DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PALAKKAD

Dated this the 28^th day of June 2019 

Present  : Smt.Shiny.P.R,  President

               : Sri. V.P.Anantha Narayanan, Member                              Date of Filing : 15/12/2017

      CC/188/2017

Sali K.P

Poovathingal House,

Chithra Naga, Akathethara P.O,                                    -  Complainant

(By Adv.Sachindas & Manoj)     

                                                                                    Vs

1. The Chief Postmaster General

Postal Department, Kerala Circle,

Thiruvanthapuram, Pin - 695 033

2. Senior Superintendent of Post Office
3.  

Palakkad - 678001

3.  Superintendent of Post office                                                     -  Opposite parties

Olavakkode Post Office,

Palakkad , Kerala 678 002

4. Post Master

Akathethara Post Office,

Palakkad -678002

                                                                  O R D E R

By Sri. V.P.Anantha Narayanan, Member  

Brief facts of the case are explained below.

            The complainant purchased Rural Postal Life Insurance Policy on 31/03/2014 which bears number :- R-KL-EA-725498 from the 4^th opposite party and monthly premium of Rs.485/- which later on increased to Rs.494/- was being regularly paid by the complainant.  The complainant completed the payment of instalments for three years in March 2017 and according to him she is eligible to surrender the policy as per the terms and condition of surrender in Rule 55 of Post Office Life Insurance Rules 2011.  On 21/03/2017 complainant submitted the policy with surrender application to the 3^rd opposite party after completing three years of policy as per the instruction of the 4^th opposite party.  But after two weeks, the 3^rd opposite party informed to the complainant that, if complainant surrenders the policy then, she will get only 50% of the amount which complainant has deposited to the postal department upto March 2017.  According to the complainant at the time of purchasing the policy, the opposite party had informed her that after completing three years she can surrender the policy for actual amount deposited with interest.  According to the complainant she had deposited Rs.18,660/- upto March 2017, but on 21/03/2017 when complainant submitted the surrender application after completing three years of policy, 4^th opposite party informed her that she would get back about Rs.9,000/- out of Rs.18,660/- deposited.  Complainant pleads that the surrender of policies, Rule 55 of Post Office Life Insurance Rules 2011 clearly states that complainant’s policy is not an Anticipated Endowment Assurance ten year Rural Postal Life Insurance or Children Policy, but it is Endowment Assurance Policy.  Hence as per the Rule 55 complainant can surrender her policy number :- R-KL-EA-725498 after completion of three years with full deposited amount with interest and rejecting the same is against the terms and conditions of the policy, as pleaded by the complainant.  According to the complainant the rejection by the 3^rd opposite party of surrender of the subject policy for full deposited amount with interest is against law and deficiency of service of the opposite parties and due to this irresponsible act of the opposite parties the complainant has suffered loss, mental agony and loss of professional practice for which she is entitled for compensation.  The complainant has sent letters to the 1^st and 2^nd opposite parties on 19/06/2017 and received replies for the same which stated new conditions not disclosed anywhere in the entry book.  Hence complainant feels that the opposite parties have willful malicious intention to cheat, withhold the amount and defeat her.  Therefore complainant prays to this Forum to pass an order directing the opposite parties to pay an amount of Rs.18,660/- with 12% interest and Rs.50,000/- as compensation for the mental agony and be awarded the cost of this proceeding to this complainant.

            The complaint was admitted and notices were issued to the opposite parties to enter their appearance and file their versions.  The 2^nd opposite party filed version on behalf of all the opposite parties in which he contends the following:- Complainant insured her life under Rural Postal Life Insurance Scheme with Endowment Assurance Policy Number :- R-KL-EA-725498 for a sum assured of Rs.1,00,000/- on 31/03/2014 whose date of maturity was 31/03/2031.  The complainant opened the said RPLI policy at Palakkad Engineering College Post Office.  According to this opposite parties, the 4^th opposite party, being not at all involved in any transactions of the said RPLI policy, he may be removed from the array of opposite parties.  According to these opposite parties, the complainant had paid premium upto March 2017 and applied for surrender of RPLI policy.  As per Rule 55 of Post Office Life Insurance Rules 2011 the complainant is eligible for surrender of the policy on 31/03/2017.  These opposite parties contend that according to the said Rules the complainant applicant was informed about the value she may get on surrender of the policy and sought her consent for processing her surrender application and the surrender amount was worked out as Rs.9,286/- as on 31/03/2017.  On knowing the surrender value, the complainant was not ready to accept eligible surrender value but claimed the deposited amount with interest.  These opposite parties also contend that the proposal form submitted by the complainant when she join the RPLI policy contains a declaration signed by her from which it can be inferred that complainant applicant is aware of the surrender details by signing under the declaration and this declaration in the RPLI proposal form states that surrender of the policy shall attract proportionate bonus as reduced on sum assured upto the date for which premium was paid.  Since the policy is less than 5 years duration the complainant is not eligible for any proportionate bonus and she has deposited Rs.17,945/- plus surcharge applicable from time to time upto March 2017.  This opposite party also contends that as per the calculations, the complainant is eligible for surrender amount of Rs.9,286/- as on 31/03/2017.  This opposite party also argues that no interest but bonus has to be given on RPLI policy, provided the concerned policy holder has completed five years duration and it is not mentioned any where regarding payment of full deposited amount with interest.  This 2^nd opposite party received a letter from the complainant on 22/06/2017 requesting the facts regarding surrendering of her RPLI policy and the complainant was replied stating the amount after surrender will be according to a reduced sum assured total.  This opposite party further contends that the terms of surrender of policies are already available in the proposal form and the complainant had accepted and signed the declaration and the opposite parties only acted according to the extent of Rules on the subject and there is no willful deficiency of service and malicious intention to cheat the complainant as alleged.  According to this opposite party, in this case the insured complainant withdraws from the contract suo moto and therefore there will be some loss to the person who withdraws from the contract and there is no willful negligence and deficiency in service on the part of the opposite parties.  This opposite party also concedes that complainant has applied for surrender of the policy fully accepting the conditions.  Hence this opposite party prays to the Hon’ble Forum to dismiss the complaint with cost to these opposite parties.

            Complainant filed chief affidavit so also the opposite parties.  Opposite party was cross examined as DW1 and complainant was cross examined as PW1.  Exts.A1 to A7 were marked from the side of the complainant and Exts.B1 to B8 were marked from the side of the opposite parties including Ext.B3 series and Ext.B8 series.  Complainant and the opposite parties filed notes of arguments.

The following issues arise in this case for consideration by this Forum.  

1. Whether there is any deficiency in service and unfair trade practice from side of the opposite parties?
2. If so, the relief and cost which the complainant is entitled for?

Issues 1 & 2

            The complainant has produced before this Forum Exts.A1 to A7 to support his complaint and pleas.  Ext.A1 is a photocopy of RPLI book which shows policy number of the complainant, date of entry into RPLI, insurant name and address, sum assured, rate of premium, last premium date, maturity date.  This exhibit also states that complainant has regularly paid premium on her policy upto 17/03/2017.  Ext.A2 is Rural Postal Life Insurance Santhosh endowment assurance certificate which also shows date of commencement of risk, policy number, sum assured, term, name, occupation and address of the insured, date of birth of the insured, date of maturity, name of nominee, terms of contract of RPLI.  Ext.A3 is a registered letter dated.01/06/2017 sent by the 2^nd opposite party to the complainant as information sought under RTI Act 2005 to complainant’s RTI request dated.27/04/2017 and 27/05/2017 enclosing copy of Rule 55 of Post Office Life Insurance Rules 2011 mentioning the terms and conditions regarding the surrender of RPLI scheme.  Ext.A4 is a letter dated.19/06/2017 sent by the complainant to the 2^nd opposite party requesting for surrender of her policy number R-KL-EA-725498 at Olavakode Post Office and repayment of actual deposited amount plus interest.  Ext.A5 is a reply letter dated. 24/07/2017 sent by the 2^nd opposite party to complainant’s letter dated.19/06/2017 informing the complainant that on surrender, the policy shall attract proportionate bonus on reduced sum assured up to the date for which premium has been paid and no bonus shall be payable before completion of five years of the policy.  Ext.A6 is a letter dated.19/06/2017 sent by the complainant to the 1^st opposite party requesting for surrender of her policy and repayment of actual deposited amount plus interest because her policy is Endowment Assurance policy (Policy Number R-KL-EA-725498) and as per Rule 55 she can surrender the policy after completion of three years with full deposited amount with interest.  Ext.A7 is an application for surrender of postal life insurance policy number R-KL-EA-725498 dated.21/03/2017 submitted by the complainant.  The opposite parties have filed Exts.B1 to B8, which includes B3 series and B8 series in support of their contentions.  Ext.B1 is a copy of Post Office Life Insurance Rules 2011 which shows that policies can be surrendered other than an anticipated endowment assurance ten year Rural PLI and children policy provided the policy is of not less than three years duration and proportionate bonus shall be paid on paid up value after completion of five years.  Ext.B2 shows details to be given for female proposers and details given as complainant is a female proposer such as her marital status, number of children, date of last delivery, mark of identification etc.  This Ext.also shows declaration by the proposer, declaration by the person filling the form etc.  Ext.B3 series shows calculation of surrender factor RPLI surrender claim calculation sheet, surrender factor etc. Ext.B4 is a letter dated.19/06/2017 sent by the complainant to the 2^nd opposite party requesting 2^nd opposite party for the surrender of the policy of the complainant and payment of the deposited amount with interest.  Ext.B5 is a letter dated.24/07/0217 to the complainant sent by the 2^nd opposite party informing her that the subject policy shall attract proportionate bonus on reduced sum assured up to the date for which premium has been paid, however no bonus shall be payable before completion of five years of the policy.  Ext.B6 is Post Office Life Insurance Rules 2011 which shows meaning of various terms used in Post Office Life Insurance Rules 2011 such as lapsing of policy life, insurance contract, paid up policy, post office life insurance fund, postal life insurance, premium etc.  Ext.B7 is a copy of Post Office Life Insurance Rules 2011 which shows that Rural Postal Life Insurance (RPLI) includes whole life insurance, endowment insurance, convertible whole life insurance, anticipated endowment insurance, joint life insurance, children policy ten year policy in Rural Postal Life Insurance and such other schemes introduced by the Department of Posts from time to time.  Ext.B7 also shows the meaning of surrender value of a policy on the amount payable to an insured, when he forgoes the contingent benefit of his policy and surrenders it for immediate cash payment provided at least 36 premiums have been paid and policy has completed minimum 36 months duration.  It also shows general rules regarding eligibility conditions for Postal Life Insurance which mentions that the benefits of Post Office Life Insurance fund are available except in the case of anticipated endowment insurance, joint life and children policy.  Ext.B8 series is the proposal form for the RPLI (Medical) of Department of post submitted by the complainant which shows the signature and name of Senior Superintendent of Post Offices, Palakkad Division, permanent address of the complainant, nominee details, husband’s name, marital status of the complainant, premium amount. 

            We have perused the affidavits and documentary evidences submitted before this Forum by the complainant and the opposite parties from which we understand that the complainant purchased Rural Postal Life Insurance Policy number R-KL-EA-725498 from the 4^th opposite party on 31^st March 2014 on completion of three years of taking of the policy, on 21/03/2017 complainant surrendered her policy along with surrender application and original pass book to the 3^rd opposite party.  In this connection we observe that nowhere nor in any part of Post Office Life Insurance Rules 2011 it is mentioned that complainant policy holder is entitled to receive only Rs.9,286/- as surrender value as on 31/03/2017 when she surrendered her policy; also complainant is not seen to have been given any booklet or any written communication or oral explanation regarding the deduction of Rs.9,374/- from complainant’s deposited amount of Rs.18,660/- in the policy taken by her.  It is also clear to us from the opposite party’s deposition as DW1 before this Forum that “Reply notice  ImcWw ]dªn«nÃ. Postal Life Insurance Policy Rules 2011 section 55 {]ImcamWv policy surrender sN¿p¶Xv.  Section 55 mandatory section BWv.  section 55 se GsX¦nepw Hcp Imcyw fulfill sNbvXn«nsæn AXv R§fpsS  `mK¯pÅ default BWv.  ]cmXn¡mcn¡v written Bbn Hcp Adnbn¸pw surrender value s\ Ipdn¨v sImSp¯n«nÃ.  written Bbn communicate sN¿Ww F¶ Imcyw AdnbnÃ. aq¶p hÀjw IgnªXn\ptijw surrender application X¶p.  36 amkw Ignªv AS¨ kwJybpsS ]IpXnsb e`n¡pIbpÅq F¶v Ext.B8 series  ]dªn«nÃ"".  Thus we find that the opposite party has admitted during his cross examination that section 55 of Postal Life Insurance Policy Rules 2011 is a mandatory section and if anything as per section 55 is not fulfilled it is the default of the opposite party and he also admitted that he did not give any written communication to the complainant regarding surrender value and also admitted that opposite parties did not know about it.  Similarly as per complainant’s deposition as PW1 before this Forum while she was cross examined “Rm³ policy surrender sN¿phm³ th­n Olavakode Post Master sb BWv kao]n¨Xv.  Post Master surrender s\ kw_Ôn¨pÅ Imcy§sfm¶pw ]dªpX¶nÃ.  surrender sN¿­, continue sN¿p F¶ Imcyw Ft¶mSv ]dªnÃ.  Rm³ Cu ]²Xnbn tNcp¶ kabw H¸n«p sImSp¯ t^man kd­À sNbvXm 50% ss]ksb In«pIbpÅq F¶v Ft¶mSv ]dªn«nÃ.  tNmZyw ;þ surrender application sImSp¯tijw 50% ss]k am{Xsa In«pIbpÅq F¶v ]dªv hà written communication Dw e`n¨n«pt­m?  D¯cw :þ F\n¡v written communication H¶pw In«nbn«nÃ..""  It is also observed that opposite party admitted during his cross examination as DW1 that he did not send any written communication to the complainant after receiving the surrender application for her consent/dissent.  So we view that there has occurred deficiency and default in service from the side of the opposite parties and in Post Office Life Insurance Rules 2011 Section 55 is a mandatory section and the opposite party clearly admitted during his cross examination that if conditions as per section 55 are not fulfilled it will amount to default and deficiency on the part of the opposite parties.  We also observe that as per reply letter sent by the 2^nd opposite party to the complainant it did not mention any details other than that no bonus shall be payable before the completion of five years of the policy; also the complainant did not receive any written notice from the Postal Department regarding surrender value after her submitting surrender application which is also mandatory under section 55 of the Post Office Life Insurance Policy Rules 2011.

            Taking into consideration all the above we view that opposite parties have clearly committed default and deficiency in service and unfair trade practice due to which complainant is put to a lot of sufferings, financial loss and mental agony. 

            Hence we decide to allow the complaint. 

            We order the opposite parties 1, 2, 3 & 4 jointly and severally to pay to the complainant the amount actually deposited by her of Rs.18,660/- (Rupees eighteen thousand six hundred and sixty only) from 31/03/2014 to 31/03/2017 in Akathethara Post Office by way of Postal Life Insurance Premium on her policy number :- R-KL-EA-725498 at Olavakode Post Office together with interest at  9% per annum from 31/03/2017 till realization; these opposite parties (1, 2, 3 & 4) are also directed jointly and severally to pay to the complainant Rs.3,000/- (Rupees three thousand only) as compensation for mental agony suffered by her and her family, due to the opposite parties deficiency in service and unfair trade practice, in addition Rs.2,000/- (Rupees two thousand only) should also be paid to her for which the opposite parties 1,2,3 & 4 are jointly and severally directed to be liable. 

            The aforesaid amount shall be paid within one month from the date of receipt of this order; failing which the complainant is also entitled to realize 9% interest p.a from the opposite parties on the total amount due to him from the date of this order till realization.

Pronounced in the open court on this the 28^th day of  June 2019.    

  Sd/-

                                                                                Shiny.P.R                                                                                

                                           President

                                                  Sd/-

                         V.P.Anantha Narayanan

                                         Member

Exhibits marked on the side of complainant

Ext.A1      -  Ext.A1 is a photocopy of RPLI book

Ext.A2      - Rural Postal Life Insurance Santhosh endowment assurance policy certificate details

Ext.A3     -  Registered letter dated.01/06/2017 sent by the 2^nd opposite party to the complainant

Ext.A4     -  letter dated.19/06/2017 sent by the complainant to the 2^nd opposite party requesting for

                   surrender of her policy number R-KL-EA-725498 at Olavakode Post Office

Ext.A5 -  Reply letter dated. 24/07/2017 sent by the 2^nd opposite party to complainant’s letter

                    dated.19/06/2017

Ext.A6     -  Letter dated.19/06/2017 sent by the complainant to the 1^st opposite party requesting to

                   take necessary action and to instruct concerned staff for surrender of her policy and

   repayment of actual deposited amount plus interest

Ext.A7 -  Application for surrender of postal life insurance policy number R-KL-EA-725498

                    dated.21/03/2017 submitted by the complainant

Exhibits marked on the side of Opposite parties

Ext.B1  -  copy of Post Office Life Insurance Rules 2011

Ext.B2  - details to be given for female proposers and details given as complainant is a female

                    proposer such as her marital status, number of children, date of last delivery, mark of

                    identification etc.

Ext.B3 series  - calculation details of surrender factor RPLI surrender claim calculation sheet,

                                surrender factor details

Ext.B4  - Copy of the letter dated.19/06/2017 sent by the complainant to the 2^nd opposite party

                    requesting 2^nd opposite party for the surrender of the policy of the  complainant and

                     payment of the deposited amount with interest

Ext.B5     -  Copy of the letter dated.24/07/0217 to the complainant sent by the 2^nd opposite party Ext.B6  - Copy of Post Office Life Insurance Rules which shows meaning of various terms used

                     in Post Office Life Insurance Rules 2011

Ext.B7  - copy of Post Office Life Insurance Rules 2011 which shows general rules, conditions

                    for Postal Life Insurance and eligibility

Ext.B8 series – Copy of  proposal form for the RPLI (Medical) of Department of posts which

                                 shows the signature and name of Senior Superintendent of Post Offices, Palakkad

                                   Division, permanent address of the complainant, 1^st nominee details, name of

                                  the complainant husband’s, his educational qualification, occupation,

                                  identification mark of the complainant etc.

Witness examined on the side of complainant

PW1        -  Sali.K.P

Witness examined on the side of opposite parties

DW1        - Renjith Krishnan

Cost

                Rs. 2,000/-