Before the District Consumer Dispute Redressal Commission [Central District] - VIII, 5th Floor Maharana Pratap ISBT Building, Kashmere Gate, Delhi
Complaint Case No. 108/03.12.2020
Subhash Arora
s/o Sh. late Mohan Lal Arora,
8913 (Ground Floor), Gali No. II, Multani Dhanda,
Paharganj, Delhi-110055 …Complainant
[through his attorney/son Amit Arora].
Versus
OP1. State Bank of India
Having its Head Office at: Building 11,
Sansad Marg, Parliament Street, Near Jantar Mantar,
Delhi-110001
Branch at: Gogia House, Desh Bandhu Gupta Road,
New Delhi
OP2.- State Bank of India Life Insurance Co. Ltd.
Having branch at 112, First Floor, Dayanand Road,
Daryaganj, Delhi110002.
Head office at : Seawoods Grand Central,
F-Wing, 8th Floor, Plot No. R-1, Sector-40,
Seawoods, Nerul, Navi Mumbai-400706 ...Opposite Party
Date of filing: 03.12.2020
Coram: Date of Order: 17.09.2024
Shri Inder Jeet Singh, President
Ms Rashmi Bansal, Member -Female
FINAL ORDER
Inder Jeet Singh , President
It is scheduled today for order (item no.13)
1.1. (Introduction to case of parties) –The complainant has grievances of severe deficiency of services against the OPs that he took insurance policy, he had deposited the installments regularly in the branch of OP2 but the premium cheque of premium of year 2016 debit in his account but it was not credited to his insurance policy account, despite it was deposited in time and subsequently when further installment was deposited, it was told that the policy has elapsed for want of deposit of premium of 2016. Subsequently in 2019, being at very later stage the OPs credited the premium amount of 2016 into the bank account of the complainant. The complainant approached the OPs to regularize his policy because of his no fault but no result.
1.2. The OP1 and the OP2 opposed the complaint that OP1 is in the banking business, it has no role in respect of insurance business. Further, OP1 has no responsibility to accept premium of insurance policy of complainant and to further tender it to OP2; in case the premium was accepted mistakenly but it would not create an obligation on OP1 to accept the premium of complainant and to forward to OP2.
Similarly, the OP2 has also reservation that it is in the insurance business, the OP2 had not received the policy premium of 2016 and complainant has failed to get revived his insurance policy within the stipulated period, the policy lapsed. In case OP1 had taken the premium amount but not deposited with the OP2, the OP2 cannot be made accountable. There is no deficiency of services on the part of OP2.
1.3. This complainant is Sh. Subhash Arora, however, it has been signed, verified and instituted through his son/attorney Sh. Amit Arora; the power of attorney has also been filed. Moreover, at the stage of evidence, the evidence was also led through Sh. Amit Arora. However, in this final order the case will be referred and adjudicated for and in the name of complainant Shri Subhash Arora.
2.1. (Case of complainant) – In December 2013 the complainant opted life insurance policy, offered by OP2, after completion of all formalities, vide SBI Life-Flexi Smart Insurance Policy no. 56068027309, which was issued on 29.12.2013 for sum insured of Rs. 10 lakh on year premium of Rs. 50,000/- for tenure of ten years (hereinafter referred as “insurance policy”).
The complainant deposited annual premium for the year 2016 vide cheque no. 147640 dated 03.12.2016 for an amount of Rs. 50,000/- drawn on Central Bank of India in the name of OP2 and deposited it with OP1 with pay-in-slip (hereinafter referred as “premium cheque of 2016”). The OP1 has been honouring the cheque drawn on OP2, this cheque was deposited with OP1 with an undertaking (as per previous practice/transaction) that OP1 will honour and credit it towards the premium of insurance policy. The cheque was duly presented; it was honoured as the amount of that premium cheque was debited in the bank account of complainant.
2.2. Thereafter, for the next annual premium of insurance policy, the complainant issued cheque no. 004922 dated 26.02.2018 for Rs. 50,000/- drawn on ICICI Bank in the name of OP2, this cheque was also deposited with OP1 to credit payment of premium to OP2.
However, the complainant surprised that till March 2018, he had not received any intimation of clearance of this cheque. Immediately, the complainant approached OP1 to enquire about the status, he was told that due to financial year closing, the cheque drawn on third party bank/ ICICI Bank, it would take time in the process of clearing. The complainant was further advised to draw a fresh cheque on OP1 (since complainant is holding bank account) for expedient processing. The complainant followed the advice of the bank official so that default in payment of premium may not happen; he wrote another cheque no. 350982 dated 31.03.2018 of Rs. 50,000/- drawn on OP1 by cancelling previous cheque of 26.02.2018 which was drawn on ICICI Bank. The complainant was again surprising as no intimation was received for two more weeks; ultimately, he approached OP1, where it shocked him to know that the cheque was not cleared as insurance policy was already lapsed. This was April 2018 when the complainant was first time informed of lapse of insurance policy. The complainant enquired about unilateral act of lapse of policy, the OP1 advised to contact OP2. The complainant contacted OP2 and he was informed that policy lapsed due to non-payment of annual premium for the year ending 2016. The complainant showed them proof of premium paid cheque of 2016 and statement of bank account depicting deduction of that premium amount. The OP2 did not resolve the issue and refused to re-check the issue with OP1. The OP2 denied receipt of premium. The complainant had also requested in case there was non-receipt of premium; the complainant could have been informed of it besides no notice for termination/lapse of the policy was issued. The OP2 obfuscated the issue and asked the complainant to follow up with the Bank.
2.3. The complainant approached Central Bank of India and enquired the premium cheque of 2016, the Central Bank of India issued letter dated 14.05.2018 while clarifying that the cheque was presented in clearance on 03.01.2017 and the cheque was also cleared. Thence, the complainant approached OP2 with that information that there is no default of the complainant, however, the OP2 issued letter dated 22.06.2018 by informing that insurance policy has been lapsed due to non-payment of premium dated 29.12.2016. Moreover, in the said letter, it was also mentioned that an amount of Rs.53,530/- was credited on 18.04.2018 (as against total premium of Rs. 1,50,000/-) in the account no. 072205000082 of the complainant. It is apparent that it was after around one and half year that too after several requests of the complainant. There was no information given to the complainant by OP2 of lapse of policy or to rectify if any mistake is there. Moreover, the complainant was also denied the opportunity to extent clarification about the payment despite showing them clearance of premium cheque of 2016. There was no fault of the complainant.
2.4. The complainant was not at fault, he made several requests to the OP for refund of the amount received by OP2 but there was no resolution. Simultaneously, the complainant was following up with OP1 to get true pictures regarding the premium cheque of 2016 and the amount debited from the account of the complainant, the complainant’s son was accompanying with him.
Then in the month of March 2019, it was first time when OP1 informed the complainant that since funds received of premium cheque of 2016 was actually belongs to December-January 2017 (demonetization period), the same was not traceable by them. The complainant was told that the fund will be released as soon as they get approval from the Regional Office as per email dated 01.03.2019.
On 10.06.2019 there was reverse entry of premium cheque of 2016, which was debited for an amount of Rs. 50,000/- into the saving bank account no. 10614976731 of complainant with OP1 and a meager interest amount was also paid by OP1. It was unilateral termination of insurance policy and forfeiture of earlier premium on the ground that complainant has not paid the premium, whereas the complainant had paid the premium. There is deficiency of services on the part of OPs. Further, in case OP2 had not received the premium, neither the complainant was informed of such information nor the complainant was approached for payment of premium. It was only when complainant tendered the premium amount for subsequent period, the things were revealed and surfaced to the knowledge of complainant.
On 28.08.2019, complainant wrote letter to OP1 that amount of Rs.1 lakh for premium forfeited by OP1 on the ground that premium cheque of Rs. 50,000/- of 2016 was collected by OP1, which was not credited to the account of OP2. There is also negligence and lack of duty/responsibilities on the part of OP1 bank. When complainant approached the OPs for resolve of bona-fide grievances, the OP1 had also raised the issues internally with OP2, but the same was not availed to the complainant. The complainant was also approached Banking Ombudsman, Reserve Bank of India and filed the complaint against OP1, but it was rejected that grievances may be settled by intervention of OP1 through Banking Ombudsman. The complainant also approached OP2 on 09.11.2020 and followed for revival of the policy but no result. That is why the complaint against OP1 & OP2 to refund forfeited premium amount of Rs. 96,470/- alongwith interest jointly and severely besides compensation of Rs. 35,000/- and other appropriate relief.
2.5 The complaint is accompanied with copies of - special power of attorney, insurance policy, cheque dated 03.12.2016, cheque of precedent premium with pay-in-slip, cheque dated 31.03.2018, letters and emails referred besides affidavit u/s 65B of Indian Evidence Act in respect of electronic record.
3.1 (Case of OP1) - The OP1 filed compact written statement under the signature of its Branch Manger Ms. Sunita Yadav, the complaint has been opposed that it is without cause of action, there is no deficiency, negligence, unfair trade practice or mal-practice on the part of OP1. The complaint is abuse of process of law. The cheque was mistakenly sent by OP1 for collection as it was not collected for any particular account of customer, it was perforce to be parked in general leisure account after its realization. There is no arrangement between OP1 and OP2 to collect premium of OP2. Therefore, the complaint is liable to be dismissed and complainant is not entitled for any relief. The OP1 has not filed any document.
3.2.1 (Case of OP2)-The OP2 also filed detailed written statement, under the signature of Ms. Dhanya K. P; (AVP-Legal) to be authorized representative of OP2 but without support of any authority letter at any stage of the case.
Briefly, the complainant was issued insurance policy in December 2013 and it was terminated in April 2018, therefore, the complaint filed in the year 2020 is after seven year of issue of insurance policy. It is barred by law. There is no merit in the entire complaint and the policy was cancelled in terms of insurance policy. The allegations of complainant are that he had issued and deposited a premium cheque of 2016 with OP1, however, as per record of OP2, no such cheque/premium was received by OP2. Hence, the policy was lapsed in 2016. The complainant did not revive the policy within revival period, it was terminated and permissible amount of Rs. 53,530/- was paid as per terms and conditions of the policy. The other amount of premium was exhausted for the risks of that period. There is no negligence or deficiency of services of OP2.
3.2.2. The complainant had furnished the proposal form and on the basis of that information the policy was issued. The complainant opted yearly premium of Rs. 50,000/- payable on 29th December of every year for tenure of 10 years. There was no contractual obligation on the part of OP2 to send intimation. But as per customer services gesture, the OP2 sent a renewal premium initiation on 14.11.2016 but complainant did not pay the premium for due date of 29.12.2016. That is why policy lapsed. Moreover, the OP2 also sent lapse intimation dated 27.02.2017 and lapse revival intimation dated 29.06.2017 by advising the complainant to revive his policy.
3.2.3. Moreover, the OP2 issued the renewal premium due till 29.12.2015 but renewal premium due on 29.12.2016 was not received. The OP2 has also replied the letters issued by complainant that complainant has to confirm from the bank to which account the premium was actually credited. There is no cause of action existing against the OP2, since the amount of Rs. 53,530/- has been paid into account of complainant. The OP2 also mentions the names of some cases to support plea of the complaint is barred by limitation, the insurance policy is to be interrupted as per policy contract and the premium paid stand exhausted for the risk covered in that period. The complainant cannot ask for refund or any other amount. The complaint is liable to be dismissed.
3.3. The written statement is accompanied with proposal form, policy document, intimations/communications/ complainant’s letter and reply dated 22.06.2018.
4.1 (Replications of complainant) –The complainant files the detailed rejoinder while denying stand of OP1 and reaffirming the case in the complaint.
4.2. The complainant files the detailed rejoinder while denying stand of OP1 and reaffirming the case in the complaint. The complainant denies all such averments made in paragraph 3.2.2, that he never received any such intimation or notice but the termination of policy was unilateral act.
5.1 (Evidence)- The complainant led exclusive evidence through his attorney/son Amit Arora by detailed affidavit with the support of documents filed besides separate certificate u/s 65B of Indian Evidence Act, 1872 in the form of affidavit for electronic record. Similarly the OP2 also led its evidence by filing affidavit of Ms Dhanya K P, AVP-Legal/authorized representative. The affidavit is reproduction of entire written statement and it is in the form of written statement, except recital of affidavit. There is no evidence by OP1 despite opportunities.
5.2 (Final hearing)- The parties were also given opportunities and they have filed their written arguments. At the stage of final submissions, Sh. Ayush Beotra, Advocate for complainant, Shri Kushal Mohal Advocate for OP1 and Sh.Vikash Shoukeen , Advocate for OP2 presented their respective submissions.
(Findings)
6.1 - The contentions of the parties are considered keeping in view documents proved and other evidence of parties. The cases of parties and documents proved have already been referred, therefore, it does not need to reproduce them again, however, their rival contentions will be appreciated while analyzing and weighing the evidence.
6.2. It is apparent from plain reading of case of parties in pleading, evidence or otherwise, that the relationships of the complainant and of the OP2 are of the Insured and the Insurer. The OP1 is Bank.
6.3. The OP2 has taken the objection that the complaint has filed in 2020 but the policy was issued in December 2013, therefore, the complaint is barred by law as the complainant had period of two years to file the complaint. Whereas, the complainant has juxtaposition stand that the insurance policy is within the limitation period, the date of issue of insurance policy is not the only cause of action but it had arisen, when complainant learned about lapse of the policy; he was pursuing the OPs to ascertain the status of cheque issued in the year 2018 and then the things revealed and surfaced to him. It was also followed by further request for revival of the policy or to know the lapse of the policy, even from that time the complaint is within time.
The contentions of both the sides on this point are considered, by taking into account the material on record. The complainant has proved letter dated 01.03.2019/Annexure-C9 when complainant was informed by OP1 about the status of funds. The complainant has also proved letter dated 22.06.2018/C8 consequent to letter of complainant, when he came know about the lapse/termination of policy. The cause of action has arisen when the complainant was informed of lapse of the policy, therefore, the complaint filed on 03.12.2020 is within time either from letter dated 22.06.2018 or from 01.03.2019; thus it is held that the complaint is within time.
7.1. So far other consumer dispute is concerned, the following conclusions are drawn:-
(i). It is admitted case of OP1 in the written statement that premium cheque of 2016 was received by it and it was lying with OP1. Although, the OP1 gives explanation that it was mistake to receive it, however, it has not been explained how the mistake had happened, since if there was no arrangement or alike, it should be entertained or kept by the OP1. Moreover, if there was mistake and it was known to the OP1, it could be rectified by informing the complainant. Instead, now the OP1 under the garb of mistake is denying the practice being followed or to cover it up by labeling it as a mistake.
(ii). The OP1 has filed compact written statement, it was given opportunity to lead evidence but no evidence has been led. Except the admitted fact, the plea taken in the written statement could not be proved in evidence by and on behalf of OP1. Therefore, the testimony of complainant remained unchallenged qua OP1.
(iii). The written statement of OP2 is authored by Ms. Dhanya K. P., stating to be authorised representative of OP2. There is no authority letter in favour of Ms. Dhanya K. P. to authenticate that she has been authorized by OP2 to sign, verify and filed the written statement for and on behalf of OP2. Similarly, she also led evidence by filing her detailed affidavit, with the plea that she has been authorized to lead evidence for and on behalf of OP2, but no authority letter or resolution or special power of attorney has been filed in her favour nor there is any fact suggesting that she is witness to the events taken place inter-se the complainant, the OP1 and the OP2.
(iv). The complainant has filed the documentary record received by him either in the form of policy, letter and email communication either with the OPs or with the Central Bank of India. They have not been disputed by the OPs.
(v). Similarly, OP2 has also relied upon several papers particularly premium intimation letter dated 14.11.2016, lapse intimation dated 27.02.2017 and notice dated 12.07.2017 of end of revival period but there is no mode of dispatch/service is mentioned on such letters nor it is supported with any proof of service to prove that it were issued and served upon the complainant. Therefore, it establishes the plea of complainant that he has not received such letters or notice from OP2. The onus was on the OP2 to prove such record with proof of service but it failed.
(vi) The Central Bank of India has issued the letter dated 14.05.2018 in respect of premium paid cheque of 2016 that it was presented in clearance and the same was cleared by debiting in the account of complainant. The OP1 also admits that the cheque was received by it.
(vii) The oral narration of complainant is being corroborated by documentary record that after taking insurance policy the complainant was depositing the annual premium amount and premium cheque of 2016 was deposited with the OP1, it was presented to the clearance as per letter issued by Central Bank of India, vis-à-vis the amount of premium had not reached to OP2. But it was not in the hand of complainant, since it was internal task of the OPs and other bank. What was in the hand of complainant was to pay the premium in time, which he deposited by way of premium cheque of 2016.
(viii) It may appear that for want of receipt of premium of 2016 by OP2, it could lapse the policy of complainant but simultaneously the premium was lying with OP1 and for this the complainant cannot be liable to suffer it. When he had approached the OPs to do needful under these circumstances, his grievances were not resolved, it amounts to deficiency of services.
7.2 In view of the sub-paragraph 7.1 above, the circumstances proved by the complainant establish his complaint against OP1 & OP2. The OP1 & OP2 are liable jointly and/ or severely to refund the premium amount of Rs. 98,470/-, since the lapse of policy was not due to acts or omissions of complainant but because of acts, omission, negligence and short of services on the part of OPs. The complainant is held entitled for refund of paid premium amount. The complaint is allowed for Rs. 96,470/- in favour of complainant and against the OPs.
7.3 The complainant claims interest at the rate of 12%pa. However, there is no such agreed rate of interest vis-à-vis the complainant was deprived of firstly continuation of policy and secondly when the refund was sought for, it was refused. Had the amount been credited to the account of complainant, he would have earned the interest or in other words the amount would have been appreciated. Therefore, interest at the rate of 7%pa from the date of complaint till realization amount is also allowed.
7.4 The complainant has also sought damages of Rs.35,000/- towards agony and harassment. On the basis of circumstances that complainant suffered lapse of policy and also inconvenience and harassment to get revived the policy or seeking refund of paid amount for want of his fault, the compensation is quantified as Rs.15,000/- in favour of the complainant and against the OPs.
7.5 The complainant has claimed other appropriate relief, without specifying them. It may be considered from the point of costs, since for want of resolution of grievances and refund of amount, the complainant had to file the complaint. Thus, complainant is also entitled for costs, which is quantified as Rs.10,000/- in favour of the complainant and against the OPs.
8. So, the complaint is allowed in favour of complainant and against the OPs while directing OP1 and OP2 to pay/refund jointly and/or severally Rs. 96,470/- alongwith simple interest at the rate of 7%pa from the date complaint till realisation of this amount to the complainant, besides compensation of Rs.15,000/- and costs of Rs.10,000/-. OPs are also directed to pay the amount within 45 days from the date of this order. In case amount is not paid within 45 days from today, then OPs will be liable to pay interest on that amount and rate of interest will be 9% per annum from that date of complaint till realization of amount.
The OPs may deposit the amount with the Registry of this Commission by way of valid instrument in the name of the complainant.
9. Announced on this 17th day of September 2024 [भाद्र 26, साका 1946]. Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for compliances, besides to upload on the website of this Commission.
[ijs-116]
