Punjab

Patiala

CC/11/46

Surinder Kaur - Complainant(s)

Versus

The Aviva LIC - Opp.Party(s)

Sh. K S Sidhu

26 May 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

PATIALA.

 

                                                Complaint No.CC/11/46 of 17.1.2011

                                                Decided on:        26.05.2015

 

Surinder Kumar Sharma aged about 64 years, s/o Sh.Kundan Lal R/o H.No.11, Malwa Colony, Patiala.

                                                                   …………Complainant

                                      Versus

1.                The Aviva Life Insurance Company Ltd. Branch Office, S.S.T.Nagar, Opp.Narain Hospital, Patiala through its Branch Manager/I.C.

2.                Mr.Sushant Kumar Sharma s/o Sh.Subash Chander, # 104, Ranjit Nagar, Near Ghuman Nagar, Sirhind Road, Patiala, Agent of ops.

3.                The Aviva Life Insurance Company Ltd., Registered Office:2^nd Floor, Prakashdeep Building 7 Tolstoy Marg, Delhi-110001, India through its Chairman/Managing Director.

                                                                   …………Ops

                                      Complaint under Section 12 of the

                                      Consumer Protection Act.

 

                                      QUORUM

                                      Sh.D.R.Arora, President

                                      Sh.Amarjit Singh Dhindsa,Member

                                      Smt.Neelam Gupta, Member

                                                                            

Present:

For the complainant:   Sh. S.P.Singh Sidhu, Advocate

For Ops No.1&3:         Sh.Mayank Malhotra, Advocate  

For op No.2:                Ex-parte

                                     

                                         ORDER

D.R.ARORA, PRESIDENT

1. Sh.Sushant Kumar Sharma, op no.2 an agent of the Aviva Life Insurance Company Ltd., i.e. ops no.1&3 approached the complainant in the month of December 2006 and explained that under a policy of the ops, in case he deposited Rs.40,000/- annually for a period of five years, he will get Rs.2,50,000/- and the policy would cover the risk of the life for a period of five years of the complainant and obtained his signatures on blank papers/forms to be filled lateron. Smt.Sita Rani wife of the complainant was shown as nominee under the policy.
2. The complainant had deposited three installments of Rs.40000/- each in December 2006,  January 2008 and December 2008. However, the complainant was surprised when he received the account statement in January 2010 having shown the fund value at Rs.90490/- only although the complainant had deposited Rs.1,20,000/-.
3. At this the complainant requested the ops to refund the amount paid by him. After a long persuasion the ops refunded only Rs.40000/- vide cheque dated 8.6.2010 and thus, he was paid Rs.80000/-less. Accordingly the complainant approached this Forum through the present complaint brought under Section 12 of the Consumer Protection Act,1986 ( for short the Act) for a  direction to the ops to pay him Rs.80,000/- with interest @ 18% per annum from the date of the deposit till payment; to pay him Rs.10,000/- by way of compensation on account of the harassment and the mental agony experienced by him and further to award Rs.5500/-as costs of the complaint.
4. On notice, ops no.1&3 appeared and filed their written version, whereas op no.2 despite service failed to come present and was proceeded against exparte.
5. In the written version filed by ops no.1&3 it is averred that op no.3 is not the agent of the insurance company and rather Jaswinder Singh is the agent whose name finds mentioned in the proposal form. The complainant had approached the ops for the issuance of the insurance policy. The proposal form No.NUP10474839 dated 17.12.2006 was received by the ops which was duly filled in and signed by the complainant after going through the “key feature documents” sample illustration of the maturity value and understanding the scope, meaning and contents of the proposal form.
6. The complainant had also signed a declaration that “ I/we fully understand the meaning and scope of the proposal form and the questions in it and am/are submitting the completed proposal on my/our own accord and I/we confirm that I/we  confirm that I/we have not been induced by anyone to make the proposal”
7. On the basis of the proposal form and the declaration made thereunder the ops had issued a life long unit linked policy No.WLG1405406 and the same was sent to the policy holder on 27.12.2006 through courier docket No.527034801 of Overnight Courier and the same was delivered to the complainant on 1^st July 2007.The policy documents included the policy schedule, the right to reconsider notice, the standard terms and conditions copy of the proposal form and the first premium receipt.
8. As per the “ right to reconsider” notice, the complainant had the option to get the policy cancelled within 15 days on receipt of the policy documents in case he was not satisfied with any of the terms and conditions of the policy. The complainant thereafter paid two more premiums under the policy without raising any dispute with regard to key features of the policy for more than three years. Regular intimations regarding the policy i.e. premium notices, premium reminder notices, lapsation notices and policy account statements were sent to the complainant.
9. On 24^th April 2010 the complainant had sent a complaint alleging that the policy was mis sold to him which was duly replied by the ops having informed him about all the terms and conditions . Thereafter another letter was received from the complainant which was also duly responded to by the ops.
10. It is also averred that the policy had acquired auto foreclosure status in accordance with article 15.3.3.2 of the standard terms and conditions  as renewal premium were not received for more than two years. An auto foreclosure cheque for Rs.40000/- was sent to the complainant and the policy was terminated. After denouncing the other averments of the complaint, going against the ops, it was prayed to dismiss the complaint.
11. In support of his complaint, the complainant tendered in evidence Ex.C1, his sworn affidavit alongwith documents Exs.C2 to C8 and his learned counsel closed the evidence.
12. On the other hand, on behalf of the ops, their learned counsel tendered in evidence Ex.RW1/A the sworn affidavit of Mr.Gaurav Malhotra, Manager(Legal) of the ops alongwith documents Exs.R1 to R4 and closed their evidence.
13. Here, it may be noted that the complaint was disposed of by the Forum vide order dated 26.4.2012.The complainant preferred First Appeal No.749 of 2012 and the same has been disposed of by the Hon’ble State Consumer Disputes Redressal Commission Punjab,Chandigarh vide order dated 19.3.2015having observed that the complaint filed by the complainant is not barred by limitation and the complaint has been remanded to the Forum for being decided afresh on merits. Hence the complaint is before us.
14. We have heard the learned counsel for the parties,gone through the written arguments already filed before the disposal of the complaint by the Forum and gone through the evidence on record.
15. It was submitted by Sh.S.P.Singh Sidhu, the learned counsel for the complainant that this Forum had earlier decided the complaint on merits and that no new argument is to be advanced by him. He simply submitted that in case the claim of compensation is possible on the basis of the material on record , it should not be denied on hyper technical pleas. In this regard, he placed reliance on the citation Dharmendra Goel versus Oriental Insurance Co.Ltd. III(2008)CPJ 63(SC) of the Hon’ble Supreme Court of India. The said citation is not apparently applicable to the facts of the present case because in the case of the citation the complaint filed before the District Consumer Disputes Redressal Forum was dismissed on the ground that the question as to whether the driver of the vehicle had a valid driving licence on the date of accident involved complicated questions of fact, which should be decided only by a civil court. In the appeal preferred by the appellant, the Hon’ble State Consumer Disputes Redressal Commission ,Bhopal accepted the appeal having held that the driver did have a valid driving licence on the date of the accident and accordingly directed the company to pay the appellant a sum of Rs.1,04,030/-with interest @6% per annum from the date of the filing of the complaint till payment. In the revision preferred by the complainant, the same was partly accepted and Hon’ble National Commission granted a compensation of Rs.1,80,000/- with interest @12% per annum .Again the complainant preferred the appeal before the Hon’ble Supreme Court. Before the Hon’ble Supreme Court, the issue involved was as to whether the complainant was entitled to the insured amount as given in the policy i.e. Rs.3,54,000/- or the amount of Rs.1,80,000/-, assessed by the surveyor and we need not  discuss the citation further because the citation is not applicable at all to the facts of the present complaint.
16. The learned counsel for the Ops also submitted at bar that this Forum had earlier decided the complaint vide order dated 26.4.2012 on merits and that no fresh point is to be raised by him.
17. It is the case of the complainant that he was approached by Op no.2, an agent of Ops no.1&3, in the month of December,2006 and who explained that in a policy for  a duration of five years, the complainant will have to deposit five installments of Rs.40,000/-each annually i.e. in all Rs.2lacs and after a gap of five years, the Ops would refund him Rs.2,50,000/- and that the  insurance would cover the risk of the life for a period of five years in respect of the complainant. Mrs.Sita Rani, wife of the complainant was mentioned as nominee in the policy. Op no.2 had also obtained the signatures of the complainant on blank papers/forms and some other forms to be filled in lateron. He had paid three installments of Rs.40,000/- in December,2006, January,2008 and December,2008 and in that way the complainant paid Rs.1,20,000/-. He was shocked to receive the account statement in the month of January/2010 disclosing the fund value at Rs.90,490/-.He made a request to the Ops on 19.2.2010 to refund the amount paid by him and after a long persuasion the ops had sent him the cheque dated 8.6.2010 for Rs.40,000/- only and thus he was paid Rs.80,000/-less.
18. It is not the case of the complainant that he had not received the policy documents and rather the complainant deposited two more premiums beside the first premium i.e. the 2^nd  premium  in January 2008 and the 3^rd in December 2008 as disclosed by the complainant himself in the complaint. It is his case that he was surprised when he received the account statement in January 2010 in which the fund value was shown to be Rs.90,090/- although he had deposited Rs.1,20,000/- . Ex.C2 is the said account statement. On going through Ex.C2 , one would come to know that the policy had commenced w.e.f.27.12.2006. It had the annual frequency of the premium at Rs.40,000/- and the sum assured was Rs.4,20,000/-. The number of the units as on 3.1.2010 was shown to be 2519.50, price of per unit as Rs.35.92 and the total fund value was shown to be Rs.90,490/-.Had the complainant on receipt of the policy documents gone through the same, he would have come to know about the scheme of the policy as enshrined under articles 27,28,29,30 and 31 as provided in Ex.R2 which is standard terms and conditions. It is no where provided under the standard terms and conditions that on the policy holder depositing the annual premium of Rs.40,000/- for a period of five years he will get Rs.2,50,000/- . Under  article 29.1 of the standard terms and conditions, it is provided “ The assets to which the Unit Linked Fund are referenced will be valued at a market price net of fund management charges on a daily basis”. Article 29.2 further provides, “The company is entitled to deduct from the assets to which the Unit Linked Fund is referenced all expenses relating to brokerage, custodial fee and such other expenses and duties incurred in connection with purchase and sale of assets under the Unit Linked Fund.” Similarly under article 30.1, it is provided, “The Unit price of Units of each Fund shall be determined daily as per the regulations/guidelines issued by the insurance Regulatory and Development Authority or any such body authorized by Government of India to issue such regulations/guidelines from time to time. As per the current guidelines issued by the Insurance Regulatory and Development Authority, the Company will determine the  Unit price of each fund daily as per the following formula:-

Unit Price=Net Asset Value(NAV) divided by the number of units existing in the Fund at the Valuation Date( before any new Units are allocated or redeemed).The net asset value can be calculated in either of the two following methods:

When appropriation price is applied The NAV of a Unit Linked Fund shall be computed as the market value of investments held by the Fund plus the expenses incurred in the purchase of the assets plus the value of any current assets plus any accrued income net of Fund Management Charge less the value of any current liabilities and provisions, if any. This is applicable when the company is required to purchase assets to allocated Units at the Valuation date.

When expropriation price is applied:  The NAV of a Unit Linked Fund shall be computed as the market value of investments held by the Fund less the expenses incurred in the sale of the assets plus the value of any current assets plus any accrued income net of Fund Management charge less the value of any current liabilities and provision, if any,. This is applicable when the Company is required to sell assets to redeem Units at the Valuation Date”

19. Therefore, it would appear that it was not the simple investment of the money with the ops by the complainant so as to earn interest after a lapse of five years and rather the policy being Unit Linked, the fund value was dependent upon the market fluctuations, the risk in the investment performance of the unit linked funds etc. and there was no guaranteed payment under the policy of the amount of Rs.2,50,000/- as claimed by the complainant.
20. In the proposal formEx.R1, the complainant had opted the unit linked plan life long. Since the value of the funds had gone down, the complainant after the lapse of a period of more than three years, tried to find fault in the product sold to him by the ops.
21. In case the complainant was not agreeable to the terms and conditions of the policy, as per the free look period notice, which the complainant does not deny having received alongwith policy documents, he had the option to get the policy cancelled but the complainant rather having deposited two more premiums showed his inclination to pull on with the policy having accepted the terms and conditions thereof. The citations ICICI Prudential Life Insurance Company Limited Versus Anil Kumar Jain 1(2010) CPJ 514, Dharani Sugars & Chemicals Limited versus Gadadhar Balir Singh II(2007) CPJ 369 and Rajinder Singh versus Kotak Mahindra Old Mutual Life Insurance Limited &Ors. III(2013)CPJ 127(Punj.) relied upon by the learned counsel for the complainant have  no semblance of the facts of the complaint and therefore, the same cannot be applied to the facts of the present case.
22.  The complainant is estopped in filing the complaint by his act and conduct so as to challenge  mis-selling of the product because not only that he failed to exercise his right to get the policy cancelled as per the free look period notice contained in the policy document which provided, “Right to Reconsider” and the same provided as disclosed by the Ops in para 5 of the preliminary objections of the written version,     “  You have the right to review the policy terms and conditions and cancel your policy within a period of 15 days from the date of receipt of your policy document. If you cancel your policy, the premium you have paid will be refunded after adjusting for adverse movement in unit prices less charges incurred on account of stamp duty and medical expenses, if any”. The complainant has not challenged , on any ground, whatsoever contained in the policy terms and conditions regarding the refund of the  amount of  Rs.40,000/-. Even the learned counsel for the complainant could not raise any point to show how the refund of Rs.40,000/- made by the Ops to the complainant vide cheque dated 8.6.2010 ( copy Ex.C6) has not been issued in accordance with the policy terms and conditions.
23. It is the plea taken up by the Ops that the policy had acquired auto foreclosure status in accordance with article 15.3.3.2 of the Standard Terms and Conditions as renewal premiums were not received for more than two years and therefore, an auto foreclosure cheque for Rs.40,000/- was sent to the complainant as per article 14 and the policy was terminated. The learned counsel for the complainant failed to point out any inconsistency in the action taken up by the Ops in consonance with article 15.3.3.2 of the Standard Terms and Conditions. Therefore, we do not find any substance in the complaint and the same is hereby dismissed.

Pronounced.

Dated:26.05.2015

 

                   Sonia Bansal                Neelam Gupta                D.R.Arora

                   Member                         Member                          President