State Consumer Disputes Redressal Commission
A.P.S.Rajput vs Kotak Mahindra Old Mutual Life ... on 1 April, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 133 of 2012 Date of Institution : 19.4.2012 Date of Decision : 1.4.2013 A.P.S.Rajput S/o Sh.B.C.Rajput, H.No.730, Sector 11-B, Chandigarh. Appellant(s) V e r s u s 1. Kotak Mahindra Old Mutual Life Insurance Ltd., SCO No.141-142, 2nd floor, Sector 9-C, Chandigarh, through its Branch Manager. 2. Kotak Mahindra Old Mutual Life Insurance Ltd., Kotak Towers, 5th floor, Zone II Building No.21, Infinity Park, Off. Western Express Highway, Goregaon Mulund Link Road, Kalad (E), Mumbai 400 097. ....Respondent BEFORE: MRS. NEENA SANDHU, MEMBER.
Argued by: Sh. Anshuman Narula, Advocate for the appellant.
Sh.
Sandeep Suri, Advocate for the respondents.
First Appeal No. :
134 of 2012 Date of Institution :
19.4.2012 Date of Decision :
1.4.2013 B.C.Rajput s/o Late Sh.Gurbachan Lal, H.No.730, Sector 11-B, Chandigarh.
Appellant V e r s u s
1. Kotak Mahindra Old Mutual Life Insurance Ltd., SCO No.141-142, 2nd floor, Sector 9-C, Chandigarh, through its Branch Manager.
2. Kotak Mahindra Old Mutual Life Insurance Ltd., Kotak Towers, 5th floor, Zone II Building No.21, Infinity Park, Off. Western Express Highway, Goregaon Mulund Link Road, Kalad (E), Mumbai 400 097.
....Respondents BEFORE: MRS. NEENA SANDHU, MEMBER.
Argued by:
Sh. Anshuman Narula, Advocate for the appellant.
Sh. Sandeep Suri, Advocate for the respondents.
PER MRS. NEENA SANDHU MEMBER This order will dispose of the aforesaid two appeals, bearing F.A. No.133 of 2012 and F.A. No 134. of 2012 filed by the complainants against the common order dated 28.3.2012 passed by the District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter referred to as the District Forum) in complaint Nos. 760 of 2011 and 761 of 2011, vide which it dismissed both the aforesaid complaints separately filed by the complainants.
2.
Since, the facts involved in both the complaints, are completely identical, the same are being culled out, from Consumer Complaint No.760 of 2011 A.P.S. Rajput Vs. Kotak Mohindra and others.
3. The brief facts of the case are that the complainant took Kotak Smart Advantage Plan from the Opposite Parties for a sum assured of Rs.5.00 lacs. The complainant paid regular three premiums from 2008 to 2010 (Ann.C-1 colly). It was stated that as per Clause 6 of the terms & conditions of the policy, the policy could be surrendered after the completion of 3 years, and as such, the complainant surrendered his policy. But to his utter dismay, the Opposite Parties paid a sum of Rs.26,038/- only against the total premium amount of Rs.45,000/-, which is illegal & unjustified. It was further stated that the matter was taken up with the Opposite Parties but to no effect.. Ultimately, a legal notice Ann.C-3 was sent, but to no avail. It was further stated that the aforesaid act of the Opposite Parties amounted to deficiency in rendering service and indulgence into unfair trade practice. Hence, this complaint was filed.
4. No reply and evidence was filed by the Opposite Parties and the District Forum struck off defence of the Opposite Parties vide order dated 16.3.2012.
5. The complainant led evidence in support of his version.
6. After hearing the Counsel for the parties and on going through the evidence on record, the District Forum dismissed both the complaints as mentioned in the opening para of this order.
7. Feeling aggrieved, the instant appeals have been filed, by the complainants (appellants in both the appeals) for setting aside the impugned order.
8. In the aforesaid cases, the Honble President, State Consumer Disputes Redressal Commission, U.T., Chandigarh, abstained himself, from the proceedings. However, the matter was argued before the Single Bench, constituted, by the Honble President, State Consumer Disputes Redressal Commission, U.T., Chandigarh, under Section 16(1B)(i) and (ii) of the Consumer Protection Act, 1986, vide order bearing No.SC/CP-2012/3650 dated 20.12.2012, to ensure speedy redressal of grievances of the consumers, as also taking into consideration the factum that the smooth working of the Commission is not hampered.
9. I have heard the Counsel for the parties, and have gone through the evidence, and record of the case, and also the written submissions submitted by the parties, carefully.
10. The Counsel for the appellant, has submitted that the appellant/complainant took insurance policy from the Opposite Parties having yearly premiums of Rs.15,000/- each. It was further submitted that after paying first three continuous premiums of Rs.15,000/- each, towards the policy, in question, the appellant/complainant surrendered the policy and requested the Opposite Parties, to pay the surrender value. However, the Opposite Parties on 8.9.2011 paid a sum of Rs.26038/- against the amount of Rs.45,000/- paid by the appellant, towards premiums. On receiving the said amount the appellant approached the Opposite Parties for making enquiry regarding the details of payment and how they calculated the amount of Rs.26,038 though he had paid a sum of Rs.45,000/- towards first three premiums. The Opposite Parties vide their reply Annexure C-4 intimated that as per surrender clause 6 of the policy the amount of first year premium was not invested in the market. It was further submitted that when the grievance of the complainant was not redressed he filed a complaint but the District Forum by ignoring the fact that the first year premium was kept aside towards payment of Assured Additional Advantage and not invested in the market for purchase of units, dismissed the complaint. It was further submitted that the Opposite Parties did not file the reply intentionally and as such the allegations of the complainant remained un-rebutted but the District Forum still dismissed the complaint on the ground that full NAV of the complainants units as on 2.9.2011 paid, which was not sustainable in the eyes of law because the units for which the price was paid were purchased with only two premium installments. Hence the order of the District Forum is liable to be set aside.
11. On the other hand, the Counsel for the respondents has submitted that the order of the District Forum is just and legal and requires no interference of this Commission. It was further submitted that the complainant was paid the surrender value as per the terms and conditions of the policy. It was further submitted that as per the terms and conditions of the policy the first year premium was not invested in the market as the same was payable on completion of the premium payment term or on death, as applicable. But in the present case none of the two conditions had arisen as the complainant surrendered the policy prior to its maturity. Hence there was no deficiency on the part of the Opposite Parties.
12. Admittedly the complainant purchased unit linked policy subject to market risks namely Kotak Smart Advantage Plan from the Opposite Parties for an assured sum of Rs.5.00 lacs against yearly premiums of Rs.15,000/- and paid first three consecutive premiums of Rs.15,000/- each from 2008 to 2010. Thereafter he surrendered the policy in the year 2011 and the Opposite Parties paid a sum of Rs.26,038/- as surrender value. Now the question for consideration before us is whether the Opposite Parties have rightly paid the surrender value to the complainant or not. It is pertinent to mention here that the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010, were notified vide notification dated 01.07.2010 and the same came into force in the year 2010, Regulation 7 of the Regulations ibid reads as under;
Obligation of an insurer upon discontinuation of a policy
7. The obligation of an 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 ceiling on commissions and expenses and v. 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 policies having annualized premium up to and including Rs.25000/-
Maximum discontinuance charges for policies having annualized premium above Rs.25000/-1
Lower of 20% (AP or FV subject to a maximum of Rs.3000/-
Lower of 6% of (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% of (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% of (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.
13.
Undoubtedly , the Insurance Companies are governed by the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010, which were notified vide notification dated 01.07.2010. In the present Complaint, the complainant surrendered the policy bearing No.01228909, in the year 2011 and, as such, cause of action accrued to him in the year 2011 i.e. much after the aforesaid Regulations, came into force, in the year 2010. Thus taking into consideration the principle of equity, I am of the considered opinion that complainant was entitled to get surrender value as per the table of Regulation 7, extracted above. Hence the respondents/ Opposite Parties, could not charge any other charges, except those mentioned therein. Since the complainant paid a sum of Rs.45,000/-, for the policy in question, as premium, for three years of Rs.15,000/- each to the respondents/Opposite Parties, according to the Regulation extracted above, the Opposite Parties should have paid the complainant surrender value after deducting Rs.1500/- from the total deposited amount by the complainant because as per the table of Regulation 7 extracted above, the same were to be deducted in case the Annualized premium is upto Rs. 25,000/-, paid for three years. Since the complainant paid a premium of Rs.15,000/- as annual premium for three years, which is less than Rs.25,000/-, thus, as has been specified in the aforesaid table of Regulation 7 extracted above, he was entitled to get Rs.43,500/- (Rs.45,000-1500) but the Opposite Parties paid a sum of Rs.26,038/- towards surrender value, hence, they are liable to pay a sum of Rs.17,462/- (Rs.43,500-Rs.26,038/-) to the complainant.
14. Similarly, in Consumer Complaint No.761/2011, the appellant/complainant paid a total sum of Rs.90,000/-, for the policy bearing No.01145445, as premium, for three years of Rs.30,000/- each and surrendered the same in the year 2011. Therefore, the complainant was entitled to get surrender value as per the table of Regulation 7, extracted above, and the respondents/ Opposite Parties, could not charge any other charges, except those mentioned therein. Thus, the respondents/Opposite Parties were liable to pay a sum of Rs.86,000/- (Rs.90,000-Rs.4000) to the appellant/complainant. But they paid him only Rs.53,376.79/- against the total amount of Rs.90,000/- paid by complainant towards premiums. Thus, Opposite Parties are liable to pay a sum of Rs.32,623.21 (Rs.86,000-Rs.53,376.79) to the complainant
15. Since the aforesaid extracted Regulations came into force in the year 2010 and the complainant surrendered the policy in question, in the year 2011, it was the duty of the Opposite Parties to pay surrender value to the complainant as per Regulation 7 of the aforesaid Regulations, but they failed to do so, which caused a lot of mental agony and physical harassment to the complainant for which he is entitled to compensation. These facts were not properly appreciated, by the District Forum. Thus the order of the District Forum being perverse, is not sustainable in the eye of law, and the same is liable to be set aside.
16. In view of the above, I find merit in both the appeals and, accordingly, the same are allowed with costs against Respondents/Opposite Parties. The order of the District Forum, is set aside and both the complaints bearing No.760/2011 and 761/2011 are allowed, in the following manner:-
Consumer Complaint No.760/2011. (Policy No. 01228909) Respondents/Opposite Parties are directed as follows: -
i) To pay to the complainant Rs.17,462/- as held in para No.13.
ii) To pay to the complainant Rs.10,000/- as compensation, for mental agony and physical harassment.
iii) To pay Rs.5,000/- as cost of litigation.
17. The aforesaid order shall be complied with, by the respondents/Opposite Parties, within 30 days from the date of receipt of a certified copy of the order, failing which they shall be liable to pay interest on the aforesaid awarded amount mentioned in clause (i) & (ii) above @12% p.a. from the date of filing the complaint till its realization, besides payment of costs.
Consumer Complaint No.761/2011. (Policy No. 01145445) Respondents/Opposite Parties are directed as follows: -
i) To pay to the complainant Rs.32,623.21 as held in para No.14.
ii) To pay to the complainant Rs.10,000/- as compensation, for mental agony and physical harassment.
iii) To pay Rs.5,000/- as cost of litigation.
18. The aforesaid order shall be complied with, by the respondents/Opposite Parties, within 30 days from the date of receipt of a certified copy of the order, failing which they shall be liable to pay interest on the aforesaid awarded amount mentioned in clause (i) & (ii) above @12% p.a. from the date of filing the complaint till its realization, besides payment of costs.
19. A copy of this order be placed in the connected First Appeal No.134 of 2012.
20. Copies of this order be sent to the parties free of charge.
Pronounced.
1.4.2013 sd/-
[NEENA SANDHU] MEMBER mp STATE COMMISSION (First Appeal No.133 of 2012 ) Argued by: Sh.
Anshuman Narula, Advocate for the appellant.
Sh.
Sandeep Suri, Advocate for the respondents.
Dated the 1st day of April 2013 ORDER Vide detailed order of even date, recorded separately, this appeal alongwith FA No.134 of 2012 has been allowed with cost, as per direction.
(NEENA SANDHU) MEMBER STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. :
134 of 2012 Date of Institution :
19.4.2012 Date of Decision :
1.4.2013 B.C.Rajput s/o Late Sh.Gurbachan Lal, H.No.730, Sector 11-B, Chandigarh.
Appellant V e r s u s
1. Kotak Mahindra Old Mutual Life Insurance Ltd., SCO No.141-142, 2nd floor, Sector 9-C, Chandigarh, through its Branch Manager.
2. Kotak Mahindra Old Mutual Life Insurance Ltd., Kotak Towers, 5th floor, Zone II Building No.21, Infinity Park, Off. Western Express Highway, Goregaon Mulund Link Road, Kalad (E), Mumbai 400 097.
....Respondents BEFORE: MRS. NEENA SANDHU, MEMBER.
Argued by: Sh. Anshuman Narula, Advocate for the appellant.
Sh. Sandeep Suri, Advocate for the respondents.
PER MRS. NEENA SANDHU MEMBER For orders, see the orders passed in First Appeal No 133 of 2012 titled as A.P.S. Rajput Vs. Kotak Mohindra and others, vide which this appeal has also been allowed with costs.
Copies of this order be sent to the parties free of charge.
Pronounced.
Sd/-
[NEENA SANDHU] MEMBER mp