State Consumer Disputes Redressal Commission
1. M/S Kotak Mahindra Old Mutual Life ... vs Komalpreet Kaur on 4 October, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 338 of 2013 Date of Institution : 05.08.2013 Date of Decision : 04/10/2013 1. M/s Kotak Mahindra Old Mutual Life Insurance Limited having their 7th Floor, Kotak Infinite, Building No.21, Infinity Park, Off Western Express Highway, General A.K. Vaidya Marg, Malad (E), Mumbai 400097 India, through its Managing Director. 2. M/s Kotak Mahindra Old Mutual Life Insurance Limited, SCO No. 5, Top Floor, Sector 34-C, Chandigarh, through its Branch Manager. 3. Sh. Vikram Sharma, Sales Manager, M/s Kotak Mahindra Old Mutual Life Insurance Limited, SCO No. 5, Top Floor, Sector 34-C, Chandigarh. Appellants/Opposite Parties V e r s u s Komalpreet Kaur daughter of Sh. Pratap Singh, resident of H.No. 5701/A, Sector 38 (West), Chandigarh. ....Respondent/complainant Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER.
Argued by: Sh. Mrigank Sharma, Advocate for the appellants.
Sh. Vivek Mohan Sharma, Advocate for the respondent.
PER JUSTICE SHAM SUNDER (RETD.), PRESIDENT This appeal is directed against the order dated 20.06.2013 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 complainant (now respondent) and directed the Opposite Parties (now appellants), jointly and severally, as under:-
We thus also allow this complaint and direct the Opposite Parties to pay the amount of Rs.10,000/-
- Rs.2,000/- = Rs.8,000/- to the Complainant, as per Regulation 7 mentioned above. Opposite Parties will also pay Rs.3000/- as costs of litigation.
This order be complied with by the opposite parties within 45 days from the date of receipt of its certified copy, failing which due amount will carry interest @9% p.a. from the date of this order till actual payment, besides the costs of litigation.
2. The facts, in brief, are that on the false assurance of Opposite Party No.3, Agent of Opposite Parties No.1 and 2, the complainant purchased an Insurance Policy, from them (Opposite Parties No.1 and 2), on payment of premium, to the tune of Rs.10,000/-, vide cheque dated 02.03.2010. It was stated that the complainant had been told by Opposite Party No.3, that the Policy was valid for a period of 05 years, and no sum would be deducted, if the amount invested, in the same, was withdrawn, before maturity i.e. after 03 years. It was further stated that the complainant was surprised, when she received the Policy document, as the terms and conditions of the same, were totally different than the one, which were explained by Opposite Party No.3, to her, at the time of purchase of the Policy. It was further stated that that the Opposite Parties had also concealed the material facts, with regard to the deduction of fund management charges @ 1.35% and administrative charges @1%, besides other applicable charges, in respect of the Policy, in question. It was further stated that, on receipt of the Policy, the complainant vide letter 29.03.2010 Annexure R/4, requested the Opposite Parties, for alteration of the terms and conditions of the same. It was further stated that, in reply to the said letter, the complainant, received letter dated 05.04.2010 (Annexure C-4), wherein the Opposite Parties stated that the Electronic Clearance System Form (ECS Form), was required to process her request. It was further stated that, when no action, in the matter, was taken by the Opposite Parties, the father of the complainant, vide letter dated 25.4.2010, requested Opposite Party No.1, to refund the amount, deposited by the complainant, towards the said Policy, alongwith interest, but to no avail. It was further stated that a complaint, in this regard, was made to the Insurance Regulatory Development Authority (I.R.D.A.), as also the Insurance Ombudsman, but the Opposite Parties did not pay any heed, to the same. 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 complainant, 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 premium amount of Rs.10,000/-, alongwith interest @24% P.A., from the date of payment, till realization; pay compensation, to the tune of Rs.25,000/- for mental agony and physical harassment; and cost of litigation, to the tune of Rs.11,000/-.
3. Opposite Parties No.1 and 2, in their joint written version, admitted the purchase of Policy, in question, by the complainant, from them, on payment of premium, to the tune of Rs.10,000/-. It was stated that the Policy, in question, was issued to the complainant, based on the details, furnished in the proposal form Annexure R-2. It was further stated that the complainant herself had opted for premium payment term of 20 years. It was further stated that, in case, the terms and conditions of the Policy, were not acceptable to the complainant, she could make a request for cancellation of the same (Policy), within 15 days of free-look-period, but she did not do so. It was further stated that, it was only vide letter dated 29.03.2010, that the complainant approached Opposite Parties No.1 and 2, with a request to increase the sum assured, in respect of the Policy, in question, to Rs.3,00,000/- from Rs.1,00,000/-. It was further stated that the said letter was responded to, by Opposite Parties No.1 and 2, vide letter dated 05.04.2010. It was further stated that subsequently, the complainant raised certain concerns, before the I.R.D.A. and the Insurance Ombudsman, which were still pending, before them. It was further stated that the complainant had never approached Opposite Parties No.1 and 2, for cancellation of the Policy, in question, or refund of the premium amount, during the free-look-period, but, on the other hand, had approached them for increase in the amount of sum assured, referred to above. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties No.1 and 2, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
4. Despite service, none put in appearance, on behalf of Opposite Party No.3, as a result whereof, he was proceeded against exparte.
5. The complainant and Opposite Parties No.1 and 2, led evidence, in support of their case.
6. After hearing the Counsel for the complainant, Opposite Parties No.1 and 2, 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.
7. Feeling aggrieved, the instant appeal, has been filed by the appellants/Opposite Parties.
8. We have heard the Counsel for the parties and, have gone through the evidence, and record of the case, carefully.
9. The Counsel for the appellants, submitted that the complainant subscribed to the Policy, namely Kotak Super Advantage, commencing from 22.03.2010, for the period of 20 years, for the basic sum assured, to the tune of Rs.1 lac, with half year regular payment of premium, to the tune of Rs.10,000/-. He further submitted that the Policy documents, were received by the complainant, on 22.03.2010. He further submitted that, in case, the terms and conditions of the Policy, were not acceptable to the complainant, she could make a request for cancellation of the same (Policy), within 15 days of free-look-period, from the date of receipt of the same, but she did not do so. He further submitted that after paying a sum of Rs10,000/-, on account of the first premium, the complainant failed to pay further premiums, and, thereafter, she stopped paying the same. He further submitted that the complainant was duly intimated, with regard to payment of further premiums, but she did not bother. He further submitted that the complainant was also intimated that, in case, the Policy was not revived, within the revival period, as mentioned in the contract, by payment of the remaining premiums, as also other charges due, the same (Policy) would be terminated, at the end of the revival period. However, the complainant failed to pay further premiums, and other charges, with a view to revive the Policy, as a result whereof, it lapsed and, subsequently, stood terminated. He further submitted that the Policy could acquire surrender value, only if the complainant had paid regular premiums, for a period of three consecutive Policy years, but she failed to do so. He further submitted that, as such, the Policy did not acquire any surrender value. He further submitted 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, and had prospective effect and not retrospective effect. He further submitted that these Regulations did not have any bearing, on the Policy, in question, which was purchased by the complainant, on 22.03.2010. He further submitted that the District Forum passed an illegal order, asking for the refund of premium paid minus (-) deductions, to the complainant, by relying upon the aforesaid Regulations. He further submitted that the order of the District Forum, being illegal, is liable to be set aside.
10. On the other hand, the Counsel for the respondent/complainant, submitted that the IRDA Regulations 2010, were applicable to the Policy, in question, as the same continued, after the same (Regulations 2010) came into force, on 01.07.2010. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.
11. The first question, that falls for consideration, is, as to, on which date, the Policy was received by the complainant, and whether, she exercised her option, for cancellation of the same, within the free-look period of 15 days, from the date of receipt of the same, or not, if she was not satisfied with the terms and conditions of the same. There is, no dispute, about the factum, that the Policy, in question, was issued and received by the complainant, on 22.03.2010. Admittedly, the complainant only paid one premium, to the tune of Rs.10,000/-, on 02.03.2010, when the proposal form was signed by her. In the Policy document Annexure A/1 dated 22.03.2010, received by the complainant, it was clearly mentioned on the first page itself, that in case you are not agreeable to any of the provisions stated in the Policy, then you have the option of returning the Policy to us (Company) stating the reasons thereof within 15 days from the date of receipt of the Policy. The complainant, for the first time, sent letter 29.03.2010, Annexure R-4, to the Manager of Opposite Parties No.1 and 2, the relevant contents whereof, read as under:-
This is to state that I have taken a Policy in your Company in Kotak Super Advantage Plan (Policy No. 01925742) amounting to Rs.10000 on half yearly mode. The sum assured in the current Policy is Rs.100000. Now, I want to increase the sum assured to Rs.300000 from Rs.100000. Kindly increase the sum assured and issue me new Policy ASAP.
12. Perusal of the contents of the letter, extracted above, clearly reveals that, on 29.03.2010, i.e. after 07 days of receipt of the Policy documents, the complainant, only requested Opposite Parties No.1 and 2, to increase the sum insured, to the tune of Rs.3,00,000/- from Rs.1,00,000/-, in respect of the Policy, in question, and not for cancellation of the same (Policy).
Thereafter, another letter dated 25.04.2010 Annexure C-5, was sent by the complainant, to Opposite Parties No.1 and 2, for refund of Rs.10,000/-, paid by her, as first premium, towards the said Policy, as she was not satisfied with the terms and conditions of the same. It means that the letter dated 25.04.2010 was sent to the Opposite Parties, by the complainant, beyond the free-look period of 15 days, from the date of receipt of the Policy documents. In case, the complainant 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 i.e. latest by 07.04.2010, and ask for cancellation thereof, but she did not do so. The complainant failed to produce, any document, on the record, to prove that she approached the Opposite Parties, during the free-look-period of 15 days, from the date of receipt of the Policy, to cancel the same and refund the amount paid by her, to the tune of Rs.10,000/-, as she was not satisfied with the terms and conditions of the same. On the other hand, as stated above, during the free-look-period, only letter dated 29.03.2010, was written by the complainant, to Opposite Parties No.1 and 2, with a request to increase the sum assured, aforesaid, in respect of the said Policy. Under these circumstances, Opposite Parties No.1 and 2, were well within their right, to decline the request of the complainant, for cancellation of the Policy, in question, and refund the amount of Rs.10,000/-, deposited by her, towards first premium.
By no stretch of imagination, therefore, it could be said that by declining the request of the complainant, for cancellation of the Policy, in question, the Opposite Parties acted arbitrarily or illegally. There was, therefore, no deficiency, in rendering service, on the part of the Opposite Parties.
13. The District Forum, relied upon Regulation 7 of the aforesaid Regulations, for coming to the conclusion that since the Policy stood terminated, in the year 2012, the complainant was entitled to the refund of amount of premium paid by her minus (-) some deductions, provided therein. In our considered opinion, the District Forum was wholly and completely remiss, in relying upon the aforesaid Regulations 2010. Perusal of the aforesaid Regulations of 2010, clearly shows that the same came into force, on 01.07.2010, the date of publication thereof. Thus, the said Regulations had no retrospective effect, but, on the other hand, the same had prospective effect. Under these circumstances, the Policy, which had been issued on 22.03.2010, i.e. before these Regulations came into force, could not be dealt with, under the same (Regulations 2010). The District Forum, was, thus, wrong in holding that, by not refunding the amount of premium, as per the aforesaid Regulations of 2010, to the complainant, the Opposite Parties were deficient, in rendering service. The findings of the District Forum, in this regard, being perverse, are reversed.
14. No other point, was urged, by the Counsel for the parties.
15. 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.
16. For the reasons recorded above, the appeal is accepted, with no order as to costs. The order of the District Forum is set aside.
17. Certified copies of this order, be sent to the parties, free of charge.
18. The file be consigned to Record Room, after completion Pronounced.
October 4, 2013 Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Rg STATE COMMISSION (First Appeal No. 338 of 2013) Argued by: Sh. Mrigank Sharma, Advocate for the appellants.
Sh. Vivek Mohan Sharma, Advocate for the respondent.
Dated the 4th day of October 2013 ORDER Vide our detailed order of the even date, recorded separately, this appeal has been accepted, with no order as to costs.
(DEV RAJ) MEMBER (JUSTICE SHAM SUNDER (RETD.)) PRESIDENT Rg