Chandigarh

DF-II

CC/51/2019

Harvinder Singh - Complainant(s)

Versus

Kotak Mahindra Life Insurance Company Limited - Opp.Party(s)

Adv. Devinder Kumar

11 Dec 2019

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	51 of 2019
Date  of  Institution	:	31.01.2019
Date   of   Decision	:	11.12.2019

 

 

 

 

Harvinder Singh son of Late Sardar Avtar Singh, r/o House No.1556, Second Floor, Sector 18-D, Chandigarh.

             ……..Complainant

 

Versus

 

1]  Kotak Mahindra Life Insurance Company Limited, SCO No.141-142, Sector 9-C, Chandigarh 160009 through its Branch Manager.

2]  Kotak Mahindra Life Insurance Company Limited, Regd. office: 2^nd Floor, Plot # C-12, G-Block, BKC Bandra (E) Mumbai- 400 051 through its Managing Director.

3]  Anand Sabarwal, #1440/1, Progressive Society, Sector 50, Chandigarh.

4]  Munish Vahishth, Kotak Mahindra Life Insurance Company Limited, SCO No.141-142, Sector 9-C, Chandigarh 160009

5]  Neeraj Sharma son of Sh.Megh Raj Sharma, R/o H.No.1147, Second Floor, Sector 22-B, Chandigarh.

  ………. Opposite Parties

 

BEFORE:  SMT.PRITI MALHOTRA    PRESIDING MEMBER

            SH.SURESH KUMAR SARDANA   MEMBER

 

Argued By:

Sh.Devinder Kumar, Adv. for complainant.

Sh.Mrigank Sharma, Adv. for OPs No.1 & 2.

None for Opposite Party No.3.

Opposite Party No.4 exparte

None for Opposite Party NO.5.

 

PER PRITI MALHOTRA, PRESIDING MEMBER

         Briefly stated, the complainant was approached by Opposite Parties No.3 to 5 who gave assurance that in case the complainant invest the amount in their company then after 10 years, he will be entitled for double of the invested amount or interest @12% p.a. and life insurance for the period of 10 years. Accordingly, the complainant paid a sum of Rs.3 lacs to OPs No.3 to 5 vide receipt dated 11.2.2008.  It is averred that after completion of 10 years, when the complainant approached Opposite Party No.1 for the release of his invested amount, he was shocked to get response of the Opposite Party No.1 vide letter dated 5.11.2018 (Ann.C-2) that due to non-payment of the renewal premiums, the policy got lapsed and further foreclosed and all policy benefits including sum assured got ceased. The complainant also sent a legal notice dated 3.12.2018 to the Opposite Parties, but to no avail.  Hence, this complaint has been filed alleging said act & conduct of the Opposite Parties as gross deficiency in service and unfair trade practice.

 

2]       The Opposite Parties No.1 & 2 have filed joint reply and while admitting the factual matrix of the case, stated that the complaint is barred by limitation.  It is also stated that the complainant opted for Kotak Retirement Income Plan without cover i.e. Unit Linked Plan and his premium was adjusted against the said Plan, which he initially paid for another plan. It is further stated that the policy was issued on 28.2.2008 having policy term of 10 years.  Stated further that the complainant after paying the first premium, failed to pay the subsequent/renewal premiums under the policy, despite notices and accordingly, the policy was foreclosed as per the terms & conditions of the policy contract.  It is submitted that the complainant on 29.8.2014 wrote a mail to the OPs mentioning that the complainant is not interested to pay further premium and his premium may be refunded, which was denied by OPs vide email dated 6.12.2014 being against the terms & conditions of the policy in question. It is further submitted that the policy has already been foreclosed and therefore, nothing is payable to the complainant.  Denying all other allegations and pleading no deficiency in service, the OPs No.1 & 2 have prayed for dismissal of the complaint.

         The Opposite Party No.3 has also filed reply stating that he served as Assistant Branch Manager with the Company and he left the company on 31.3.2008 and has no concern with the company since then.  It is stated that the policy in question has been issued by the company in response to the proposal made by complainant. It is further stated that the Opposite Party No.3 is not responsible for any liability of the Company. Denying all other allegations, the Opposite Party No.3 has prayed for dismissal of the complaint.

         Opposite Party No.4 did not turn up despite service of notice, hence it was proceeded exparte.  

         Opposite Party NO.5 has also filed reply and stated that on the assurance of Opposite Parties No.3 & 4, the complainant paid a sum of Rs.3 lacs to OPs NO.3 & 4 and thereafter the said amount has been deposited with Opposite Parties NO.1 & 2.  It is stated that as the OPs No.3 & 4 were the Senior Officers of OPs No.1 & 2, they have disclosed to the complainant that only one time premium has to be paid.   Other allegations have been denied for want of knowledge with a prayer to dismiss the complaint qua Opposite Party No.5.

3]       Replication has been filed by the complainant thereby controverting the assertions of Opposite Parties.

 

4]       Parties led evidence in support of their contentions.

 

5]       We have heard the ld.Counsel for the parties and have also perused the entire record.

 

6]      The Opposite Parties No.1 & 2 at the very onset have taken a preliminary objection with regard to the present complaint being highly time barred, as the matter pertains to 2008 and the present complaint has been filed in the year 2019.  In the present scenario, we are of the opinion that as the policy in question issued by the OPs No.1 & 2 on 11.2.2008 was for a term of 10 years having maturity on 11.2.2018.  Undisputedly, when the complainant approached Opposite Party No.1 for the release of his invested amount, the Opposite Party No.1 vide letter dated 5.11.2018 (Ann.C-2) denied the same on the ground that the policy had lapsed and foreclosed and all policy benefits including sum assured got ceased. In this view of the matter, the cause of action to the complainant has accrued on 5.11.2018, whereas the present complaint has been filed on 31.1.2019, well within limitation period of 2 years as prescribed under The Consumer Protection Act., 1986 (as amended upto date).  Furthermore, the present complaint is also within period of limitation, as the Opposite Parties are still retaining the proceeds of the policy of the complainant till date.  Therefore, the objection with regard to the present complaint being barred by limitation is out rightly rejected.

 

7]       The objection with regard to the maintainability of the present complaint, as mentioned in Para No.3 of Preliminary Objection (Page 3) of the reply of the Opposite Party No.1 & 2, wherein they have referred to the citation of the Hon’ble National Commission– Ram Lal Aggarwala Vs. Bajaj Allianz Co. Ltd., decided on 23.4.2013.  We are of the opinion that the facts of the matrix of the complaint mentioned in the aforementioned citation is totally different from the case of the complainant for the reason that the complainant never claimed to have opted for the policy in question for any commercial purpose.

 

8]       Further, it is necessary to quote here other two set of judgments of the Hon’ble National Commission, New Delhi i.e. Life Insurance Corporation of India Vs. Smt.Sudhi P.P., R.P. No.2674 of 2013, decided on 15.01.2014 And Dr.Aditya Prasad Roy VS. Mr.Suresh Mahalingam & Ors., R.P.No.4351 of 2014, decided on 6^th Jan., 2015, wherein the Hon’ble National Commission, New Delhi, while dealing with similar set of Unit Linked Policies had decided them on merits and has nowhere given its specific observation that the complainant did not fall under the definition of ‘consumer’ and the dispute did not fall under the preview of Consumer Protection Act. It is also necessary to quote here that the complainant, in the present case has nowhere quoted that he had opted for the policy in question for the purpose of investment whereas his stand is that he was misguided by the officials of Opposite Parties No.1 & 2. Therefore, it would not be appropriate for us to deviate from the merits of the present case, which has been contested by the Opposite Parties on merits as well as on its maintainability. Thus, we proceed further to decide the present complaint on its merits. 

 

9]       The complainant has preferred the present complaint on the ground that on being approached by the agents of Opposite Parties No.1 & 2, who coaxed him into buying insurance policy of their company i.e. OPs NO.1 & 2 by presenting a rosy picture about the features of the policy, which he ultimately subscribed for.

 

10]      It is the allegation of the complainant that he was convinced by the Officials of OPs No.1 & 2 that under the policy in question, he is liable to pay only one premium and after 10 years of period, he will get double the amount.  It is claimed that under that impression, the complainant paid an amount of Rs.3 lakhs.  It is alleged further that when the complainant approached OPs No.1 & 2 for the release of his payment under the policy after policy period, he was told that the policy has been terminated as he failed to pay the premiums as required under the policy. 

 

11]      It is the stand of OPs No.1 & 2 that the complainant himself opted for the policy in question which does not cover the life of the insured, as he originally opted the policy with life cover.  Opposite Parties No.1 & 2 claimed that the complainant after making payment of one premium under the policy in question did not pay any other premiums, which as per the policy term he was under obligation to pay till policy period.  The Opposite Parties No.1 & 2 claimed that the complainant was duly issued the lapsation notice (Ann.R-1/5) as well as the policy termination notice vide Ann.R-1/6.

 

12]      After having thoroughly perused both the proposal forms (Ann.R-1/1 & R-1/3), as placed on record by Opposite Parties No.1 & 2, the policy issued thereafter (Ann.R-1/4)and the so called lapsation notice issued on 29.12.2010 (Ann.R-1/5) followed by policy termination letter dated 28.2.2011 (Ann.R-1/6) issued by Opposite Parties NO.1 & 2, it transpires that the complainant in the present complaint has been duped by the Opposite Parties No.1 & 2 of his hard earned money.  We have thoroughly gone through the proposal forms claimed to have been filled by the complainant disclosing that the complainant is an Agriculturist having the annual gross income amounting to Rs.6 lakhs only and has no other source of income.

 

13]      The Opposite Parties No.1 & 2 failed to place on record any of the income proof which they procure from the complainant to ensure the regular premiums to be paid in the policy in question i.e. annual premium of Rs.3 lakhs for another period of 9 years (total 10 years) as per policy in question. There is also no proof with regard to any additional income of the complainant. This raises a reasonable presumption in favour of the complainant that he has definitely been not only shown the rosy picture, but has been misrepresented in terms that in case he deposits Rs.3 lakhs once, he will be paid double the amount after 10 years of the policy period to which he agreed and thus made the payment of premium under the policy in question.

         In corroboration, we have the duly sworn averments of Sh.Neeraj Sharma, Opposite Party No.5 (whose name duly reflects in the proposal forms Ann.R-1/1 & Ann.R-1/3 as an Agent of Opposite Parties NO.1 & 2) stating that the OPs NO.3 & 4 i.e. Senior Officials of the Company (OPs No.1 & 2) discloses to the complainant that only one time premium has to be paid by him.

          

14]      There is no clarification given by the OPs No.1 & 2 that how come the amount paid by the complainant under the policy in question, got invested, what was the proceeds of the investment etc. Only issuing notice of lapsation stating that due to non-payment of subsequent premiums, within the revival period, the policy lapsed & thereafter, issuing notice after the revival period get over that the policy get terminated and there is nothing to pay under the policy, as it has not acquired any surrender value, is only an eyewash to camouflage their unfair trade practice vide which they siphoned the hard earned money of the complainant, which in the present complaint it clearly reflects to have happened. 

 

15]      The bonafide of the OPs NO.1 & 2 could be gathered had they acted as per the regulation of IRDA (Insurance Regulatory & Development Authority) pertaining to Unit Linked Policies notified under Treatment of Discontinued Unit Linked Policies Regulations, 2010.  

 

16]      The complainant, who has specifically pleaded that his case falls under the ambit of Treatment of Discontinued Unit Linked Policies Regulations, 2010 and as per the provisions of these regulations, the Opposite Parties are not entitled to deduct discontinuation charges more than the specified amount of Rs.5000/- and the Opposite Parties having deducted the complete amount of Rs.3 lacs, are claimed to have ignored the provisions of the said regulations. 

 

17]      The Opposite Parties while answering to the allegations of the complainant about not dealing the case of the complainant as per Treatment of Discontinued Unit Linked Policies Regulations, 2010, have claimed that the case of the complainant is not covered under the said regulations as he had subscribed for the policy on 11.2.2008.  However, the said regulations have come into effect on the date of its notification i.e. 1.7.2010 and only the policies issued after this date, would attract the provisions of the said regulations.  Thus, claiming no deficiency in service on their part, the OPs have prayed for dismissal of the complaint. 

 

18]      We are not impressed by the justification so put forward by the Opposite Parties for the reason that the clause 7, 8 & 9 of the said regulations stipulates as follows:-

“Obligations of an insurer upon discontinuance of a policy

7.         The obligations of the insurer in this regard shall be as follows:-

i.          To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and  incidental thereto.

ii.         To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iii.       To ensure that the discontinuance charges reflect the actual expenses incurred.

iv.        To structure the discontinuance charges within the statutory ceilings on commissions and expenses and

5. To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium) do not exceed the limits specified below:-

 

Where the policy is discontinued during the policy year.	Maximum Discontinuance charges for the policies having annualized premium up to Rs.25000/-	Maximum discontinuance charges for the policies having annualized premium above Rs.25000/-
1	Lower of 20% (AP or FV) subject to a maximum of Rs.3000.	Lower of 6% (AP or FV) subject to maximum of Rs.6000/-
2	Lower of 15% (AP or FV) subject to a maximum of Rs.2000.	Lower of 4% of (AP or FV) subject to maximum of Rs.5000/-
3	Lower of 10% (AP or FV) subject to a maximum of Rs.1500.	Lower of 3% (AP or FV) subject to maximum of Rs.4000/-
4	Lower of 5% (AP or FV) subject to a maximum of Rs.1000.	Lower of 2% (AP or FV) subject to maximum of Rs.2000.
5 and onwards	NIL	NIL

 

 

 AP - Annualised premium

FV- fund value on the date of discontinuance

Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied.

Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

            8.         xxxxxxxxxxxxxx

9.         Every insurer shall send a statement of account, on a half yearly basis, within fifteen days, in respect of every policy in force including discontinued policies where the proceeds are yet to be paid to the policyholder or her nominee as the case may be, his last known address, which shall contain the following details :-

(i) The total premium paid by the policyholder

(ii) Next due date of the premium

(iii) Pattern of the investment chosen

(iv) Pattern of investment

(v) Status of the policy

(vi) Total fund value

(vii) Total units

(viii) Detail of charges recovered.

 

19]      The contents of Regulation-9 clearly indicate that these regulations are attracted even to the policies, which are in existence on 1^st July, 2010 and also to the policies, which are in the discontinued mode and the proceeds of such policies have not been paid to the insured.  Policy of the complainant in the present complaint alleged to have slipped to lapsed mode in the year 2011 only as reflects in Ann.R-1/5 i.e. Lapsation Notice claimed to have been issued by OPs NO.1 & 2. Meaning thereby, that the case of the complainant is squarely covered under Regulation 9 of the IRDA Regulations, 2010, quoted above. 

 

20]      In the light of these regulations, the insurance company is not entitled to deduct any amount in excess to the one mentioned in Regulation No.7 according to which the OPs were not entitled to deduct any amount after 5 years period.

 

21]      The Opposite Parties while dismissing the claim of the complainant and stating that the policy of the complainant did not attain any surrender value, preferred not to disclose the fund value that the investment of the complainant had acquired at the time when the policy in question stood discontinued after the non-payment of subsequent premiums. Neither a particular date has been disclosed nor any statement of account is placed on record by the Opposite Parties from where the pleadings of Opposite Parties could be believed for the reason that a huge investment of Rs.3,00,000/- could not just diminish to Nil amount and it is incumbent upon the Opposite Parties to prove their version with a cogent, reliable and trustworthy evidence from their records.  The Opposite Parties have also failed to adhere to Regulations 7, 8 & 9 of the IRDA July, 2010 regulations, referred to above, and therefore, deficiency in service on their part is writ large, which certainly is coupled with unfair trade practice.   

 

22]      In our considered opinion, the facts & circumstances of the present case clearly reveals that the Opposite Parties No.1 & 2 not only acted unfairly to deal the present complaint, but at the same time the functioning of Opposite Parties No.1 & 2 is absolutely   non-transparent. 

 

23]      In the light of above observations, we are of the concerted view that the Opposite Parties are found deficient in rendering proper service to the complainant. Hence, the present complaint of the Complainant is allowed qua OPs No.1 & 2. Accordingly, the Opposite Parties No.1 & 2 are directed jointly & severally as under:-

 

1. To refund Rs.3 lacs to the complainant, along with interest @9% p.a. from the date of deposit i.e. 11.2.2008 till actual payment.

 

2. To pay an amount of compensation to the tune of Rs.15,000/- along with litigation expenses amounting to Rs.10,000/-.

         The above said order shall be complied with within 45 days of its receipt by the Opposite Parties; failing which they shall be liable to pay additional compensatory cost of Rs.15,000/- apart from above relief.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

11^th December, 2019

                                                                              Sd/-                                                                                          (PRITI MALHOTRA)

PRESIDING MEMBER

 

 

 

 

Sd/-

(SURESH KUMAR SARDANA)

MEMBER