BEFORE THE KARNATAKA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

BANGALORE (ADDL. BENCH)

DATED THIS THE 31^st DAY OF MAY 2024

PRESENT

MR. RAVISHANKAR                          : JUDICIAL MEMBER

MRS. SUNITA CHANNABASAPPA BAGEWADI     :    MEMBER

CONSUMER COMPLAINT NO. 388/2017

V/s

ORDER

MR. RAVISHANKAR, JUDICIAL MEMBER

This is a complaint filed by the complainant alleging deficiency in service on the part of the Opposite Parties in not returning the amount of Rs.40 lakhs with interest after cancellation of the policy, hence, prayed for refund of the said amount along with compensation and costs.

2.      The brief facts of the complaint are hereunder;

It is the case of the complainant that she is an highly acclaimed Indian film actress who ordinarily a resident of Bengaluru.  The complainant is regular and genuine customer of Opposite Party for the last 8 to 9 years.  Such being the case, one Ms. Vishalakshi Bhat who posed as an Employee of the Opposite Party canvassed for investment to the tune of Rs.40 lakhs and assured to pay interest at 9% on the said investment.  Believing the reputation of the Opposite Party and canvas made by the said agent/employee Ms. Vishalakshi Bhat, the complainant decided to make a deposit.  Accordingly, on 15.05.2015 she paid Rs.40,00,000/- by way of cheque bearing no.000084 dt.15.05.2015 in favour of Opposite Party for which theops have issued a receipt regarding deposit having made by the complainant. 

3.      During the course of discussion, the Opposite Party had clearly informed to the complainant that she is going to receive Rs.40,00,000/- along with interest at 9% by November 2016.  Further, the complainant was under impression that along with deposit at the end of the term she would atleast get the amount of Rs.43,60,000/- from the deposit amount.  Anyhow subsequently the complainant received a telephone call from the Opposite Party employee one Mr. Srinivasan Yuvaraj who enquire whether the complainant was aware about the terms and conditions regarding the insurance policy issued in her name vide No.17638500.  The complainant informed through telephone that she had made a deposit of Rs.40,00,000/- as an investment as per the advise made by one Ms. Vishalakshi Bhat and further informed to Opposite Party that she had no knowledge about the terms and conditions of her deposit and also stated that she had deposited the said amount as per the advise and good faith on the Opposite Party company.

4.      The complainant further alleged that she received another telephone call from one Mr. Prashanth who informed to the complainant that Ms. Vishalakshi Bhat an employee of the Opposite Party was involved in fraud and had misused customers fund and caution was given, she shocked and surprised.  Then she visited the office of the Opposite Party at Bangalore where she noted that said Ms. Vishalakshi Bhat mislead this complainant and issued a policy by receiving Rs.40,00,000/-.  At the time of receiving the amount, Ms.Vishalakshi Bhat had stated that the amount is towards investment, but, later on the said amount was paid towards pension policy.  After knowing all these, she perused the policy wherein it clearly goes to show that the financial condition would clearly show that she is ineligible for such a plan and definitely she was not in a position to commit to pay such huge amount every year.  This is a clear misleading made by the employee of the Opposite Party who had misrepresented and received an amount of Rs.40 lakhs.  Thereafter knowing all these, the complainant wrote a letter dt. 18.11.2015 requesting for refund of the amount along with interest at the rate of 9% on the said amount for which the Opposite Party had issued a reply letter dt.08.12.2015 through Mr.Sanjay Idnani, Customer Relations and stated that the resolvation will be provided within 14 days.  Believing on the said letter, the complainant waited, but, even after lapse of 14 days, there was no response from the Opposite Party regarding refund of the amount for which she wrote another reminder letter dt.30.01.2016 requested for refund of Rs.40,00,000/- with interest at 9% from 15.05.2015, but, inspite of receiving of the said reminder, the Opposite Party has replied through their letter dt.04.03.2016 untenably. 

5.      However, there was no action taken with respect to the refund.  The complainant had followed on enormous occasions, but, Opposite Party not made any sincere efforts for refund of an amount of Rs.40,00,000/-.  The complainant was in need of funds, but, the Opposite Party deliberately and willingly denied for refund of the deposit amount, hence, Opposite Party rendered deficiency in service.  The complainant further alleged that on 20.01.2017, she constrained to issue legal notice and called upon the Opposite Party to refund the amount along with interest from the date of deposit.  Instead of complying the legal notice, the Opposite Parties have replied through their letter dt.25.02.2017 untenably, hence, the complainant filed this complaint alleging deficiency in service.

6.      After service of notice, the Opposite Party Nos. 1 & 2 appeared through their counsel and filed version and contended that the present complaint filed by the complainant is an abuse of process of Law and not maintainable in its present form.  There is neither any unfair trade practice adopted by the answering Opposite Parties nor any deficiency in service on their part.  The allegations made in the complaint are frivolous, baseless and misconceived, hence, complaint is liable to be rejected.  Hence, prayed for dismissal of the complaint. The opposite Party further contended that the complainant admits that a sum was invested in the short term deposit scheme to fetch higher returns, therefore, the complainant invested with an intention to make profit, hence, complaint is not maintainable under the provisions of the Consumer Protection Act, hence, prayed for dismissal of the complaint.

7.      The Opposite Party further contended that the complaint is hopelessly barred by law of limitation.  The Opposite Parties had issued a policy on the basis of duly signed proposal form dt.16.05.2015 submitted by the complainant.  Even from annexure ‘A’ dt.25.05.2015 and ‘B’ dt. 26.05.2018 clearly reflects the installment premium of Rs.40,000/- and the final premium is to be paid on 16.05.2015 and the term as 10 years.  The frequency of premium is mentioned as “annually from the date of commencement”.  Wherein all the above information is readily available on the face of the policy document form signed by her, which is signed by the complainant before making payment of the first premium.  If she had not invested in the policy, she could opted from the same then itself, but, the present complaint has been filed after 2 years that too has not been supported by any application for condonation of delay.  No explanation for condoning the delay has been explicitly mentioned in the complaint, it is held by the various verdicts that delay of each and every day has to be explained clearly and under what disability despite due diligence the complainant was not able to file the same has to be mentioned.  Only this fact renders the present complaint to be dismissed in limini without going into the merits as the same is vague and frivolous.

8.      It is further contended that being a well educated person, on perusal of the proposal form itself, the complainant must have understood that it is an insurance policy and not an investment/Fixed Deposit or otherwise, as alleged.  It is a clear case of afterthought.  It is further contended that the insurance is a subject matter of solicitation.  The great solicits the insurance policies from the proposed customer after briefing her about the terms and conditions of the insurance policy.  Only after being convinced and satisfied with the terms of the policy explained through the agent and relevant sales literature, complainant had submitted duly signed proposal forms for issuance of the said policies and therefore, in the said proposal form she had ‘declared’ under section – E (Declarations) that she had read and understood the terms and conditions of the Insurance Policy opted by her.

10.    It is further contended that the complainant has made payment of the first premium only and no payment has been made since May 2015.  She has also failed renew the policy under Clause 5 (ii) (b) of the terms of the policy.  As on date, the status of the policy is “lapse terminate”.  Further, no amount is payable as refund to the customer as the first premium paid has been adjusted towards charges as per the agreed terms and conditions mentioned in the schedule of charges.  It is submitted that the policy was properly explained to the complainant and at the same time, the complainant is also well qualified to read and understand the proposal form, illustration and policy documents.  The complainant has also failed to exercise her right under the clause “Option to Return” contained in the said policy document which gives policy holder the option to return the policy to us stating the reasons thereof, within 15 days of receipt of the policy in case she is not agreeable to any of the provisions stated in the policy and the details in the proposal form.  Therefore, it is very clear that she has failed to exercise the option to return the policy as aforesaid within 15 days of the receipt of the policy as per the terms of the policy.

11.    It is further contended that the complainant had misconceived all the true material facts and had filed the complaint only to shift her negligence on the Opposite Parties.  The said provision clearly hinders the complainant to claim compensation, when she herself has breached the terms of the contract.  As such, the complaint is deserves to be dismissed in limine.  The Opposite Parties submit that the complainant has availed the policy knowing fully that the same is an insurance policy and now is blaming the Opposite Parties.  Certainly the Opposite Parties had instituted a private complaint against their employee as she was involved in criminal activities, but, in the present case, the complainant has invested in the policy and she has also received the same.  Hence, there is no deficiency in service on the part of the Opposite Parties and prayed to dismiss the complaint.

12.    The complainant has filed affidavit evidence and marked documents at Ex.C1 to C10.  The Opposite Parties have also filed affidavit evidence and marked documents at Ex.R1 to R4.   Heard the arguments from both sides.

13.    On perusal, the following points will arise for our consideration;

 (i)      Whether the complainant has proved the alleged deficiency in service against the Opposite Parties?

(ii)      Whether the complainant is entitled for the reliefs sought?

            (iii)     What order?

14.    The findings to the above points are;

                             (i)       Affirmative

                             (ii)      Affirmative

                             (iii)     As per final order

REASONS

15.    On perusal of the pleadings, affidavit evidence and documents produced by both parties, it is not in dispute that the complainant has paid an amount of Rs.40,00,000/- in favour of Opposite Party towards the policy issued by the Opposite Party.  The said policy is marked as Ex.C3.  The policy disclosed that it is HDFC Life Guarantee Pension Plan whereas the complainant alleged that she had no knowledge that the amount was invested towards the policy.  On perusal of the affidavit sworn by the complainant, it was learnt that one Ms. Vishalakshi Bhat, she had paid Rs.40,00,000/- by way of cheque, but, to her utter surprise, she received the policy called HDFC Life Guarantee Pension Plan.  Immediately she approached the Opposite Party and to enquire with respect to her investment wherein she came to know that the said Ms. Vishalakshi Bhat who was an employee of the Opposite Party had approached her and mis-guided by assuring to pay interest at 9% after completion of the term.  In this regard, the Opposite Party also admitted in their version stating that they have initiated the proceedings against the said Ms. Vishalakshi Bhat with respect to the misuse of the funds raised by customers.  After noticing all these, the complainant wrote a letter dt.18.11.2015 which is marked at Ex.C4 for refund of the amount as because she was mislead and misguided by an employee of the Opposite Party Ms. Vishalakshi Bhat for which the Opposite Party issued a reply which is marked as Ex.C5 which clearly discloses that they are going to resolve the dispute within 14 days.  There was a telephone conversation caused between the complainant and the Opposite Party, but no refund was made subsequently she wrote a letter dt.30.01.2016 and demanded for refund of the amount paid which is marked as Ex.C6.

16.    Even after receipt of reminder letter, the Opposite Party company had not responded properly, subsequently she issued a legal notice dt.20.01.2017 which is marked as Ex.C7 and called upon the Opposite Party to refund Rs.40,00,000/- along with interest at 9% from the date of investment.  After receipt of the legal notice, the Opposite Party replied through their reply letter dt.25.02.2017 which is marked as Ex.C8 and declined to refund the amount sought by the complainant.  On the other hand, the Opposite Party filed a documents in support of their contention, the proposal form marked as Ex.R1 to show that the complainant had signed the proposal form after knowing the contents illustration letter attached to the policy marked as Ex.R3 to show that the complainant had accepted all the terms and conditions of the policy.  The auto debit mandate issued by the Opposite Party marked as Ex.R4 to substantiate their defence.

17.    It is an admitted fact that after payment of Rs.40,00,000/-, the Opposite Party had issued a policy which is HDFC Life Guarantee Pension Policy.  The complainant in her affidavit has sworn that she never invested such a huge amount towards the pension policy and even on perusal of the policy terms and conditions, she was not eligible for such a pension scheme.  Further, she sworn affidavit that it is only due to misrepresentation and misleading by one of the employee/agent of the Opposite Party company Ms.Vishalakshi Bhat she has issued a cheque for Rs.40,00,000/-.  After issuance of the policy, she came to know that an amount of Rs.40,00,000/- was invested on pension scheme policy.  Immediately she approached the Opposite Party for refund of the amount paid.  We noticed here that the policy clearly discloses that an option was provided to opt for cancellation of the policy within 15 days from the date of issuance of the policy whereas the complainant had noticed that after issuance of the policy and after knowing the information that Ms. Vishalakshi Bhat has played a fraud, she approached immediately for refund of the amount.  The Opposite Party on the other hand, after receipt of the refund letter could have suggested for refund of the amount after deduction of certain amount under the head of surrender of the policy.  Inspite of that the Opposite Parties have not refunded the amount even after receipt of reminders and legal notice issued for refund the amount, the Opposite Parties have not refunded the amount after deduction of certain charges under the head surrender of the policy, but, kept quiet without providing a fare chance for refund of the amount.  This act of the Opposite Parties definitely amounts to deficiency in service.  Further, no explanation given with respect to the amount paid and what happened next not known.  These aspects go to establish that the Opposite Party rendered deficiency in service.

18.    It is also proven from the version and affidavit of the Opposite Party that one Ms. Vishalakshi Bhat had mislead the complainant and obtained Rs.40,00,000/- saying the amount towards investment by way of policy and assured to pay 9% interest on behalf of the Opposite Party.  In this regard, the Opposite Parties also initiated the criminal proceedings against Ms. Vishalakshi Bhat.  These facts go to show that the complainant was suffered financial loss due to misrepresentation and misguide on the side of agent.  If any misrepresentation or misguide was done by the agents of the Opposite Parties, the Opposite Parties are liable to face such consequences.  Accordingly, the complainant is entitled for refund of the entire amount.  The complainant is constrained to file a complaint before this Commission for refund of the said amount.  The Opposite Parties could have refunded the said amount after deducting certain amount under the head of ‘surrender charges’ of the policy as because the said policy obtained by the complainant by fraud and misrepresentation.  As such, we are of the opinion that the complainant is entitled to get an entire amount of Rs.40,00,000/- along with interest at 7.5% p.a. from the date of filing of the complaint, till realization.  Hence, the following;

ORDER

The complaint is allowed.

The Opposite Parties are jointly and severally directed to pay a sum of Rs.40,00,000/- with interest at 7.5% p.a. from the date of complaint, till realization.

The Opposite Parties are jointly and severally further directed to pay a sum of Rs.10,00,000/- to the complainant for deficiency in service in not refunding the amount as soon as she sought for cancellation of the policy along with Rs.25,000/- towards litigation expenses.

The Opposite Parties are directed to pay the abovesaid amounts within 30 days from the date of this Order.

Forward free copies to both the parties. 

                  Sd/-                                                             Sd/-

MEMBER                                           JUDICIAL MEMBER

KCS*