State Consumer Disputes Redressal Commission
Sbi Life Insurance Company Limited vs Amrit Kaur on 10 June, 2014
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
(1) First Appeal No.107 of 2012.
Date of Institution: 31.01.2012.
Date of Decision: 10.06.2014.
SBI Life Insurance Company Limited, SCO 109-110, First Floor, Sector
17-B, Chandigarh, having operation office at Central Processing Centre,
Kapas Bhavan, Plot No.3-A, Sector-10, CBD Belapur, Navi Mumbai-400
614.
.....Appellant/Opposite Party No.1.
Versus
1. Amrit Kaur W/o Sh. Labh Singh, R/o Kothi No.23-A, Street No.3/2,
Guru Nanak Colony, Fardkot, Punjab.
....Respondent/complainant
2. Pawan Kumar Verma, Clerk, State Bank of Patiala, Circular Road,
Faridkot.
3. State Bank of Patiala, Circular Road, Faridkot, through its Chief
Manager.
....Respondents/Opposite parties no.2 & 3.
Present:-
For the appellant : Sh. Rajneesh Malhotra, Advocate.
For respondent No.1: None.
For respondent No.2: Exparte.
For respondent No.3: Sh. Vikas Chatrath, Advocate.
AND
(2) First Appeal No.147 of 2012.
Date of Institution: 08.02.2012.
1. State Bank of Patiala, Circular Road, Faridkot, through its Chief
Manager.
2. Pawan Kumar Verma, Clerk, State Bank of Patiala, Circular Road,
Faridkot.
.....Appellants/Opposite Parties No.2 & 3.
Versus
First Appeal No.107 of 2012 2
1. Amrit Kaur W/o Sh. Labh Singh, R/o Kothi No.23-A, Street No.3/2,
Guru Nanak Colony, Fardkot, Punjab, Teh. & Distt. Faridkot.
....Respondent/complainant
2. SBI Life Insurance Company Limited, SCO 109-110, First Floor,
Sector 17-B, Chandigarh, having operation office at Central
Processing Centre, Kapas Bhavan, Plot No.3-A, Sector-10, CBD
Belapur, Navi Mumbai-400 614.
....Respondent/Opposite party no.1.
Present:-
For the appellants : Sh. Vikas Chatrath, Advocate.
For respondent No.1: None.
For respondent No.2: Sh. Rajneesh Malhotra, Advocate.
First Appeals against order dated
08.12.2011 passed by the District
Consumer Disputes Redressal Forum,
Faridkot.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Shri Jasbir Singh Gill, Member.
.............................................. J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
This order will dispose of two appeals i.e. F.A. No.107 of 2012 (SBI Life Insurance Company Limited Vs. Amrit Kaur & Ors.) and F.A. No.147 of 2012 (State Bank of Patiala & Anr. Vs. Amrit Kaur & Anr.), since both the appeals have arisen out of the same impugned order dated 08.12.2011 passed by the District Consumer Disputes Redressal Forum, Faridkot (in short, "the District Forum") and can be conveniently decided by means of this common First Appeal No.107 of 2012 3 order. The facts are taken from F.A. no.107 of 2012 and the parties would be referred by their status in this appeal.
2. The brief facts are that, Smt. Amrit Kaur, respondent no.1 no.1/complainant filed a complaint u/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the opposite parties, on the allegations that opposite parties no.2 & 3 are the agents of opposite party no.1 and at the behest of opposite parties no.2 & 3, who are agents of opposite party no.1, a proposal was entered for the SBI Plus II Pension Policy and hence the complainant is consumer of the opposite parties under the Act. The complainant opened her bank account in State Bank of Patiala, Faridkot vide Account No.55100524535. The complainant took the pension policy No.28010749209 Unit + 2- Pension on 08.11.2007 by depositing the instalment of premium of Rs.90,000/-. Even the husband of the complainant is an illiterate person and taking undue benefit of this fact that the complainant and her husband are laymen, the policy was got applied after getting the amount withdrawn from the bank account of the complainant to the tune of Rs.90,000/-. It was represented by the opposite parties that the policy would mature in three years and the complainant would be awarded interest @ 12% or more than one and a half of the amount being so deposited. The amount was to be deposited only once as premium and thereafter, it was the option of the complainant either to deposit it or not. After the lapse of three years, the complainant was asked by opposite parties no.2 & 3 to apply for return of the deposited amount of the above policy. Keeping the complainant in dark for three years, a sum of Rs.68,588/- was got deposited by the opposite parties in her said account on 15.04.2011. The complainant came to know subsequently that the alleged policy was actually a market related policy. At the time of getting cover note/application filled from the complainant, it First Appeal No.107 of 2012 4 was disclosed to her that 12% profit or one and a half more amount of Rs.90,000/- would be released to her to the extent of Rs.1.35 lacs after maturity of three years. The complainant has been paid less amount of Rs.25,412/- even out of her premiums amount of Rs.90,000/-. Neither any interest @ 12% p.a. on the amount of Rs.90,000/- nor one and a half amount of the premium amount to the tune of Rs.1.35 lacs was returned to the complainant. The complainant served a legal notice on 10.05.2011 on the opposite parties, whereby opposite parties issued the letter to the effect that the policy number has not been mentioned therein. The opposite parties are, thus, deficient in providing service to the complainant and are, thus, guilty of unfair trade practice to the complainant. The complainant has accordingly prayed that the opposite parties be directed to pay her Rs.25,412/- being the less amount of original premium of Rs.90,000/- along with interest @ 12% p.a. over the amount of premium of Rs.90,000/- or to pay Rs.1.35 lacs at the time of maturity of the policy after three years, besides compensation of Rs.20,000/- and costs of litigation.
3. Notice of this complaint was issued to the opposite parties by the District Forum after admitting the complaint. Opposite party no.1-SBI Life Insurance Co. filed its separate written reply, admitting that it grants insurance coverage to individuals through Individual insurances having some commonality among them. It was averred in preliminary objections that opposite party no.1 had already discharged the contractual obligation under the policy in this case and hence, the complaint is without any substance. The opposite party no.1 has issued the policy in good faith and the complainant has not raised any issue pertaining to terms and conditions of the policy and rather applied for surrender of the policy. There is no question of any deficiency in service on the part of opposite First Appeal No.107 of 2012 5 party no.1. The opposite party no.1 has received the proposal form in compliance with all the requirements along with premium amount. There is, thus, no dispute of terms and conditions of the policy. The opposite party no.1 never forced the complainant to go in for insurance. Opposite party no.1 is not privy to the transaction between opposite parties no.2 & 3 and the complainant. On merits, it was pleaded that the proposer is expected to ascertain the terms and conditions of the policy before signing the proposal form. There is even a provision for cancellation of policy under 'Free Look Period" clause, if the policy holder does not agree with the terms and conditions of the policy. After the elapse of three years, the complainant applied for surrender of policy on 11.04.2011 and accordingly, surrender value of Rs.68,588/- was paid through direct credit in the account of the complainant at State Bank of Patiala. The policy would acquire surrender value provided that at least one entire policy years' premium has been paid. The contract of insurance has to incorporate the terms and conditions of the policy document. Opposite party no.1 denied the contents of the complaint. The complainant, who is a nurse, signed the proposal form after duly understanding its terms and conditions. Opposite party no.1 vehemently denied any deficiency in service on its part. Opposite party no.1 sent reply to the legal notice to the complainant, requesting the policy details. Thereafter, opposite party no.1 replied in detail to the legal notice of the complainant on 25.06.2011. Opposite party no.1 prayed for dismissal of the complaint.
4. Opposite parties no.2 & 3 filed their separate written reply, contesting the complaint of the complainant stoutly. It was averred in the preliminary objections that complicated questions of law and facts are involved in this case which require detailed evidence to examine them. The complainant entered the proposal for SBI Unit Plus II Pension Policy First Appeal No.107 of 2012 6 willingly. Rest of the averments regarding undue benefit of laymanship of the complainant were denied. It was further denied that the maturity amount of the above policy was Rs.1.35 lacs. It was admitted that the complainant deposited the premium of Rs.90,000/- by withdrawing it from her account towards this policy premium. It was further averred that opposite party no.1 accepted the premium paid by the proposer and the policy and in return thereof, it issued the policy to the purchaser. There is no deficiency in service or unfair trade practice on the part of opposite parties no.2 & 3 and they prayed for dismissal of the complaint.
5. In support of her contentions, the complainant tendered in evidence her own affidavit Ex.C-1 along with proposal deposit receipt Ex.C-2, unpaid premium intimation Ex.C-3, legal notice Ex.C-4, Rejoinder/additional notice Ex.C-5, reply to legal notice Ex.C-6, postal receipts Ex.C-7 to Ex.C-10, Acknowledgment Receipts Ex.C-11 & Ex.C12 and additional affidavit of complainant Ex.C-13. To rebut it, opposite party no.1 tendered affidavit of V. Srinivas, Legal Head in SBI Life Insurance Co. as Ex.R-1, insurance policy documents Ex.R-2 & Ex.R-3. Ex.R-4 is the surrender application form signed by the complainant, Ex.R-5 is the submission of surrender value to complainant, Ex.R-6 is the legal notice notice, Ex.R-7 is the reply to legal notice, Ex.R-8 is the order of the Hon'ble National Commission in Revision Petition No.2884 of 2010 decided on 10.12.2010, Ex.R-9 is the CDJ Law Journal, Ex.R-10 is the judgment of Hon'ble Supreme Court reported as AIR 1996 SC-1644, Ex.R-11 is the order of the Hon'ble National Commission in Revision Petition No.211 of 2009 decided on 02.02.2010, Ex.R-12 is another judgment of the Hon'ble National Commission reported as 1986-95 Consumer 138 (NS) "LIC of India Vs M. Gowri & Ors.", Ex.R-13 is the affidavit of J.K. Dogra, Manager, State Bank of Patiala, Ex.R-14 is the First Appeal No.107 of 2012 7 affidavit of Pawan Kumar, SWO, of State Bank of Patiala. On conclusion of evidence and arguments, the District Forum partly accepted the complaint of the complainant and directed the opposite parties to pay the amount of Rs.21,412/- being less of amount of Rs.90,000/- along with interest @ 12% p.a. from the date of its payment till realization of amount and to pay Rs.5,000/- as compensation. It was further held that the liability of the opposite parties is joint and several to comply with the order. Aggrieved by the impugned order, the appellant/opposite party no.1 has preferred the appeal i.e. F.A. No.107 of 2012 (SBI Life Insurance Company Limited Vs. Amrit Kaur & Ors.), whereas opposite parties no.2 & 3 filed separate appeal i.e. F.A. No.147 of 2012 (State Bank of Patiala & Anr. Vs. Amrit Kaur & Anr.).
6. We have heard learned counsel for the parties and have examined the record of the case. The sum and substance of the allegations of the complainant is that she is account holder with opposite party no.1 State Bank of Patiala at Faridkot vide Account No.55100524535. On the persuasion of opposite parties no.2 & 3, the SBI Unit Plus II Pension Policy was taken by the complainant on 08.11.2007. She paid the instalment of premium of Rs.90,000/- towards it. Opposite parties no.2 & 3 took undue advantage of lack of due knowledge of the complainant and her husband. It was represented to the complainant that she would get 12% interest on the premium amount of Rs.90,000/- or more than one and a half of the amount being so deposited by her. On the basis of this persuasion, she took the policy. She has also filed her affidavit Ex.C-1, corroborating the allegations of the complaint in verbatim. It is further alleged in the complaint as well as in her affidavit that after the lapse of three years, she was asked by opposite parties no.2 & 3 to apply for return of the above amount. Instead of returning the premium amount First Appeal No.107 of 2012 8 of Rs.90,000/- with interest @ 12% p.a.; the amount of Rs.68,855/- was deposited in her account with opposite party no.3. She discovered at that time, when she received the above amount of Rs.68,588/- that it was, in fact, a market related policy, but at the time of getting the cover note/application form filled from the complainant, it was disclosed that at least 12% profit or one and a half more amount thereof to the tune of Rs. 1.35 lacs would be paid to her. Even the less amount of Rs.25,412/- out of the premium amount of Rs.90,000/- has been paid to her without any valid reason. Her affidavit Ex.C-1 is in support of the allegations that embodied the complaint in toto. The proposal form is Ex.C-2 dated 24.10.2007 on the record, vide which premium of Rs.90,000/- was received from the complainant by way of draft No.746208 dated 05.10.2007. Ex.C-3 is the intimation to the effect that annual premium due on 08.11.2008 was not received within the grace period. Ex.C-4 is notice dated 1.05.2011 by the complainant to the opposite parties about it. Ex.C- 6 is the reply of notice by opposite party no.1 and Ex.C-7 to Ex.9 are the postal receipts. Ex.C-5 is the notice dated 31.05.2011 and Ex.C-10 is the postal receipt. Ex.C-11 and Ex.C-12 are the acknowledgments. Ex.C-13 is the supplementary affidavit of the complainant on the record.
7. To rebut this evidence, opposite party no.1 relied upon affidavit of V. Srinivas, Legal Head to the effect that it has discharged the contractual obligation under policy no.28010149209 as per terms and conditions of the policy and hence, cause of action of the complainant has to come an end to file the complaint. Opposite party no.1 issued policy in good faith on the basis of proposal form of the complainant and the complainant has not raised any issue pertaining to terms and conditions of the policy. She rather applied for surrender of policy. The complainant is bound by the terms and conditions of the insurance policy and cannot First Appeal No.107 of 2012 9 back out them. She was fully aware of the terms and conditions of the policy, when she filled the proposal form, taking this policy. It was admitted that the premium amount of Rs.90,000/- was received from the complainant through State Bank of Patiala, opposite party no.3, which amount was actually withdrawn from her account. It was further deposed that it was only a market related policy and calculation of surrender amount thereof came to Rs.68,588-31p. It was denied in the affidavit that the complainant was not aware of the terms and conditions of the policy. Ex.R-2 and Ex.R-3 are the copies of the policy with terms and conditions. Ex.R-4 is the surrender application form of the complainant dated 05.04.2011. Ex.R-5 is the intimation to the complainant regarding arriving at surrender charges. Ex.R-6 is rejoinder to notice. Ex.R-7 is the reply to legal notice. Ex.R-8 to Ex.R-12 are the authorities of the Hon'ble National Commission; which have been exhibited, it was not fair to exhibit them and rather only to cite the law point. So whatever the case may be. Ex.R13 is the affidavit of J.K. Dogra on behalf of opposite party no.3 State Bank of Patiala, denying averments of the complainant that she was not intimated the terms and conditions of the policy. Ex.R-14 is the affidavit of Pawan Kumar, SWO of State Bank of Patiala, in denial of the averments of the complainant to the effect that the terms and conditions of the insurance policy were not made clear to the complainant at the time of filling the proposal form.
8. Opposite party no.1, now appellant, mainly relied upon Ex.R- 8 the judgment of the Hon'ble National Commission i.e. Revision Petition No.2884 of 2010 "SBI Life Ins. Co. Ltd. Vs. Smt. Asha Dixit", decided on 10.12.2010. This authority is to the effect that since the insurance premium was debited by State Bank of Patiala for providing insurance cover to the insured and the liability of the bank was confirmed. This First Appeal No.107 of 2012 10 authority arose from different facts and would not be attracted in this case. Ex.R-9 is the judgment of the Hon'ble National Commission in Revision Petition No.469 of 2006 "United India Ins. Co. Ltd. Vs Subhash Chandra", decided on 19.05.2010 to the effect that the complainant being literate person, it would be expected from him to ascertain the terms and conditions of the policy before signing the proposal form, more so, when it was a case of obtaining Mediclaim policy. Each of the authority arises on its own facts and circumstances. The facts and circumstances of the cited authorities are not par-materia with the facts of the case in hand. Similarly, reliance has been placed by the opposite parties on the judgment of the Apex Court in "General Assurance Society Limited Vs Chandumull Jain & Anr.", AIR 1996 SC 1644 Ex.R-10 to the effect that cancellation of policy was not illegal, as cancelation is reasonably possible before liability under the policy has commenced or has become inevitable. This authority is again of no help to the opposite parties due to different facts.
9. The District Forum has arrived at this conclusion that opposite parties no.2 & 3 are the agents of opposite party no.1 and due to increase of competitive market practices by the banks which generally induce the customers to purchase such financial policies on behalf of the insurer; they allure the customers by their misleading information system. Similarly, the District Forum further observed that the insurance policy was not supplied to the complainant by the opposite parties and there is no document like dispatch number, receipt number on the record with regard to supply of this insurance policy, containing full terms and conditions. The complainant could have opted for the cancellation of the policy immediately, had she been supplied any such policy by the opposite parties in this case. We agree with the findings of the District Forum that there is no record or other evidence to this effect as to when First Appeal No.107 of 2012 11 the insurance policy was dispatched to the complainant by opposite party no.1. There is no record on the file as to who received this policy document on behalf of the complainant. There is no such record to this effect that when this fact was in the knowledge of opposite party no.1 and it could have proved it by leading evidence to this effect. The complainant has categorically deposed and also sworn affidavit that she never received the insurance policy document, containing full terms and conditions. She has also sworn supplementary affidavit Ex.R-13 reiterating her stand to this effect on the record. The complainant could have taken the benefit of free look period provided in the terms and conditions of the policy vide clause no.20 thereof, had she been supplied this policy containing terms and conditions by opposite party no.1. Since no such insurance policy is proved to have been supplied to the complainant, hence, there is no question of opting for free look period to go in for cancellation of the policy by the complainant in this case. We are not unaware of this fact that the banks are persuading the customers to go in for insurance policy, acting as agents of the insurer as a result of aggressive market practices adopted especially by the banks. They induce the customers to purchase such policies. The complainant has pleaded and sworn in the affidavit that no such insurance policy was ever supplied to her and due to this reason, she could not get the benefit of free look period clause for cancellation of the policy within time. Opposite party no.1 is expected of leading evidence to this effect as to on which date the insurance policy was supplied to the complainant by virtue of which dispatch and receipt number and who received it for the complainant. There is no such document to this effect on the record. When we arrive at this finding of fact that the complainant had not received the insurance policy with full terms and conditions, therefore, First Appeal No.107 of 2012 12 there is no question of taking the benefit of free look period clause thereof by the complainant.
10. The next submission of the opposite parties is that the complainant applied for surrender after 3 years and she was supposed to be provided with the policy. This contention carries no force as the complainant could have got cancelled the policy after a lapse of 3 years when she was interested in the refund of her amount.
11. Hon'ble National Commission has examined this point recently and held in "The Oriental Insurance Co. Ltd. Vs Satpal Singh & Ors.", 2014 (2) CLT-305 that the insured is not bound by the terms and conditions of the insurance policy unless it is proved on the record that the policy has been supplied to the insured by the insurance company. The onus to prove that the terms and conditions of the policy were supplied to the insured lies upon the insurance company. The contention of the insurance company was repelled that the cover note duly recorded them. It was observed that every insured is not computer savy to ascertain the terms and conditions thereof. This authority of the Hon'ble National Commission is directly applicable to the facts and circumstances of the case. On the basis of law laid down by the Hon'ble National Commission as well as facts and circumstances of the case, we have reached this conclusion that opposite party no.1 has failed to prove that the terms and conditions of the policy were ever supplied to the complainant. Reliance of the opposite parties, now appellants, on law laid down in "Unit Trust of India Vs. Iqbal Chand Arora", IV (2006) CPJ-414 (NC) is to the effect that net assesses value is bound to fluctuate after one year and NAV went below face value of Rs.10 lacs and he got back Rs.1,83,000/-. The claim for refund of balance amount is not acceptable. The cited authority is not applicable due to different factual background involved in this case. First Appeal No.107 of 2012 13 Similarly, reliance was placed by the opposite party on "Life Insurance Corporation of India Vs. Anil P. TadkaSkar", I (1996) CPJ-159 (NC). This authority is based on the facts that the service under the policy can arise only after occurrence of contingencies i.e. maturity or the policy of death of the insured. Each of the authority arises of its own facts.
12. The next point is as to whether the District Forum is justified in jointly and severally holding the liability of the opposite parties. We find that opposite parties no.2 & 3 acted as agents of opposite party no.1 and prevailed upon the complainant to go in for insurance policy. Opposite party no.1 is actually the beneficiary of this insurance policy and here its liability has to be fixed jointly and severally with opposite parties no.2 & 3. The amount was withdrawn from the account of the complainant by opposite parties no.2 & 3 to go in for insurance policy. The liability of opposite parties no.1 to 3 has to be joint and several in our view. The District Forum has, thus, correctly recorded the findings holding the opposite parties jointly and severally liable to the complainant.
13. In view of above detailed discussion, we have come to the conclusion that this is a case of deficiency in service and unfair trade practice on the part of the opposite parties no.1 to 3. We affirm the order passed by the District Forum under appeal and dismiss both the appeals i.e. F.A. No.107 of 2012 (SBI Life Insurance Company Limited Vs. Amrit Kaur & Ors.) and F.A. No.147 of 2012 (State Bank of Patiala & Anr. Vs. Amrit Kaur & Anr.).
14. The appellant in F.A. No.107 of 2012 had deposited the amount of Rs.14,230/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the respondent no.1/complainant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the First Appeal No.107 of 2012 14 learned District Forum and to the appellants. Remaining amount as per order of the District Forum shall be paid by the appellant and opposite parties no.2 & 3 to the complainant within 45 days of receipt of copy of the order.
15. The appellants in F.A. No.147 of 2012 had deposited the amount of Rs.20,000/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the respondent no.1/complainant way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants. Remaining balance amount, if any, as per order of the District Forum shall be paid by the opposite parties to the complainant within 45 days of receipt of copy of the order. If any excess amount, as per order of the District Forum, is paid to complainant, then the complainant shall return the same to the opposite parties.
16. Arguments in this appeal were heard on 03.06.2014 and the order was reserved. Now the order be communicated to the parties. The appeal could not be decided within the stipulated period due to heavy pendency of court cases.
17. Copy of order be placed in F.A. No.147 of 2012 (State Bank of Patiala & Anr. Vs. Amrit Kaur & Anr.).
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (JASBIR SINGH GILL) MEMBER June 10, 2014.
(Gurmeet S) Referred to Reporter
(J. S. KLAR)
PRESIDING JUDICIAL MEMBER