IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA
Friday the 18th day of September, 2020
Filed on 05.07.2018
Present
1. Sri.S.Santhosh kumar(President)
2. Smt. Sholly.P.R ,LLB (Member)
In
CC/No.184/2018
Between
Complainant:- Opposite parties:-
1. Sri.Sasikumar.V.T 1. Branch Manager
Sreekrishnapuram LIC Divisional Office
Kalavoor.P.O Global Mount Building
Alappuzha Cherthala
(Adv. S.Devlal)
2. Savitha Devi.J 2. Pradeep.G
Sreekrishnapuram Naduvileparambil
Kalavoor.P.O Karikkad.P.O.
Alappuzha Thanneermukkom,Cherthala
(Party in Person) (Party in Person)
O R D E R
SMT. SHOLLY.P.R (MEMBER)
This case based on a consumer complaint filed u/s 12 of the Co nsumer Protection Act. 1986.
The averments in the complaint in short are as follows:-
On 26/7/2007 1st complainant had taken three money plus policies from the 1st opposite party, each one required an amount of Rs. 20,000/- for its yearly premium. The 2nd complainant is wife and nominee of the insured 1st complainant. The policy numbers are 393695442, 393695446 and 393695447. The 2nd opposite party, the insurance agent had given an assurance to the 1st complainant insured that on continuous payment of single annual instalment of premium for three years alone, after 10 years, without further payments of instalments in future, the complainant will get Rs. 5,07,874/- for each policy and thereby the 1st complainant had taken the above said policies and he paid annual premium in the above three policies continuously for three years. But after 10 years the insured got only an amount of Rs. 1,81,509/- for the above three policies. The 1st complainant had paid a total amount of Rs. 1,80,000/- towards premium of three policies, but after 10 years only a margin of Rs. 1,509/- was received in excess. The 2nd opposite party had shown sufficient documents to convince his assurance and persuaded the insured to purchase the said policy. In the above circumstances the complainants filed this complaint demanding the amount assured by the opposite party. The opposite parties resisted the complainant by filing separate version.
2. The averments in the version filed by the first opposite party is as follows.
It is admitted that the subject policies were issued under Money Plus Plan for 10 years’ term with date of commencement 26.07.2007 for Sum Assured Rs. 1,00,000/- with yearly premium of Rs. 20,000/- for each policy to the 1st complainant. In answer to the allegations and claims in the complaint that the 2nd opposite party had given an assurance to the 1st complainant that on continuous payment of instalments of premium for 3 years, the 1stcomplainant will get Rs. 5,07,874/- under each policy, on completion of 10 years, it is most respectfully submitted that this opposite party is not aware as to what transpired between the 1st complainant and the 2nd opposite party. If a policy holder acts on the version of the Agent, it is only at his own risk and responsibility and it is not in any way binding on the 1st opposite party i.e. LIC of India. It is further submitted that Rule 8(4) of the LIC of India(Agents) Rules, 1972 and Rule 8(2) of LIC of India (Agents) Regulations, 2017 published in the Gazette of India dealing with the functions of the Agent reads as follows:
“ Nothing contained in these regulations shall be deemed to confer any authority on an agent to collect any moneys or to accept any risk for or on behalf of the corporation or to bind the corporation in any manner whatsoever”.
As specifically laid down by the statute, there is no vicarious liability on this opposite party in respect of the alleged acts of the 2nd opposite party. The dispute per se relates to the confabulation between the 1st complainant and 2nd opposite party wherein certain promises were allegedly made and those issues to be sorted out amount themselves without dragging this opposite party to his case. The 2nd complainant has no locus standi to file the complaint herein. It is clearly specified in bold at the top of the policy documents that “IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PROTFOLIO IS BORNE BY THE POLICY HOLDER.”
It is further submitted that condition No.21 of the policies under the head “Risks Borne by the Life Assured” clearly cautions that “The value of the units as well as the benefits relating to the policy holder’s fund value are subject to market and other risks and there can be no assurance that the objectives of any of the above funds will be achieved. Further the value of units within each fund type can go up or down depending on the different factors affecting the capital markets and may also be affected by changes in the general level of interest rates and other economic factors. All benefits under the policy are also subject to the Tax Laws and other financial enactments as they become applicable from time to time.”
In addition to that, at the top of the proposal form for LIC’s Money plus plan also, it is clearly pointed out that “IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PROTFOLIO IS BORNE BY THE POLICY HOLDER”. “LIC’s Money Plus is a ULIP plan which is different from the traditional policy in the sense that it is subject to market risk. LIC does not authorize its agent/ intermediaries, staff and officials to express their opinion on the future performance of the ULIP fund excepting the prescribed illustrative rate of 6 percent and 10 percent growth”. In the Proposal Forms, the 1st complainant had specifically declared that he had been informed about the risk profile of the Unit Linked Insurance Plan and Fund and he is bound by the declaration. The 1st complainant had further declared therein that in consultation with the agent/ intermediary, he had taken a personal and independent decision in an informed manner to go for the plan and fund which he had chosen. The 1st complainant was well aware of, and was specifically informed about the plan, fund the element of risk etc while proposing for assurance and he cannot turn around and make claims contrary to his absolute acceptance of terms and conditions as to risk involved to suit his advantage and convenience. The policy conditions are crystal clear and are detailed in policy documents. Had there been any doubt regarding any condition, the complainant was free and could have verified the same at the time of proposing for assurance itself, without raising wild allegations that he was misinformed.
The complainant paid premium only for three years totaling Rs.1,80,000/-(Rs.20,000 X 3 years X 3 policies = 1,80,000/-). No subsequent premium was remitted. The complainant did not avail the option for the revival of policies within 2 years. Thus the policies lapsed from 26/7/2010 onwards and he failed to discharge his contractual obligations and the complaint has been filed in the back drop of this failure, on experimental basis. The complainant alleges that the 2nd opposite party had assured him that remittance of premium amounting to Rs. 1,80,000/- would miraculously grow into an astronomic investment figure of Rs.15,23,622/-(i.e. Rs.5,07,874 X 3) in a short span of 10 years. The claim made by the complainant is prima facie absurd, disproportionate and is apparently invented for the purpose of his case based on wild allegations against 2nd opposite party.
Money plus is a Unit Linked Endowment Plan which offers investment cum life insurance during the term of policy. Hence, life cover is compulsory under this plan. Life cover charge will be deducted every month upon the difference between the sum assured under the plan and the fund value of the units as on date of deduction of charge, only if, the basic sum assured is more than the fund value of the units on the date of deduction. The premium paid, after deducting the allocation charges, shall be utilized for purchase of units which will be invested according to the investment pattern prescribed for different fund types 1) Bond fund, 2) Secured fund, 3) Balanced fund and 4) Growth fund, The policy holder will have the option to choose any one of the above 4 funds. The Net Asset Value(NAV) will be computed on daily basis. The policy holder can switch between any fund types during the policy term depending on the performance of the fund. After receipt of premium and further deduction of allocation charges, balance amount of premium will be utilized for arriving at the number of units in policy holder’s unit capital A/c. From this, the following charges shall be deducted by cancellation of appropriate number of units out of policy holder’s unit account every month. The total number of units to be deducted will be calculated as:
Total amount of following charges/ Applicable NAV Rate are as follows:-
1) Premium Allocation charge.
2) Mortality Charge.
3) Critical illness Benefit charge.
4) Accident Benefit Charge.
5) Policy Administration Charge
6) Service Tax Charge.
7) Miscellaneous charge.
8) Switching Charge.
The premiums were required to be paid for the full term of 10 years under all the three policies but, after payment of premiums for 3 years the policies were allowed to lapse on non-payment premiums from 07/2010 on wards. Further the policies were not revived during the revival period of 2 years from date of First Unpaid Premium. The eligible total amount of Rs. 1,81,509/- was settled on maturity with respect to all the three policies which was accepted without any protest and there after the complainant is stopped from filing a complaint against the 1st opposite party alleging defect and deficiency in service. The above complaint is only a product of afterthought and is quite experimental one and is frivolous, vexatious and liable to be dismissed with cost. Exorbitant amounts are claimed with wild allegations against 2nd opposite party utterly disregarding the caution and risk elements brought to the notice of the complainant at various stages and also conveniently suppressing the general awareness as to the element of risk associated with Capital Market and exposure to equity. The complainant is not entitled to claim any relief as prayed for. It is respectfully submitted that insurance is a contract entered into between the 1st complainant and the 1st opposite party. Both have to abide by the conditions in the policy and the LIC of India has only complied with the terms and conditions in the policy in dealing with the claim of the complainant and giving strict compliance to the conditions in the policy can never be treated as a defect or deficiency in service.
It is evident that the complainant was aware of the plan, fund and risk involved etc at the proposal stage itself, and those are also clearly spelt in the policy documents, which have been accepted without any whimper of protest. The 1st opposite party has cautioned him about the element of risk in various stages. Had the returns been more, depending on market gyrations, the complainant would have gleefully accepted the benefits. The 1st complainant has no case that the benefit due under the policies was not paid by this opposite party. The number of units will not remain the same, as charges specified in the policy are to be met by cancelling appropriate number of units. It is most respectfully submitted that the Life Insurance Corporation is a statutory Corporation, an instrumentality of the State dealing with the public monies and the officers and employees abide by the relevant rules and procedures while dealing with the policy matters they are bonafidely implementing the conditions in the policy with utmost good faith, doing justice to the customers and at the same time protecting the public interest. Hence by processing the policy in tune with the conditions in the policy they have done nothing illegal. The above complaint is frivolous and vexatious and is liable to be dismissed with compensatory costs.
There is no defect or deficiency in service on the part of the 1st opposite party in dealing with the policies of the complainant. The complainant has not sustained any monetary loss or damage ascertainable in terms of money to claim compensation. Therefore, it is most respectfully submitted that this written version may be accepted in favour of the 1st opposite party finding that, there is no defect or deficiency in service or any unfair trade practice on the part of the 1st opposite party in this case. Hence the complaint may be dismissed with costs.
3. Contentions raised by the 2nd opposite party in short are as
follows:-
The 2nd opposite party denied the allegations raised against him contenting that he never gave any assurance with respect to the policy as alleged in the complaint and denied his liability. The 2nd opposite party also explained that the policy taken by the 1st complainant was unit linked endowment money plan policies and the amount paid to that policy invested to different investment fund and lastly got the policy amount on the basis of the profit of that investment. All the matters regarding investment scheme were explained to the 1st complainant and he had purchased the policy according to his wishes. He also had explained the risk factor of the policy i.e., the growth of the policy amount will be depending on the up and down of the investment growth. The insured has got the eligible amount assured as per the policy. The 1st complainant did not get the expected amount in the policy due to lapse of policy by non-payment of premium after 3 years. As an agent the 2nd opposite party had introduced policy of the 1st opposite party and he explained its specialties to the 1st complainant. The 1st complainant had purchased the said policy according to his on wishes. Therefore there is no deficiency in service on the part of the 2nd opposite party, thus the complaint may be dismissed with compensatory cost of the opposite party.
3. In view of the above pleadings points that arise for consideration are:-
1.Whether there is any deficiency in service or unfair trade
practice on the part of the opposite parties?
2. Whether the complainant is entitled to get the amount
from the 1st opposite party as claimed in the complaint?
3. Relief and Cost?
4. Evidence on the side of the complainant consists oral evidence of PW1, 2nd complainant and Ext.A1 and A2(Marked as subject to objection). No oral evidence on the part of the opposite parties Ext.B1 to B6 marked on the side of 1st opposite party Ext.B1 to B3 are Proposal forms regarding the policies taken by the 1st complainant. Ext.B4 to B6 are copy of policy document. 1st opposite party filed notes of arguments. Heard both sides.
5. Points No.1 and 2:-
For avoiding repetition of discussion of materials these two points are considered together. Admittedly the 1st complainant was an insured of the 1st opposite party in 3 policies for a period of 10 years which evident from Ext.B4 to B6. The sum assured for each policy was one lakh rupees. The main contention of the opposite parties regarding the subject matter of the complaint is the type of policy and its nature and speciality. Ext.B1 to B3 would shows that insured, 1st complainant had purchased the policy under the plan of “ Growth Fund”. Ext.B4 to B6 would also evident that the said policies are Money Plus and Fund Opted for policies in question was Growth Fund. More over it is clearly stated in policy itself that, “ In This Policy, The Investment Risk In Investment Portfolio is Borne By The Policy Holder”. Besides this in condition No.21 of the policy under the head “Risk Borne By The Life Assured”. It is clearly stated that, “ The Value Of Units As Well As The Benefits Relating to the Policy Holder’s Fund Value are subject to market and other Risk and there can be no assurance that the objective of any of the funds will be achieved. Further the value of units even such fund type can go up or down depending on the different factors affecting the capital market and may also been affected by changes in the general level of interest rate and other economics factors. All benefits under the policy are also subject to the tax loss and other finance enactments as they become applicable from time to time.” The 1st opposite party categorically stated in the version and the counsel of the 1st opposite party vehemently argued that the LIC’s Money Plus policy is a ULIP Plan which is different from the traditional plan in the sense that it is subject to the market risk. In Ext.B1 to B3 in the description of Investment Pattern of the Funds selected by the assured, 1st complainant is “Growth Fund” and its risk shown as “ Long Term Capital Growth- High Risk. Moreover PW1 agreed in the box when she was cross examined that the complainant had received the certificates of policies within one month from its purchase and they understand that the policy was combined with investment and insurance.
Regarding the assurance made by 2nd opposite party, the 1st opposite party disputed the agency as well as his assurance. In the evidence stage, the insured did not enter the box. Here the definite case of the 1st complainant is that , he happened to purchase the said policies solely relying on the persuasive words of the 2nd opposite party. The 2nd opposite party has denied those allegations in his version. In such circumstance the 1st complainant himself has to give evidence. When the counsel for the 1st opposite party questioned about non appearance of the 1st complainant, insured while PW1 was cross examined, she could not answer convincingly and also she was not prepared to answer in a responsible way with respect to the terms and conditions of the policy, even though she is a Post graduate. The complainant has no material to prove that the policy in question has got a coverage as claimed in the complaint. The notices marked as subject to proof which has no authority or authenticity and we found those notices were agents training materials by private circulation and not proved the veracity of the same. PW1 herself avoided 2nd opposite party from his responsibilities in cross examination. While the counsel for 1st opposite party put a question that “ 2nd opposite party I_fn¸n¨p F¶mtWm \n§Ä ]dbp¶Xv. She answered 1st Opposite party BWv I_fn¸n¨Xv.” The complainant has also not furnished any document which establishes the fact that the policies in question were covered the amount as claimed in the complaint. More over in
this case the complainant raised issue after surrendering the policies by accepting the amount satisfactory. Therefore we are of the opinion that the complainant is not entitled to get any relief sought for, since the claim is falling outside the perview of the policy condition. 1st opposite party relied on decision rendered by National Consumer Distpute Redressal Commission laid down in Revision petition No.4/2018 in SwapnaKumar Vs. Adithiya Birla Sunlight Pvt. Ltd., that the policy document clearly mentions about the inherent Investment Risk in the Portfolio which is to be Borne by the policy holder and thereby not found any deficiency in service on the part of the opposite party/ insurance company.
In this case in the proposal forms 1st complainant had specifically declared that he had been informed about the Risk Portfolio of the Unit Linked Insurance Plan and Fund and he is bound by declaration. It is well settled law that parties are bound by the terms and conditions in the policy. In the aforementioned reasons, we are only to hold that the complaint deserves dismissal.
Point No.3
In the result the complaint stands dismissed. No cost.
Dictated to the Confidential Assistant, transcribed by her correct by me and pronounced in open Commission on this the 18th day of September, 2020.
Sd/-Smt. Sholly.P.R(Member)
Sd/-Sri.S.Santhosh Kumar(President)
Appendix:-Evidence of the complainant:-
PW1 - SavithaDevi(2nd Complainant)
Ext.A1 - Brousher of LIC
Ext.A2 - Brousher of Money Plus scheme
Evidence of the opposite parties:-
Ext.B1 - Proposal Form
Ext.B2 - Proposal Form
Ext.B3 - Proposal Form
Ext.B4 - Copy of policy document
Ext.B5 - Copy of policy document
Ext.B6 - Copy of policy document
// True Copy //
To
Complainant/Oppo. party/S.F.
By Order
Senior Superintendent
Typed by:- Br/-
Compared by:-
