Petitioners/Opposite Parties have filed this petition under section 21(b) of the Consumer Act,1986 (for short, ‘Act’) challenging order dated 08.05.2013, passed by Chhattisgarh, State Consumer Disputes Redressal Commission, Raipur (for short, ‘State Commission’)

2.   Brief facts are that on 25.06.2008, Respondent No.1/Complainant took life insurance policy namely “Invest Shield Cash-Back Plan” of the Petitioners. The yearly premium was Rs.1,00,000/- and term of the policy was 20 years. Accordingly, Policy No.09258290 was issued. It is stated that he could not pay the second premium of the policy due to financial crises. He intimated Petitioner No.3 about the same, who assured him that on deposit of some part of the premium, for deposit of the remaining amount some time would be given. Accordingly, respondent no.1 deposited Rs.49,000/- towards the second premium, by  cheque for which receipt No.1007309 dated 13.08.09 was sent by Petitioner No.2. After some days, the said cheque was returned to the respondent no.1 stating that the amount would be accepted only when entire premium amount is paid. Thereafter, a Demand Draft No.525881 dated 29.01.2010 for the sum of second premium, was given to Respondent No.2/Opposite Party No.4-authorized agent of the petitioners. However, respondent No.2 instead of depositing the aforesaid amount towards second premium, deposited the same in a new ‘Pension Plan Policy’ without his permission and consent and also without getting the proposal form filled up from him. It is further alleged that he(respondent no.1) for the first time came to know about this fact, when he contacted respondent no.2 on 20.08.10 for payment of third premium of the first policy. Thereafter, he made a written complaint to the petitioners in this regard. He also demanded the cancellation of wrongly issued new policy and to adjust the amount towards second premium of his initial policy. When no action was taken, he made a complaint to Ombudsman Office at Bhopal on 03.11.2010, but no action was taken. It is further alleged that petitioners cancelled his initial policy and informed him about Unit Value of Rs.51,721/- as on 28.06.2011. However, respondent no.1 received the cheque for Rs.12,930/-only, as total settlement of the first policy. A legal notice through advocate was sent to the petitioners on 20.10.2011, which was not replied. Thus, alleging the act of the petitioners as deficiency in service and unfair trade practice, respondent no.1 filed a consumer complaint.

3.  Petitioners in their reply, have stated that respondent no.1 himself at his own wish filled and signed the proposal form for ‘Invest Shield Cash Back Plan’. Therefore, petitioners cannot be held responsible for the acts of their agent. Further, every policy document sent by them are accompanied by a letter with clear condition that in case the policyholder is not satisfied with the features or the terms and conditions of the policy, then he can withdraw /return the policy within 15 days, which is called “Free Look Period”. However, respondent no.1 did not make any complaint. Thus, the contract of insurance had become binding upon him. Further, as per clause 4.3 of the policy, if the premium is not paid on the due date or within the grace period during the first three policy years, then the life insurance cover and the guaranteed value shall cease and mortality charges will  be deducted. Therefore, as per the terms of the policy cheque for the sum of Rs.12,930/- was sent to the respondent no.1. Petitioners in doing so, have not committed any deficiency in service.

4.  Respondent No.2 failed to appear before the District Forum, so the case was proceeded ex-parte against him.

5. District Consumer Disputes Redressal Forum, Rainandgaon, Chhattisgarh (for short, ‘District Forum’) vide order dated 09.08.2012, dismissed the complaint with cost of Rs.1,000/-.

6.   Being aggrieved, respondent no.1 filed an appeal before the State Commission, which allowed the same and passed the following order;

     “It is directed that respondents will pay to the

appellant/complainant:-

1. The remaining amount of unit value of the policy Rs.38,791.16 p. i.e. Rs. 38,791/-(Rs. Thirty Eight Thousand Seven Hundred Ninety One) along with interest @ 9% p.a. from 11.06.11.
2. Interest @ 9% p.a. for the period between 29.01.2010 to 14.01.2012 on Rs.1,00,000/- as the said amount remained with the OPs during that period.
3. Rs.25,000/- for mental agony and harassment; and
4. Rs.3,000/- as cost of litigation”.

7.   Now petitioners have filed the present revision.

8.   We have heard the learned counsel for the petitioners and gone through the record.

9.   It has been contended by the learned counsel for the petitioners that respondent was under an obligation to pay the second premium on due date i.e.25.06.2009, which admittedly was not paid by respondent no.1, even during the grace period. Due to the negligence of the respondent no.1, the policy lapsed from 25.7.2009.

10.  Further, it is submitted that after receipt of the legal notice dated 20.10.2011, Petitioners’ Company refunded the amount of Rs.1,00,000/-vide Cheque No.635446 dated 06.12.2011,which fact was admitted before the lower forum also. Hence, there was no need to bring the said proposal form on record.

11.  Learned counsel in support of its submissions, has relied upon the following judgments;

     (i)  Mohan Lal Vs. M/s ICICI Prudential Life

         Insurance Co. Ltd, decided by this Commission on 16.10.2012 in R.P. No.2870 of 2012;

         (ii) Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. Ltd. and Anr.(2010) (9) UJ SC 4640* and

     (iii)General Assurance Socieity Ltd. Vs.

         Chandumull Jain and Anr, AIR 1966 SC 1644

12.  The State Commission, in its impugned order observed;

“9. During the period of pendency of the complaint before District Forum on 14.01.12, amount of premium Rs.1,00,000/-was refunded by the OPs to the appellant/complainant obtaining acknowledgmentof receipt on discharge voucher. In this way refund of amount of premium Rs.1,00,000/- and obtaining acknowledgement of receipt of the same on discharge form by the respondents without producing proposal form of the second policy is an unconvincing defence and on the contrary it is clearly showing their act of committing deficiency in service and unfair trade practice. In this regard it is also another important fact that copy of reply dated 22.11.2011 of the legal notice sent by the appellant/complainant dated 20.10.2011 was produced by the respondents on record of the District Forum, but postal receipt and acknowledgement of the same was not produced to show that such reply was in fact sent to the appellant/complainant. In page No.3 of the reply of legal notice the respondents had made a proposal to adjust the said amount of Rs.1,00,000/- towards second premium of the first policy No.09258290, which was earlier foreclosed on 27.06.2011 by the OPs at their own. This proposal of the respondents also shows admission of their act of committing deficiency in service because after foreclosure of insurance policy by adjusting unpaid premium its revival, appears impractical and against the rules. First policy was foreclosed by the respondents because the appellant/complainant failed to move application for its revival within two years when he failed to pay the second premium and so according to terms of the policy it was foreclosed in June 2011 and after four months for hiding their such act, making proposal for revival of the policy, appears unfair.

10. We have gone through the documents for deciding the surrender value of the first policy as per the relief prayed by the appellant. Due to failure of the appellant/ complainant in payment of premium of the first policy on 25.06.2009, lapse of grace period of 30 days and according to terms of the policy non-revival of the policy within two years, the appellant/complainant was entitled to get surrender value of the policy. We have perused the letter dated 29.06.11 sent by the respondents to the appellant/ complainant. In that letter on 27.06.2011 the unit value of the policy has been mentioned as Rs.51,721/- and if such valuation is believed to be correct as per the terms and conditions of the policy, then payment of only Rs.12,930/- by the respondents to the appellant / complainant clearly proves deficiency in service on the part of the respondents. Therefore, we find the respondents liable for payment of remaining amount of unit value of the policy Rs.38,791.16P on the date of its foreclosure i.e.27.06.2011.

11. In view of the aforesaid discussion, we find that the respondents utilized the amount ofRs.1,00,000/-deposited by the appellant/ complainant without his permission and consent in other policy and then the said amount was returned by way of Demand Draft dated 29.01.2010 during the pendency of the complaint. In the facts of the case and foregoing discussion the impugned order passed by learned District Forum being not sustainable is set aside and the appeal is allowed.”

13. There is no dispute that due to the failure of respondent no.1 in making the payment of premium of the first policy No.09258290 due on 25.6.2009, this policy has lapsed. However, respondent no.1 was entitled to get the surrender value of the policy. In this regard, letter dated 29^th June, 2011 sent by the petitioners to respondent no.1 is quite relevant and it read as under;

     “Dear Vimlesh Singh,

Sub: Foreclosure of your InvestShield Cashback policy.

We refer to your InvestShield CashBak policy, policy no.09258290, UIN *105LO62V01.

We wish to inform you that the Value of Units under your policy as on June 27, 2011 is   Rs.51,721.55 in view of the terms and conditions of the policy your policy has been foreclosed with effect  from June 27, 2011.

Please find enclosed cheque number 444575 dated June 28, 2011 drawn on ICICI Bank for an amount for Rs.12,930.39 drawn in your favour.

We further wish to inform you that in view of the above the Company will not be under any risk and no benefits become payable under the said policy from June 27,2011.

Yours sincerely,

ICICI Prudential Life Insurance Company Limited.”

14.  As per above letter sent by the petitioners to respondent no.1, the value of units under the policy as on 27.6.2011, was Rs.51,721.55P. It has nowhere been mentioned in this letter as to on what basis only a sum of Rs.12,930.39P was remitted by the petitioners. Thus, State Commission vide its impugned order, has rightly directed the petitioners to pay the remaining amount of the units value of the policy, i.e.Rs.38,791.16P to respondent no.1. In view of the facts and circumstances of the case, none of the judgments(supra)cited by learned counsel for the petitioners are not applicable to the present case.

15.   Accordingly, we hold that the State Commission has not committed any jurisdictional error or illegality in passing the impugned order. Therefore, the present revision petition stand dismissed having no merits.

16.  No order as to cost.