BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. P. SUDHIR                                       :  PRESIDENT

SMT. R. SATHI                                         :  MEMBER

SMT. LIJU B. NAIR                                  : MEMBER

C.C. No. 367/2012 Filed on 18.10.2012

ORDER DATED: 15.12.2016

Complainant:

Ayyappan Sankar, S/o V. Sankar, Thevalaphu Sasiprasadam, Miladi, Puliyarakonam P.O, Thiruvananthapuram-695 573.

                             (By adv. Manmohan. A)                                

Opposite parties:

1. The Managing Director, Bajaj Allianz Life Insurance Co. Ltd., GE Plaza, Airport Road, Yerawada, Pune-411 006.

2. The Manager, 1^st Floor, Parameswara Towers, Opp: Geethanjali Hospital, Vazhuthacaud, Thiruvananthapuram-14.

(By Adv. Dhanya. R)

This C.C having been heard on 01.11.2016, the Forum on 15.12.2016 delivered the following:

ORDER

SMT. LIJU B. NAIR:  MEMBER

Case of the complainant is as follows:  The complainant invested in the Bajaj Allianz Equity Index Fund II with premium amount of Rs. 5,000/- to be paid every half yearly for 3 years amounting to a total investment of Rs. 30,000/-.  The complainant was issued the policy number 0117947786.  The complainant paid first premium on 16^th January 2009 of Rs. 5,000/- but only Rs. 2,250/- was only invested by the opposite party and allocated 244.8580 units at the rate of Rs. 9.1890 per unit.  But the statement is not showing any description as to what happened to the balance amount of Rs. 2,750/-.  The complainant on 28.02.2011 paid Rs. 20,000/- as the premium amount for the period 16^th July 2009, 16^th January 2010, 16^th July 2010 and 16^th January 2011.  The company only invested Rs. 2,250/- against the premium of Rs. 5,000/- invested on 28 February 2011 against the transaction date 16^th July 2009, for which 131.0975 units was allocated at the rate of Rs. 17.1628 per unit.  But the statement is not showing any description as to what happened to the balance amount of Rs. 2,750/-.  For the transactions dated 16^th January 2010, 16^th July 2010, 16^th January 2011 the complainant paid premium of Rs. 5,000/- each on 28^th February 2011 and was allocated 279.6746 units each at the rate of Rs. 17.1628 per unit.  The company only invested Rs. 14,400/- and no description as to what happened to Rs. 600/-.  The complainant in total made an investment of Rs. 30,000/- during the period from 16^th January 2009 to 16^th July 2011.  But to the surprise of the complainant only Rs. 21,452.77 was only invested by the opposite party.  The opposite party is not providing any explanation as to what happened to the balance amount of Rs. 8,548/- which is not reflecting in the statement.  The opposite party ought to have invested the full premium amount of Rs. 30,000/- invested.  The complainant on 10^th September 2012 surrendered the allocated 1237.1055 units vide request Id 3941985.  The opposite party processed the complainant surrender request and only paid Rs. 21452.77 which is the net investment as per the statement against the actual premium payment of Rs. 30,000/-.  The opposite party is not disclosing any details as to the growth on the investment made by the complainant.  The opposite party ought to have calculated the surrender request as per the prevailing NAV of Rs. 18.1117 as on 10^th September 2012 for the entire allocated units of 1237.1055 units and so the actual amount comes to Rs. 22406.0836 even as per their own statement.  Here the complainant is losing Rs. 953.3136 that actually the opposite party is liable to pay.  The opposite party has deducted Rs. 3,564.04 equivalent to 244.8891 units as charges for surrendering the entire allocated units of 1237.1055.  This is in addition to Rs. 8547.23 that was deducted earlier when the half yearly premium for which no clarification is provided by the opposite party.  On 14^th September 2012 the opposite party transferred Rs. 17,973/- to the complainant’s bank account No. 24520100013385 with Bank of Baroda, Vanchiyoor Branch, Trivandrum.  If the opposite party has invested the complainant’s full premium amount of Rs. 30,000/- paid half yearly, then the complainant is eligible to receive 544.1288 units for the transaction date 16.07.2009 at the rate of Rs. 9.1890.  291.3277 units each for the transaction dates 16.07.2009, 16.01.2010, 16.07.2010 and 16.01.2011 at the rate of Rs. 17.1628 per unit.  278.1409 units for the transaction date 16.07.2011 at the rate of Rs. 17.9765.  Totally 1987.5805 units the complainant is lawfully eligible to get for the entire premium paid.  The complainant on surrendering 1987.5805 units at the rate of Rs. 18.1117 /- the complainant is eligible to get Rs. 35998.462 as the total value and if the opposite party has deducted Rs. 3564.04 from Rs. 35998.462 the complainant is eligible to get Rs. 32,434.4217 as the surrender amount.  The opposite party has handled the funds of the complainant in a most reckless and negligent manner, causing huge loss which amounts to serious deficiency in service.  The negligence from the part of the opposite party caused financial loss and mental agony to the complainant and is entitled to get Rs. 14461.42 which the complainant is entitled to get from the opposite party and Rs. 25,000/- as damages to the mental agony suffered to the complainant. 

Opposite parties filed version contending as follows:  There is no consumer dispute in the alleged set of facts and the complaint is not maintainable as against these opposite parties.  There is no deficiency of service on the part of these opposite parties and this complaint is not maintainable against these opposite parties.  The complainant had approached the opposite party insurance consultant and evinced interest in availing policy under Bajaj Allianz New Unit Gain Scheme and accordingly executed proposal form and submitted relevant documents.  Based on the information provided by the complainant in proposal form the policy was provided and in fact the complainant in clause 5 of the proposal form had personally instructed the company to invest his investible premium in Equity Index Fund-II and accordingly the company invested his investible premium in such fund.  Further while selecting the fund the complainant policy holder had agreed to bear the entire investment risks that may arise out of such investments since investing in such funds are of his own decision.  The complainant is an educated practicing lawyer and after clearly knowing the policy terms had subscribed for the policy and further he is also aware that the policy he had requested is for 25 years with sum assured i.e; risk cover of Rs. 1.00 lac and premium payment is half-yearly and premium amount is Rs. 5,000/-.  The contents of para 6 that after expiry of lock in period at any stage the complainant can withdraw the money invested in the “Bajaj Allianz Equity Index Fund-II” at the prevailing NAV (Net Accrued Value).  The policy subscribed by the complainant was ‘New Unit Gain’ and as per clause 6 (c) (i) of the policy terms, the policy will accrue surrender value only upon payment of full three years premium and it is wrong to say that there is a lock in period of 3 years.  The complainant had subscribed for policy on 16.01.2009by paying Rs. 5000/- half yearly premium.  The opposite parties are in insurance business and for providing various services and meet out their expenses and for commission payouts, they are entitled for charges as per clause 33(d) of the policy terms and accordingly 55% of the first year premium would be premium allocation charge which will be charged by insurance company.  Therefore out of Rs. 10,000/- invested by the complainant as first year premium only Rs. 4500/- would be credited to his fund and the same are clearly mentioned and explained to the policy holder when he had subscribed for the policy and feigning ignorance at this stage and that too after surrendering the policy and receiving the fund value proceeds clearly explains the intention of the policy holder.  Further in the same clause it was also stated that from 2^nd year premium the premium allocation charge goes down to 4% and from 6^th year onwards it is reduced to 3% and becomes zero gradually.  The rationale behind such charges are the expenses in the initial stage would be too high and if policy holder after accepting policy for long terms suddenly discontinues prematurely then opposite party company would be saddled with huge liability and hence upfront when the policy holder subscribes for the policy the major portion of company expenditure in issuing the policy is charged to the policy holder.  Complainant had paid Rs. 5,000/- 1^st half yearly premium on 16.01.2009 and allocation rate is 45% on first year premium and hence Rs. 2,250/- was credited and NAV as on particular day was Rs. 9.189 and hence 244.859 units were credited to customer fund account.  The complainant paid Rs. 5,000/- 2^nd half yearly premium of first year premium on 16.02.2011 and allocation rate is 45% and hence Rs. 2,250/- was credited to his fund and NAV as on particular day was Rs. 17.1628 and hence 131.09 units were credited.  Further complainant had paid overdue premium of Rs. 15,000/- (for three half years) on 16.02.2011 and allocation rate from 2^nd year onwards was 96% and accordingly 4800/- was credited to his fund and NAV as on that particular day was 17.97 and hence 267.01 units were credited to customer fund account. The policy was surrendered on 07.09.2012 @ 04.30.06 p.m and any surrender after 3.00 pm on a particular day entitles NAV of next working day.  In the instant case though surrender was on 07.09.2012 that after 3.00 pm and 8^th being Saturday and 9^th being Sunday complainant was allotted NAV as on 10.09.2012 and NAV on record on that day was 17.3411 and number of units which stood credit to the customer account was 1237.1055 and hence the fund value was Rs. 21452.77.  Since the complainant had surrendered the policy before maturity date he was liable to pay surrender charge as per clause 33 (g) (2) and after deduction of surrender charge balance amount of Rs. 17973/- was credited to complainant’s bank account by way of direct fund transfer.  It is wrong to say that the opposite party deducted Rs. 3564.04 while surrendering the policy and Rs. 8547.23 while paying the premium are all as per above said policy terms and it is wrong to say that no clarification was provided to complainant.  Further the allegations of the complainant that he is eligible for 544.1288 units for 16.07.2009 @ NAV of Rs. 9.189 and 291. 3277 units for transaction 16.07.2009, 16.01.2010, 16.07.2010 and 16.01.2011 and 278.4109 units for transaction dated 16.07.2011 are wrong and denied.  The company is providing various services like insurance cover, fund management and company incurs lots of expenditure on such professional services availed by the complainant and hence the company is entitled to charge for providing such services and the calculation arrived by the complainant is without such charges.  Further all the terms and conditions of the policy are approved by Insurance Regulatory Development Authority and also the charges mentioned which are mentioned in the policy terms are also duly approved before issuance of any policy to policy holders.  The regulatory has been created to protect the interest of the policy holder and all the terms of policy issued in India are thoroughly scrutinized before approval and if any of the policy terms are detrimental to the interest of policy holder then such policy terms would not have been approved by the Regulatory.  The complainant was given an opportunity to go through policy terms and conditions and policy bond and schedule and if there is any discrepancy or if he is not agreeable for any of the policy terms and conditions then he was at liberty to return the policy within 15 days from the date of receipt of policy bond and company would refund the entire amount subject to deductions of certain insurance charges for the intermittent period and in this case there was no discrepancy nor any was pointed out by the complainant till policy was surrendered and hence it is deemed that he has agreed for all policy terms contained in the policy bond and both the insurance company and complainant are liable to act as per accepted terms and conditions of policy.  Further the policy holder had availed policy for 25 years but surrendered policy immediately after 3 years and hence he is liable to pay certain charges as surrender penalty which are as per above said policy terms.  The relation between the complainant and opposite parties arose out of insurance contract and complainant had to point out whether the opposite party insurance company had violated any of the agreed policy terms to allege commission of deficiency of service.  The opposite party insurance company had acted in good faith and complied all policy terms and conditions on the contrary the complainant failed to point out violation of accepted terms and conditions and fails the essential test of eligibility for grant of any relief from this Forum.  

Complainant filed affidavit along with documents which were not marked before this Forum.  Opposite parties have not even cared to file an affidavit to substantiate their version.

Points raised:

1. Whether the complaint is maintainable before this Forum?
2. If so, is there any unfair trade practice committed by the opposite parties?
3. Reliefs and costs if any?

Points (i) to (iii):- Before going into the merits of the case, maintainability is to be answered.    The law is now well settled that policies with speculative nature and are taken for investment purpose and as such, the policy holder is not a consumer as per the citation in Ramlal Aggarwala Vs. Bajaj Allianz Life Insurance Co. Ltd. 2013 (2) CPR 389 (NC).  Here the complainant purposefully hides the nature of the insurance, but ultimately it is revealed that it is an insurance policy which is unit linked and so we can safely conclude that the present complainant will not come under the purview of ‘consumer’ as envisaged in Consumer Protection Act 1986.  So the complaint is not maintainable.  When the 1^st question itself is found to be negative, the other issues are not discussed.

In the result, complaint is dismissed as not maintainable.       

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room. 

          Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 15^th day of December 2016.

Sd/-

LIJU B. NAIR                        : MEMBER 

 Sd/-

P. SUDHIR                            : PRESIDENT

Sd/-

                        R. SATHI                               : MEMBER

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