State Consumer Disputes Redressal Commission
Chhinder Singh vs The Manager, Bajaj Allianz Life ... on 19 December, 2013
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 75 of 2012
Date of institution: 19.1.2012
Date of Decision: 19.12.2013
Chhinder Singh son of Sh. Jit Singh, Resident of Village Maujpur, Tehsil
Mohali, District Mohali, Punjab.
.....Appellant/Complainant
Versus
1. The Manager, Bajaj Allianz Life Insurance Company Limited,
Regd. & Head Office : GE Plaza, Airport Road, Yerwada, Pune
411 006.
2. The Manager, Bajaj Allianz Life Insurance Company Limited,
SCO 139-140, 2nd Floor, Sector 8-C, Chandigarh.
3. The Manager, Bajaj Allianz Life Insurance Company Limited,
SCO 73, Phase 9, Mohali.
.....Respondents/Opposite parties.
Argued By:-
For the appellant : Sh. Sandeep Bhardwaj, Advocate
For the respondents : Sh. Varun Chawla, Advocate
First Appeal against the order dated
14.12.2011 (wrongly mentioned as 11.5.2011)
passed by the District Consumer Disputes
Redressal Forum, SAS Nagar (Mohali)
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Shri Piare Lal Garg, Member
Shri Jasbir Singh Gill, Member
ORDER
Gurcharan Singh Saran, Presiding Judicial Member The appellant/Complainant (hereinafter called "the complainant") has filed the present appeal against the order dated 14.12.2011 passed by the District Consumer Disputes Redressal Forum, SAS Nagar (Mohali) (hereinafter called "the District Forum") in FIRST APPEAL NO. 75 OF 2012 2 consumer complaint No.325 dated 9.8.2011 vide which the complaint filed by the complainant was dismissed.
2. The complaint was filed by complainant under Section 12 of the Consumer Protection Act, 1986 (in short 'the Act') against the respondents/opposite parties(hereinafter referred to as 'opposite parties') on the allegations that in the year 2006-07 Mr. Parveen Verma, FPC/Agent approached the complainant, who was working in Government Medical College & Hospital, Sector 32, Chandigarh and allured him to invest the amount which his father got after selling his land with their Company in order to get the double of the amount after three years from the date of payment of the first premium and accordingly, he was showed high dreams about the investment policy and for that the complainant was required to make one time investment. Otherwise the complainant was earning only Rs. 4,000/- working on contract basis. After getting the assurance about double benefits of the investment of the policy from the opposite party, the complainant invested Rs. 6 lacs in the following policies:-
Policy Number Commencement Insured Name Premium Paid Date 0045786216 28.3.2007 Chhinder Singh Rs. 1,00,000/- 0050226037 4.5.2007 Chhinder Singh Rs. 2,00,000/- 0045715460 28.3.2007 Chhinder Singh Rs. 1,00,000/- 0045766544 28.3.2007 Lovepreet Singh Rs. 1,00,000/-
(son) 0045704341 28.3.2007 Aashikjeet Singh Rs. 1,00,000/-
(son)
TOTAL Rs. 6,00,000/-
Even in the column meant for premium frequency resemblance i.e. six single premium as the tick has been put in front of the word single otherwise the complainant could not understand the complex FIRST APPEAL NO. 75 OF 2012 3 language of the policy and the opposite party also did not verify whether the terms and conditions of the policy has been communicated to the complainant and understood by him. Even the terms and conditions of the policy have not been signed by the complainant. Accordingly, the complainant approached the opposite parties No. 2 & 3 in the month of March, 2010 for getting the double benefit of the policies but he was shocked to know from the Executive sitting in the office of the opposite party that the amount invested in all the policies would be verified as the complainant had deposited only one premium whereas the policies were regular premium policies and it was further disclosed to get the benefit of the policies three premiums were required to be paid and accordingly, he was shocked to know that he was required to pay more premiums to get benefits from the policies. However, the complainant explained that he is not in a position to pay Rs. 12 lacs as he is getting monthly income of Rs. 4,000/- only. Ultimately, the Executive of the opposite party assured that his case would be referred to their Head Office at Pune for refund of the premium alongwith other consumers of the same village and it will take around 4-5 months for the approval for converting these policies into one premium policy and accordingly, he will get the amount due at his residence after about six months and signatures of the complainant were obtained on some forms. The complainant believed their version and in the month of December, 2010, he again approached the opposite party and by that time those Executive had changed and others were unable to re-collect the case of the complainant. It was further alleged that the policy No. FIRST APPEAL NO. 75 OF 2012 4 0045766544 and 0045704341 does not contain any proposal form and the OP cannot issue the policies without its proposal form. In two policies bearing No. 0045786216 and 0045715460 the profession of the complainant has been mentioned as service, annual income of Rs. 3 lacs whereas in Policy No. 0050226037 the profession of the complainant has been mentioned as agriculture and his annual income is Rs. 4 lacs, which shows that proposal forms have been filled up by the opposite parties as per their convenience without verifying its contents. Further no verification was done by the OP with regard to the health and income of the complainant. His PAN No. was not collected, which is mandatory for issuance of policy of more than Rs. 1 lac. Moreover, the Insurance Regulatory Development Authority of India (I.R.D.A.) had issued guidelines/norms which are known as 'Know Your Customer' (KYC) norms and according to these norms, the insurance company is required to gather evidence with regard to the residential proof, identity of the insured and capacity with regard to the paying capacity. The Ops have not verified that fact from which source as to how the complainant will pay Rs. 6 lacs when his annual income is Rs. 3 lacs, which clearly shows that the Ops have indulged in unfair trade practice and regularly issued policies worth Rs. 6 lacs, knowing fully that in the next year he will not be able to pay the premium and the premium already paid would become zero. The policies were purchased on the assurance of the opposite party that it is one time premium and that too with the income of his father, who had sold the property and then there is Circular No. 032/IRDA/Act1/Dec-2005 dated 21.12.2005 in which detailed FIRST APPEAL NO. 75 OF 2012 5 guidelines were given to the insurance company with regard to the Unit Linked Life Insurance Products and these guidelines were totally ignored while issuing the policies. The opposite party has further ignored the provision of Section 50 of the Insurance Act that Policy Holder must be given a notice about the options available to him.
There is another instructions issued by IRDA vide Circular No. 049/IRDA/ACTL/ULIP/January-08 dated 1.1.2008 wherein it has been clearly stipulated that in all the cases of Unit Linked Policies, the insurer is bound to get the signatures of the policy holder from Table 'A' and 'B' i.e. guaranteed benefits and non-guaranteed benefits. The signatures of the complainant were not taken on the policies as these were issued by assurance that these are one time investments. IRDA has further issued guidelines on 1.7.2010 clarifying the position as to how the charges are to be deducted while refunding the amount to the consumers at the time of dis-continuance of the policies, which should not exceed Rs. 6,000/-. A legal notice was served upon the opposite party on 15.1.2011 but to no effect, hence, the complaint with the direction to the Ops to review the premium amount of Rs. 6 lacs with interest @ 18% per annum, compensation of Rs. 50,000/- and litigation expenses of Rs. 11,000/-.
3. The claim was contested by the Ops, who filed written statement taking preliminary objections that the complaint filed by the complainant is barred by limitation as the policies were taken on 28.3.2007 and 4.5.2007, on the basis of proposals made by the complainant himself and original policy bonds containing terms and conditions were dispatched to him vide registered letter dated FIRST APPEAL NO. 75 OF 2012 6 30.3.2007, 23.4.2007 and 8.5.2007 and were duly received by the complainant and the complainant has never disputed the receipt of the policy bonds or the terms and conditions whereas the complaint has been filed after a gap of 4½ years, therefore, it is barred by limitation under Section 24A of the Act; the learned District Forum does not have the jurisdiction to entertain the present complaint because all acts were done in Chandigarh; the complaint is bad for mis-joinder or non-joinder of necessary party Mr. Parveen Verma, Insurance Agent has not been impleaded as party; Mr. Chhinder Singh complainant is duly licensed Insurance Consultant under License No. 5546847 issued by IRDA and is working as an active agent of the opposite parties under IC Code No. 1000988858 since 10.7.2009, therefore, it cannot be blamed that he is not aware about the terms and conditions of the policy; the complainant is estopped to file the present complaint due to his own act and conduct as he has failed to discharge its contractual liability under the policies; the yearly premiums were Rs. 1 lac in four policies and Rs. 2 lacs in one policy, which was required to be paid without any obligation on the Company to issue the notice thereof but the premiums were not paid, therefore, policies were lapsed; or at the most there could be revived within the period of two years from the date of payment of first premium failing, which policy will be lapsed and the refund value on the date of lapse, less the surrender charges, in case first three years regular premium are not paid according to Section 10(b) of the Surrender Charge on regular premium unit, surrender value would be 100% of the first year annualized allocated premium. It was further stipulated that all regular FIRST APPEAL NO. 75 OF 2012 7 premium payable in the first year policy will be used to allocate Capital Units and subsequent premiums will be used to allocate Accumulation Units whereas the insurance Agent is only authorised by the Company to arrange compilation and submission of the proposal form; he is not authorised to act as Company or the legal representative to act in any way on behalf of the company and any payment given to the insurance Agent should not be considered as having been given to the Company. Accordingly, both the parties are bound by the terms and conditions of the contract. The insurance Agents are independent Contractors, who are licensed by the IRDA, therefore, the opposite parties are not responsible for the act and omission on the part of the Agent as there is no principle agency relationship between them. The complainant was given 15 days "Free Look Cancellation Period" from the date of issue of the policy bond to review the terms and conditions of the contract and if he/she was dis- satisfied with the terms and conditions of the policy, he/she should have given written notice to the opposite parties to cancel the policy within 15 days. The complainant being insurance agent was fully satisfied with the proposed plans and terms and conditions of the policy bond; no cause of action has arisen to the complainant against the opposite party; he is not a consumer as defined under Section 2(I)(d) of the Consumer Protection Act, 1986; the opposite parties have acted strictly in accordance with the terms of the policy; the complaint filed by the complainant is false, frivolous and vexatious and it be dismissed with special costs; the complainant has levelled allegations, which requires full scale trial, therefore, the matter be FIRST APPEAL NO. 75 OF 2012 8 relegated to the Civil Court and that the contract of insurance does not provide for the payment of interest on the payment due under the policy. On merits, it has been again stated that the District Forum, Mohali, does not have any territorial jurisdiction because the proposal form was filled at Chandigarh Branch and the Ops are doing the business in Chandigarh; the complainant is not a 'Consumer' as defined under Section 2(1)(d) of the Act; the policies were issued in the year 2007 whereas the complaint has been filed in the year 2011 after a gap of 4½ years. Otherwise the submissions of the complaint have been denied and it has been stated that the complainant be put to strict proof of the same. The information contained in the proposal form was filled up as given by the complainant. No institution, leave aside the insurance company is in a position to guarantee 100% returns of investment in three years. It has been denied that the income of the complainant is only Rs. 4000/- per month, he has placed on the record the documents showing his income in the range of Rs. 4 lacs per annum. Further the Hon'ble National Commission in case "LIC Vs. Mansa Devi", II (2003) CPJ 135 (NC) has held that contract of insurance is of utmost good faith and life assured is bound to disclose honestly and truthfully all the answers in the proposal form whereas the complainant by concealing material facts and information regarding his income the contract became void ab-initio. The complainant himself had opted for regular premium Unit Linked Policies, therefore, it cannot be accepted that it was one time investment policy and ultimately, it was submitted that there is no FIRST APPEAL NO. 75 OF 2012 9 merit in the complaint filed by the complainant and the same be dismissed.
4. The parties were allowed by the learned District Forum to lead their evidence.
5. In support of his allegations, the complainant had tendered into evidence affidavit of Chhinder Singh Ex. CW-1/1, policy schedule Ex. C-1, 2, 3, 4, 5, Notification dt. 14.7.2000 of IRDA Ex. C-6, Agents Commission Ex. C-7, guidelines of Anti Money Laundering Programme for insurers Ex. C-8, IRDA circular dt. 21.12.05 Ex. C-9, IRDA letter dt. 1.1.2008 Ex. C-10, notification dt. 1.7.2010 Ex. C-11, forms Ex. C-12/1 and 12/2, notification of IRDA dt. 16.10.2002 Ex. C-13, guidelines dt. 26.9.2006 Ex. C-14. On the other hand, the opposite parties had tendered into evidence affidavit of Rajinder Singh Kalsi, Zonal Legal Manager Ex. RW-1/1, affidavit of Parveen Verma Ex. RW-2/1, proposal forms Ex. R-1, 2, 3, 4, 5, policy document Ex. R-6, 7, SARAL forms Ex. R-8, 9, 10, Financial Supplementary Statement Ex. R-11.
6. After going through the allegations in the complaint, written statement, evidence and documents brought on the record, it was observed by the learned District Forum that the complainant himself working as Insurance Consultant having Licence No. 5546847 issued by the IRDA under IC Code No. 1000988858 since 10.7.2009, therefore, it cannot be said that he was not known to the terms and conditions of the policies. He has referred in the complaint about the policies and have placed the policies on the record, therefore, the policies were duly received by him but it does not FIRST APPEAL NO. 75 OF 2012 10 reveal on which date he had received the same. Although he has referred his income to the extent of Rs. 4 lac only in the year 2003- 04, he has shown his business and accordingly, his income is Rs. 7,61,196/-, for the year 2004-05 Rs. 8,98,415/- and for 2005-06 Rs. 10,64,400/- and out of that he could pay the premium of Rs. 6 lacs otherwise he has not placed Income Tax Return for the year 2006-07. No photograph has been affixed with the proposal form Ex. R-1 and R-2 whereas the photograph of some other person than the complainant was affixed and Parveen Verma, the agent was cross- examined as RW-2 and on proposal form Ex. R-1 & 3 signature do not tally with his signatures on affidavit Ex. CW-1/1. Moreover, these discrepancies do not affect the merits of the case. He did not cancel his policies within the "Free Look Period" and that the complaint filed by him is barred by limitation, although the District Forum has the territorial jurisdiction to entertain the complaint.
7. Aggrieved with the order passed by the learned District Forum, the appellant/complainant has filed the present appeal.
8. In the grounds of appeal, it has been contended by the appellant that the appellant was made to understand that he has to make one time investment and the amount will become double after three years but after three years when he went to the office of the Ops, he came to know that it was the policy for regular premium and not for one time premium and that atleast he will have to pay two more premiums against each policy amounting to Rs. 12 lacs and only then he will be able to get the refund of the amount according to the surrender value, therefore, the policies have been given to the FIRST APPEAL NO. 75 OF 2012 11 appellant by way of mis-representation, which is also clear from the documents because he was given proposal form only for three policies and there was no proposal form for the other two policies and the Ops cannot issue the policy without proposal form. There is discrepancy with regard to his income, who is just an employee in Government Hospital, Sector 32, Chandigarh earning Rs. 4,000/- on contractual basis whereas his income has been shown as Rs. 4 lacs. No PAN No. was obtained and instructions of IRDA known as '(KYC) norms' were not followed. Further the instructions of the IRDA issued vide Circular No. 032/IRDA/Act1/Dec-2005 dated 21.12.2005 were not followed, according to which notice was required to be given to the appellant at the time of dis-continuance of the premium. Further according to Circular No. 049/IRDA/ACTL/ULIP/January-08 dated 1.1.2008, the signatures of the appellant were required to be taken on Table 'A' i.e. list of charges paid and payable by a Policy Holder and Table 'B', it is an illustration of guaranteed benefits and non- guaranteed benefits. Further guidelines were also issued by the IRDA on 1.7.2010 in which on dis-continuance of policy specific amount is required to be deducted by the Insurance Company. Whereas the learned District Forum has not considered the discrepancies in the proposal form and have rejected the same merely by saying that these are not material. Whereas these are basic and material discrepancies, which show that the signatures of the complainant were taken on the proposal form and lateron columns were filled by the Agent. The discrepancies have appeared as the Agent was not knowing about all the facts. There is discrepancy with regard to his FIRST APPEAL NO. 75 OF 2012 12 profession whether he is Government Servant. Further, his photographs are not appearing in three proposal forms produced by the Ops whereas in two proposal forms the photographs are of some other person. No document with regard to the age and income source of the complainant has been collected, which is again against the IRDA guidelines and Praveen Verma, Agent in his cross-examination has admitted that he was not aware about the terms and conditions of the policy, he did not collect the necessary documents. The contentions of the appellant were rejected by the learned District Forum only on the ground that he was also an Insurance Agent but he was enrolled as a Insurance Consultant w.e.f. 10.7.2009 whereas the policies were taken in the year 2007, which clearly proves that it is a case of unfair trade practice, therefore, the judgment of the learned District Forum is liable to be set-aside.
9. We have heard the learned counsel for the appellant Sh. Sandeep Bhardwaj, Advocate and learned counsel for the respondents Sh. Varun Chawla, Advocate and have gone through the written submissions made by the parties.
10. The counsel for the respondents in his written submissions have taken some basic objections, those are required to be dealt with before dealing with the main proposition whether the policies were given to the complainant by way of mis-representation or not?
11. The first point is with regard to the limitation. It has been contended by the counsel for the respondents that the proposal forms were filed in by the complainant on 28.3.2007 and 4.5.2007 whereas FIRST APPEAL NO. 75 OF 2012 13 the policies were issued on 30.3.2007, 23.4.2007 and 8.5.2007 whereas the complaint was filed on 9.8.2011 whereas under Section 24A of the Act, it was required to be filed within two years from the date of cause of action. In case we go through the complaint filed by the complainant, it has been stated that he came to know in March, 2010 that these were not the policies with single premium investment but were of regular premium investment, therefore, the cause of action arose to him in March, 2010 and then he issued the legal notice on 15.1.2011 but the OP failed to give the surrender value, therefore, the cause of action was continuous till the Ops failed to pay the surrender value of the policies or the original amount paid by them taken by way of mis-representation, therefore, the limitation will not be the date when the policies were stated to be issued. Moreover, it is the date mentioned in the policies, on the record the respondents have not placed any document i.e. any registered letter, despatch register of the Company as to on which date these policies were despatched to the complainant. In this regard, a reference can be made to the judgment of the Hon'ble Supreme Court in "Oriental Insurance Company Ltd. versus Prem Printing Press", I (2009) CPJ 55 (SC) that 'final decision regarding repudiation was conveyed on 28.7.1994, as such, till then the cause of action is recurring one.' Then there is judgment of the Hon'ble National Commission cited as "United India Insurance Company Ltd. & Anr. versus R. Piyarelall Import & Export Ltd.", I (2010) CPJ 22 (NC) where it has been observed as under:-
FIRST APPEAL NO. 75 OF 2012 14
"6. We have carefully gone through the material on record. There is a statement brought on record by the complainant, wherein as on 7.8.1996, a total sum of Rs. 2,58,483 was available with the Insurance Company and they have been merrily deducting the premiums in respect of various vessels and as on that date there was a balance of Rs. 38,132. It is also not in dispute that another amount of Rs. 39,398 was paid to the Insurance Company on 20.8.1996, meaning thereby, that there was sufficient funds available 'in deposit' with the Appellants, from which the premium could be deducted."
12. Against these judgments, no contrary judgment has been cited by the counsel for the respondents that cause of action will be from the date of release of the policy or in case the policy has been disputed it will be continuous one till grievance of the complainant not redressed, therefore, we are of the opinion that the complaint filed by the complainant is within limitation.
13. Another point has been raised by the counsel for the respondents with regard to the territorial jurisdiction. It has been stated that the proposal forms were filled in the office of the opposite parties at Chandigarh. The offices of the appellant are located at Chandigarh. Even if the opposite party has its Branch Office at Chandigarh that does not confer jurisdiction on that Forum in view of the judgment of the Hon'ble Supreme Court in case "Sonic Surgical versus National Insurance Company Ltd.", IV (2009) CPJ 40 (SC), however, in case we go through the written statement filed by the respondents and in the written arguments submitted by the respondents, it has been stated that the insurance policies were despatched to him vide registered letter Nos. 772875100 dated 30.3.2007, 772878622 dated 8.5.2007, 772874719 dated 30.3.2007, FIRST APPEAL NO. 75 OF 2012 15 775142386 dated 23.4.2007 & 775142253 dated 23.4.2007 and certainly, the address of the complainant is that of the Mohali, therefore, the registered letters were received by the complainant at Mohali, therefore, the District Forum, Mohali has the jurisdiction. Moreover, the learned District Forum has returned the findings on this point in favour of the complainant and no cross appeal has been filed by the Ops. Therefore, we do not concur with the plea taken by the respondents and the findings so recorded by the learned District Forum observing that the District Forum, Mohali has the jurisdiction are the correct findings.
14. The next material point is whether the policies were taken by the complainant of his own accord or whether these were given to him by way of mis-representation. It has been contended by the counsel for the respondents that in all policies the signatures of the complainant were obtained and there is judgment of the Hon'ble Supreme Court given in case "Grasim Industries Ltd. Vs. Aggarwal Steel", 2010 (1) SCC 83 wherein it was observed by the Hon'ble Supreme Court that 'when a person signs the document, there is presumption, unless there is proof of force or fraud that he has read the document properly and understood it and only then he has affixed his signature thereon, otherwise no signature on a document can ever be accepted.' However, it has been contended by the counsel for the appellant that he was mis-represented by the Insurance Agent Praveen Kumar, who has appeared as RW-2 and has tendered his affidavit as Ex. RW-2/1 and he was cross-examined by the counsel for the complainant before the District Forum and in the cross- FIRST APPEAL NO. 75 OF 2012 16 examination he has admitted that photograph on Exs. R-1 and R-2 at points 'Z1' and 'Z2' are not of complainant Chhinder Singh. It is also correct that column meant for describing the type of annuity are lying blank in all the proposal forms Exs. R-1 to R-5 at places A-1 to A-5. He did not personally verify the information given on proposal form Ex. R-1 at Point A-6 to the effect that he was having a business as Shopkeeper in SCO 154, Sector 35-A, Chandigarh. In Ex. R-1 at point A-8, the signature of the proposer do not exist. He does not know the area of land owned and possessed by the complainant when he submitted the proposal forms. Witness Ramesh, whose signatures appears on Exs. R-1, R-2 and R-5 were brought by the complainant. He does not know him. However, it is mandatory to obtain the photograph if he is other than the insured and of the insured, if he is proposer also while getting the proposal form from him. He had explained to the complainant only those terms and conditions, which were mentioned in the proposal form and nothing more. He further admitted that according to IRDA regulation, it is necessary for the Insurance Agent to inform atleast before one month on each premium is due, I had not informed the complainant in writing that his next premiums were due. Therefore, it is clear from the cross- examination of this witness that the terms and conditions of the policies were not explained to the complainant. There is no other witness of the Ops, who have stated that terms and conditions were made to understand by the complainant. The counsel for the appellant has referred the document Ex. C-7 i.e. Agent's Commission in Insurance Policies in Regular Premium, which is 20% to 40% and FIRST APPEAL NO. 75 OF 2012 17 this is the reason that they mis-represent the public. They say it for one time premium investment because in case they say that it is regular premium policy then there will be very few persons, who will opt of these policies.
15. The first insurance policy is Ex. C-5 bearing No. 0045704341 and its proposal form is Ex. R-1, which is in the name of Aashikjeet Singh minor s/o Chhinder Singh in which his business has been stated as Shopkeeper, SCO No. 154, Sector 35-A, Chandigarh and the premium amount has been mentioned as Rs. 2 lacs whereas in the policy Ex. C-5, it has been mentioned as Rs. 1 lac only. The annual income has been shown as Rs. 4.5 lacs. No proof of age has been taken, whose driving licence was taken and the photograph placed on the record on the last page of the proposal form is not that of Chhinder Singh, who is proposer in this proposal form. One witness Ramesh has been referred, who identified the proposer but his parentage has not been mentioned and his address has been mentioned as just House No. 836, Sector 35-B, Chandigarh. Whereas the complainant is not running any business, no document has been placed on the record or collected by the Insurance Agent to prove on the record that the complainant was doing any business rather he has placed on the record the documentary evidence Ex. C- 12/1 and Ex. C-12/2 i.e. wages slip issued by Government Medical College and Hospital, Sector 32, Chandigarh whereas as per the instructions issued by IRDA on 31.3.2006 Ex. C-8, it has been specifically mentioned to collect the identify proof, list of residence proof and list of income proof whereas these documents have not FIRST APPEAL NO. 75 OF 2012 18 been collected by the insurance agent totally ignoring these instructions.
16. The next policy is Ex. C-4 bearing No. 0045766544 and its proposal form is Ex. R-2, which is in the name of Lovpreet Singh. Again in this policy the income has been mentioned as Rs. 4.5 lacs, doing business as Shopkeeper at SCO 154, Sector 35-A, Chandigarh. The premium amount of Rs. 2 lac whereas in the policy it is Rs. 1 Lac. The photograph placed on the last page is not that of the complainant but is of some unknown person and similarly, one witness Ramesh has identified, his full particulars not mentioned only his address has been mentioned and the Insurance Agent again did not comply with the instructions of the IRDA issued vide Circular dated 31.3.2006 Ex. C-8.
17. The next policy is Ex. C-3 bearing No. 0045715460. Its proposal form is Ex. R-4, in which the annual income has been mentioned as Rs. 3,00,000/- and occupation has been mentioned as Govt. Medical College, Sector 32, Chandigarh. The column of age proof has been left blank. No age proof was collected, no occupation proof was collected rather on the other hand, the complainant has placed on the record the document Exs. C-12/1 and C-12/2 in which his monthly income has been shown as Rs. 4,000/- from the service, which comes to Rs. 48,000/- annually and how the Insurance Agent mentioned as Rs. 3 lacs has not been explained. Then the type of annuity opted for is blank. No photo identity is there on the form. One witness Rajinder has been stated to have identified him. Again his parentage is not there, who is that Rajinder and his address is FIRST APPEAL NO. 75 OF 2012 19 mentioned as 131, Sector 11-A, Chandigarh. The Agent is the same, the person taken the insurance policy is the same but there is drastic difference in the proposal form Ex. R-1 and Ex. R-2 with Ex. R-3 and certainly, the guidelines given by the IRDA in its Circular dated 31.3.2006 Ex. C-8 have not been followed.
18. The next policy is Ex. C-1 bearing No. 0045786216 and its proposal form is Ex. R-4 in which again his occupation has been mentioned as Service, Government Medical College, Sector 32, Chandigarh, income Rs. 3,00,000/- and educational standard has been mentioned as 'matriculation' whereas in proposal form Ex. R-1 to R-3 whereas in Exs. R-1 and R-2, it is lying blank, no age proof was collected, no income proof was collected otherwise it is against the documentary evidence produced on the record Ex. C-12/1 to C- 12/2 according to which his monthly income is Rs. 4,000/- and how the Insurance Agent mentioned as Rs. 3,00,000/- is not known. No photo identity is there on the proposal form and again there is violation of IRDA instructions dated 31.3.2006 Ex. C-8.
19. The next policy is Ex. C-2 bearing No. 0050226037 and its proposal form is Ex. R-5, in which his annual income has been mentioned as Rs. 4 lacs, occupation is agriculturist, qualification is 'matriculation', no age proof was collected, no photo identity is there. One witness 'Ramesh' has stated to have identified him, his full particulars are not there. He has shown to be resident of House No. 336, Sector 36-A, Chandigarh, therefore, in five proposal forms, out of which four were taken on 28.3.2007 and one on 4.5.2007 of the same person by the same Insurance Agent, whereas the columns FIRST APPEAL NO. 75 OF 2012 20 filled in these proposal forms are self contradictory; in two proposal forms, occupation has been stated to be 'business', in two 'service' and one in Agriculture. In two proposal forms Ex. R-1 & R-2 his income has been shown Rs. 4.5 lacs, in Exs. R-3 & R-4 Rs. 4 lacs whereas in Ex. R-5, it has been mentioned as Rs. 4 lac. No income proof has been collected. With regard to the identify, photo proof has been collected in two forums and in that too these are not the photographs of the complainant, rather, these are of some unknown person, whereas, in three proposal forms, there is no photo proof, no income proof has been taken, it is certainly against the instructions issued by the IRDA dated 31.3.2006 Ex. C-8.
20. However, the counsel for the respondents has stated that there are SARAL forms of the complainant submitted by him in the Income Tax Department Ex. R-8 to Ex. R-10. Firstly, the perusal of these photocopies of the SARAL form, will reveal that seal No. of the income tax department has been affixed on it, in column of signatures of the receiving official on the left side of the form, it bears the seal of the opposite party only, therefore, its authenticity is doubtful. Moreover, these are the receipts for the assessment year 2004-05, 2005-06, and 2006-07 whereas the policies were taken in the year 2007 and there is no SARAL form pertaining to the year 2006-07 i.e. assessment year 2007-08. So far as the financial supplementary statement is concerned, it is also pertaining to year 2003-04, 2004-05 and 2005-06 and the income has been shown as business income and agricultural income and against both the income, the opposite parties has not been able to substantiate any documentary evidence FIRST APPEAL NO. 75 OF 2012 21 on the record that the complainant was doing any business or was having agricultural income. It has been stated in the complaint that his father was having agricultural land, which was acquired by the Government and he had received the acquisition money and invested that money in those policies. Otherwise no Surveyor was appointed by the opposite parties to see whether the complainant is having any business income or agricultural income whereas the complainant on the record has placed Salary Certificate issued by Govt. Medical College and Hospital, Exs. R-12/1 and R-12/2 and this is not disputed because in two of the proposal forms, it has been mentioned by the Insurance Agent that he is serving in Government Medical College and Hospital, Sector 32, Chandigarh, therefore, we do not subscribe to the arguments of the counsel for the respondents that the income proof was collected for the record and it is not relevant and substantiated by any documentary evidence that the complainant was doing any business or was having any income from the agriculture whereas his clear cut stand is that he is in service, which is also accepted by the opposite parties. In case the proposal form has been obtained by the Insurance Agent by way of mis-representation and terms and conditions have not been made to understand then those are not applicable. As reference can be made to judgment of the Hon'ble Supreme Court reported as "M/s Modern Insulator Ltd. versus Oriental Insurance Co. Ltd.", I (2000) CPJ 1 followed by the Punjab State Commission in First Appeal No. 1583 of 2005 titled as "National Insurance Company Ltd. versus Mona Ohri". FIRST APPEAL NO. 75 OF 2012 22
21. Further no notice was given as required under Section 50 of the Insurance Act, 1938. A reference can be made to the judgment of the Hon'ble National Commission "LIC of India versus Bimla Devi", III (2009) CPJ 370 (NC) that the act of opposite party unilaterally cancelling the policy without giving any notice or option to the complainant is not justified clearly proving the opposite parties are not following the rules and regulations of their own authority, which amounts to unfair trade practice.
22. It has been contended by the counsel for the respondents that Insurance Agent is independent, appointed by the Company, he is authorised by the Company only to arrange, compilation and submission of the proposal form. The Insurance Agent is not authorised to act as the Company's legal representative or act in any other way on behalf of the Company. Information of payment given to the insurance agent should not be considered as having been given to the Company and that there is no relationship of principle or agency between them. But this contention raised by the counsel for the respondents is not accepted because in case the premium is received by the Insurance Agent, the same is forwarded to the Insurance Company on the basis of which they issue the policy. In that way the Company and the Insurance Agent have the relationship of principle and agent otherwise he has no authority to collect the premium on behalf of the insurance company. In case the insurance agent is just to collect the documents then onus becomes more heavy upon the insurance company to verify all the contents mentioned in the proposal form before issuing insurance policy but FIRST APPEAL NO. 75 OF 2012 23 nothing was done to check it whether the information given in the proposal form is correct or whether the complainant actually intend to purchase the policy, which the insurance company has issued. In case we see the totality of the circumstances, it is clear case of mis- representation of the Insurance Agent on behalf of the Insurance Company to fleecing/ freeze the money of the innocent public person on the pretext that in case he invest for three years in single premium policy, his amount will be double whereas the picture is otherwise; the policy was issued as a regular premium policy and three years was just a lock-in period. In case the complainant, who had just income of Rs. 4,000/-, serving on contract basis with the Government Medical College and Hospital, Sector 32, Chandigarh, how he will be in a position to pay premium of Rs. 6 lacs for three years or five years as stated above. Company is also responsible for the acts of the agent as stated above, therefore, it is held that the Company is adopting unfair trade practice in connivance with the insurance Agents to boost their commission and to have their goodwill for good promotion in their respective Companies, therefore, the Ops are liable to return the amount to the complainant. Accordingly, the observation made by the learned District Forum that these are not material are not correct as these facts were not properly considered by the learned District Forum and the order passed by the learned District Forum is liable to be set-aside.
23. In view of the above discussion, we accept the appeal and the order passed by the learned District Forum is set-aside. The complaint filed by the appellant/complainant is accepted with the FIRST APPEAL NO. 75 OF 2012 24 direction to the opposite party/respondent No. 1 to return a sum of Rs. 6 lacs to the complainant alongwith interest @ 9% per annum from the date of receipt till payment; to pay compensation of Rs. 40,000/- for harassment and Rs. 11,000/- as litigation fee.
24. The arguments in this appeal were heard on 10.12.2013 and the order was reserved. Now the order be communicated to the parties as per rules.
25. The appellant had deposited an amount of Rs. 1,000/- with this Commission at the time of filing the appeal. This amount of Rs. 1,000/- with interest accrued thereon, if any, be remitted by the registry to the appellant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum.
26. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Gurcharan Singh Saran) Presiding Judicial Member (Piare Lal Garg) Member December 19, 2013. (Jasbir Singh Gill) as Member