This appeal by  opposite parties  is directed against the  order dated 6.7.2009 passed by District Consumer Forum-I, U.T.Chandigarh whereby the complaint bearing No.1471 of 2008  filed by Sh.Sudarshan Kumar Duggal , respondent /complainant was allowed  in the following terms ;  

“In view of the above discussion, we are of the opinion that the present complaint must succeed and the same is accordingly allowed.  The OPs are directed to refund the amount of Rs.60,000/- to the complainant along with interest at the rate of 8% per annum with effect from 6.9.2007 till the payment is actually made to the complainant. 

Since the OPs are guilty of adopting unfair trade practice by which they may be harassing a number of customers/consumers, it is necessary that they should be penalized.  Keeping in view the facts & circumstances of the case, as narrated above, we are of the opinion that the OPs should pay a sum of Rs.One Lakh as penalty to the complainant.

The aforesaid entire amount along with litigation cost of Rs.5,000/- shall be paid to the complainant within 30 days from the date of receipt of copy of the order, failing which the OPs would be liable to pay the same along with penal interest at the rate of 12% per annum with effect from today till the payment is actually made to the complainant. ”      

2.         The parties hereinafter shall be referred to as per their ranking before the District Consumer Forum.

3..       The facts culminating to the commencement of this appeal may be recapitulated  thus ;

                The Complainant had opted for a life insurance policy unit linked plan  for a term of five years and the sum assured was Rs.3,00,000/- for which he made the payment of the Annual Premium of Rs.60,000/- to the OPs and a Life Insurance Policy (Life Invest Unit Linked Investment 3 Pay Plan) bearing No. 442580544, dated 27.8.2007 was issued by OP No.1 to him. The complainant   received the Policy dated 27.8.2007 along with the covering letter dated 28.8.2007 by courier on 30.8.2007 and on going through the said documentation and details of the Life Insurance Policy, he did not find the “returns” on investment to be of his liking and thus, decided to exercise the option of the surrender/return of the Policy within the stipulated period of 15 days “free lock” period as offered by the OPs to all new policy holders.  Accordingly, he exercised the option and returned the original Life Insurance Policy along with his letter seeking refund to the OP No.2 on 6.9.2007, which was duly acknowledged by the said OP vide endorsement dated 7.9.2007 (Annexure C-2).  On the receipt of the Original Life Insurance Policy, the OP No. 2 informed the Complainant that the refund of the premium paid would be made within a period of 7 working days, but when nothing came through for about a fortnight, he sent series of reminders dated 22.9.2007, 1.10.2007, 6.10.2007, 23.10.2007, 24.10.2007, 14.11.2007, 16.11.2007 and 07.12.2007, but to no avail. Finally, OPs vide letter dated 18.10.2008 informed that since the “Free Lock Period” had expired, there was no cause for refunding the premium so received from the Complainant. Hence, alleging deficiency in service and unfair trade practice on the part of OPs, complainant filed complaint before the District Consumer Forum.

 4.        On the other hand, the case of OPs  before the District Forum was that  the  Complainant could return the policy during the 15 days of free lock period as per the IRDA Rules. The Complainant had received the policy documents on 30.8.2007 and therefore, the free lock period started from that date and would end on 15.9.2007.  The refund, if any, could only be made as laid down under clause 27 of the Insurance Policy. It was submitted that after the request for cancellation was received, with a view to settle any differences that the Complainant had regarding the Policy, a meeting was arranged on 28.9.2007, in which the Complainant agreed to continue with the Policy. It was only on the basis of this meeting and wish of the Complainant to continue the policy,  the policy was not cancelled. Subsequently , when the ‘free lock’ period was over, he  again wrote  for cancellation of the policy vide letter dated 16.11.2007. As the free lock period had ended and the policy could not be cancelled, the   Complainant was informed accordingly  vide letter dated 30.11.2007. It was pleaded that there was no deficiency in service  on their part and a prayer was  made for dismissal of the complaint.

5.           The learned District Consumer Forum after  going through the evidence  and hearing the   learned counsel for the parties allowed the complaint as indicated in the  opening part of this judgment. This is how feeling aggrieved against the said order, opposite parties have    come up in this appeal.

6.         We have heard  learned counsel for the parties  and also gone through the file   carefully. The main contention of the learned counsel for OPs is that the grant of penalty  amounting to Rs.one lac is exaggerated and excessive as the same does not co-relate with the amount of loss or injury, if any, suffered by the complainant and  even  complainant had enjoyed the life insurance cover for more than one year .  Further on receipt of the cancellation request of the complainant on 7.9.2009, in order to settle the difference which the complainant had regarding the policy, a meeting  was arranged with him and letter dated 24.9.2007 was written to that effect.  In the said meeting when the complainant was explained the benefits of the policy contract, he agreed to continue with the policy. Subsequently, after almost two months, complainant vide letter dated 16.11.2007 asked for cancellation of the policy and his said request was declined vide letter dated 30.11.2007 because the request was received after the expiry of the free lock period. Complainant agains sent letter dated 19.8.2008 requesting for cancellation of the policy which was declined vide letter dated 18.10.2008. Thereafter, the policy was cancelled and the amount of Rs.60,000/- was refunded. So, there was no deficiency in service on the part of OPs. However, the above  contentions of OPs were repelled by the learned counsel for complainant. 

7.         We have given our thoughtful consideration to the entire matter and find that Clause 27 of the policy empowered the complainant to return the original policy document to the OP Company with a written request for cancellation of the policy within 15 days from the date of receipt of the policy and in that event the premiums paid, adjusted for any adverse movement etc. were to be refunded to him.  It is proved on the file rather   admitted by  OPs that the complainant  within 15 days of the receipt of the policy had requested the OPs  on 6.9.2007 to cancel the policy and to pay back the amount of Rs.60,000/- to him which   was received in the office of OP Insurance Company on 7.9.2007.  The OPs  did not cancel the policy and failed to  refund the amount due to which the complainant wrote various letters/reminders seeking refund of the amount. Ops failed to produce on file consent letter, if any, given by the complainant having agreed to continue with the policy.  Thus, the learned District Forum rightly directed  OPs to refund Rs.60,000/- alongwith interest @ 8% p.a.  with effect from 6.9.2007 till its payment, besides litigation costs of Rs.5000/- . However, keeping in view the totality of facts and circumstances of the case and the amount involved in dispute, we think the penalty amount of Rs.one lakh appears to be on the higher side which is reduced to Rs.50,000/-.

8.         But for  this modification/reduction in the penalty amount from Rs.one lac to Rs.50,000/-, the rest part of the impugned order is confirmed.  Accordingly the  appeal is partly allowed as indicated above, leaving the parties to bear their own costs. 

             Certified copies of this order be communicated to the parties, free of charge. The file be consigned to records.