Tamil Nadu

South Chennai

29/2010

Mrs. Ponnammal - Complainant(s)

Versus

The Manager, HDFC Bank - Opp.Party(s)

N.L.Rajah

20 Oct 2016

ORDER

                                                                        Date of Filing  :  31.12.2009

                                                                        Date of Order :  20.10.2016.

 

DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI(SOUTH)

     2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

PRESENT: THIRU. B. RAMALINGAM M.A.M.L.,                     : PRESIDENT

                 TMT. K.AMALA, M.A. L.L.B.,                                 : MEMBER I

           DR. T.PAUL RAJASEKARAN, M.A ,D.Min.PGDHRDI, AIII,BCS : MEMBER II

 

C.C.NO. 29 /2010

THURSDAY THIS  20^th DAY OF OCTOBER 2016

 

Mrs. Ponnammal Thiyagarajan,

Rep. by K.Shankar Raman,

JA 3^rd Block Lakshmima Apartments,

No.40, 4^th Seaward Road,

Valmiki Nagar,

Thiruvanmiyur,

Chennai 600 041.                                          .. Complainant

 

                                      ..Vs..

1. The HDFC Bank,

Nungambakkam Branch,

Rep. by the Branch Manager in Charge,

Chennai – 600 034.

 

 

2. The HDFC Standard Life

Insurance Company Ltd.,

Rep. by the Branch Manager in charge,

Ground Floor,

503, Anna Salai,

Teynampet,

Chennai 600 018.                                              ..Opposite parties 

 

 

For the Complainant              :  M/s. N.L. Rajah & another

For the opposite party-1         :  M/s. King & Partridge

For the opposite party-2         :  M/s. M.B.Raghavan 

 

        Complaint under section 12  of the Consumer Protection Act 1986.  The complaint is filed seeking direction against  the opposite parties  to cancel the Unit Linked Pension Plan policy with interest and also to pay a sum of Rs.5,00,000/- as compensation for mental agony and to pay cost of the complaint. 

                                ORDER

THIRU.   T.PAUL RAJASEKARAN ::    MEMBER-II     

1.The case of the complainant is briefly as follows:

            The  complainant submit that  he having savings bank account with opposite party-1 and keeping an outstanding balance of Rs.6,00,000/- in his account as on April 2008.    The complainant further stated that in order to get higher rate of interest the complainant approached the opposite party-1 to make Rs.4,00,000/- under fixed deposit for which he had signed certain documents, where the details furnished in the document were not explained by the opposite party.  With utmost good faith without reading substance in the form given, the complainant signed the forms, but to his surprise instead of keeping the amount of Rs.4,00,000/- under fixed deposit it had been kept under unit linked insurance where the amount had been transferred and the opposite party-2 had issued an Unit linked pension plan to the party.   Since the complainant was residing in canada she was not aware of the contents prescribed in the policy provided which was handled by her power agent who is a brother of the complainant.  All the transactions were carried out by the brother of the complainant it was reported,  one fine morning in 2009 the representative of the opposite party had called in April 2009 and demanded Rs.10,000/- as a renewal premium.   On hearing his notice the complainant’s brother had a shock and started to verify the documents issued by the opposite party-2.  To his surprise he found the policy containing “growth fund” issued by the opposite party and an amount of Rs.2,60,000/- was adjusted towards the policy premium and the balance of Rs.1,40,000/- had been used by the opposite party are various heads  unauthorizedly which is outside the scope of the law.  On 2^nd July 2009  the 2^nd opposite party confirmed in the complainant that the said policy had been revived and that the policy was in force w.e.f. 11.4.2009.  The 1^st and 2^nd opposite parties are solely responsible for the diversion of huge sum of Rs.4,00,000/- meant for fixed deposit into the opposite parties Unit Linked Pension Plus policy as a single annual premium.    On 3^rd July 2009 the complainant wrote a letter to the Grievance Redressal officer of the opposite parties bank at Mumbai and also approached the Insurance Ombudsman.    As such the act of the opposite parties amounts to deficiency in service and which caused mental agony and hardship to the complainant.  As such the complainant sought for  cancellation of the Unit Linked Pension Plan policy issued by the opposite parties with interest and also to pay a sum of Rs.5,00,000/- as compensation for mental agony and to pay cost of the complaint. 

Written version of 1^st opposite party is  briefly as follows:-

2.     The 1^st opposite party deny all the averments and allegations contained in the complaint, except those that are specifically admitted herein.     The opposite party-1 had not disputed about the complainant’s saving bank account and the balance maintained by him and transfer of Rs.4,00,000/- to HDFC Standard Insurance being the 1^st year premium.   The allegation made by the complainant stating his request of putting Rs.4,00,000/- under fixed deposit  was completely denied.   This complaint was neither true nor correct which rather tantamount to be a traversing  allegation.   Para-5 to7 of the complaint stated in the complaint, it was stated the 1^st opposite party was not aware of the transactions that had happened between opposite party-2 and the complainant.  The opposite party-1 confirmed the clearance of Rs.10,000/- cheque issued on 5.5.2009 and another Rs.10,000/- on 23.2.2010.   The allegation made in para 12 to 16 are completely denied. The opposite party-1 contended that the product given to the complainant was not the product of the bank it was the product of opposite party-1. Para 22 to 28 the allegation pertain to opposite party-2  and the opposite party-1 had not received any letters stated therein.  The opposite party-1 stated the various relief sought by the complainant unsustainable. Hence there is no deficiency in service on the part of the 1^st opposite party  and the complaint is liable to be dismissed.

Written version of 2^nd  opposite party is  briefly as follows:-

3.     The 2nd opposite party deny all the averments and allegations contained in the complaint, except those that are specifically admitted herein.     The opposite party-2 submit that having known all the details of the HDFC Unit Linked Pension Plus policy the complainant had submitted a proposal on 9.4.2008 by paying premium of Rs.4,00,000/- for a term of 10 years.   Having received the premium the opposite party-2 had issued a policy containing the various features of the policy and the conditions thereof on within the mentioned policy.  As on offer the complainant had submitted the proposal and as a ‘consideration’ the opposite party-2 received the premium as an evidence of acceptance, opposite party-2 had issued the policy documents.   The contract of insurance is binding on the parties and does not permit cancellation.     The complainant approached the opposite parties to cancel the fund deposited and required refund.  As per the terms of the policy refund is not allowable without completing ‘surrender value conditions’ which was stipulated in the policy.  Therefore there is no deficiency in service on the part of the 2^nd opposite party and pleads the complaint is liable to be dismissed.

 

4.   Complainant has filed his Proof affidavit and Ex.A1 to Ex.A17 were marked on the side of the complainant.   Proof affidavit of Opposite parties filed and Ex.B1 to Ex.B11 were marked on the side of the  opposite parties.    

5.      The points that arise for consideration are as follows:-

1)   Whether there is any deficiency in service on the part of the opposite parties?

 

2. Whether the complainant is entitled to the  reliefs sought for?.

 

6.     POINTS 1 & 2 :

           Perused the complaint filed by the complainant and his proof affidavit and documents Ex.A1 to Ex.A17 were marked on the side of the complainant.  Written version and proof affidavit filed by the opposite parties and Ex.B1 to Ex.B11 was marked on the side of opposite parties and also considered the both side arguments.

7.        The complainant had savings bank account with opposite party-1 and keeping an outstanding balance of Rs.6,00,000/- in his account as on April 2008.  It was stated that in order to get higher rate of interest the complainant approached the opposite party-1 to transfer Rs.4,00,000/- from her saving bank account and kept the amount under fixed deposit for which she had signed certain documents where the details furnished in the document were not explained by the opposite party.  With utmost good faith, without reading contents in the form given the complainant, the complainant signed the forms but to her surprise instead of keeping the said amount under fixed deposit  it had been kept under unit linked insurance where the amount had  been transferred and the opposite party-2 had issued an Unit linked pension plan to the complainant.  Since the complainant was residing in canada she was not aware of the contents prescribed in the policy provided which was handled by her power agent who is a brother of the complainant.   All the transactions were carried out by the brother of the complainant.   It was reported one fine morning in 2009 the representative of the opposite party had called her brother who was acting a power agent of the complainant in April 2009 and demanded Rs.10,000/- as a renewal premium.   On hearing his notice the complainant’s brother had a shock and started to verify the documents issued by the opposite party-2.  To his surprise he found the policy containing “growth fund” was issued by the opposite party and an amount of Rs.2,60,000/- was adjusted towards the policy premium and the balance of Rs.1,40,000/- had been used by the opposite party are various heads in an unlawful manner.

8.     It was noted that the policy had become lapsed due to the non- payment of renewal premium.  On scrutiny of the policy the 2^nd opposite party had collected Rs.4,00,000/- as annual premium spread over for the period of 10 years.  And giving various assurances like the benefits and return of premium guarantee in the event of maturity.    The contention of the complainant was that he had not requested for any unit link pension plus policy and he had asked the opposite party-1 to deposit Rs.4,00,000/- as fixed deposit.  To his surprise the opposite party-1 had in collusion with opposite party-2 provided an unit linked pension plan policy and demanded Rs.10,000/- as renewal premium  in April 2009.    On perusal of his records he approached both the opposite parties for the acts done by them and requested them to give reasons for altering the request of making fixed deposit and issuing Unit Linked pension plus policy.    Since there was a reply from the opposite party stating that the policy was in a lapsed condition and paying Rs.10,000/-, the policy could be reviewed hence she had acceded the call given by the opposite parties and paid Rs.10,000/-as the renewal premium.    

9.     Aggrieved by the improper and wrong sale of insurance policy the opposite party had approached the grievance cell of the opposite parties and on their direction she approached the insurance Ombudsman and the CMD of opposite parties and no fruitful results or reply were given to her.  Hence she approached this forum to get  her grievance  redressed.   The prayer of the complainant to get  back the amount deposited Rs.4,00,000/- with the opposite party with interest 18% and Rs.5,00,000/- towards mental agony and cost of the proceedings. 

10.    The opposite party-1 had not disputed about the complainant’s saving bank account and the balance maintained by him and transfer of Rs.4,00,000/- to HDFC Standard Insurance being the 1^st year premium.   The allegation made by the complainant stating her request of putting Rs.4,00,000/- under fixed deposit was completely denied.   This complaint is neither true nor correct which rather tantamount to be a traversing  allegation.   Para-5 to7 of the complaint stated in the complaint it was stated the 1^st opposite party was not aware of the transactions that had happened between opposite party-2 and the complainant.  Para -8 to 11 of were incorrect and specifically denied and the complainant was put to strict proof of the same.   The opposite party-1 confirmed the clearance of Rs.10,000/- cheque issued on 5.5.2009 and another Rs.10,000/- on 23.2.2010 the allegation made in para 12 to 16 were completely denied and para 17 to 21 the allegations created pertains to opposite party-2.  The opposite party-1 contended that the product given to the complainant was not the product of the bank it was product opposite party-1. Para 22 to 28 the allegation pertain to opposite party-2  and the opposite party-1 had not received any letters stated therein.  The opposite party-1 stated the various relief sought by the complainant  unsustainable and pleading the forum, to dismiss the cost.

11.    The opposite party-2 stated that having known all the details of the HDFC Unit Linked Pension Plus policy the complainant had submitted a proposal on 9.4.2008 by paying premium of Rs.4,00,000/- for  a term of 10 years.   Having received the premium the opposite party-2 had issued a policy containing the various features of the policy and the conditions thereof in the within the mentioned policy.  The contract of insurance is binding on the parties and does not permit cancellation.  In order to cancel the policy minimum three years premium has to be paid then only the complainant is entitled for surrender value.  The opposite party-2 further states that there is provision of “free look period” of 15 days.   On receipt of the policy if there was disagreement by the policy holder they could have gone for cancellation.    The complainant wriggling out of the contract of insurance neither submitted her inclination to cancel the policy within the free look period nor any objections with regard to the conditions stipulated in the insurance contract.  The opposite party had not received any objection from the insured they called for renewal premium in 2009.  The policy issued by the opposite party is subject to NAV participation in the market, accordingly the NAV rates may be fluctuating either on the higher side or on the lower side depending on the market conditions.    The complainant having known the market situation and the market trend was lower, immediately.  The complainant approached the opposite parties to cancel the fund deposited and required refund.  When once the policy had become lapsed the consultant of the opposite party reminded the insured to get it revived by paying an amount of Rs.250/- as revival charges along with premium payable.  But at the request of the insured the policy was revived at a lower premium and the insured was advised accordingly and kept the policy in live and on acceptance he insured had paid the renewal premium of Rs.10,000/- in a reduced rate and kept the policy in force.  The allegations made by the complainant was completely negated by the complainant and it is with the knowledge and concurrence discussed and signed by way of a proposal from the insured the insurer had issued the policy document and there is no provision to refund the Rs.400,000 paid by the insured at the beginning of the policy.  So it was contended the cancellation possibility is within the free look period and since the risk was run in force and the possibility of canceling the issued policy is very remote.

12.    Pursuant on the compliant, proof affidavit and documents filed by the complainant and  written version of opposite parties along with documents are deeply scrutinized and having heard the learned counsels arguments we observed that the following.

13.    The issuance of HDFC standard Life insurance Unit linked policy is said to be based on the proposal form submitted by the complainant. As per insurance act 1938 u/s 48 disclosure of material facts is very much important failing which the contract between the insured and the insurance will become null and void.  

14.    On scrutiny of the documents submitted the opposite party-2 had mentioned for office use only Column, it was mentioned “Banc assurance code (A Neelima) and there is no comments  of branch operation officer comments.

15.    The funds provided by the opposite party-2 in the Unit Linked Insurance are Liquid fund, Secured Managed fund, Defensive manage fund balance manage fund, Equity manage fund, Growth fund, stable manage fund wherein the opposite party had mentioned has 100% in growth fund.  The complainant paid Rs.4,00,000/- on 9.4.2008 and the object  of insurance was mentioned as “for pension”.   U/s “c” of the policy the life assured is mentioned as CANADIAN.  The opposite party-2 except by collecting the copy of the pass port no other details were called for to issue a policy for a foreign national.  U/s. “D” of the proposal question 2 to 14 are left blanks which are mandatory for underwriter to accept the risk of a person.  Because the insurer is providing life risk also within mentioned policy in the Unit Linked  insurance, it is mandatory to fill all columns.   U/s “E” the signature of the declaration for proposed life assured requirement which has been kept “blank”.    In the confidential report of the consultant he had stated he knew the life assured only for three months and KYC form also completed.  

16.    The insurer had issued an Unit Linked Pension plus policy which was commenced on 10.4.2008 for a term of 10 years and the benefit of the term is 10 years premium paid and the frequency of annual premium of Rs.4,00,000/-.  The insurer had stated from April 2009 to April 2017 the non guaranteed benefit on assured investment return upto 2017  @ 6% Rs.44,26,852/-, if it is 10% it is Rs.53,82,477/-.  In addition the death benefit it was mentioned as 6% p.a. which amounts to Rs.44,26,852/- if it is 10% it is Rs.53,82,477/-.

17.    It is also observed that the insurer had maintained they will debit the following charges in the premium amount

        Premium allocation charges 0.96%

        Policy administration charges 0.01%

        Fund management charges 0.84%

        Reduction yield due to expenses 1.81%

        Additional benefit in the form of loyalty 0.10%

The Net deduction yield 1.71%

        Return on investment 4.29%

18.    On scrutiny of the first premium receipt (Ex.B2) the premium Rs.4,00,000/- was adjusted on 11.4.2008.   it is observed that the fund name was “growth fund” and the premium invested in the fund is Rs.2,60,000/-.   On the date of allotment the unit price was 16.39210 total units allotted to the insured was 4,305.10886 which values Rs.2,59,980/-.  The balance Rs.1,40,020/- was used by the opposite party unauthorized and not informed  to the complainant neither written to the complainant nor informed to the forum, how this Rs.1,40.020 has been utilized and on what head it was adjusted not clearly stated.   The opposite party-2 had sent an intimation if any discrepancy found in the above transaction it was directed to inform financial consultant or local HDFC Standard Life Insurance Branch within  15 days of receiving the statement.    The complainant had not shown any objections on this. 

19.    Moreover the opposite party had sent the letter to the complainant on 12.4.2008 informing about the “free look period” of 15 days where the complainant had not shown any interest on denying above transactions.    Under Ex.B4 having received a complaint form the complainant to the grievance cell and having not satisfied the grievance cell had directed the complainant to approach ombudsman.  The complaint sent to ombudsman was return back stating that the said matter does not come under their jurisdiction. 

20.    In the mean time the complainant had sent a email to the opposite party-2 seeking to review of the policy under reduced premium of Rs.10,000/- per year which was processed and agreed by the opposite party-2 w.e.f 11.4.2009 and on 19.6.2009 and on 24.4.2010 each Rs.10000 was paid by the complainant under Ex.B8 & Ex.B9. 

21.    The citation submitted by the opposite party-1 on Redressal 1998 no complaint to the Ombudsman shall lie unless the complainant had before making a complaint to the ombudsman made a written representation to the insurer named in the complainant and either insurer had rejected the complaint or the complainant had not received any reply within a “period of one month” after the insurer concern received his representation or complainant is not satisfied with the reply given to him by the insurer.   Accordingly the complainant submitted his grievances to the Ombudsman before the expiry date of filing this complaint with the grievance redressal department of the opposite parties. 

22.    It is observed that there is no dispute on issuing a unit link pension policy for which the premium was adjusted for Rs.2,60,000/- and the opposite party had not submitted any calculation  on the utilization on the balance amount of Rs.1,40,020/- even if it is assumed as per the allocation charges, administration charges, management charges and the total return on investment shown as 4.29% works out to Rs.17,160/- (Rs.4,00,000/- X 4.29% / 100 ) balance Rs.1,22,860/- the opposite party-2 had not submitted any proof and the opposite party’s leaned counsel was also not mentioned anything about this excess money in possession of opposite party.   Hence it is found that the opposite party-2 had kept Rs.1,22,860/- under their possession unauthorized.   Hence it is directed to refund a sum of Rs.1,22,860/- @ 9% p.a. as interest from the date of payment deposited with the opposite party-2 i.e.  9.4.2008 and Rs.5,000/- as litigation charges to the complainant.  Considering the facts and circumstances of the case we are not inclined to grant any compensation and accordingly points 1 & 2 are answered. 

In the result the complaint is partly allowed.  The opposite parties are jointly and severally directed to refund a sum of Rs.1,22,860/-  (Rupees one lakh twenty two lakhs eight hundred and sixty only) along with interest at the rate of 9% p.a. from 9.4.2008 to till the date of payment and also to pay a sum of Rs.5,000/- (Rupees Five thousand only)  as litigation charges to the complainant within six weeks from the date of this order.

               Dictated to the Assistant transcribed and typed by her corrected and pronounced by us on this the  7^th   day  of  October  2016.

 

MEMBER-I                        MEMBER-II                             PRESIDENT.

Complainant’s side documents:

Ex.A1- 27.4.2009  - Copy of complainant’s letter to the 1^st opposite party.

Ex.A2- 5.5.2009    - Copy of complainant’s email to opposite party.

Ex.A3- 20.5.2009  - Copy of complainant’s letter to the Manager, HDFC.

Ex.A4- 22.5.2009  - Copy of Grievance Redressal officer HDFC’s letter to the

                             complainant. 

 

Ex.A5- 25.5.2009  - Copy of complainant letter to the Grievance redressal

                               Officer HDFC and the opposite parties.

 

Ex.A6- 2.6.2009    - Copy of complainant’s letter to the Grievance Redressal

                              Officer HDFC.

 

Ex.A7- 5.6.2009    - Copy of Grievance Redressal officer, HDFC, letter to the

                             Complainant.

 

Ex.A8- 18.6.2009  - Copy of grievance Redressal officer, HDFC letter to the

                             Complainant.

 

Ex.A9- 23.6.2009  - Copy of Asst. Secretary, Insurance Ombudsman letter to

                             The complainant.

 

Ex.A10- 23.6.2009         - Copy of complainant letter to Insurance Ombudsman.

 

Ex.A11- 23.6.2009         - Copy of complainant’s letter to Grievance redressal.

 

Ex.A12- 23.6.2009         - Copy of complainant’s letter to the CMD, HDFC Standard

                              Life Insurance Co. Ltd Mumbai.

 

Ex.A13- 2.7.2009  - Copy of 4^th opposite party letter to the complainant.

 

Ex.A14- 2.7.2009  - Copy of President, Customer Service HDFC letter to the

                             complainant.

 

Ex.A15- 3.7.2009  - Copy of 4^th opposite party letter to the complainant

 

Ex.A16- 3.7.2009 - Copy of Zonal legal & Compliance Manager, HDFC, letter to

                             Insurance Ombudsman and complainant.

 

Ex.A17- 3.7.2009  - Copy of complainant’s letter to the Grievance Redressal

                             Officer, HDFC.

 

Opposite parties’ Exhibits:- 

 

Ex.B1- 9.4.2008    - Copy of proposal submitted by the complainant.

Ex.B2- 11.4.2008  - Copy of first premium receipt.

Ex.B3- 11.4.2008  - Copy of Unit Statement on acceptance of premium.

Ex.B4- 12.4.2008  - Copy of Insurance policy.

Ex.B5- 5.5.2009    - Copy  of email of the complainant for reduction of premium.

Ex.B6- 23.6.2009  - Copy of letter from complainant.

Ex.B7- 3.7.2009    - Copy of letter of HDFC Standard Life Insurance Co. Ltd.,

                             Confirming reduction of premium requested by complainant.

 

Ex.B8- 19.6.2009  - Copy of premium receipt.

Ex.B9-         -       - Copy of premium receipt.

Ex.B10- 9.4.2008  - Copy of cheque issued by the complainant and the

                             2^nd opposite party.

 

Ex.B11-       -       - Copy of statement of account for 1.1.1008 to 31.5.2008.  

 

 

MEMBER-I                        MEMBER-II                             PRESIDENT.