State Consumer Disputes Redressal Commission
Sbi Life Insurance Company Limited vs Ranjit Kaur on 10 June, 2014
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
(1) First Appeal No.106 of 2012.
Date of Institution: 31.01.2012.
Date of Decision: 10.06.2014.
SBI Life Insurance Company Limited, SCO 109-110, First Floor, Sector
17-B, Chandigarh, having operation office at Central Processing
Centre, Kapas Bhavan, Plot No.3-A, Sector-10, CBD Belapur, Navi
Mumbai-400 614.
.....Appellant/Opposite Party No.1.
Versus
1. Ranjit Kaur W/o Sh. Pritam Singh, R/o Kothi No.123,
Vishavkarma Complex, Ferozepur Road, Fardkot, Punjab.
....Respondent/complainant
2. Pawan Kumar Verma, Clerk, State Bank of Patiala, Circular
Road, Faridkot.
3. State Bank of Patiala, Circular Road, Faridkot, through its Chief
Manager.
....Respondents/Opposite parties no.2 & 3.
Present:-
For the appellant : Sh. Rajneesh Malhotra, Advocate.
For respondent No.1: None.
For respondent No.2: Exparte.
For respondent No.3: Sh. Vikas Chatrath, Advocate.
AND
(2) First Appeal No.152 of 2012.
Date of Institution: 09.02.2012.
Date of Decision: 10.06.2014.
1. State Bank of Patiala, Circular Road, Faridkot, through its Chief
Manager.
2. Pawan Kumar Verma, Clerk, State Bank of Patiala, Circular
Road, Faridkot.
.....Appellants/Opposite Parties No.2 &
3.
First Appeal No.106 of 2012 2
Versus
1. Ranjit Kaur, aged about 68 years, W/o Sh. Pritam Singh, R/o
Kothi No.123, Vishavkarma Complex, Ferozepur Road, Fardkot,
Punjab.
....Respondent/complainant
2. SBI Life Insurance Company Limited, SCO 109-110, First Floor,
Sector 17-B, Chandigarh, having operation office at Central
Processing Centre, Kapas Bhavan, Plot No.3-A, Sector-10, CBD
Belapur, Navi Mumbai-400 614.
....Respondent/Opposite party no.1.
Present:-
For the appellants : Sh. Vikas Chatrath, Advocate.
For respondent No.1: None.
For respondent No.2: Sh. Rajneesh Malhotra, Advocate.
First Appeals against order dated
08.12.2011 passed by the District
Consumer Disputes Redressal Forum,
Faridkot.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Shri Jasbir Singh Gill, Member.
.............................................. J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
This order will dispose of the above referred two appeals i.e. F.A. No.106 of 2012 (SBI Life Insurance Company Limited Vs. Ranjit Kaur & Ors.) and F.A. No.152 of 2012 (State Bank of Patiala & Anr. Vs. Ranjit Kaur & Anr.) together, since both the appeals have arisen out of the same impugned order dated 08.12.2011 passed by the District Consumer Disputes First Appeal No.106 of 2012 3 Redressal Forum, Faridkot (in short, "the District Forum") and can be conveniently decided by means of this common order. The facts are taken from F.A. No.106 of 2012 and the parties would be referred by their status as originally arrayed in the complaint of this appeal.
2. The brief facts are that Smt. Ranjit Kaur, respondent no.1 no.1, being complainant filed a complaint u/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the opposite parties, on the allegations that the complainant is having Account No.55100506865 in State Bank of Patiala, Branch Faridkot. Being persuaded by opposite party no.2, the complainant took SBI Unit Plus II Pension Policy of opposite party no.1. The complainant and her husband have weak eyesight and without explaining the terms and conditions of the proposal, it was rather represented by opposite party no.2 to her that this is the best policy with good return and maturity value thereof would be after three years and the complainant would get Rs.75,000/- against policy premium of Rs.50,000/-. Opposite parties no.2 & 3 further represented to her that the policy would mature after three years therefrom and, thus, persuaded the complainant to move for foreclosure of the policy for getting the benefit and opposite party no.2 thereby got signatures of the complainant for the said purpose on the documents. The amount of premium was withdrawn from the above said account of the complainant for getting the draft prepared for issuing the above policy and opposite parties no.2 & 3 also got the signatures of complainant on 01.11.2010 on the receipt without disclosing any maturity amount of policy and thereafter, transferred the amount of Rs.38,861/- instead of assured amount of Rs.75,000/- to her. This fact came to the knowledge of the complainant on 02.12.2010 and she then wrote the letter to the Managing Director, SBI Insurance First Appeal No.106 of 2012 4 Company Limited, Chandigarh and also to Chief Senior Manager, State Bank of Patiala, Faridkot about the said lapse and deficiency in service, as the complainant was not paid full assured amount of Rs.75,000/- on the basis of above policy. Deduction of Rs.11,139/- is only an act of unfair trade practice, because at the time of filling the proposal, it was never disclosed to her that any deduction would be made from the premium amount of Rs.50,000/- in case of withdrawal of the amount after three years. The complainant is, thus, entitled to receive balance amount of Rs.36,139/- from the opposite parties. The complainant issued a legal notice dated 15.02.2011 to the opposite parties, but it carried not effect on them. The complainant has, thus, prayed that the opposite parties be directed to pay the balance amount of Rs.36,139/- as they only transferred the amount of Rs.38,861/- to her instead of insured amount of Rs.75,000/-, along with interest @ 18% and claimed Rs.20,000/- as compensation and Rs.5,500/- as costs of litigation as well.
3. Notice of this complaint was issued to the opposite parties by the District Forum after admitting the complaint. Opposite party no.1-SBI Life Insurance Co. filed its separate written reply, admitting that it grants insurance coverage to individuals through Individual insurances having some commonality among them. It was averred in preliminary objections that opposite party no.1 had already discharged the contractual obligation under the policy in this case and hence, the complaint is without any substance. The opposite party no.1 has issued the policy in good faith and the complainant has not raised any issue pertaining to the terms and conditions of the policy and rather applied for the surrender of the policy. There is no question of any deficiency in service on the part of opposite party no.1. The opposite First Appeal No.106 of 2012 5 party no.1 has received the proposal form in compliance with all the requirements along with premium amount. There is, thus, no dispute of the terms and conditions of the policy. The opposite party no.1 never forced the complainant to go in for insurance policy. Opposite party no.1 is not privy to the transaction between opposite parties no.2 & 3 and the complainant. On merits, it was pleaded that the proposer is expected to ascertain the terms and conditions of the policy before signing the proposal form. There is even a provision for cancellation of policy under 'Free Look Period" clause in it, if the policy holder does not agree with the terms and conditions of the policy within the stipulated period. After the elapse of three years, the complainant applied for surrender of policy on 10.11.2010 and accordingly, surrender value of Rs.38,861/- was paid through direct credit in the account of the complainant at State Bank of Patiala. The policy would acquire surrender value provided that at least one entire policy years' premium has been paid. The contract of insurance has to incorporate the terms and conditions of the policy document. Opposite party no.1 denied the allegations of the complaint. The complainant signed the proposal form after duly understanding the terms and conditions of the policy. Opposite party no.1 vehemently denied any deficiency in service on its part. Opposite party no.1 sent reply to the legal notice to the complainant, requesting the supply of policy details by her. A complaint was received from the complainant on 07.12.2010, which was duly replied on 10.12.2010 by the opposite parties. Opposite party no.1 prayed for dismissal of the complaint.
4. Opposite parties no.2 & 3 filed their separate written reply, contesting the complaint of the complainant stoutly. It was averred in the preliminary objections that complicated questions of law and facts First Appeal No.106 of 2012 6 are involved in this case which require detailed evidence to examine them. The complainant entered the proposal for SBI Unit Plus II Pension Policy voluntarily. Rest of the averments regarding taking undue benefit of ignorance of the complainant were denied. It was further denied that the maturity amount of the above policy was Rs.75,000/-. It was admitted that the complainant deposited the premium of Rs.50,000/- by withdrawing it from her account towards this policy premium. It was further averred that opposite party no.1 accepted the premium paid by the proposer and the policy and in return thereof, it issued the policy to the purchaser. It was alleged that there is no deficiency in service or unfair trade practice on the part of opposite parties no.2 & 3 and hence they prayed for dismissal of the complaint.
5. In support of her contentions, the complainant tendered in evidence her own affidavit Ex.C-1 along with legal notice dated 15.02.2011 Ex.C-2, postal receipts Ex.C-3 and Ex.C-4, reply dated 91,93,2911 to legal notice Ex.C-5, Acknowledgment Ex.C-6, proposal deposit receipt showing deposit of instalment of premium of Rs.50,000/- by complainant Ex.C-7 and additional affidavit of complainant Ex.C-8. To rebut it, opposite party no.1 tendered in evidence affidavit of V. Srinivas, Legal Head in SBI Life Insurance Co. as Ex.R-1, insurance policy documents Ex.R-2, copy of proposal form Ex.R-3, surrender application form Ex.R-4, transaction-cum-unit statement Ex.R-5, letters dated 25.11.2010 and 10.12.2010 issued by opposite party no.1 to the complainant Ex.R-6 & Ex.R-7 respectively, Ex.R-8 is the order of the Hon'ble National Commission in Revision Petition No.2884 of 2010 decided on 10.12.2010, Ex.R-9 is the judgment of Hon'ble National Commination in case "United India Ins. First Appeal No.106 of 2012 7 Co. Vs Subhash Chandra",R.P. No.469 of 2006 and Ex.R-10 is the affidavit of Sh. Pawan Kumar, SWO, State Bank of Patiala. On conclusion of evidence and arguments, the District Forum partly accepted the complaint of the complainant and directed the opposite parties to pay the amount of Rs.11,139/- being less of amount of Rs.50,000/- along with interest @ 12% p.a. from the date of its payment till realization of amount and further to pay Rs.5,000/- as compensation. It was further held that the liability of the opposite parties is joint and several to comply with the order. Aggrieved by the above impugned order, the appellant/opposite party no.1 has preferred the main appeal i.e. F.A. No.106 of 2012 (SBI Life Insurance Company Limited Vs. Ranjit Kaur & Ors.), whereas opposite parties no.2 & 3 filed separate connected appeal i.e. F.A. No.152 of 2012 (State Bank of Patiala & Anr. Vs. Ranjit Kaur & Anr.). The order will be announced by this Commission in the main appeal i.e. F.A. No.106 of 2012 (SBI Life Insurance Company Limited Vs. Ranjit Kaur & Ors.).
6. We have heard the submissions of learned counsel for the parties and have also examined the record of the case. The gist of the allegations of the complainant is that she is account holder with opposite party no.1 State Bank of Patiala at Faridkot, vide Account No.55100506865. On the inveiglement of opposite parties no.2 & 3, the SBI Unit Plus II Pension Policy was taken by the complainant on 12.10.2007. She paid the instalment of premium of Rs.50,000/- towards it. Opposite parties no.2 & 3 took undue advantage of her nescience and of her husband about the insurance transaction. It was held out to her that she would get 12% interest on the premium amount First Appeal No.106 of 2012 8 of Rs.50,000/- or more than one and a half of the amount being so deposited by her, when she took the above policy. On the basis of this persuasion, she took the above policy. She has also filed her affidavit Ex.C-1, corroborating the averments of the complaint in verbatim. It is further stated in the complaint as well as in her affidavit that after the lapse of three years, she was asked by opposite parties no.2 & 3 to apply for the return of the above amount. Instead of returning the premium amount of Rs.50,000/- with interest @ 12% p.a.; only the amount of Rs.38,861/- was deposited in her account maintained with opposite party no.3. She ascertained it, when she received the above amount of Rs.38,861/- that it was, in fact, a market related policy, but at the time of getting the cover note/application form filled from her, it was represented to her that at least 12% profit or one and a half more amount thereof to the tune of Rs. 75,000/- would be paid to her. Even the less amount of Rs.11,139/- out of the original premium amount of Rs.50,000/- has been paid to her without any valid reason. Her affidavit Ex.C-1 is in support of her allegations and it embodies the averments of the complaint in toto. Copy of legal notice is Ex.C-2, postal receipts Ex.C-3 and Ex.C-4, reply to legal notice Ex.C-5, AD Ex.C-6, proposal deposit receipt showing deposit of instalment of premium of Rs.50,000/- Ex.C-7 and additional affidavit of complainant Ex.C-8.
7. To rebut this evidence, opposite party no.1 relied upon affidavit of V. Srinivas, Legal Head to the effect that it has discharged the contractual obligation under policy no.28010303207 as per terms and conditions of the policy and hence, cause of action of the complainant has to come an end to file the complaint. Opposite party no.1 issued policy in good faith on the basis of above proposal form of the complainant and the complainant has not raised any issue First Appeal No.106 of 2012 9 pertaining to the terms and conditions of the policy. She rather applied for the surrender of policy. The complainant is bound by the terms and conditions of the insurance policy and cannot back out them. She was fully aware of the terms and conditions of the policy, when she filled the proposal form, while taking this policy. It was admitted that the premium amount of Rs.50,000/- was received from the complainant through State Bank of Patiala, opposite party no.3, which amount was actually withdrawn from her account for payment of above premium. It was further deposed that it was only a market related policy and calculation of surrender amount thereof came to Rs.38,861/-. It was denied in the affidavit that the complainant was not aware of the terms and conditions of the policy. Ex.R-2 are the copies of the policy with terms and conditions. The proposal form is Ex.R-3 dated 12.10.2007 on the record, vide which, premium of Rs.50,000/- was received from the complainant by way of draft No.746346 dated 11.10.2007. Ex.R-4 is the surrender application form of the complainant dated 08.1.2010. Ex.R-5 is the transaction-cum-unit statement, Ex.R-6 & Ex.R-7 respectively are the letters dated 25.11.2010 and 10.12.2010 issued by opposite party no.1 to the complainant, Ex.R-8 is the order of the Hon'ble National Commission in Revision Petition No.2884 of 2010 decided on 10.12.2010, Ex.R-9 is the judgment of Hon'ble National Commination in case "United India Ins. Co. Vs Subhash Chandra",R.P. No.469 of 2006, which have been exhibited, it was not fair to exhibit them in evidence and rather only to cite the law point. So whatever the case may be. Ex.R10 is the affidavit of Pawan Kumar, SWO of State Bank of Patiala, in denial of the averments of the complainant to the effect that the terms and conditions of the insurance policy were not made clear to the complainant at the time of filling the proposal form. First Appeal No.106 of 2012 10
8. Opposite party no.1, now appellant, mainly relied upon Ex.R-8 the judgment of the Hon'ble National Commission i.e. Revision Petition No.2884 of 2010 "SBI Life Ins. Co. Ltd. Vs. Smt. Asha Dixit", decided on 10.12.2010. This authority is to the effect that since the insurance premium was debited by State Bank of Patiala for providing insurance cover to the insured and the liability of the bank was confirmed. This authority arose from different facts and would not be attracted in this case. Ex.R-9 is the judgment of the Hon'ble National Commission in Revision Petition No.469 of 2006 "United India Ins. Co. Ltd. Vs Subhash Chandra", decided on 19.05.2010 to the effect that the complainant being literate person, it would be expected of him to ascertain the terms and conditions of the policy before signing the proposal form, more so, when it was a case of obtaining Mediclaim policy. Each of the authority arises on its own facts and circumstances. The facts and circumstances of the cited authorities are not par-materia with the facts of the case in hand. In the law of precedents, it is the ratio decidendi of the judgment which has the applicability. Each part of the judgment cannot be said to have the ratio of the judgment. Each of the case is peculiar with its own facts and circumstances and is decided in view of the particular circumstances of that very case.
9. The District Forum has arrived at this conclusion that opposite parties no.2 & 3 are the agents of opposite party no.1 and due to increase of competitive market practices by the banks, which generally induce the customers to purchase such financial policies on behalf of the insurer; they allure the customers by their misleading information system. Similarly, the District Forum further observed that the insurance policy was not supplied to the complainant by the First Appeal No.106 of 2012 11 opposite parties and there is no document like dispatch number, receipt number on the record with regard to supply of this insurance policy, containing full terms and conditions. The complainant could have opted for the cancellation of the policy immediately, had she been supplied any such policy by the opposite parties in this case. In the absence of the same, it was not possible for the insured to opt for the cancellation of the policy. We agree with the findings of the District Forum that there is no record or other evidence to this effect as to when the insurance policy was actually dispatched to the complainant by opposite party no.1. There is no record on the file as to who received this policy document on behalf of the complainant. There is no such evidence to this effect that when this fact was especially in the knowledge of opposite party no.1, and it could have proved it by leading evidence to this effect on the record. The complainant has categorically deposed and also sworn affidavit that she never received the insurance policy document, containing full terms and conditions thereof. She has also sworn supplementary affidavit Ex.R-13 reiterating her stand to this effect on the record by categorically deposing that she has not been supplied with any such insurance policy. The complainant could have taken the benefit of free look period clause provided in the terms and conditions of the policy, vide clause no.20 thereof, had she been supplied this policy containing terms and conditions by opposite party no.1. Since no such insurance policy is proved to have been supplied to the complainant, hence, there is no question of opting for free look period to go in for cancellation of the policy by her in this case. We are not unaware of this fact that the banks are persuading the customers to go in for insurance policy, acting as agents of the insurer as a result of aggressive market First Appeal No.106 of 2012 12 practices adopted especially by the banks. They induce the customers to purchase such policies. The complainant has pleaded and sworn in the affidavit, which is not rebutted, that no such insurance policy was ever supplied to her and due to this reason, she could not get the benefit of free look period clause for cancellation of the policy within time. Opposite party no.1 is expected to lead evidence to this effect as to on which date the insurance policy was supplied to the complainant by virtue of which dispatch and receipt number and thereafter, who received it for the complainant. There is no such document to this effect on the record. When we arrive at this finding of fact that the complainant had not received the insurance policy with full terms and conditions, therefore, there is no question of taking the benefit of free look period clause thereof by the complainant.
10. The next submission of the opposite parties is that the complainant applied for surrender of policy after 3 years only if she was supposed to be provided with the policy. This contention carries no force as the complainant could have got cancelled the policy after a lapse of 3 years when she was interested in the refund of her amount. Hon'ble National Commission has, of late, examined this point in "The Oriental Insurance Co. Ltd. Vs Satpal Singh & Ors.", 2014 (2) CLT-305 holding that the insured is not bound by the terms and conditions of the insurance policy, unless it is proved on the record that the policy has been supplied to the insured by the insurance company. The onus to prove that the terms and conditions of the policy were supplied to the insured lies upon the insurance company. The contention of the insurance company was repelled that the cover note duly recorded them. It was observed that every insured is not computer savy to ascertain the terms and conditions thereof. This authority of the First Appeal No.106 of 2012 13 Hon'ble National Commission is directly applicable to the facts and circumstances of the case. On the basis of law laid down by the Hon'ble National Commission as well as the facts and circumstances of the case, we have reached this conclusion that opposite party no.1 has failed to prove that the terms and conditions of the policy were ever supplied to the complainant. Reliance of the opposite parties, now appellants, on law laid down in "Unit Trust of India Vs. Iqbal Chand Arora", IV (2006) CPJ-414 (NC) is to the effect that net assesses value is bound to fluctuate after one year and NAV went below face value of Rs.10 lacs and he got back Rs.1,83,000/-. The claim for refund of balance amount is not acceptable. The cited authority is not applicable due to different factual background involved in this case. Similarly, reliance was placed by the opposite party on "Life Insurance Corporation of India Vs. Anil P. TadkaSkar", I (1996) CPJ-159 (NC). This authority is based on the facts that the service under the policy can arise only after occurrence of contingencies i.e. maturity or the policy of death of the insured. Each of the authority arises of its own facts and the facts of the case are not covered by them.
11. The next point is as to whether the District Forum is justified in jointly and severally holding the liability of the opposite parties. We find that opposite parties no.2 & 3 acted as agents of opposite party no.1 and prevailed upon the complainant to go in for insurance policy. Opposite party no.1 is actually the beneficiary of this insurance policy and here its liability has to be fixed jointly and severally with opposite parties no.2 & 3. The amount was withdrawn from the account of the complainant by opposite parties no.2 & 3 to go in for insurance policy by her. The liability of opposite parties no.1 to 3 has to be joint and several in our view. The District Forum has, thus, First Appeal No.106 of 2012 14 correctly recorded the findings holding the opposite parties jointly and severally liable to the complainant.
12. In view of above detailed discussion, we have come to the conclusion that this is a case of deficiency in service and unfair trade practice on the part of the opposite parties no.1 to 3. We affirm the order passed by the District Forum under appeal and dismiss both the appeals i.e. F.A. No.106 of 2012 (SBI Life Insurance Company Limited Vs. Ranjit Kaur & Ors.) and F.A. No.152 of 2012 (State Bank of Patiala & Anr. Vs. Ranjit Kaur & Anr.).
13. The appellant in F.A. No.106 of 2012 had deposited the amount of Rs.8,875/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the respondent no.1/complainant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant. Remaining amount as per order of the District Forum shall be paid by the appellant and opposite parties no.2 & 3 to the complainant within 45 days of receipt of copy of the order.
14. The appellants in F.A. No.152 of 2012 had deposited the amount of Rs.12,000/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the respondent no.1/complainant way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants. Remaining balance amount, if any, as per order of the District Forum shall be paid by the opposite parties to the complainant within 45 days of receipt of copy of the order. If any excess amount, as per order of the District Forum, is First Appeal No.106 of 2012 15 paid to complainant, then the complainant shall return the same to the opposite parties.
15. Arguments in both these appeals were heard on 03.06.2014 and the orders were reserved. Now the order be communicated to the parties. The appeals could not be decided within the stipulated period due to heavy pendency of court cases.
16. Copy of order be placed in F.A. No.152 of 2012 (State Bank of Patiala & Anr. Vs. Ranjit Kaur & Anr.).
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (JASBIR SINGH GILL) MEMBER June 10, 2014.
(Gurmeet S) Referred to Reporter (J. S. KLAR) PRESIDING JUDICIAL MEMBER