State Consumer Disputes Redressal Commission
Axis Bank Ltd., vs Sukhdial Singh on 1 November, 2013
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 1691 of 2010
Date of institution: 27.9.2010
Date of Decision : 1.11.2013
1. Axis Bank Ltd., Trishul, Opposite Samartheswar Temple, Near
Law Garden, Ellisbridge, Ahmedabad.
2. Prem Kumar Gupta, Branch Manager, Axis Bank, Mall Road,
Ferozepur City.
3. Komal Jaiswal, C/o Axis Bank, Mall Road, Ferozepur City.
.....Appellants/OP Nos. 2, 3 & 5
Versus
1. Sukhdial Singh son of Sampuran Singh, resident of Dilawarpur,
P.O. Phelo Ke, District Tarantaran.
.....Respondent No.1/Complainant
2. Met Life India Insurance Company Ltd., Brigade Seeshmahal, 5
Vani Vilas Road, Basavanagudi, Bangalore.
3. Radhika Khanna (Met Life Representative), C/o Axis Bank
Ferozepur-Moga Road, Moga.
.....Proforma Respondents
Argued By:-
For the appellants : Ms. D.J. Dhatt, Advocate
For respondent No.1 : Sh. Gursimran Singh, Advocate
For respondent No.2 : Sh. Gurwinder Singh, Advocate
For respondent No.3 : Ex.-parte.
First Appeal against the order dated 11.8.2010
passed by the District Consumer Disputes
Redressal Forum, Ferozepur.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Shri Piare Lal Garg, Member Shri Jasbir Singh Gill, Member Gurcharan Singh Saran, Presiding Judicial Member The appellants/ OP Nos. 2, 3 & 5 (hereinafter called "OP Nos. 2, 3 & 5") has filed the present appeal against the order dated 11.8.2010 passed by the District Consumer Disputes Redressal Forum, Ferozepur (hereinafter called "the District Forum") in First Appeal No. 1691 of 2010 2 consumer complaint No. 181 dated 31.3.2010 vide which the complaint of the complainant was accepted and the following directions were given:-
".......Accordingly, we allow the complaint and direct opposite party No. 2, 3 and 5 to pay to the complainant a sum of Rs. 50,000/- towards loss suffered by the complainant due to investment of his amount in mutual funds and insurance policies by misguiding the complainant. Opposite party No. 2, 3 and 5 are held jointly and severally liable for the same. Opposite party No. 1 and 4 are directed to refund to the complainant the insurance premiums paid by the complainant towards his two lapsed policies i.e. policy No. 301010849 and policy No. 301010830. Opposite party No. 1 and 4 are held jointly and severally liable for the same. Orders be complied with within a period of thirty days from the date of receipt of copy of this order. If the opposite parties failed to refund/pay the above said amounts to the complainant within the stipulated period of thirty days, then the opposite parties will be liable to pay interest at the rate of 9% per annum on the unpaid amount from the date of complaint i.e. 31.3.2010 till realization."
2. The complainant-Sukhdial Singh(hereinafter called "the complainant") has filed the complaint under Section 12 of the Consumer Protection Act, 1986 (in short 'the Act') on the allegations that he had visited the opposite bank to deposit his amount in the shape of FDRs but at that time OP No. 3 allured the complainant in connivance with OP Nos. 1 & 2 to make up his mind to invest in different mutual funds and got issued two insurance policies in the name of the complainant without his consent and against his wishes. The opposite party further give assurance to the complainant that these mutual funds will give 12% guaranteed yearly return with which he could pay the yearly premium of these mutual funds, otherwise, the complainant does not have any source of income to pay the yearly premium because this amount was only amount, which he First Appeal No. 1691 of 2010 3 received on account of his retrial benefits from the Indian Army. After sometime when the complainant was asked to deposit the premium of the insurance policies, he immediately requested the Ops that he is not in a condition to pay the amount of the premium but the Ops did not give any satisfactory reply. Then the complainant issued legal notice to the Ops through registered post on 23.12.2009 but its reply was not given. The act and conduct of the Ops tantamount to deficiency in service and unfair trade practice, therefore, the Ops be directed to return the amount to the complainant i.e. Rs. 2,68,000/-, which was invested by the Ops in different mutual funds, pay Rs. 1 lac on account of economic loss, mental harassment, pain, agony and Rs. 11,000/- with litigation expenses.
3. The complaint was contested by the Ops. OP No. 1 in his written statement has stated that she is an employee of Met Life Insurance Company. The complaint itself reveals that he had approached defendant No. 3/OP No. 3, therefore, any mis- representation on her behalf is not possible. Each and every fact regarding investment was made clear by her as per the policies and guidelines of the bank and the insurance company, therefore, there is no question to lure the complainant for any investment and being an employee of the insurance company, she is not liable to pay any claim to the complainant.
4. Respondents No. 2, 3 & 5 in their written statement have taken the preliminary objections that the complainant has filed the present complaint with malafide intention as she is an educated and retired person and he obtained the policies of his own accord; the First Appeal No. 1691 of 2010 4 complainant has already withdrawn the amount from the respective mutual funds and policies; and the claim of Rs. 2,68,000/- has been wrongly claimed and that he has concealed the material facts from the Court. On merits, it has been stated that the complainant himself came to the bank and informed about the various mutual funds and insurance policies; at the time he had told that he had landed property approximately 7-8 acres. The complainant was given the best available information; it has been denied that the complainant had shown his intentions to invest the amount only in the shape of FDRs or that he was mis-guided by the opposite parties. It has also been denied that the Ops in connivance with each other to get wrongful gain committed fraud with the complainant and allured him to invest his amount in different mutual funds. The policies were issued with his consent. It has been denied that the Ops had given any assurance that these policies given 12% guaranteed yearly return with which he can pay the premium of the policies. The complainant himself had purchased the child plan policy, "Met Bavishya" for the welfare of his children and signed all the documents. It has also been denied that the complainant was asked to deposit the installment/premium of the policies upon which he visited the office and told about the status and condition that he is not in a position to pay the policy premium. This plea taken in the complaint is based upon falsehood and is a concocted version as it is also pertinent to mention that he has already withdrawn the amount of the policies, therefore, no reason to pay the premium. It has been denied that the complainant has suffered any loss, harassment on First Appeal No. 1691 of 2010 5 account of any conduct of the Ops, therefore, he is not entitled to any amount as alleged in the complaint, therefore, the complaint is without merit and it be dismissed.
5. OP No. 4 in his written statement has taken the preliminary objections, that the complaint is false, malicious, incorrect, malafide and nothing but an abuse of the process of law and has been filed just to harass the Ops, therefore, it is liable to be dismissed under Section 26 of the Act; there is no negligence or deficiency in service on the part of the Ops; there is no cause of action to the complainant to file the complaint against the Ops as required under the IRDA the complainant had a "Free Look Period" of 15 days during which period the Policy owner is entitled to review the policy and the terms and conditions and request for a cancellation but no such option was exercise by the complainant; the complainant has availed life insurance cover for the period of one year, cannot be permitted to claim for refund of the premium; the complainant has alleged the fraud and the Act and the machinery thereunder cannot be effectively utilized in determining the complicated questions of fraud and cheating; the complainant has filled up and signed a proposal form dated 24.4.2008 bearing No. 300961984 for a "Met Smart Plus" policy and paid premium of Rs. 50,000/- and it was payable annually and accordingly Policy No. 1200800586219 was issued on 17.6.2008 and he had also paid 2nd renewal premium of the policy on 1.7.2009. The complainant had also taken another policy "Met Bhavishya Plan" by filling the proposal form dated 3.6.2008, policy bearing No. 301010849 was issued on the same day and its First Appeal No. 1691 of 2010 6 annual premium was Rs. 56,065/- and by filling another proposal form No. 301010830 policy No. 1200800654828 i.e. "Met Bhavishya Plan"
was issued having its annual premium of Rs. 57,783/- and for all these policies apart from the initial premium, no further amount was deposited. The policy documents contained "Free Look Period" within which the policy cannot be cancelled but this option was not exercised. On merits, again the same plea has been taken as taken in the abovesaid preliminary objections and ultimately, it was stated that there is no merit in the complaint and the same be dismissed.
6. The parties were allowed by the learned District Forum to lead their evidence.
7. In support of his allegations, the complainant had tendered into evidence his affidavit Ex. C-1, first premium receipts Exs. C-2 & 3, mutual fund receipts Ex. C-4 to C-12, copy of legal notice dt. 23.12.09 Ex. C-13, postal receipts Ex. C-14 to C-16. On the other hand, opposite party No. 1 had tendered into evidence her affidavit Ex. R-1 and salary slip Ex. R-2. OP Nos. 2, 3 & 5 had tendered into evidence affidavit of Kuldarsh Thapar Ex. R-3, statement of account Ex. R-4, Form of saving bank account Ex. R-5, copy of Health card Ex. R-6, copy of pan card Ex. R-7, copy of ration card Ex. R-8, copy of form No. 60 Ex. R-9. OP No. 4 had tendered into evidence affidavit of Anil P.M., Deputy Director Legal Ex. R-10, copy of application form Ex R-11 and policy documents Ex. R-12, copy of application form Ex R-13 and policy documents Ex. R-14, copy of application form Ex R-15 and policy documents Ex. R-16, letter of complainant Ex. R-17, reply of letter Exs. R-18&19. First Appeal No. 1691 of 2010 7
8. After going through the allegations in the complaint, written statements, evidence and documents brought on the record, the learned District Forum vide impugned order partly allowed the complaint of the complainant and opposite parties were directed as stated above.
7. Aggrieved with the order passed by the learned District Forum, the appellants/OP Nos. 2, 3 & 5 has filed the present appeal.
8. In the grounds of appeal, it has been contended by the counsel for the appellant that the role of the appellant bank was only as a facilitator or Corporate Agent of the insurance company, namely, Met Life India Insurance Co. Ltd. and it had only facilitated and assisted the complainant to get the insurance policy from the insurance company i.e. Ms. Radhika Khanna of M/s Met Life India Insurance Co. Ltd. i.e. OP No. 1 & 4 and the observations of the learned District Forum that the appellant mis-guided and mis- represented respondent to invest his hard earned money in the mutual funds or the insurance policies has not been substantiated by any evidence whatsoever and the findings are based upon surmises and conjectures. Even evidence brought on the record by the complainant does not substantiate these averments. The learned District Forum has also not considered the contentions of the appellant given in para Nos. 4 & 5 of their written statement. The amount on the basis of which the complaint was filed has also been withdrawn by the complainant before 31.3.2009. The learned District Forum has carved out the case for the respondent/complainant 'on their own'. It has been further contended that under Section 230 of First Appeal No. 1691 of 2010 8 the Indian Contract Act, no liability of the appellant can be fixed. The respondent/complainant had 15 days "Free Look Period" and he did not exercise his option to withdraw the policy during that period. Therefore, the findings of the learned District Forum holding the Ops jointly and severally liable to pay a sum of Rs. 50,000/- as compensation towards the complainant is incorrect and is liable to be set-aside.
9. In case we go through the facts and circumstances of the case, the complainant retired from the Army and had received Rs. 7 lacs as retiral benefits. As per his allegations duly supported by an affidavit, he had come to the Bank to deposit his amount in the FDRs. It has been alleged that he was mis-guided and mis-represented that in case he invest his money in the insurance policies, he will get good return for him. It was further contended by the complainant that he does not have the capacity to pay the annual premium and it was mis-represented that it will give 12% guaranteed return through which he can pay the premium. Certainly, there cannot be any direct evidence with regard to mis-guidance or mis-representation, however, the same can be gathered from the circumstances of the case. As is clear from the allegations in the complaint, firstly, he had taken first policy on 24.4.2008 i.e. "Met Smart Plus" policy and its annual premium was Rs. 50,000/- and he paid just two installments against that policy. On 3.6.2008, he purchased two policies i.e. "Met Bhavishya Plan" in which one of the policy was having annual premium of Rs. 56,065/- and 2nd premium was Rs. 57,783/-. In the proposal form of first policy, it was mentioned that his annual income First Appeal No. 1691 of 2010 9 is Rs. 1,75,000/- and in the second and third policy, it was mentioned that his annual income is Rs. 3 lacs per annum. Certainly, these proposals forms are in the handwriting of the employees of the insurance company and have not been filled up by the insured himself. He just signed this document. It is not known that how within the period of just two months, income of complainant has increased from Rs. 1,75,000/- to Rs. 3,00,000/-. As per pleadings of respondent No. 2/OP No. 4 he has withdrawn his money from the policies. If the intention of the complainant could have been to get the policies and to continue with the same then certainly, he would not have withdrawn the money from his policies. In case his annual income is just Rs. 1,75,000/- as pleaded in the first policy, then, it is very difficult for him to pay an annual premium of Rs. 1,66,000/-. So far as the proposition that he did not cancel the policy within the free look period of 15 days as stated above, he is just matriculate and retired Soldier. All the columns of the proposal form were filled by employees of the insurance company, he just signed it and it is possible in all probability that the terms and conditions were not read over and explained to him and it is only after a period of one year when he did not get any return and had to pay a sum of Rs. 1,66,000/-, then he realized that he is unable to pay annual premium and accordingly, he withdraw the amount from his policies. With regard to source of income, the appellants in their written statement have stated that it was intimated by the complainant that he has 7-8 acres of land but they did not collect any documents to corroborate this version. In case the insurance company give three policies to one person, who First Appeal No. 1691 of 2010 10 has just retired having annual income of Rs. 1,75,000/- then the Company before issuing the policy should verify whether the complainant will be in a position to pay that amount. Further in the statement of the Bank Manager, it has been stated that targets are given to the bank officials and in case they complete the targets then they are given the incentives in the form of increments, promotion etc. and in case targets are not achieved there is a risk to his service. It seems that to get the commission and to complete the targets, the complainant has been made a easy target to invest his hard earned money in the policies without disclosing the market risk in the investment of mutual funds. Therefore, the circumstances surrounding the case disclose that the policies were given to the complainant by way of mis-guidance or misrepresentation and in case any contract between the parties is arrived at by way of fraud and mis-representation then certainly the contract between the parties shall vitiate and the bank cannot be allowed to take the benefit of Section 230. In this regard, the reference can be made to the judgment of the Hon'ble Orissa State Consumer Disputes Redressal Commission, Cuttack "Life Insurance Corporation of India versus Sudhashana Ranee Bhola", II (2007) CPJ 294 wherein it has been observed that 'the claim was repudiated on the allegations of suppression of facts. Contention of the OP that the life assured was neither educated person nor any source of income - Burden to prove that the insured given false statement; lies upon the ins. Co. - In the absence of any evidence in support of plea taken by O.P., claim of complainant accepted.' First Appeal No. 1691 of 2010 11
10. Insurance Company has also filed the written arguments in this case stating that the complainant did not exercise the option to cancel the policy within the 15 days of "Free Look Period" and in case he is alleging fraud and mis-representation then the matter should be referred to the Civil Court because fraud and mis-representation cannot be determined in the summary proceedings. But it is pertinent to mention here that no appeal has been filed by respondent No. 2 against whom the award has been passed, therefore, he cannot challenge the findings so recorded by the learned District Forum without filing any appeal. Therefore, we are of the opinion that the findings so recorded by the learned District Forum are quite reasonable and we do not find any infirmity and the same are hereby affirmed.
11. No other point has been argued.
12. In view of the above discussion, we do not find any merit in the appeal and the same is dismissed with no order as to costs.
13. The arguments in this appeal were heard on 22.10.2013 and the order was reserved. Now the order be communicated to the parties as per rules.
14. The appellants had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the registry to respondent No. 1 by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants and respondents No. 2 & 3. First Appeal No. 1691 of 2010 12
15. Remaining amount shall be paid to respondent No. 1 within 30 days from the receipt of the copy of the order.
16. 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 November 1, 2013. (Jasbir Singh Gill) as Member First Appeal No. 1691 of 2010 13