State Consumer Disputes Redressal Commission
1. Max New York Insurance Company ... vs 1. Ms. Meenu Kalia on 13 November, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 424 of 2013 Date of Institution : 01.10.2013 Date of Decision 13/11/2013 1. Max New York Insurance Company Limited, having its Branch Office at S.C.O. No. 36-38, Sector 8-C, Chandigarh, through its Branch Manager. 2. Max New York Insurance Company Limited, having its Regd. Office at Max House, 1, Dr. Jha Marg, Okhla, New Delhi 110020, through its Branch Manager. 3. Max New York Insurance Company Limited, having its Corporate Office at 11th Floor, DLF Square, Jacaranda Marg, DLF City, Phase-II, Gurgaon 122002, through its Branch Manager. Appellants/Opposite Parties No.1 to, 3 V e r s u s 1. Ms. Meenu Kalia d/o Sh. B.M. Kalia, R/o H.No. 191/2, Sector 45-A, Chandigarh. 2. Sh. B.M. Kalia, R/o H.No. 191/2, Sector 45-A, Chandigarh. ....Respondents No.1 and 2/complainants 3. AXIS Bank Limited, SCO No. 916, Pocket No. 6, Chandigarh Shimla Road, Manimajra, Chandigarh, through its Branch Manager. (Service dispensed with vide order dated 03.10.2013) ....Respondent No.3/Opposite Party No.4 Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER.
Argued by: Ms. Jaimini Tiwari, Advocate proxy for Sh. Ranjeesh Malhotra, Advocate for the appellants.
Sh. Varinder Arora, Advocate for respondents No.1 and 2.
Service of respondent No.3 dispensed with, vide order dated 03.10.2013.
PER JUSTICE SHAM SUNDER (RETD.), PRESIDENT This appeal is directed against the order dated 08.07.2013 rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint, filed by the complainants (now respondents no.1 and 2) and directed Opposite Parties No.1 to 3 (now appellants), as under:-
The policy has obviously lapsed due to non-payment of the 2nd premium. The Complainants have averred that E.C.S has been stopped and they do not wish to continue with the policy. In the given situation, payment be made to the Complainants by the Opposite Parties No.1 to 3 in terms of the above guidelines, which to our mind should be Rs.99,000/- minus Rs.6000 = Rs.93,000/-. The complaint is allowed accordingly.
Opposite Parties No.1 to 3 shall also pay Rs.5,000/- to the Complainants as costs of litigation.
This order be complied with by the Opposite Parties No.1 to 3 within 45 days from the date of receipt of its certified copy, failing which the Opposite Parties No.1 to 3 would be liable to pay additional interest @ 9% p.a. on the decreed amount from the date of this order, till actual payment, besides the costs of litigation.
2. However, the complaint qua Opposite Party No.4 (now respondent no.3), was dismissed, by the District Forum, on the ground, that there was no deficiency, in rendering service, on its part.
3. The facts, in brief, are that, complainant No.1 alongwith her father-complainant No.2, were approached by an employee of Opposite Party No.4, with the proposal of an Insurance Policy, which attracted tax benefits. Initially, complainant No.2 refused to take the Policy, but he was persuaded, by the said employee of Opposite Party No.4, as a result whereof, the same (Policy) was taken, in the name of complainant No.1, his unmarried daughter. It was stated that the complainants were made to understand that the premium towards the said Policy was to be paid only once. Premium of Rs.99,000/- was paid by the complainants. It was further stated that, when the complainants received the Policy documents, after one month, they were shocked to realize that the Policy term was 20 years, and the premium was required to be paid, annually. This fact was immediately reported to the Branch Manager of Opposite Parties No.1 to 3. It was further stated that ECS payment, in respect of the Policy, in question, for the following year i.e. December 2011 was stopped vide email Annexure C-2. In reply to the said email, the Opposite Parties confirmed regarding surrender of Policy, and issued letter dated 24.01.2012. Thereafter, despite a lot of correspondence, between the parties, the amount of Rs.99,000/-, paid as premium, towards the said Policy, was not refunded. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainants, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to refund the amount of Rs.99,000/-, referred to above; pay compensation, to the tune of Rs.50,000/-, for mental agony, physical harassment and deficiency, in rendering service; and interest @18% P.A., on the aforesaid amounts, from the date of issuance of the Policy, till realization.
4. Opposite Parties No.1 to 3, in their joint written version, stated that the Policy namely Life Gain Plus 20 Participating Plan, for a term of 20 years, for the sum insured to the tune of Rs.5,90,088/-, with annual premium, to the tune of Rs.97,990.01Ps., which commenced on 30.12.2010, was issued, in favour of complainant no.1, at the instance of complainant no.2, on the basis of proposal form, duly filled in, and submitted by the complainants. It was denied that wrong Policy, was issued, in favour of complainant no.1. It was stated that letter dated 16.01.2012 was received from complainant no.1, asking for discontinuation of the Policy, in question. It was further stated that it was a traditional Policy, and not a unit linked one. It was further stated that the Policy documents, alongwith welcome kit, were sent to the complainants, wherein, it was clearly mentioned that, in case, complainant no.1 was not satisfied with the terms and conditions of the Policy, she could return the same, during the free-look-period of 15 days, from the date of receipt of the same, and ask for cancellation thereof, but she did not do so, during the said period. It was further stated that since complainant no.1 had paid only one premium, in respect of the Policy, in question, the same did not acquire any surrender value/paid up value. It was further stated that the Policy could have acquired surrender value/paid up value, only if complainant no.1, had paid three consecutive annual premiums. It was further stated that, as such, on the basis of letter dated 16.01.2012, the same (Policy) could not be cancelled. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.1 to 3, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
5. Opposite Party No.4, in its written reply, stated that complainant no.1 had approached it, for purchase of an Insurance Policy, which was offered by Opposite Parties No.1 to 3. It was further stated that Opposite Party No.4 had acted as an Agent, between complainant No.1 and Opposite Parties No.1 to 3, and its role was limited to that extent only. It was denied, that an assurance was given to the complainants, regarding the benefits of Insurance Policy. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Party No.4, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.
6. The Parties led evidence, in support of their case.
7. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order.
8. Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties No.1 to 3.
9. Service of respondent no.3, which was Opposite Party No.4, in the District Forum, was dispensed with, vide order dated 03.10.2013, as the complaint against it was dismissed by it (District Forum).
10. We have heard the Counsel for the appellants, respondents no.1 and 2, and, have gone through the evidence, and record of the case, carefully.
11. The Counsel for the appellants/Opposite Parties No.1 to 3, submitted that it was a traditional Policy, named as Life Gain Plus 20 Participating Plan, which was issued, in favour of complainant no.1. She further submitted that, the date of delivery of the Policy documents was 29.01.2011. She further submitted that, alongwith the Policy documents, welcome letter was also sent to complainant no.1, wherein, it was, in clear-cut terms, stated that, in case, she was not satisfied with the terms and conditions of the Policy, she could return the same, during the free-look-period of 15 days, from the date of receipt of the same, and ask for cancellation thereof, but she did not do so, during the said period. She further submitted that the request of complainant no.1, was received after about one year, for cancellation/discontinuation of the Policy. She further submitted that, as per the terms and conditions of the Policy, no cancellation of the same could be made, after the expiry of free-look period. She further submitted that since complainant no.1 had paid only one premium, in respect of the Policy, in question, the same did not acquire any surrender value/paid up value. She further submitted that the Policy could have acquired surrender value/paid up value, only if complainant No.1, had paid three consecutive annual premiums. She further submitted that since it was a traditional Policy, the District Forum was wrong, in placing reliance on the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies), Regulations 2010 (hereinafter to be referred as the IRDA Regulations 2010 only), which came into force on 01.07.2010. She further submitted that the District Forum passed an illegal order, asking for the refund of premium paid to the tune of Rs.99,000/- minus (-) deductions of Rs.6,000/-, to the complainants, by relying upon the aforesaid Regulations. She further submitted that the order of the District Forum, being illegal, is liable to be set aside.
12. On the other hand, the Counsel for respondents no.1 and 2, submitted that the complainants were misguided by the Agent of Opposite Parties No.1 to 3, and mis-sold the Policy, in question, in favour of complainant no.1. He further submitted that the moment, the said fact came to the notice of the complainants, they applied for cancellation/ discontinuation of the Policy. He further submitted that it was not a traditional Policy, but unit linked Policy. He further submitted that the District Forum was right, in relying upon the IRDA Regulations 2010, and granting relief to the complainants, referred to above. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.
13. After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the appellants, respondents no.1 and 2, and the evidence, on record, we are of the considered opinion, that the appeal is liable to be accepted, for the reasons, to be recorded hereinafter. It is evident, from Annexure C-1, that the Policy, in question, was issued, in favour of complainant no.1, at the instance of complainant no.2, on the basis of the proposal form, filled in and duly signed. This was a Policy namely Life Gain Plus 20 Participating Plan, for a term of 20 years, for the sum insured to the tune of Rs.5,90,088/-, with annual premium, to the tune of Rs.97,990.01Ps., commencing w.e.f. 30.12.2010. This Policy was dispatched on 21.01.2011, as is evident from the welcome letter, attached therewith, and received by the complainants, on 29.01.2011. In the welcome letter, it was, in clear-cut terms, stated that, in case, complainant No.1 was not satisfied with the terms and conditions of the Policy, she could return the same, during the free-look-period of 15 days, from the date of receipt of the same, and ask for cancellation thereof. Admittedly, no request, for cancellation of the Policy, during the free-look-period of 15 days, from the date of receipt of the same, was made by complainant no.1. Under these circumstances, Opposite Parties No.1 to 3 were right, in not cancelling the Policy, as the request had not been made, during the free-look-period of 15 days, from the date of receipt of the same. There was, therefore, no deficiency, in rendering service, on the part of the appellants/Opposite Parties No.1 to 3, in that regard.
14. The next question, that falls for consideration, is, as to whether, it was a traditional Policy, or unit linked Policy. As stated above, it was a Life Gain Plus 20 Participating Plan. It was a traditional Policy, and not unit linked one. The District Forum failed to take into consideration, that since it was a not a unit linked Policy, but a traditional one, and, as such, the IRDA Regulations 2010, were not applicable to the same. The IRDA Regulations 2010, which came into force on 01.07.2010, were only applicable to the unit linked Policies. Reliance placed by the District Forum, on the aforesaid Regulations-2010, was completely and wholly misconceived. Had the District Forum, gone through the contents of the Policy, it would have certainly understood the nature thereof, and had not fallen into a grave error, in applying the provisions of the IRDA Regulations 2010, notified on 01.07.2010, to the present case. The District Forum, was, thus, wrong, in coming to the conclusion, that the complainants were entitled to the refund of premium paid to the tune of Rs.99,000/- minus (-) deductions of Rs.6,000/-, on the basis of Regulation 7 of the IRDA Regulations 2010. The findings of the District Forum, in this regard, being perverse, are reversed.
15. The next question, that falls for consideration, is, as to whether, the Policy, in question, had acquired any surrender value or not. Since there was a concluded contract, between the parties, they were bound by the terms and conditions thereof. It is evident, from page 62 of the Policy document Annexure R-4 (colly.)/C-6, that the Policy was to acquire cash/surrender value, if it had been in force, for atleast three years, and provided all the premiums that had fallen due, had been received. The guaranteed cash/surrender value, was to be 30% of the premiums, excluding the first premium. Under the heading Surrender Value, on this page, it was stated that after the Policy had acquired cash/surrender value, the insured may opt for surrender of the same (Policy). The surrender value payable was subject to the condition that the Policy was in full force, and there were no statutory or other restrictions to the contrary. From this Clause, it is evident, that the Policy could acquire cash/surrender value, only if it (Policy) had remained in full force for a period of three years, and the due premiums for the same (three years) had been paid. In the instant case, admittedly, only one premium, to the tune of Rs.99,000/-, was paid, in respect of the Policy, in question. Thereafter, no further premium was paid by complainant no.1, in respect of the Policy, in question. The Policy, therefore, did not remain, in force, for atleast three years. Under these circumstances, it did not acquire any cash/surrender value. Under these circumstances, the complainants were not entitled to any amount of cash/surrender value, as per the terms and conditions of the Policy.
16. Since, it was a traditional Policy and premium for second year, had not been paid, it had not acquired any cash/surrender value. Regulation 7 of the IRDA Regulations 2010, were not applicable to the Policy, in question. Under these circumstances, Opposite Parties No.1 to 3, were neither deficient, in rendering service, nor indulged into unfair trade practice. The findings of the District Forum, to the contrary, being perverse, are reversed.
17. No other point, was urged, by the Counsel for the appellants, and respondents No.1 and 2.
18. In view of the above discussion, it is held that the order passed by the District Forum, being not based on the correct appreciation of evidence, and law, on the point, suffers from illegality and perversity, warranting the interference of this Commission.
19. For the reasons recorded above, the appeal is accepted, with no order as to costs. The order of the District Forum is set aside.
20. Certified copies of this order, be sent to the parties, free of charge.
21. The file be consigned to Record Room, after completion Pronounced.
November 13, 2013.
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[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Rg STATE COMMISSION (First Appeal No.424 of 2013) Argued by: Ms. Jaimini Tiwari, Advocate proxy for Sh. Ranjeesh Malhotra, Advocate for the applicants/appellants.
Sh. Varinder Arora, Advocate for respondents No.1 and 2.
Service of respondent No.3 dispensed with, vide order dated 03.10.2013.
Dated the 13th day of November 2013 ORDER Alongwith the appeal, an application for condonation of delay of 51 days, in filing the same (appeal) has been moved, by the applicants/appellants, stating therein, that on receipt of a copy of the order impugned, by the Counsel for the applicants/appellants, on 12.07.2013, the same was sent to their Local Office, which further sent the same to the Regional Office, at Gurgaon, for approval of the Competent Authority, to file an appeal. It was further stated that after going through the record of the case, decision for filing an appeal, was taken, by the Competent Authority, and the Counsel was engaged for doing the needful. It was further stated that, in these circumstances, the delay of 51 days, in filing the appeal occurred. It was further stated that the delay, in filing the appeal, was neither intentional, nor willful. Accordingly, the prayer, referred to above, was made.
2. Notice of this application, was given to respondents No.1 and 2, who filed reply, stating therein, that the application deserved to be dismissed, as no sufficient cause, was constituted, for condonation of delay.
3. No doubt, there is delay of 51 days, in filing the appeal. The question arises, as to whether, the delay was intentional, or on account of the reasons, beyond the control of the applicants/appellants. Before discussing this question, let us have a look at law, laid down by the Hon`ble Supreme Court and the Delhi High Court, regarding the condonation of delay. In Lanka Venkateswarlu (D) By Lrs. vs State Of A.P. and Ors., A.I.R. 2011 S.C. 1199: (2011) 4 S.C.C. 190, the Apex Court held as under:-
(i). The Courts generally adopt a liberal approach in considering the application for condonation of delay on the ground of sufficient cause under Section 5 of the Limitation Act.
(ii). Rules of limitation are not meant to destroy the rights of parties. They are meant to see that the parties do not resort to dilatory tactics, but seek their remedy promptly.
(iii). Once a valuable right has accrued in favour of one party as a result of the failure of the other party to explain the delay by showing sufficient cause and its own conduct, it will be unreasonable to take away that.
(iv). Whilst considering applications for condonation of delay under Section 5 of the Limitation Act, the Courts do not enjoy unlimited and unbridled discretionary powers. All discretionary powers, especially judicial powers, have to be exercised within reasonable bounds, known to the law.
4. In N.Balakrishnan v. M.Krishnamurthy (1998) 7 Supreme Court Cases 123, there was a delay of 883 days, in filing application, for setting aside exparte decree, for which application for condonation of delay was filed, the Apex Court held as under:-
It is axiomatic that condonation of delay is a matter of discretion of the court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first court refuses to condone the delay. In such cases, the superior court would be free to consider the cause shown for the delay afresh and it is open to such superior court to come to its own finding even untrammeled by the conclusion of the lower court.
10. The primary function of a court is to adjudicate the dispute between the parties and to advance substantial justice.
The time- limit fixed for approaching the court in different situations is not because on the expiry of such time a bad cause would transform into a good cause."
The Court further observed in paragraphs 11, 12 and 13 which run thus:-
"11. Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a lifespan must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae up sit finis litium (it is for the general welfare that a period be put to litigation). Rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.
12. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal construction so as to advance substantial justice vide Shakuntala Devi Jain v. Kuntal Kumari (1969) 1 SCR 1006 and State of W.B. v. Administrator, Howrah Municipality (1972) 1 SCC 366.
13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. "
5. In Jyotsana Sharda vs Gaurav Sharda, (2010-3) 159 P.L.R. D15,Delhi High Court, while condoning 52 days delay, in filing the appeal, observed as under:-
No doubt, originally the Apex Court in Ram Lal Vs. Rewa Coalfield AIR 1962 SC 351 had held that while seeking condonation of delay under Section 5 of the Limitation Act the application must not only show as to why he did not file the appeal on the last day of limitation but he must explain each day`s delay in filing the appeal. The later judgments of the Apex Court have considerably diluted this requirement of explaining each days delay by a party. The latest trend and the ratio cases which the Apex Court has laid down in the judgments is that the Court must adopt a liberal approach rather than pedantic approach while doing so. It must see the bonafides of the person who is preferring the appeal rather than seeing the quantum of delay which has been occasioned. Reliance in this regard can be placed on Collector, Land Acquisition, Anantnag and Anr. Vs. Mst. Katiji & Ors. AIR 1987 SC 1353.
6. The principle of law, laid down, in the aforesaid cases, is fully applicable to the facts of the instant case. It is evident, from the record that delay, in this case, occurred due to the cumbersome procedure, which was required to be followed, to obtain approval for filing the appeal. Certified copy of the order impugned, after having been received on 12.07.2013, by the Counsel was, in the first instance, sent to the Local Office of the applicants/appellants, and, thereafter, to their Regional Office, at Gurgaon, for seeking approval of the Competent Authority, as to whether, it was a fit case, for filing an appeal or not. For taking decision by the Company, as to whether, an appeal against the order was to be filed or not, the file had to pass through many channels. No single person, could take the decision, at his own level independently, for filing an appeal. Under these circumstances, it could be held that the delay in filing the appeal, was neither intentional nor willful, but, on account of the reasons, explained in the application. There is, thus, sufficient cause, for condoning the delay. The application thus, deserves to be accepted.
7. For the reasons recorded above, the application for condonation of delay of 51 days, in filing the appeal, is allowed, and the delay is, accordingly, condoned.
8. Admitted.
9. It be registered.
10. Arguments, in the main appeal already heard.
11. Vide our detailed order of the even date, recorded separately, the appeal has been accepted with no order as to costs.
12. Certified copies of this order, be sent to the parties, free of cost.
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(DEV RAJ) MEMBER (JUSTICE SHAM SUNDER (RETD.)) PRESIDENT Rg