DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ERNAKULAM
Dated this the 15th day of December, 2023.
Filed on: 03/01/2022
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C. No. 13/2022
COMPLAINANT
M.K.Venugopalan, S/o Komalavally Amma, Driver, Civil Construction Wing All India Radio & TV Kakkanad, CSEZ PO-682037 Residing at Maliackal House, Irumpanam North Irumpanam 682 309.
(Rep. by Adv. Rajesh Rajagopala Pillai & Sumson T.S., Raman Menon & Co., 3rd Floor, Ram Meena Buildings, S.A. Road, Valanjambalam, Kochi 682016)
Vs
OPPOSITE PARTIES
- Chief Post Master General Kerala Circle, Thiruvananthapuram - 695 033.
- The Deputy Divisional Manager Postal Life Insurance, O/o.the Chief Post Master General Kerala Circle, Thiruvananthapuram-695033.
- Senior Postmaster General Head Post Office, Ernakulam - 682 011.
F I N A L O R D E R
D.B. Binu, President.
1. A brief statement of facts of this complaint is as stated below:
This complaint was filed under Section 35 of the Consumer Protection Act, 2019. In this case, the complainant worked as a driver at All India Radio and TV and purchased a Postal Life Insurance (P.L.I) policy offered by the 1st and 2nd opposite parties. The policy allowed conversion into an endowment policy, and the complainant opted for this. However, despite sending the necessary documents, the conversion did not happen for three years. When it finally did, the premium amount significantly increased, causing financial hardship to the complainant.
The complainant sought resolution from the opposite parties and even approached the Prime Minister's Office, but no action was taken. Eventually, the 2nd opposite party assured a resolution but calculated a lower payout than expected, citing a "surrender factor." The complainant disagreed with this calculation, as he had not surrendered the policy, and the opposite parties had failed to convert it as promised.
The complainant claimed a total amount of Rs 2,82,435, including interest, for the deficiency in service. Additionally, the complainant sought Rs 1,00,000 as compensation for mental agony and requested the opposite parties to bear the entire cost of the proceedings. The complainant filed the complaint within the jurisdiction of the Consumer Protection Act.
2) Notice
The commission sent notices to the opposite parties, which were acknowledged by them, but they did not file their versions. Therefore, they have been set as ex-parte.
3). Evidence
The complainant submitted an ex-parte proof affidavit along with seven documents, which were marked as Exhibits A-1 to A-7.
Exhibit A-1: Copy of acceptance letter of PLI proposal along with the policy document dated 22.10.2009 issued by the opposite parties.
Exhibit A-2: Copy of letter for conversion of policy issued by the opposite parties.
Exhibit A-3: Copy of the option of conversion executed by the complainant along with acknowledgment of the opposite parties dated 09.10.2014.
Exhibit A-4: Copy of notice for stopping premium deduction from salary issued by the Opposite Parties.
Exhibit A-5: Copy of the letter along with the surrender manual calculation sheet and application for surrender issued by the opposite parties.
Exhibit A-6: Copy of the representation submitted to the opposite party by the complainant.
Exhibit A-7: Copy of the postal acknowledgment card evidencing the receipt of the above representation.
4) The main points to be analysed in this case are as follows:
i) Whether the complaint maintainable or not?
ii) Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant?
iii) If so, whether the complainant is entitled to get any relief from the side of the opposite party?
iv) Costs of the proceedings if any?
5) The issues mentioned above are considered together and are answered as follows:
In the present case in hand, as per Section 2(7) of the Consumer Protection Act, 2019, a consumer is a person who buys any goods or hires or avails of any services for a consideration that has been paid or promised or partly paid and partly promised, or under any system of deferred payment. Copy of acceptance letter of PLI proposal along with the policy document dated 22.10.2009 issued by the opposite parties. (Exhibit A-1). Hence, the complainants are consumers as defined under the Consumer Protection Act, 2019 (Point No. i) goes against the opposite parties.
The complainants have filed a case seeking damages and compensation from the opposite parties for deficiency in service, unfair trade practices, and negligence. These allegations arise from the opposite parties' failure to fulfill their obligations, resulting in the stated grievances.
We have heard from Sri. Rajesh Rajagopala Pillai, the learned counsel representing the complainants. The complainant, employed as a Driver at the Civil Construction Wing of All India Radio and TV, engaged with the 1st and 2nd opposite parties, who are responsible for postal life insurance operations in Kerala, and the 3rd opposite party, who oversees operations in Ernakulam District.
The opposite parties, through their Development Officer, promoted postal life insurance to the complainant, leading him to take policy No. KL98112CC (new No.0000001378745) on 01.10.2009. The Ext A1 includes a copy of the acceptance letter of the PLI proposal and the policy document dated 22.10.2009. The policy offered was Suvidha convertible all life assurances, with the complainant instructing premium deductions from his salary at Rs. 773/- per month and a sum assured of Rs. 1,50,000/-.
The policy allowed the complainant to convert it into an endowment-assured policy, with bonus additions adjusted accordingly, maturing at ages 50/55/58. The complainant was instructed to exercise this option by October 2014.
The complainant duly filled out the option form on 09.10.2014, sent it through the nearest post office, and received acknowledgment (Ext.A3). However, the opposite parties did not convert the policy despite reminders and even the complainant's willingness to pay a higher premium.
Premium deductions continued at the regular rate, causing financial hardship when the opposite parties unexpectedly increased the premium to Rs. 3,971/- from Rs. 773/-. The complainant's financial situation worsened due to this.
Premium deductions ceased on 01.10.2020 (Ext A4), and the complainant approached the 3rd opposite party to inquire about the maturity value. However, he received no payment, prompting him to submit a detailed representation to the opposite parties, which went unanswered.
Frustrated, the complainant sought the intervention of the Hon'ble Prime Minister of India, whose office forwarded the complaint to the opposite parties. Even after a month, no action was taken.
Subsequently, the complainant contacted the 2nd opposite party via phone, who assured a resolution without loss to him. As a result, the 2nd opposite party issued a letter to the Senior Superintendent of Post Office Ernakulam division Kochi 682011 on 23.06.2021, indicating that the issue was resolved. Ext A5 includes this letter along with a surrender manual calculation sheet and an application for surrender.
The surrender manual calculation sheet mentions a "surrender factor" but does not explain how it was calculated. The complainant contends that the surrender factor deduction is unjustified as he did not surrender the policy, and premium deductions had already ceased.
In response, the complainant submitted a representation (Ext A6) to the opposite party, which was acknowledged (Ext A7). The complainant emphasizes that the deficiency in the opposite parties' service and their unfair trade practices have caused him significant hardship.
The complainant claims a total of Rs.2,82,435/- (including interest) as the net amount payable, Rs.1,00,000/- as compensation for mental distress, and the entire cost of the proceedings.
The complainant argues that the opposite parties have demonstrated a deficiency in service and have engaged in unfair trade practices.
The case was filed in Ernakulam district on 01.01.2022, and the opposite parties were set exparte after failing to file a version in time. Subsequently, the opposite parties filed a version but sought to condone the delay, which the Commission dismissed. The complainant requests the Commission to direct the opposite parties to pay the amounts mentioned and the cost of the proceedings.
Sivadasan P.K., serving as the Senior Superintendent of Post Offices for the Ernakulam Division, submitted an argument note. The key points of this note are summarized as follows.
The policy, a Convertible Whole Life Assurance, was initiated on 01.10.2009 with a sum assured of Rs. 1,50,000 and a monthly premium of Rs. 773. It allowed for conversion into an Endowment Assurance policy after 5 years, with a maturity age option of 50, 55, or 58 years.
The complainant had the option to continue the policy as a Whole Life Assurance or convert it to Endowment Assurance after 5 years. In 2014, the policy was due for conversion, and the premium rates for conversion were specified (Rs. 3385 per month for age 55 and Rs. 1645 for age 58). However, the complainant submitted a conversion request without specifying the desired maturity age and failed to pay the revised premium or arrear premium, resulting in the policy continuing as a whole-life policy.
The policy matured on 01.10.2020, and the complainant was given options for surrendering the policy, considering premiums paid up to either September 2017 or September 2020. The complainant requested to exclude the surrender factor in the calculation.
The Senior Superintendent denies all allegations in the complaint, stating that the complainant was aware of the terms and did not comply with them, especially in not paying the enhanced premium for the converted policy. The document concludes that the complaint lacks merit and should be dismissed, emphasizing the importance of adhering to life insurance contract terms, including premium payments, to realize their benefits.
The evidence presented included an ex-parte proof affidavit filed by the complainant, and it was unchallenged by the opposite parties. Therefore, the complainant's claims were considered credible and supported by the evidence. Therefore, the complainant requests the commission to grant the relief sought, including compensation for mental agony and unfair trade practices.
The opposite parties’ conscious failure to file their written versions in spite of having received the Commission’s notice to that effect amounts to an admission of the allegations levelled against them. Here, the case of the complainant stands unchallenged by the opposite party. We have no reason to disbelieve the words of the complainant as against the opposite parties. The Hon’ble National Commission held a similar stance in its order dated 2017 (4) CPR page 590 (NC).
We have meticulously reviewed the complaint affidavit and the documents submitted by the complainant. We have extracted the pertinent portion of the complaint below for our analysis:
In this case, the policy allowed for conversion into an endowment policy, but despite sending the necessary documents, the conversion did not happen for three years. When it finally did, the premium amount significantly increased, causing financial hardship to the complainant. The complainant sought resolution from the opposite parties and even approached the Prime Minister's Office, but no action was taken. Eventually, the 2nd opposite party assured a resolution but calculated a lower payout than expected, citing a "surrender factor." The complainant disagreed with this calculation, as he had not surrendered the policy, and the opposite parties had failed to convert it as promised.
The complainant claimed a total amount of Rs 2,82,435, including interest, for the deficiency in service. Additionally, the complainant sought Rs 1,00,000 as compensation for mental agony and requested the opposite parties to bear the entire cost of the proceedings.
A. Maintainability of Complaint:
- Consumer Status: Under Section 2(7) of the Consumer Protection Act, 2019, a consumer is defined as anyone who avails of a service for a consideration. The complainant, having purchased a postal life insurance policy, clearly falls within this definition.
B. Deficiency in Service and Unfair Trade Practice:
- Non-Conversion of Policy: Despite the complainant’s compliance with all required procedures for policy conversion (as evidenced in Exhibit A-3), the opposite parties failed to act on this. This inaction over an extended period is a clear case of deficiency in service.
- Increased Premium: The unilateral and unexpected increase in the premium amount (as noted in Exhibit A-4) further adds to the evidence of not only service deficiency but also unfair trade practices, as it imposes an unplanned financial burden on the complainant.
- Mental Agony and Financial Hardship: The resultant financial strain and the distress caused by the inaction of the opposite parties, despite repeated communications, qualify as mental agony and hardship inflicted on the complainant.
C. Evidence and Reliability:
- Unchallenged Evidence: The opposite parties did not contest the complainant's evidence, leading to an assumption of its accuracy and reliability. The ex-parte proof affidavit and the exhibits form a strong foundation for the complainant's claims.
D. Liability of Opposite Parties:
- Admission by Silence: The opposite parties' failure to respond to the Commission's notice or to contest the complainant's claims effectively amounts to an admission of the allegations.
- Legal Obligation: The opposite parties' obligation to convert the policy as per the agreement and their failure to do so establish their liability.
This judgment rests on the principles of protecting consumer rights and holding service providers accountable. The evidence presented by the complainant, the legal framework of the Consumer Protection Act, and relevant case laws guide the decision-making process. The complainant's hardships, financial and emotional, due to the opposite parties' failure to fulfil their obligations, justify the compensation awarded. The Commission's objective is to address the grievances of the complainant effectively and act as a preventive measure against comparable misconduct by service providers in the future, thereby maintaining the principles of equity and integrity in consumer dealings.
We find that issues (i) to (iv) also favour the complainant, as they are a result of the serious deficiency in service on the part of the Opposite Parties. Naturally, the complainant has experienced a significant amount of inconvenience, mental distress, hardships, financial losses, etc., due to the deficiency of service and unfair trade practices by the Opposite Parties.
In view of the above facts and circumstances of the case, we are of the opinion that the Opposite Parties are liable to compensate the complainant.
Hence the prayer is partly allowed as follows:
- The Opposite Parties shall pay a total amount of ₹2,82,435(Two Lakh Eighty-Two Thousand Four Hundred Thirty-Five Rupees) to the complainant for the deficiency in service and unfair trade practices caused by the Opposite Parties.
- The Opposite Parties shall pay a sum of ₹40,000 (Forty Thousand Rupees Only) as compensation to the complainant for mental agony and the financial impact and distress caused by their deficiency in service and unfair trade practices.
- The Opposite Parties shall also pay the complainant the sum of ₹10,000/- (Ten Thousand Only) towards the cost of the proceedings.
The opposite parties are jointly and severally liable for the above-mentioned directions. They must comply within 30 days from the date of receiving a copy of this order. If they fail to do so, the amounts ordered in points (i) and (ii) above will attract interest at a rate of 9% per annum from the date of the complaint (03.01.2022) until the date of realization.
Pronounced in the Open Commission on this the 15th day of December, 2023.
Sd/-
D.B.Binu, President
Sd/-
V. Ramachandran, Member
Sd/-
Sreevidhia.T.N, Member
Forwarded/By Order
Assistant Registrar
Appendix
Complainant’s Evidence
Exhibit A-1: Copy of acceptance letter of PLI proposal along with the policy document dated 22.10.2009 issued by the opposite parties.
Exhibit A-2: Copy of letter for conversion of policy issued by the opposite parties.
Exhibit A-3: Copy of the option of conversion executed by the complainant along with acknowledgement of the opposite parties dated 09.10.2014.
Exhibit A-4: Copy of notice for stopping premium deduction from salary issued by the OPPOSITE PARTIES.
Exhibit A-5: Copy of the letter along with the surrender manual calculation sheet and application for surrender issued by the opposite parties.
Exhibit A-6: Copy of the representation submitted to the opposite party by the complainant.
Exhibit A-7: Copy of the postal acknowledgment card evidencing the receipt of the above representation.
Opposite party’s evidence
Nil
kp/
Despatch date:
By hand:
by post: C.C. No. 13/2022
Order date: 15/12/2023
