State Consumer Disputes Redressal Commission
Kotak Mohindra Old Mutual Life ... vs Pal Singh on 27 November, 2015
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.836 of 2012
Date of Institution: 19.06.2012.
Date of Decision: 27.11.2015.
1. Kotak Mohindra Old Mutual Life Insurance Limited, Khanna,
District Ludhiana.
2. Kotak Mohindra Old Mutual Life Insurance Limited, Registered
Office 9th Floor, Godrej Coliseum, behind Everard Nagar, Sion
(E), Mumbai-400022.
Both 1 & 2 through their authorized signatory.
.....Appellants/opposite parties
Versus
Pal Singh Son of Dalwar Singh VPO U/o Muskabad, Tehsil Samrala,
District Ludhiana-141114.
.....Respondent/complainant
First appeal against order dated
29.03.2012 passed by the District
Consumer Disputes Redressal
Forum, Ludhiana.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Shri H.S. Guram, Member.
Present:-
For the appellants : Sh. Mrigank Sharma, Advocate For the respondent : Sh. Munish Goel, Advocate ................................................... J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
The appellants of this appeal (the opposite parties in the complaint [in short the 'OPs']) have filed this appeal against the respondent herein (the complainant in the complaint), assailing order dated 29.03.2012 of District Consumer Disputes Redressal Forum Ludhiana (in short, "the District Forum"), accepting the complaint of the complainant by directing the OPs to settle the claim of the First Appeal No.836 of 2012 2 complainant, as per guidelines of IRDA, besides payment of Rs.3000/- as costs of litigation.
2. The complainant has filed the complaint under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that OP induced him to invest his hard earned money with the scheme of OP, being profitable and secure one. It was assured to complainant by OP that the investment was onetime payment under 10 year term scheme and complainant has right to withdraw it after three years with accrued profits thereon. The complainant signed the documents and paid Rs.1,51,000/- to OP through account payee cheque on 20.03.2008 for taking the above said single premium life insurance policy. The OP sent the printed policy alongwith forms signed by the complainant alongwith first premium receipt for Rs.1,51,000/-. On receiving of said policy against number 00958526 and client ID 51331030 on 11.07.2008, the complainant realized that the representative of OP added the term of premium as 10 year against the assurance of single premium given to him. The complainant could not afford yearly premium of Rs.1,51,000/- for nine years more. On completion of three years, the complainant approached OPs for refund of the deposited amount of Rs.1,51,000/- as assured by them. The OPs disclosed to complainant that amount lying in the policy could not be refunded unless complainant paid premium for next two years from the first year period of policy, as the said policy stood lapsed due to non- payment of premium for the next year. OP no.2 advised the complainant to fill the major revival form, vide letter dated First Appeal No.836 of 2012 3 27.01.2011, instead of releasing the amount of Rs.1,51,000/- to the complainant, with the option that if policy is not revived within minimum revival period, the policy would be terminated at the end of revival period and the surrender value, if any, would be payable at the end of the revival period or on completion of three years, whichever occurred later. The complainant approached OP no.1 with the said letter dated 27.01.2011 to consider the policy as terminated, but OP no.1 refused to do so on the ground that said condition would be applicable after 28.03.2011 and advised the complainant to revive the policy. The OP disclosed in letter dated 18.03.2011 that if above requirement was not fulfilled in 90 days from the date of last premium receipt date, the premium paid by complainant would be refunded after the deduction charges, if any. The OPs have no right to retain the amount of Rs.1,51,000/- paid by the complainant to OP. The complainant has, thus, prayed that OPs be directed to refund the amount of Rs.1,51,000/- alongwith interest @ 12% per annum from the date of its deposit till actual payment, besides costs of litigation Rs.7500/- and compensation of Rs.25,000/- for mental harassment.
3. Upon notice, OPs no.1 and 2 filed joint written reply and contested the complaint of the complainant vehemently. It was averred in the written reply raising preliminary objections that complex questions of facts and law were involved in this case, which cannot be examined in summary proceedings by the Consumer Forum. The representative of the Insurance Company only plays the role of agent and the policy holder ratifies all the entries in the First Appeal No.836 of 2012 4 proposal form by signing on the same. The complainant duly received the policy documents and he has not exercised the free look period option to opt out of the policy. The complaint is alleged to be barred by time, as the policy in question was issued to complainant on 31.03.2008 and complainant filed the complaint on 18.08.2011. The complaint was also contested even on merits by the answering OPs. This fact was admitted that complainant deposited Rs.1,51,000/- as first premium of the policy, but it was denied that it was represented to complainant that the payment of premium in the above said policy was single for 10 years. Any allurement unduly exercised upon complainant by OP was vehemently denied. It was stressed that complainant received the terms and conditions of the policy and failed to exercise the free look period of 15 days to cancel the policy and hence he is bound by the terms and conditions of the policy. As goodwill gesture, the OP tried to accept the request of complainant for revival of the policy even beyond the termination date, but revival of the policy was declined by the OP on account of change of statement of complainant regarding his health condition. The complainant requested for fund switch through application dated 29.04.2008. The OPs sent confirmation for fund switch through letter dated 30.04.2008. It was further reiterated that complainant was fully aware of the terms and conditions of the policy. The OPs pleaded that the policy stood lapsed due to non-payment of premium by the complainant and prayed for the dismissal of the complaint.
4. The complainant tendered in evidence his affidavit Ex.CA/1 alongwith documents Ex.C-1 to Ex.C-3 and closed the First Appeal No.836 of 2012 5 evidence. As against it, the OPs tendered in evidence the affidavit Ex.RW1/A alongwith documents Ex.R-1 to Ex.R-6 and closed the evidence. On conclusion of evidence and arguments, the District Forum accepted the complaint of the complainant, as referred to above. Dissatisfied with the above order of the District Forum, the OPs, now appellants have directed this appeal against the same.
5. We have heard the learned counsel for the parties at considerable length and have also examined the record of the case. The District Forum relied upon IRDA notification dated 01.07.2010 and thereupon passed the order directing the OPs to settle the claim, as per the guidelines contained in it. The fact that complainant deposited the first premium of Rs.1,51,000/- with the OPs is an admitted fact in this case. This fact is disputed by complainant as to whether it was single payment premium plan or regular payment plan. The complainant alleged it to be single premium plan as represented to him by the representative of the OPs. The affidavit of complainant Ex.CA/1 is on the record. Ex.C-1 is the copy of letter dated 27.01.2011 from OP to complainant to the effect that revival period of the policy end on 28.03.2011 and the above conditions would be applicable. The policy would be terminated at the end of revival period and surrender value, if any, would be payable at the end of the revival period or on completion of three years of policy, whichever is later. Ex.C-2 is the copy of request for major revival of policy-MRF 2. Ex.C-3 is the copy of letter dated 18.03.2011 from OP to complainant to the effect that if the requirement is not fulfilled in 90 days from the date of last premium receipt, the premium paid by the First Appeal No.836 of 2012 6 complainant would be refunded after the deduction of charges, if any and it pertained to major revival request. The complainant based his claim on two letters Ex.C-1 and Ex.C-3 and contended that he is entitled to the refund of deposited amount alongwith interest after lapse of three years period. On the other hand, affidavit of J. Jaikumar, Associate Vice President, Legal of OPs Ex.RW1/A is on the record and gist of this affidavit as stated on oath is that complainant took the policy by paying the premium of Rs.1,51,000/-. It was denied that the said policy was of single premium plan in this affidavit. It was further stated on oath that the complainant on receipt of policy documents failed to exercise the free look period option of 15 days. Ex.R-1 is the copy of proposal form filled in by the complainant for taking the policy. It is recorded in it that investment risk in the investment proposal is borne by the policy holder for unit linked plans. The payment of premium is yearly for 10 years regular premium, which is the part of the plan, as recorded in the proposal form. It is nowhere recorded in the proposal form that it would be single premium plan. Ex.R-2 is the copy of first premium payment receipt of Rs.1,51,000/-. Ex.R-3 is the copy of letter dated 31.03.2008 from OP to complainant alongwith terms and conditions of the policy for taking the Kotak Life Insurance Policy and 15 days free look period is contained in it. The terms and conditions are Contract of Insurance are to be interpreted stricto sensu by us. The next premium due date as recorded in it was 29.03.2009. It is not recorded in it that it is single premium plan policy. The complainant has not paid any premium thereafter and only paid first premium of First Appeal No.836 of 2012 7 Rs.1,51,000/- to the OPs. The District Forum relied upon The Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010 in order to settle the claim of the complainant. The counsel for the OPs, now appellants strongly submitted before us that this notification is not applicable with retrospective effect and it is applicable with prospective effect only. Section 1 of the above Regulation, 2010 is reproduced as under:
1. Short title and commencement - (1) These regulations may be called the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulation, 2010.
(2) They shall come into force on the date of their publication in the Official Gazette and shall apply to all products of linked life insurance cleared by the Authority thereafter.
It is, thus, evident that the above Regulation shall come into force on the date of their publication in the Official Gazette and shall apply to all products of linked life insurance cleared by the Authority thereafter. It was published vide Notification F.No.IRDA/Reg/2/52/ 1010, dated 1st July, 2010, in Gazette of India, Extra., Pt. III, Sec.4, dated 6th July, 2010 which came into force on 06.07.2010. The policy in question was taken by the complainant on 20.03.2008 before the enforcement of the above Regulations. The above Regulations are not applicable with retrospective effect as specifically made clear under Section 1 of the above Regulation. The District Forum, thus, wrongly applied the above regulations of 2010 in this case. Free look period option was available for complainant, First Appeal No.836 of 2012 8 as complainant received the policy documents, but complainant failed to exercise free look period option of 15 days to come out of the policy. As per clause 4 of the terms and conditions of the policy, in case the policy is not revived within the prescribed period, the same shall stand terminated and the surrender value, if any, shall be paid. As per clause 5 of terms and condition of the policy on payment of three full year's premiums, the policy shall acquire a surrender value. The surrender value will be the then fund value less a surrender charge (expressed as a % of fund value) of 3% in year 4, 2% in year 5, 1% in year 6 and 0% thereafter. The complainant paid only one single premium and has not paid any premium thereafter and hence Clause 5 of the terms and conditions of the policy is applicable in this case. The complainant is bound by the terms and conditions of the policy because documentary evidence excludes oral evidence as per settled principle of law. It is not proved on record by complainant that it was single premium plan policy. Keeping in view the policy documents, the policy stood lapsed on account of non-payment of premium for the first three years, as required by it. Consequently, the policy stood lapsed for non- payment of premium in this case.
6. In view of our above discussions, the order of the District Forum under challenge in this appeal is not sustainable and the same is ordered to be reversed in this appeal. The appeal of the appellants is accepted and by setting the order of the District Forum Ludhiana, the complaint filed by the complainant, now respondent in this appeal is ordered to be dismissed without any order as to cost. First Appeal No.836 of 2012 9
7. The appellants had deposited the amount of Rs.1500/- with this Commission at the time of filing the appeal and further deposited Rs.23,500/- in compliance with order of this Commission. Both these amounts with interest, which accrued thereupon, if any, be remitted by the registry to the appellant, which deposited it, by way of a crossed cheque/demand draft after the expiry of 45 days.
8. Arguments in this appeal were heard on 20.11.2015 and the order was reserved. Now the order be communicated to the parties. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (H.S.GURAM) MEMBER November 27, 2015.
(MM)