DATE OF FILING : 13.12.2012
BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI
Dated this the 25th day of March, 2013
Present :
SRI. LAIJU RAMAKRISHNAN PRESIDENT
SMT. LIZAMMA ABRAHAM. K. MEMBER
CC NO. 300/2012
Between
Complainant : Chandrika C. Nair,
Chandrabhavanam,
Elavumchuvattil,
Manakkadu P.O.,
Thodupuzha, Idukki District.
And
Opposite Parties : 1. ICICI Prudential Life Insurance
Company Ltd.,
ICICI PruLife Towers,
1089, Appasaheb Marg, Prabhadevi,
Mumbai – 400 025.
2. ICICI Prudential Life Insurance
Company Ltd.,
K.K. Road, Kottayam,
Kottayam District.
(Both by Adv: K. J. Thomas)
3. The Advisor,
Code No.00509122, IRG Thodupuzha,
C/o ICICI Prudential Life Insurance
Company Ltd.,
K.K. Road, Kottayam,
Kottayam District.
O R D E R
SRI. LAIJU RAMAKRISHNAN (PRESIDENT)
Complainant is a 65 years old lady, having no source of income and living in a rented house at Thodupuzha. The financial advisor of the opposite party, who is the 3rd opposite party represented complainant and offered high interest for the deposits made to and also induced the complainant to investment with them. The complainant obtained Rs.2 lakhs, which was the share of her family property, out of that she purchased some old ornaments for her grand children and there was a balance of Rs.1 lakh in the bank account. Attracted by the offer
of the opposite party she deposited an amount of Rs.50,000/- as fixed deposit with the 1st opposite party and the 3rd opposite party got obtained the signature. But the conditions were not at all disclosed to the complainant and she is an illiterate in English. The 1st opposite party issued a cheque for Rs.11,202.55/- to the complainant and on receiving the same, the complainant approached the counsel and at that time only she awared the true nature of the transaction. As per the documents received to the complainant, it appeared that the opposite party have obtained money under certain insurance scheme of the opposite party. Complainant was totally unaware of the scheme of the opposite party. A letter with the cheque was issued to the complainant on 2.2.2011 and on receiving the same, the complainant believed that it was the interest payment done by the opposite party. So this petition is filed for getting back the amount paid by the complainant in the year 2008 with 18% interest, since it was received by the opposite party by suppressing the material facts.
2. As per the written version filed by the opposite party, it is denied that the complainant deposited Rs.50,000/- as fixed deposit. It is admitted that the opposite party issued a cheque for Rs.11,202.55/- towards the foreclosure of the policy and it was not towards the interest. The opposite party have already paid the foreclosure amount of the policy as per the terms and conditions of policy, after making the payment, the opposite parties are not liable to pay any further amount to the complainant. Complainant after being fully satisfied with the terms and conditions of the policy, herself have filled and signed the proposal form. The opposite party company is not having any obligation to return Rs.50,000/- to the complainant. The policy was issued in the year 2008 and the complainant approached this Forum only in the year 2012, after the expiry of 4 years. So the petition is not maintainable under Section 24 A of the Consumer Protection Act, 1986. The policy is a contract by the policy holder with the insurance company and parties to it are bound to the terms and conditions.
As per Clause 5.1, Payment of Premiums,
Premiums are payable on the due dates and at the amount mentioned in the policy at time of commencement of the policy. However, there is a grace period for payment of premium of 15 days where the mode of payment is monthly and 30 days for all other modes.
If a premium is not paid on the due date or during the days of grace, the provision as per clause 5.5 shall apply and policyholder will continue to have the benefit of investment in the respective unit funds.
As per Clause 5.5, Continuation of Policy,
If the premium is not paid by the due date or during the days of grace, during the first three policy years, Fund Management Charges and the Policy Administration Charges will continue to be applicable. Further no other transaction will be allowed during this period till the policy is revived. On death during this period, the Fund Value is only payable. The policy shall terminate upon such payment.
As per Clause 11, Foreclosure of the policy,
If the full premium for the first three policy years is not paid and the policy is not revived within a period of two years from the due date of the first unpaid premium, then surrender value as described in clause 4 will be paid at the end of the third policy year or at the end of the reinstatement period, whichever is later.
As per Clause 4, Surrender,
The policy acquires a surrender value after the payment of full premium for the first policy year. However, the surrender value would be payable only after completion of three policy years or whenever the policy is surrendered thereafter. The surrender value payable is the Fund Value after deducting the following surrender charges.
(a) Applicable surrender charges where three full year's premiums have not been paid.
Complete policy years for which premiums have been paid | Surrender Charge as a % of Fund value |
Less than one year | 100% |
One year | 75% |
Two years | 60% |
In case the premium payments are discontinued within the first three policy years, all benefits shall cease after the expiry of the days of grace for the payment from the due date of first unpaid premium.
In this case, the complainant has paid only one premium at the time of issuance of the subject policy. Thereafter, the complainant has negligently failed to pay the renewal premiums and further has also failed to revive the policy within two years from the first unpaid premium. Hence the policy was foreclosed on
1.2.2011 as per clause 11 and the surrender value as per clause 4 was paid to the complainant vide cheque No.190067 dated 1.2.2011 with the sum of Rs.11,202.55/-. At the time of filling the proposal form, the complainant replied the question No.27 A in the following manner that for the selection of Plan types as Regular Premium and Single Premium, it was answered as Regular Premium and for the Mode for Regular Premium as yearly, half-yearly and monthly, it is marked as half-yearly. It is manifest that the complainant herself filled the proposal form and in the same, it is opted for yearly premium mode under the subject policy. A period of 15 days is available for the complainant for reviewing the policy. If the complainant do not find the policy suitable, the policy documents must be returned to the company within 15 days from the date of receipt of the same. The complainant retained the policy and never complained about the discrepancies of the policy. As per the clause 4(1) of the Insurance Regulatory and Development Authority (Protection of Policyholder's Interests) Regulations 2002, a copy of the proposal form is sent to the policyholders along with the policy document, thereby, giving an opportunity to the policyholders to re-examine the replies made by him in the proposal form and get the details rectified in case of any discrepancies in the proposal form. In this case also, a copy of the proposal form along with other policy documents were sent by the opposite party to the complainant. However, after receiving the policy documents, the complainant did not approach the opposite party within free look period implying that the policy and policy documents are acceptable to the complainant. The opposite party issued a letter on 2.2.2011, informing the complainant that the value of units in the subject policy as on 31.1.2011 is Rs.44,810.20/- and as per the terms and conditions of the policy, the subject policy has been foreclosed due to non premium of the renewal premiums with effect from 31.1.2011. It is submitted that along with the above said letter the opposite party has also sent the foreclosure amount vide cheque No.190067 dated 1.2.2011 with a sum of Rs.11,202.55/- to the complainant. So these opposite parties are not liable to pay any amount to the complainant.
3. The point for consideration is whether there is any deficiency in service from the part of the opposite parties, and if so, for what relief the complainant is entitled to ?
4. No oral evidence adduced by both the parties. Exts.P1 to P3 marked on the side of the complainant and Exts.R1 to R3 marked on the side of the opposite parties.
5. The POINT :- Heard. The complainant was attracted by the assurance given by the 3rd opposite party, who is the advisor of the opposite party and joined in the fixed deposit scheme of the opposite party by paying an amount of Rs.50,000/- as fixed deposit, from the money received as per the family property share, expecting the high interest offered by the opposite party. Petitioner paid the amount in the year 2008. The 3rd opposite party who is the agent of the opposite party got signed in several papers and forms from the complainant since the petitioner is an illiterate and not able to read English. Petitioner was not aware of the conditions of the policy and the opposite party never disclosed the entire material facts of the policy to the complainant. The policy issued by the opposite party with proposal form is marked as Ext.P1. Unfortunately, on 2nd February, 2011, a letter has been received from the opposite party with enclosing a cheque for Rs.11,202.55/-, stating that the company will not be under any risk and no benefits become payable under the said policy after 31.1.2011. It is also stated that the policy has been foreclosed with effect from 31.1.2011. While it was received by the complainant, the complainant thought that it was the interest for the amount deposited by the complainant. But at the time of producing the same before the counsel of the complainant, it is revealed that the opposite party joined in the insurance policy and not in the deposit scheme, so that the opposite party cheated the complainant. Copy of the letter is marked as Ext.P2. The premium receipt issued by the opposite party is marked as Ext.P3.
As per the opposite party, they never assured the complainant that it was a fixed deposit scheme by the advisor of the opposite party. It was a policy contract entered by the complainant and the insurance company and both parties are bound to its terms and conditions. After convincing the terms and conditions, the complainant herself filled up the proposal form and signed it and the complainant herself has opted for yearly premium and after that it is discontinued. After the receipt of the premium documents, the complainant has got a 15 days free look period for cancelling the policy or return the policy documents to the opposite party. But the complainant retained the same after understanding entire conditions and terms of the policy. Copy of the proposal form signed by the complainant is marked as Ext.R1. Policy documents with conditions are marked as Ext.R2. As per the conditions of the policy, as per clause 5.5 of the policy, if the premium is not paid by the due date or during the days of grace, during the first three policy years, fund management charges and the policy administration charges will continue to be applicable. No further transaction will be allowed during this period till the policy is reviewed. On the expiry of the period, the fund value is only payable. As per clause 11 of the
policy, if the full premium for the first three policy years is not paid and the policy is not revived within a period of two years from the due date of the first unpaid premium, then surrender value as described in clause 4 should be paid at the end of the 3rd policy year or at the end of the reinstatement period, whichever is later. So the complainant never reviewed the policy or renewed the premium since it was an yearly premium, within 2 years from the first unpaid premium. Hence the policy was foreclosed on 1.2.2011 as per clause 11 and the surrender value as per clause 4 was paid to the complainant with cheque No.190067 dated 1.2.2011 for an amount of Rs.11,202.55/- and copy of the letter enclosed with the cheque is marked as Ext.R3.
As per the complainant, the policy conditions were not at all revealed to the complainant. But the complainant who is an illiterate, eventhough received the documents, but not able to read English, so she was not aware of the terms and conditions of the policy. But we think that, eventhough the complainant is an illiterate and not able to read the conditions, she herself filled up the proposal form and entered in the policy declaring that she had gone through all the terms and conditions of the policy. The contention of the complainant is that she has only signed in the proposal form because she is an illiterate, is not at all sustainable. The complainant is an illiterate, so that she is ignorant of the terms and conditions is not at all sustainable. But as per the complainant, the 3rd opposite party assured that it was a fixed deposit scheme having hike interest and not an insurance policy, the complainant who is a 65 years old lady, attracted with the assurance given by the advisor of the opposite party and signed in all the documents as per the assurance given by the opposite party also paid Rs.50,000/- as deposit to the opposite party. The amount was not at all returned by the opposite party, but only an amount of Rs.11,202.55/- has been repaid, which was the amount after foreclosure of the policy. So we are in a view that the main contention of the complainant is that the advisor of the opposite party, who is the 3rd opposite party convinced the complainant and assured that high interest has been provided for the deposit scheme of the opposite party and it was not an insurance policy, so that the 3rd opposite party got signed in several papers of the opposite party and received the premium from the complainant. The opposite party has a contention that the policy proposal form was filled up by the complainant understanding the terms and conditions of the policy and the opposite party revealed all the terms and conditions of the opposite party through their agent. But the opposite party never tried to prove these things before the Forum, even never tried to produce the 3rd opposite party as witness to substantiate the contention that they have revealed the terms and conditions and after that got signed in the conditions of
the opposite party, without suppressing any material fact. If the complainant had filled up the proposal form and all the other documents of the opposite party as per the conditions of the opposite party, that ought to have proved through the 3rd opposite party. But no evidence has been produced by the opposite party to substantiate the same. So we think that there is nothing to disbelieve the contention of the complainant and the complainant who is an old lady expecting the huge amount after the expiry of the fixed deposit scheme, received only Rs.11,202.55/- from the opposite party. If the opposite party is having the said contention that it was an yearly premium policy and if the complainant never paid and reviewed the policy on the 2nd year, they ought to have sent a notice to remember the same. But that was not at all done by the opposite party. So we find it is an unfair trade practice, so the opposite party should return the amount paid by the complainant with interest to the complainant. An amount of Rs.11,202.55/- has been received by the complainant, and the balance amount should be disbursed to the complainant with interest from the date of payment of that amount, which is 1.2.2011.
Hence the petition allowed. The opposite parties are directed to disburse the balance amount paid by the complainant as per the Ext.P3 with 9% interest from the date of Ext.R3, within 30 days of receipt of a copy of this order, failing which the amount shall carry 12% interest per annum from the date of default.
Pronounced in the Open Forum on this the 25th day of March, 2013
Sd/-
SRI. LAIJU RAMAKRISHNAN (PRESIDENT)
Sd/-
SMT. LIZAMMA ABRAHAM. K. (MEMBER)
APPENDIX
Depositions :
Nil.
Exhibits :
On the side of the Complainant :
Ext.P1 - The policy issued by the opposite party with proposal form.
Ext.P2 - Copy of the letter issued by the opposite party.
Ext.P3 - The premium receipt issued by the opposite party.
On the side of the Opposite Party :
Ext.R1 - Copy of the proposal form signed by the complainant.
Ext.R2 - Policy documents with conditions.
Ext.R3 - Copy of the letter enclosing the cheque issued by the
opposite party.
