Kerala

Idukki

CC/151/2020

Ramdas Prabhakaran - Complainant(s)

Versus

The Federal bank - Opp.Party(s)

Adv:shiji joseph

04 Jan 2022

ORDER

DATE OF FILING : 5.11.2020

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION IDUKKI

Dated this the 4^th day of January, 2022

Present :

SRI. C. SURESHKUMAR PRESIDENT

SMT. ASAMOL P. MEMBER

SRI. AMPADY K.S. MEMBER

CC NO.151/2020

Between

Complainant : Ramdas Prabhakaran,

Balakrishna Bhavan,

Millumpady, Adimali – 685 561.

(By Adv: Shiji Joseph)

And

Opposite Parties : 1. The Federal Bank Ltd.,

Adimali Branch,

Adimali P.O. – 685 561.

Represented by its Branch Manager

(By Advs: Thomas Paul &Sudhakaran K.R)

2. The IDBI Federal Life Insurance Company,

Registered Office at 22^nd Floor, A Wing,

MarathoneFulurex N.M Joshi Marg,

Lower Parel (East), Mumbai – 400 013.

Represented by its Managing Director.

(By Advs: Sunil Kumar Nair, Binu K.S.,

&Fenil Jose)

O R D E R

SRI. C. SURESHKUMAR, PRESIDENT

 

1. Complaint filed under Section 35 of Consumer Protection Act of 2019. Complainant’s case is briefly discussed hereunder :

2. Complainant is an employee of United India Insurance Company. 1^st opposite party is Manager of Federal Bank, Adimali and 2^nd opposite party is anInsurance Companyhaving its registered office at Mumbai, represented by its Managing Director. (cont.....2)

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Insurance business is a joint venture of Federal Bank Limited and IDBI Bank. In April 2018, complainant had, in connection with purchase of a residential building, availed a housing loan of Rs.40,000/- from 1^st opposite party. Upon insistence by 1^st opposite party, complainant was compelled to take insurance coverage for the loan amount from 2^nd opposite party. He had paid a single premium of Rs.99,750/- for covering the loan. Thereafter an insurance certificate was issued to him. Rate of interest for the loan was 8.25% at the time when complainant had availed the loan. Other banks were charging lower rate of interest for similar loans. Hence complainant had decided to port the loan with SBI Parathode Branch. Upon his application, loan was taken over by SBI at an interest rate of 6.9% per annum. After porting the loan, complainant had approached 1^st opposite party for cancelling insurance policy, as it had no validity due to closure of the loan. Policy surrender was accepted and 1^st opposite party had credited Rs.40200.20/- to the account of complainant, on 29.7.2020 as surrender value of the policy. Complainant submits that the amount is meagre as he is entitled to get at least Rs.30,000/- more towards surrender value. Deduction of premium was in violation of all norms and further it is illegal. Such deduction amounts to deficiency in service. Complainant therefore prays for refund of Rs.30,000/- from opposite parties with 14% interest from the date of complaint till the date of realisation towards excess deduction made. He also prays for Rs.50,000/- as compensation for pain and mental agony owing to deficiency in service and Rs.5000/- as litigation cost.

3. Opposite parties 1 and 2 have appeared and filed separate written versions. According to 1^st opposite party, complainant along with his wife applied for a housing loan of Rs.40 lakhs on 5.3.2018. After sanctioning of loan, complainant had then applied for insurance coverage for the loan with 2^nd opposite party, which is a separate independent legal entity on 15.3.2021. In so far as the contract of insurance is concerned, there is no customer - service provider relationship between complainant and 1^st opposite party. It is incorrect to say that insurance business is a joint venture of 1^st and 2^nd opposite parties. There was no insistence by 1^st opposite party for taking insurance coverage for the loan amount. Insurance is not a pre-condition for sanctioning of loan. Sanction order makes this very much clear. Copy of the same is submitted along with written version. It is true that the loan was availed at an interest of 8.25% on 5.3.2018. Subsequently loan was taken over by SBI, Parathodu Branch in 2020 upon concessional (cont....3)

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rate of interest. It is true that surrender value was credited to the account of complainant. However, amount was credited by 2^nd opposite party and not by 1^st opposite party. Complainant has no cause of action against 1^st opposite party. He is not entitled for the reliefs claimed in the complaint as against 1^st opposite party.

4. Second opposite party has filed detailed written version with quotes from judgments of various Courts including Hon’ble Supreme Court. For sake of brevity, these quotes are omitted from the narration here. According to 2^nd opposite party, complaint is devoid of merits and is to be dismissed as such. Complainant had applied for an insurance policy (IDBI Federal Incomesurance Endowment and Money Back Plan) as per application No.124080496 dated 15.3.2012. As per his application, Policy No.4001188785 was issued to him on 31.3.2018. Policy term was for 16 years and sum insured was Rs.40 lakhs. A sum of Rs.99,780.8/- was received towards premium amount. Policy had commenced on 31.3.2020. As per clause 6 of Insurance Regulatory and Development Authority (Protection of Policy Holder’s Interests) Regulations, 2002, every policy document sent to the insured is accompanied by a welcome letter which clearly states that in case policyholder is not satisfied with features or terms and conditions of policy, he can withdraw / return the policy under “free look period”. In clause 15 of policy document, this aspect is clearly mentioned. Opposite party No.2 had communicated policy document and covering letter which specifically mentioned free look provision vide speed post, on 7.4.2018. Complainant has now raised questions with regard to the policy conditions only in 2020. It is wellsettled that a policy holder can withdraw or return the policy only during free look period and not afterwards. As per regulations and terms of policy, complainant was required to send policy document with request for cancellation within 15 days of receipt of policy document. This has not been done by him. It is true that complainant had paid the entire premium amount with respect to the policy. However, along with loan coverage, risk of life of complainant was also covered for a period of 16 years. While so, complainant had upon his own volition sought for surrender of his policy and had sent request for the same to opposite party No.2. Request was accepted and surrender value calculated in accordance with sliding percentage of total amount of premium paid as per clause 8 of the policy was refunded by opposite party No.2 to the complainant. Policy document evidences terms of contract between complainant and 2^nd opposite party. After acceptance of terms and conditions, (cont....4)

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complainant cannot back out from the same. Surrender value was paid in accordance with the contract of insurance and as per prevailing regulations. Therefore contentions that complainant is entitled for Rs.30,000/- more at least, towards surrender value are without any merits. Complainant being an employee of insurance company is aware of all legal provisions and regulations relating to insurance. Present complaint is only a malafide attempt to see whether more money can be extracted from 2^nd opposite party. Complainant has no cause of action and there is no deficiency in service on the part of 2^nd opposite party. Hence complainant is not entitled for Rs.30,000/- with interest towards deducted surrender policy amount, Rs.50,000/- as compensation for pain and mental agony and litigation cost of Rs.5000/-. Complaint is liable to be dismissed with costs.

5. After filing of written version, case was posted for evidence, affording sufficient opportunity to both sides to take steps. Though the case was repeatedly adjourned for evidence, complainant has not chosen to give evidence in support of his case. Since complainant has not tendered evidence, no evidence was let in by opposite party also. Evidence was closed. We have also heard the learned counsel for 2^nd opposite party. Now points which are arises for consideration are :

1. Whether complainant is entitled for Rs.30,000/- more towards surrender value of the policy ?

2. Whether there is any deficiency in service on the part of opposite parties ?

3. Whether complainant is entitled for any of the reliefs prayed for ?

4. Order as to costs.

6. Point Nos.1 and 2 are considered together :

According to complainant, he is entitled for Rs.30,000/- more towards surrender value of the policy taken by him covering the loan initially taken from 1^st opposite party. It is admitted by all that complainant had initially availed a loan of Rs.40 lakhs from the 1^st opposite party and subsequently the loan was taken over by the SBI, Parathodu Branch at a concessional rage of interest. According to the complainant, he had paid the policy amount in lump and pre-mature surrender of policy will entitled him for a surrender value which is far more than what has been paid to him. He would say that surrender value paid was Rs.40200.20/- and that he is entitled for more, Rs.30,000/- at least towards (cont....5)

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surrender value. 2^nd opposite party has contended that surrender value is calculated in accordance with clause 8 of policy document. It was accordingly calculated and paid over to complainant also. That the complainant is not entitled for Rs.30,000/- or any other sum further than what has been paid to him. Complainant has not given any reason in his complaint or facts as such to show that the surrender value paid to him was less than what was his entitlement. Admittedly, he had not surrendered the policy within free look period. Copy of letter sent by 2^nd opposite party to complainant clearly mentions that there was a free look period of 15 days from the date of receipt of policy copy, available to complainant, to decide upon terms and conditions of the insurance contract. It is evident that the insurance was taken in the year 2018. This is borne out from the copy of policy certificate along with its terms and conditions produced by 2^nd opposite party. Clauses 8 and 9 of terms and conditions are about calculation of surrender value and terms of surrender. These clauses govern the contract of insurance entered into between complainant and 2^nd opposite party. Complainant has not succeeded in proving that as per the terms given in the policy certificate, he is entitled for more compensation than what has been paid to him already by 2^nd opposite party. Under the circumstances, we find that claim for Rs.30,000/-, more towards surrender value of the policy is without any basis. Complainant has not proved his entitlement for the same from the 2^nd opposite party. As far as 1^st opposite party is concerned, it is not in any way connected with the contract of insurance entered into between complainant and 2^nd opposite party. Complainant has not proved that he is entitled for Rs.30,000/- more towards surrender value of the policy. He has also not proved that there is any deficiency in service on the part of 1^st and 2^nd opposite parties. Point Nos.1 and 2 are answered accordingly.

 

7. Point Nos.3 and 4 are considered together:

 

Complainant is not entitled for Rs.30,000/- claimed towards surrender value of the policy and Rs.50,000/- as compensation for pain and mental agony. He is also not entitled for the cost of litigation. On the other hand, we find that the claim was made without any basis at all, though the complainant was well aware of the regulations prevailing with regard to contracts of life insurance. He himself is an employee of insurance company. It is difficult to believe that he had not gone through the policy document which he admittedly had with him. Despite this, he had filed a complaint making

(cont....6)

 

 

 

 

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unnecessary and frivolous claim towards value of surrender of policy as against opposite parties. As mentioned earlier, 1^st opposite party is not a necessary party at all. Therefore, we find that complainant will have to pay cost of litigation which is fixed as Rs.2000/- each to both opposite parties.

8. In the result, complaint is dismissed with costs of Rs.2000/- each towards litigation expenses of opposite parties 1 and 2.

Pronounced by this Commission on this the 4^th day of January, 2022

Sd/-

SRI. C. SURESHKUMAR, PRESIDENT

Sd/-

SMT. ASAMOL P., MEMBER

Sd/-

SRI. AMPADY K.S., MEMBER

 

 

APPENDIX : Nil.

 

Forwarded by Order,

 

SENIOR SUPERINTENDENT