State Consumer Disputes Redressal Commission
Sri Anup Kr Biswas vs Sales Manager, Icici Prudential Life ... on 26 November, 2009
State Consumer Disputes Redressal Commission State Consumer Disputes Redressal Commission West Bengal BHABANI BHAVAN (GROUND FLOOR) 31, BELVEDERE ROAD, ALIPORE KOLKATA 700 027 S.C. CASE NO-CC/09/12 DATE OF FILING : 17.2.09 DATE OF FINAL ORDER: 26.11.2009 APPELLANTS/COMPLAINANTS : 1. Sri Anup Kr Biswas. FD/469/7, Sector-III, Salt Lake City , Kolkata-700 106. RESPONDENTS/O.P.S : : 1. Sales Manager, ICICI Prudential Life Insurance Company Limited, City High , 1st Floor, 85, Prince Anwar Shah Road, Kolkata- 700 033. 2. Customer Relations Manager, ICICI Prudential Life Insurance Company Limited, P-253, C.I.T. Road, (1st Floor), Scheme- VI, Kakurgachi, Kolkata- 700 054. 3. ICICI Prudential Life Insurance Company Limited having its registered office at ICICI Prulife Towers, 1089, Appasaheb Marathe Marg. Prabhadevi, Mumbai- 400 025. 4. Senior Manager, Consumer- Legal, ICICI Prudential Life Insurance Company Limited, ICICI Prulife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai-400 025. BEFORE : HONBLE JUSTICE : Mr.A.Chakrabarti,PRESIDENT. HONBLE MEMBER : Shri A.K. Ray. HONBLE MEMBER : Smt. Silpi Majumder. FOR THE PETITIONER : Mr. Roychowdhury. Advocate. Md. Salim . Advocate. FOR THE RESPONDENT : Mr. Sandip Bandhopadhyay.Advocate. Mrs. S. Dutta. Advocate. -------------------------------------------------------------------------------------- Sri. A.K. Ray, Honble Member.
The Complainant Sri Anup Kr Biswas purchased a policy under the plan Life Time being no. 00929641 of the ICICI Prudential Life Insurance Company Ltd. for a sum of Rs. 3 lakh initially and then for two consecutive years @ Rs. 2,40,000/-per year. This was the first policy and it commenced on 25.05.04. The Complainant was told that it was under a particular scheme which was called one time premium plan and there was no necessity for paying any further premium towards continuance of the said policy. When he got the original policy subsequently, he found that he had been misguided by the Agent / Representative of the insurance company as it was not a one time policy. Under the terms of the said policy the Complainant was required to pay Rs. 3 lakh for next 2 consecutive years in order to get the maturity amount of the said policy. The Complainant was entitled to free look period from the date on which he got the policy kit. Under its provisions the Complainant had option either to continue with the policy or to refuse acceptance of the terms of the policy. The Complainant opted for the second one. He was however, compelled to continue with the unacceptable terms of the policy for another two years. He was however allowed a rebate in paying annual premium @ Rs. 2, 40,000/- instead of Rs. 3 lakh.
2. On maturity of the first policy on 5.11.07 his trouble started. The maturity payment of Rs. 10 lakh was not given to him; but instead, he was forced to purchase a second policy being no 06619934. After maturity of the first policy two persons from the Insurance Company met him with details of his policy profile. At that time he was also having two other policies with the same Insurance Company. Details of these policies were available with those two persons. He, however, diarized the incident with the local police station. He was persuaded by the Agents of the Insurance Company to switch over the matured sum of the first policy to the new fund with an allurement that the investment in the new fund would fetch higher returns than the first policy. He had signed certain papers reluctantly as he had no wish to switch over to any new policy. The policy kit bearing policy no. 06619934, being the second policy was sent to him. He learnt therefrom that a sum amounting to Rs. 1, 40,000/- had been deducted from Rs. 10 lakh being the maturity payment of the first policy. He objected to such unauthorized deduction of Rs. 1, 40,000/- from the maturity payment of the first policy. He sent back the policy kit of the second policy on 24.01.08. He demanded refund of money but the Insurance Company adopted dilatory tactics to defer payment of the maturity amount of the first policy. The Complainant and his ailing wife attended the grievance cell of the insurance company a number of times but without any results. In the mean time, the Complainant invested another amount of Rs. 2 lakh towards Life Stage Pension Policy in January 2008. He paid the said amount by a cheque dated 29.1.08. He did not receive the policy till 07.05.08. This delay prompted him to intimate the insurance company of his intention not to continue the said Life Stage Pension Policy He was handed over a cheque of Rs. 1,82,872.73 meaning thereby deduction of a substantial amount of Rs. 17,127.27/-. He refused to accept the said cheque and by his letter dated 31.05.08 returned the said cheque to the Insurance Company with a further claim for paying the original amount of Rs. 2 lakh and interest till date. He has not been paid any amount and hence the complaint with a prayer for directing the OPs to pay the Complainant a sum of Rs. 22 lakh being the investment made by the Complainant with interest & a further sum of Rs. 25 lakh towards compensation. A direction on the OPs to pay all the admitted amount dues payable to the Complainant along with litigation and incidental costs.
3. The OPs filed their preliminary objections including parawise reply against the complaint on 17.4.09 before us without verification or through affidavit. They have also filed their written argument subsequently on 23.9.09 before this Commission and denied the material allegations of the Complainant. They have stated amongst others that the complaint as laid is not maintainable in law as he had clubbed 3 different and separate cause of actions in one complaint which is not permissible in law. He has filed the present complaint on the basis of 3 policies bearing no 00929641, second policy bearing no 06619934 & the 3rd policy namely Life Stage Pension Polic bearing policy no. 07565935 taken on 31.01.08. Every policy gives separate and independent cause of action and thus the Complainant cannot make one complaint on the basis of 3 separate and independent cause of actions arising out of the above 3 policies. In order to bring the complaint within the pecuniary jurisdiction of this Commission the Complainant has purposely valued the present complaint at Rs. 22 lakh. Apart from Rs. 25 lakh as compensation towards mental agony, harassment etc but nothing has been stated to substantiate the aforesaid 2 claims. Obviously the claim is not genuine, it is imaginary. The Complainant has further raised serious allegations of cheating, inducement, coercion, force against the replying OPs and this cannot be adjudicated in a summary proceeding. The District Forum or the State & the National Commission, as the case may be has the jurisdiction to decide a matter in which there is negligence or deficiency in service on the part of the OP. Deficiency and negligence do not include any intentional or deliberate act. The present complaint therefore is liable to be dismissed. The Complainant is a literate person, he is a marine engineer. He understands the importance of signing a proposal form and the terms and conditions of a policy. He has not only purchased the policies aforesaid but has also purchased every policy during the relevant period from the OP from the 2004 to 2008. Thus the allegations of the Complainant that he was made to sign on a blank paper and he was not aware of the terms and conditions of the policy are not tenable.
4. The Complainant had proposed for Life Time Plan with the OP vide his application dated May 24th 2004. It was a Life Time Policy. A copy of the proposal form is at annexure-A. On the basis of the proposal form a Life Time Plan Insurance Policy (first policy) was issued in May,2004 to the Complainant (annexure-B) .Thereafter on the application of the Complainant the OP reduced the premium from Rs. 3 lakh to Rs. 2.40 Lakh. Another proposal form from the Complainant was also received by the OP (second policy). It was Premier Life Pension. The OP had also received a signed application from the Complainant for partial withdrawal of an amount of Rs. 10 lakh from the first policy and to transfer the same to the above new second policy. The said sum of Rs. 10 lakh was a partial surrender value of the first policy and not the maturity amount. A copy of the application for partial withdrawal is at annexure-C. This second policy was issued to the Complainant on 14.11.07 (annexure-D). The Complainant had received the above policy document on 17.11.07, but no application for cancellation of the same was received by the OP within the free look cancellation period. The charges applicable to the second policy had been clearly and duly explained to the Complainant. The OP also had intimated their inability in cancelling the policy on 4.2.08 through e-mail dated 4.2.08 (annexure-E). As the amount of Rs. 10 lakh towards partial surrender of the 1st policy had been invested in the second policy by the Complainant, therefore, no refund of the said amount was possible.
5. The Complainant again applied for the 3rd policy on 22.1.08. It was Life Stage Pension Plan on payment of the first premium of Rs. 2 lakh by cheque.
Every policy document was sent to the insurer along with a forwarding letter which clearly mentioned that in case he was not satisfied with the terms and conditions of the policy he could withdraw/ return the policy within 15 days, i.e under the Free Look Period Provisions.
The Complainant sought refund of his above 3rd policy amount invoking the Free Look Period Provisions. A period of 15 days was available to the policy holder during which the policy could be reviewed and the booklet could be returned within 15 days from the date of receiving the policy. The company was to return the premiums paid subject to the following deductions:
a) Proportionate risk premium for the period of cover. b) Insurance stamp duty on the policy. c) Any expenses incurred by the Company on medicals. The units would be repurchased by the Company
and any fluctuations in the fund value would be on customers account. Thus the amount of Rs. 1,82,872.73/- was refunded to the Complainant by the OP after effecting deductions as above for an amount of Rs. 17,127.27/-.
In their parawise replies the OPs categorically denied the allegations made by the Complainant in his complaint. It was stated inter alia that the Complainant was shown the policy brochure containing suggestions for switching over the fund of the earlier policy to a new fund. He had signed the papers with the clear understanding to switch over to any new fund or to purchase a new policy. He did not make any objections within the free look period. The second policy bearing no 066/9934/ was issued to the Complainant on 14.11.07 on the basis of a declaration and fund transfer request received by the OP on 5.11.07. No application for cancellation of the same was received within the free look cancellation period. As the amount of /Rs. 10 lakh was invested in the second policy by way of partial surrender of the first policy, therefore there was reason for the OP to refund the said amount to the Complainant. At the time of purchase of the second policy, the Complainant held 3 other policies which were purchased by him in 2006 from the OP.
6. The Complainant purchased the first policy in 2004 voluntarily without any compulsion after understanding the features, terms and conditions of the policy. The said first policy was not cancelled during the free look period meaning thereby that he was satisfied with the policy. No compulsion or any situation was created by the OP regarding transfer from maturity payment to a new fund. The Complainant himself transferred the amount from his first policy to purchase the second policy by making a partial withdrawal of Rs. 10 lakh from the first policy.
The Complainant has claimed refund of Rs. 22 lakh; but he has not explained or substantiated his claim as to how he reached the said figure of Rs. 22 lakh. Moreover, his demand for payment of Rs. 25 lakh as compensation for his mental agony, harassment, humiliation, loss of fund also remained un-substantiated.
7. Both the Complainant & the OPs filed their respective evidence on affidavit before us on 20.5.09 and 09.06.09 respectively. The OPs did not file any questionnaire. On behalf of the Complainant his wife affirmed the evidence on affidavit being authorized by her husband. It dwelts mainly on the lines of the complaint. The OP Insurance Company in their answers to the questions of the Complainant stated that the Complainant had proposed for a Life Time Plan under policy no 00929641 and the same was issued on 28.5.04. As per clause 3.3 maturity benefits of the policy terms and conditions, the policy being open ended -
has no fixed maturity date and in the event the life assured survives the policy anniversary on which the life assured is 70 years of age, the only benefit payable under the policy would be the unit value at the time of withdrawal of the units. In their answer to question no 5 it has been stated that in case a policy holder requests for cancellation of the policy within the free-look period he shall be entitled to refund of the premium paid subject to deductions of proportionate premium, stamp duty charges and expenses for medical investigation, if any. The deduction of Rs. 17,127.27/- has been explained in their answers to question no 6.
8. We have heard both the sides at length. Admittedly, the Complainant took his first policy on 25.5.04. It was a Life Time Plan insurance policy. An amount of Rs. 3 lakh was paid initially and then for two consecutive years @ Rs.2, 40,000/- per year. He got the policy kit of the first policy at a later date when the free-look period had been over. As per record he made a partial withdrawal of Rs. 10 lakh from his first policy and invested the same amount in his second policy. It was a case of switchover of the matured amount of the earlier policy to the second policy. From the policy kit of the second policy he could know that a sum of Rs. 1, 40,000/- had been deducted from Rs. 10 lakh being the matured payment of the first policy. The insurance company however did not pay the maturity amount of Rs. 10 lakh of the first policy. According to the Complainant the act of switching over the maturity amount of Rs. 10 lakh of the first policy to the second one amounted to unfair trade practice and deficiency in service. But the proposal form clearly spoke of his intention to go in for the second policy by switching the aforesaid amount. The Complainant, a marine engineer by profession, could not be persuaded by any agent to go blind folded in respect of taking a policy.
9. It is evident that the OP Insurance Company allowed partial surrender value of the first policy amounting to Rs. 10 lakh for investment in the second policy. It was further a fact that in spite of being an open ended policy the company allowed partial withdrawal of a hefty amount of Rs. 10 lakh from the first policy. In that view of the matter we consider it prudent to allow the Complainant payment of this amount of Rs. 10 lakh on humanitarian grounds of serious illness of his wife. The deduction of Rs. 17,127.27/- made from the Life Stage Pension Policy appeared to be justified in the light of the explanation adduced by the OP. We however do not find any cogent reason for deducting a sum of Rs. 1, 40,000/- from Rs. 10 lakh being the maturity payment of the first policy. This acts of the OP obviously amounted to deficiency in service. The Complainant therefore succeeds in part as we do not feel inclined to accept his claim in to to.
10. It is accordingly ordered that the OP ICICI Prudential Life Insurance Company Ltd., shall pay an amount of Rs. 10 lakh being the maturity value of the first policy to the Complainant along with a cost of Rs. 2,000/-. The OP shall also pay compensation of Rs. 10,000/- for causing undue harassment, mental agony, and distress to the Complainant. Payment of the aforesaid decreetal amounts is to be made within 45 days from the date of the communication of this order failing which the amounts will accrue interest @ 10 % p.a for the period of default.
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(Sri A.K. Ray) Member CC/09/12 I have perused the judgment prepared by Mr. A.K. Ray, the Ld. Member. I express my view about the matter as follows:
As the facts have been discussed by Mr. Ray I am not stating the facts separately. I find three policies by the petitioner obtained from ICICI Prudential Life Insurance Co. Ltd. are the subject matter of dispute.
Though the petitioner obtained other policies also from the same company, those are not in dispute in the present proceeding. Admittedly the first policy of the three disputed policies bearing no.00929641 known as Life Time Plan Policy was issued on 28.5.04 and the petitioner paid first premium of Rs.3 lacs, second and third premium each of Rs.2,40,000/- after enjoying rebate of 20% according to the terms of the policy. On 05.11.2007 the petitioner made an application to the Insurer requesting for withdrawal of Rs.10 lacs from the existing policy and for transfer of the same to a policy known as Premier Life Pension Policy.
Accepting such request the said policy (hereinafter referred as second policy) bearing no.06619934 was issued on 14.11.2007 after deduction of Rs.1.40 lacs. The Kit was received by the petitioner from the Insurer in respect of the second policy on 17.11.07.
Again by an application the petitioner obtained life stage policy upon payment of Rs.2 lacs as premium and the said policy bearing no.07565935 dated 28.01.08.
The petitioner became aggrieved by deduction of Rs.1.40 lacs from the balance lying in the first policy and asked for withdrawal of Rs.10 lacs from the second policy upon its termination/closer. The petitioner also by letter requested for refund of Rs.2 lacs withdrawing the third policy also as the policy was not sent to him.
The Insurer did not allow surrender/closer of the second policy contending that transfer of the amount of Rs.10 lacs on partial withdrawal from first policy was allowed for initiating the second policy the petitioner did not ask for refund within the Free Look Period of 15 days from the receipt of the Kit on 17.11.07. As regards the third policy the insurer allowed the prayer of the petitioner and refunded Rs.1,82,872.73 deducting a sum of Rs.17,127.27 as the allocation charge under the terms and conditions of the policy.
I find that policies and the conditions governing them have been disclosed in the records of the present proceeding. As regards the first policy, it appears the same was under a Life Time Plan and being an Open Ended Policy there was no maturity date. The contention of the petitioner is that the maturity value of the first policy was invested in the second policy and, therefore, on surrender of the second policy the maturity value of Rs.10 lacs should be refunded to the petitioner. This contention is not correct on facts. It is not that the OPs only denied the same but the letter dated 05.11.2007 by the petitioner to the Insurer at the initial stage of opening second policy, the language used by the petitioner himself was for partial withdrawal of Rs.10 lacs from the existing first policy and to transfer the same to the second policy.
Therefore, the petitioner himself was then conscious that the first policy did not mature and was an existing policy and, therefore, only a partial withdrawal was being made and receipt of the entire maturity value was not mentioned. Secondly, admittedly some amount continued to be there in the first policy even after partial withdrawal of the said amount of Rs.10 lacs. The petitioners own using the expression existing policy while referring to the first policy wherefrom Rs.10 lacs were to be partially withdrawn, shows conclusively that the petitioner knew the first policy was existing on that day and, there was no maturity of the said policy and, therefore, the amount withdrawn was not maturity value.
From the terms and conditions of the first policy at Annexure B to the reply of the OPs to the complaint show Clause 3.2 provides for withdrawal benefit if all the premiums have been paid for three full years and the policy continues to be in force for the full sum assured for these years. Therefore this power allowed the Insurer to permit petitioner to withdraw Rs.10 lacs from the existing first policy. The said Clause is as follows:
3.2.
Withdrawal Benefit:
Withdrawal benefits are allowed only if all premiums have been paid for three full years and the policy has been in force for the full Sum Assured for these years.
No withdrawal of Units, full or partial withdrawal shall be allowed in the first three policy years. The withdrawal benefit shall be the Unit Value as of the Valuation Date following receipt of withdrawal request.
The Clause itself conceives of partial withdrawal and also of the quantum with reference to unit value as on the valuation date.
In this connection I find Clause 6.3 refers to cancellation/withdrawal/ switching of units and the said Clause is as follows:
6.3. Cancellation/Withdrawal/Switching of Units:
(i) If a request for cancellation/withdrawal/switching of units is received and accepted at companys office on a business day, the number of units of the relevant Plan to be cancelled/withdrawn/switched will be computed using the unit value as of the Valuation Date following the receipt of such request.
Notwithstanding anything contained in the above clause, where the request for cancellation/withdrawal/switch of units is received and accepted at the Companys office on the last day of the Financial Year of the Company, the number of Units of the relevant Plan to be Cancelled/Withdrawn/Switched will be computed using the Unit Value on the last day of the Financial Year.
(ii) The Company may, at its sole discretion, change the time by which requests for cancellation/withdrawal have to be received and accepted for the purpose of determining the Unit Value of the relevant Plan which are to be used for calculating the number of Units provided that the same shall be intimated to the Proposer/Life Assured at least 14 days before any such change.
(iii) While there is no withdrawal penalty currently, the Company, may at its sole discretion, charge withdrawal penalty from any future date as also vary the penalty so charged from time to time, at its sole discretion.
(iv) The Company may, in the general interest of the holders of unit linked policies and keeping in view unforeseen circumstances/unusual market conditions, limit the total number of units withdrawn on any day to 5% of the total number of Units then outstanding.
In the circumstances aforesaid as regards the first and the second policy the transfer was by agreement of parties and the said sum of Rs.10 lacs formed the subject matter of second policy and, therefore, the first policy is no more required to be considered. The deduction of Rs.1.40 lacs being under the agreed terms and conditions, does not amount to deficiency in service.
The terms and conditions of the second policy have been disclosed as Annexure-D to the reply filed by the OPs to the original complaint. The conditions of the said second policy at Annexure-D above referred to have defined the expression surrender to mean terminating the contract once for all and on surrender the surrender value is payable which is fund value less the surrender charge and is subject to the Clause 4 on surrender.
Fund value has also been defined as the product of total number of units under the policy and the NAV. Surrender Charge has been defined to mean a charge levied on the fund value at the time of surrender of the policy. Clause 4 of the said terms and conditions provides for surrender which is as follows:
4. Surrender:
The Policy acquires a Surrender Value after the payment of full premium for the first Policy year. However, the surrender value would be payable only after completion of three policy years or whenever the Policy is surrendered thereafter. The surrender value payable is the Fund Value after deducting the following surrender charges.
a) Applicable surrender charges where three full years premiums have not been paid Complete policy years for which premums are paid Surrender Charge as a % of Fund value Less than 1 year 100% 1 year but less than 2 years 75% 2 years but less than 3 years 60%
b) Applicable surrender charge where three full years premiums have been paid.
no.
of completed policy years surrender charge as a % of Fund value Three 4% Four 2% Five and above 0% Another Clause being Clause 6.5 is for fund closer which is as follows:
6.5. Fund Closure:
Although the Funds are open-ended, the Company may, in its sole discretion close any of the Funds on the happening of any event which in the sole opinion of the Company requires the said Fund to be closed. The Policyholder shall be notified of the Companys intention to close any of the Funds and on and from the date of such closure, the Company shall cease to issue, redeem and cancel Units of the said Fund and cease to carry on business activities in respect of the said Fund. In such an event if the Units are not withdrawn or switched to another Fund by the Policyholder, the Company will switch the said Units to any another Fund at its sole discretion. However no fee would be charged for switching to another Fund in the event of such closure of Funds.
I find that in the present case none of the parties has made out a case of fund closer in respect of the second policy. Complainant has claimed the amount as maturity value and in view of my finding holding the same as not maturity value, the refusal by OP is not a case of deficiency in service.
I am of the opinion that partial withdrawal of Rs.10 lacs from the first policy and transfer of the same to the second policy was allowed. As regards the second policy the petitioner did not exercise the right to cancel the second policy within the permitted period of Free Look Period being 15 days from 17.11.07. The withdrawal was asked subsequently and the Insurer was within its rights to refuse to such withdrawal of the policy beyond the Free Look Period. The provision of surrender becomes available to a policy holder after payment of full premium for the first policy year. The petitioner has paid Rs.10 lacs for the first policy year. It appears that the petitioner by his letter dated 24.01.08 requested for surrender of the second policy and to refund him the entire premium of Rs.10 lacs. The reply of the OP was expiry of Free Look Period and, therefore, that benefit is not available. On reminder of the petitioner the OP investigated in the matter and a letter in reply reiterated the charges applicable for the said policy. From the subsequent correspondences including the letter dated 07.4.08 the OP appears to have proceeded on the basis of cancellation of a policy during Free Look Period though the petitioner proceeded to surrender the policy after the expiry of the Free Look Period. The materials on record do not disclose any consideration by the OP of the provisions of surrender in the background of request of the petitioner surrendering the policy. This appears to be a deficiency in service. But in any event the OP is required to decide the question of surrender applying the relevant terms and conditions. The OP is, therefore, directed to decide the question of surrender as prayed for by the petitioner in respect of the second policy within a period of one month from the date of communication of this order.
In respect of the third policy I find that petitioner has asked for withdrawal from the policy and the OPs have allowed the same and refunded some amount after deducting the requisite charges.
This third policy was issued on 28.01.2008 and was delivered to the petitioner on 19.4.2008 as admitted by the OP even in their letter dt.24.10.08 at annexure J to their reply to the complaint. On May 7, 2008 the petitioner cancelled it within the Free Look period. This request has been accepted by OP but Rs.17,127,27 was deducted as allocation charge. OP has failed to show any terms of the transaction which entitles it to deduct allocation charge even if cancellation is asked for within the Free Look period. This is deficiency in service.
Accordingly the OPs are directed to decide the question of surrender of the second policy as requested by the petitioner and to communicate their decision to the petitioner within one month from the date of communication of this order. The OPs are further directed to pay Rs.17,127.27 to the petitioner in respect of the third policy. OPs shall pay also compensation of Rs.10,000/- for the undue harassment, mental agony and distress to the complainant as also Rs.2,000/- as litigation cost. Payments of the aforesaid amounts are to be made within 60(sixty) days from the date of this order. In case of default by the OPs in complying with this order the petitioner will be entitled to recover the said amount in accordance with law along with interest @ 10% per annum for the period of default. Complaint is allowed as aforesaid.
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(Justice A. Chakrabarti) PRESIDENT I Agree ............................
( Smt Silpi Majumder) Member