Sham Sunder (Retd.), President:
1. This appeal is directed against the order dated 18.09.2013, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint, filed by the complainant (now respondent) and directed the Opposite Parties (now appellants), as under:-
œ To our mind, the policies stand discontinued as the Complainant has not paid any further premium. In terms of Clause 4 and 5 as well as 6(1) the fund value of the policies on the date of discontinuance has to be communicated to the Complainant by the Opposite Parties as per the above guidelines to grant her the liberty to exercise her option accordingly. The Opposite Parties have not done this, which in our opinion tantamounts to deficiency in service.
We accordingly, allow this complaint and direct the Opposite Parties to inform the Complainant about the above guidelines, so that the Complainant can exercise her option for the two policies in terms of the same. Opposite Parties are directed to pay a consolidated amount of Rs.20,000/- to the Complainant towards compensation and costs of litigation.
This order be complied with by the Opposite Parties within 30 days from the date of receipt of its certified copy.?
2. The facts, in brief, are that the complainant is a senior citizen. According to her, she subscribed to a two year Policy plan, against annual premium of Rs.80,000/-. She was given to understand that the capital amount, alongwith interest and bonus, would be paid to her, after two years. On receipt of cheque dated 17.07.2012, in the sum Rs.80,000/-, by the Opposite Parties, the complainant received Policy (Annexure C-1 colly.), on 17.08.2012. It was stated that the agent of the Opposite Parties, had taken the signatures of the complainant, on blank papers. On receipt of the Policy, the complainant found a number of mistakes therein. Even the relationship of the beneficiary was wrongly recorded in the Policy. The complainant, thus, contacted the Opposite Parties, within the free look period of 15 days, and also wrote a letter dated 10.10.2012 requesting them, to cancel the Policy, and refund the amount. However, no action was taken by the Opposite Parties.
3. After three months, one Mr. Rohit “ representative of the Opposite Parties, again approached the complainant stating that the Policy of Rs.80,000/- would be closed, and another cheque of Rs.81,000/-, be given by her, for issuance of a fresh policy. The complainant gave another cheque, in the sum of Rs.81,000/-, against which, a new Policy was issued to her, which was received by her, on 06.11.2012. It was further stated that the same mistakes were repeated, in this Policy also. It was further stated that the Opposite Parties were asked to cancel the Policies, and refund the amount, deposited by the complainant, as premium, but they failed to do so.
4. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to refund the amounts of Rs.80,000/- and Rs.81,000/-, in respect of Policies No.500-8845223 and 500-9155390, respectively, alongwith interest @18% P.A., till realization; pay compensation to the tune of Rs.2 lacs, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.7,000/-.
5. The Opposite Parties, in their joint written version, stated that the complainant subscribed to the Policy, by filing in and signing the proposal form dated 16.07.2012, annual premium whereof was Rs.80,000/-. The premium payment term was 15 years, whereas, the Policy benefit period/term was 30 years. The death benefit was to the tune of Rs.12,83,315/-. On the basis of the proposal form, the complainant was issued Policy No. 500-8845223. The Policy was issued on 31.07.2012, whereas, inception date thereof was 28.07.2012. Another Policy, on the basis of the proposal form, submitted by the complainant, bearing No. 500-9155390, annual premium whereof was Rs.81,000/-, was issued, in favour of the complainant. The premium payment term was 15 years, whereas, the Policy benefit period/term was 30 years. The death benefit was to the tune of Rs.12,99,355/-. It was further stated that alongwith the Policy documents, welcome letters were also sent, wherein, an option was given to the complainant, that, in case, she was not satisfied with the terms and conditions of the Policy, she could return the same, during the free-look-period of 15 days, from the date of receipt of the same, and ask for cancellation thereof. It was further stated that the complainant failed to make a request for cancelling the aforesaid Policies, within free-look period of 15 days, from the date of receipt of the same, and, as such, the request made by her, at a later stage, for cancellation, could not be accepted. It was further stated that the terms and conditions of the Policies were duly explained to the complainant. It was further stated that since the complainant herself filled in and signed the proposal forms, as a result whereof, the Policies aforesaid, were issued, she could not turn round and say, at a later stage, that the terms and conditions of the same were not acceptable to her, as the same were not according to the representations made to her, by the agent of the Opposite Parties, and the information supplied by her, to him (agent). It was further stated that the complainant only paid one annual premium each, at the time of inception of the Policies, and, thereafter, failed to pay any further premium. It was further stated that the Policies, therefore, did not acquire any surrender value. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
6. The Parties led evidence, in support of their case.
7. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order.
8. Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties.
9. We have heard the Counsel for the parties, and, have gone through the evidence, and record of the case, carefully.
10. Admittedly, the complainant subscribed to two Policies, referred to above, and paid one annual premium, in respect of each. No doubt, according to the complainant, the terms and conditions of the Policies were not the one, which was told to her, by the representative of the Opposite Parties. The first Policy, bearing No. 500-8845223, was received by the complainant, on 17.08.2012, as was admitted by her, in paragraph 2 of the complaint, whereas the second Policy, bearing No. 500-9155390, was received by her, on 06.11.2012, as admitted by her, in paragraph 9 of the complaint. Alongwith the said Policies, Annexures OP-3 and OP-4, welcome letters respectively, were also sent to the complainant, wherein, it was, in clear-cut terms, stated that, in case, the terms and conditions of the same were not acceptable to her, then she could request for cancellation thereof, within 15 days, from the date of receipt of the same. However, the complainant did not apply for cancellation of the Policies, within a period of 15 days, from the date of receipt of the same. First request, which was made by the complainant is dated 10.10.2012, vide letter, copy whereof is Annexure C-2. This was in respect of the Policy bearing No 500-8845223, which was received by her, on 17.08.2012. Certainly, this request was not within the free-look period of 15 days, from the date of receipt of the Policy documents. The second request is also dated 10.10.2012, copy whereof is Annexure C-3, wherein, request for cancelling both the Policies was made. It appears that, in this letter, the Policy bearing No. 500-9155390, was entered, later on. The second Policy, as per the admission of the complainant, in paragraph number 9 of the complaint, was received on 06.11.2012. Since, this Policy was received by the complainant, on 06.11.2012, the question of making a request for cancellation of the same, on 10.10.2012, vide Annexure C-3, did not at all arise. It, therefore, can be said that the complainant, in respect of both the Policies, did not make a request for cancellation thereof, within the free-look period of 15 days, from the date of receipt of the same. No doubt, the complainant, in the complaint, as also in her affidavit, submitted by way of evidence, stated that she contacted the Opposite Parties, within the free-look period of 15 days, yet, in the absence of any documentary evidence, having been produced by her, in that regard, her bald statement, cannot be believed. Since, requests for cancellation of the Policies, aforesaid, were not made by the complainant, within the free-look period of 15 days, from the date of receipt of the same, the Opposite Parties could not cancel the same. Refusal of the Opposite Parties, in cancelling the aforesaid Policies, on the basis of the request made after the expiry of free-look period of 15 days, therefore, could be said to be legally justified. The Opposite Parties were, thus, not deficient, in rendering service, on this score.
11. The next question, that falls for consideration, is, as to whether, the Policies, in question, acquired any surrender value, after the payment of only one premium, each, in respect thereof. For the purpose of deciding this question, reference to the terms and conditions of the Policy, at page 96 of the District Forum file, is required to be made. Clause 6 of the terms and conditions of the Policy, reads as under:-
œ6. Surrender Value Guranteed Surrender Value: Provided that the Premiums have been paid for at least first three Policy Years, the Policy acquires a minimum guaranteed Surrender Value which is equal to 30% (Thirty percent) of all the Premiums paid excluding the Premium paid for the Policy in the first Policy year and all extra premium (if any). The Company may allow surrender value at such other rates not less that the Guaranteed Surrender Values specified above. These rates will be declared by the company from time to time.
The total Guaranteed Monthly Income paid during the year of surrender shall be deducted from this Surrender Value and is inclusive of the vested bonuses, if any.
The Company may allow surrender values at such other rates not less than the Guaranteed Surrender Values specified above. These rates will be declared by the company from time to time.
Surrender of the Policy shall extinguish all rights and benefits of the Policyholder under the Policy?
12. It is evident from the afore-extracted Clause that the Policy(s) could acquire the surrender value, only after the premiums had been paid for at-least three Policy years. Since, in the instant case, as stated above, only one annual premium, in respect of each of the Policies, was paid by the complainant, the same did not acquire any surrender value. The parties were bound by the terms and conditions of the Policies, and could not go beyond the same. Since, the Policies had not acquired the surrender value, the complainant was not entitled to any amount, under the same. The Opposite Parties, therefore, by not paying anything, to the complainant, on the ground that the Policies had not acquired any surrender value, were not at all deficient, in rendering service.
13. The District Forum, however, placed reliance on the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies), Regulations 2010 (hereinafter to be referred as the IRDA Regulations 2010 only), which were notified on 01.07.2010, in coming to the conclusion, that the complainant was entitled to a certain amount. It may be stated here, that the aforesaid IRDA Regulations 2010, were only applicable to the unit linked Policies, and not to the traditional Policies. In the instant case, the Policies, in question, were traditional Policies. Both the Policies were Bharti AXA Life Monthly Income Plan. It is evident, from the General and Definitions of the Policy Bond, at page 59 of the District Forum file that œBharti AXA Life Monthly Income Plan is a traditional participating Policy. Participating Policy participates in the performance of participating insurance fund and the surplus is distributed as bonus?. Since, the Policies, in question, were only the traditional participating Policies, and not unit linked Policies, the District Forum was wrong, in placing reliance on the IRDA Regulations 2010. Had the District Forum, gone through the Policy Bond, at page 59 of its file, it would have certainly come to know that the Policies, in question, were not unit linked Policies, but were only traditional Policies. The directions of the District Forum, to the Opposite Parties, that the complainant be informed about the Guidelines, contained in the IRDA Regulations 2010, so that she may be able to exercise her option, in terms of the same, is not in accordance with the provisions of law. The reliance of the District Forum, on the IRDA Regulations 2010, was, thus, misconceived.
14. No other point, was urged, by the Counsel for the parties.
15. In view of the above discussion, it is held that the order passed by the District Forum, being not based on the correct appreciation of evidence, and law, on the point, suffers from illegality and perversity, warranting the interference of this Commission.
16. For the reasons recorded above, the appeal is accepted, with no order as to costs. The order of the District Forum is set aside.
17. Certified copies of this order, be sent to the parties, free of charge.
18. The file be consigned to Record Room, after completion.