Point No.1:
7. One of the objections taken by the opposite parties to the maintainability of the complaint is that this Forum cannot entertain the complaint in view of Arbitration clause in the complaint. It is now well settled that the presence of Arbitration clause in the contract/agreement would not deprive this Forum to have jurisdiction to decide the deficiency or otherwise on the part of the contracting parties. If once Arbitration proceedings are commenced this Forum may not entertain the complaint but when there is no Arbitration proceedings the parties are at liberty to approach this Forum for redressal.
8. The 2nd opposite party is the insurance company which had issued the policy and which was liable to refund the premium amount after permissible deductions if the policy holder cancelled the policy within free looking period of 15 days. According to the 1st opposite party the policy was issued in the name of K.S. Muralidharan Nair. Admittedly the amount of premium was paid from out of the prize money payable to the complainant concern. Therefore the 2nd opposite party is not a stranger and he is a proper party if there was no fault on the part of the 2nd opposite party and necessary party in case of default.
9. The opposite parties question the locus standi of the complainant to file this complaint. As observed above the premium amount was paid by the complainant and the policy was said to have been handed over to the complainant. Though the policy does not stand in the name of the complainant, though refund as such can be claimed by the policy holder only the complainant can ask for refund of the amount deducted from the prize money when there is deficiency in service, as alleged, on the part of the 1st opposite party. Therefore it cannot be said that the complainant has no locus standi to claim the premium amount from the 1st opposite party. We therefore hold that this Forum has jurisdiction and this complaint is maintainable. The opposite parties do not give reasons as to how the complaint is barred by limitation and how this forum does not have territorial jurisdiction.
Point No.2:
10. The 1st opposite party admittedly deducted Rs.50,000/- from the prize money payable to the complainant and the said amount of Rs.50,000/- was diverted towards premium for insurance policy to be issued by the 2nd opposite party. Lasita Muralidharan, W/o K.S. Muralidharan Nair is the managing partner of the complainant firm. She has given authorization to K.S. Muralidharan Nair to deal with all the matters including legal matters. Therefore K.S. Muralidharan Nair filed this complaint representing the firm Leela Tyres. The 2nd opposite party had issued policy in the name of K.S. Muralidharan Nair under the original of Ex.A3. It is not known when it was actually issued. The policy had commenced from 28.2.2013. The policy holder has an option to cancel the policy within 15 days of receiving the policy. As per the terms and conditions of the policy under Ex.A5 the insurance company would refund the premium amount on such cancellation, after deducting proportionate risk premium and riders premium for the period of cover, stamp duty paid and medical expenses incurred by the company. This option is not available after 15 days of receiving the policy document. The complainant states that he received policy document on 10.4.2013 and on 16.4.2013 he addressed the opposite parties 1 and 2 for refund of the premium amount surrendering the policy. The 2nd opposite party had rejected the request on the ground of making request beyond the permissible period. Ex.A7 is the copy of e-mails exchanged between the 1st opposite party and the 2nd opposite party. As per Ex.A7 the 2nd opposite party addressed the 1st opposite party stating that they received request for the policy with the date of commencement 28.2.2013 and the life assured stated that he received the policy document on 16.4.2013 and the 2nd opposite party was asked to give decision. Thereafter a renewal request was made on 24.4.2013. Then the 2nd opposite party seems to have replied stating that ‘request was rejected as Post FLC:: unless they do not have any reason to fall apart’. Therefore the refund was rejected on the ground that the request was made beyond free look period.
11. PW.1 would have exercised the option properly, had the 1st opposite party delivered the policy document immediately after issue. By the date of handing over the policy document to the complainant free look period was over. The 1st opposite party does not say if the policy document was handed over to the complainant or PW.1 on any specific date within 15 days of issue or receipt from insurance company. No document is filed by the 1st opposite party in that regard. Therefore only because of fault on the part of the 1st opposite party K.S. Muralidharan Nair was unable to get refund of the amount after permissible deductions and consequently the said K.S. Muralidharan Nair has to be compensated. Since he is no other than authorized representative of the complainant firm and since the premium amount was paid from the firm we are of the opinion that there is deficiency in service on the part of the 1st opposite party towards the complainant. This point is therefore answered in favour of the complainant.
Point No.3:
12. When it is found that there is deficiency in service on the part of the 1st opposite party the complainant has to be compensated for the loss occasioned. The loss occasioned is premium paid from the pocket of the complainant. As observed above if the cancellation was requested within free look period the premium could be returned after some deductions. Therefore those deductions must be taken into consideration even for assessing compensation payable to the complainant. The opposite parties have not given medical expenses incurred, stamp duty paid on the policy. In the absence of the details we feel it proper to deduct 10% of the policy amount and fix compensation amount of Rs.45,000/-. Since the amount was payable in about month of March, 2013, the complainant shall also be entitled to interest at a reasonable rate of 9% p.a., from 1.4.2013 till realization. The complainant is also entitled to costs assessed at Rs.3,000/-. We are not inclined to grant further compensation as claimed.
13. In the result this complaint is allowed in part and the 1st opposite party is directed to pay a sum of Rs.45,000/- (Rupees forty five thousand only) towards compensation with interest thereon at the rate of 9% p.a., from 1.4.2013 till realization and to pay costs of Rs.3,000/- within one month from the date of receiving copy of this order. The Complaint for rest of the reliefs is dismissed.
Dictated to steno, N. Hazarathaiah, transcribed by him, corrected by me and pronounced by us in the open Forum, this the 12th day of March, 2014.
PRESIDENT MEMBER MEMBER
Appendix of evidence
Witnesses examined
For the complainant: For the opposite party:
K.S. Muralidharan Nair – PW.1 Ch. Kishore Kumar, Employee of (by affidavit) OP.1 DW – 1, K. Revathi, Employee of OP.2 - DW.2
(by affidavits).
Documents marked
On behalf of the complainant:
Ex.A1 05.06.2013 Original copy of certificate.
Ex.A2 16.11.2011 Photocopy of chit pass-book.
Ex.A3 Photocopy of non-ulip policy schedule.
Ex.A4 27.02.2013 Photocopy of first premium receipt.
Ex.A5 Photocopy of policy conditions and privileges.
Ex.A6 16.04.2013 Copy of letter issued by complainant to OP.
Ex.A7 Photocopy of e-mail.
Ex.A8 17.05.2013 Copy of legal notice got issued by complainant to OP.
Ex.A9 Postal acknowledgement.
Ex.A10 Postal receipt.
On behalf of the opposite parties:
Ex.B1 15.06.2010 Photocopy of agreement of chit.
Ex.B2 20.02.2013 Photocopy of letter issued by complainant to OP.
Ex.B3 23.02.2013 Photocopy of promissory note.
PRESIDENT
