STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

PUNJAB, CHANDIGARH.

First Appeal No.183 of 2021 Date of institution : 26.05.2021 Reserved On : 18.01.2022 Date of decision : 09.02.2022

1. Bharti AXA Life Insurance Company Limited, SCO 3266/1, 2^nd Floor, Sheranwala Gate, Patiala-147001 (Opposite Electricity Board), through its Senior Manager.

2. Bharti AXA Life Insurance Company Limited, Unit 601 & 602, 6^th Floor, Raheja Titanium, Off Western Express Highway, Goregaon (E) Mumbai-400 063.

….Appellants/Opposite Parties No.1 & 2

Versus

1. Gangu Ram Kumra, aged 74 years, S/o Sh. Tirath Dass, Resident of H.No.102, Street No.4, Old Bishan Nagar, Tehsil and District Patiala.

….Respondent/Complainant

2. S.K. Pathak, agent of SMC Insurance Broker, Parsvnath Metro Mall, near Pratap Nagar Metro Station, Pratap Nagar, New Delhi-

110 007.

….Respondent/Opposite Party No.3 First Appeal under Section 41 of the Consumer Protection Act, 2019 against the order dated 06.04.2021 passed by the District Consumer Disputes Redressal Commission, Patiala.

Quorum:-

Hon'ble Mrs. Justice Daya Chaudhary, President Mrs. Urvashi Agnihotri, Member.

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1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No

2) To be referred to the Reporters or not? Yes/No

3) Whether judgment should be reported in the Digest? Yes/No

Argued By:-

For the appellants : Sh. K.S. Cheema, Advocate For respondent No.1 : Sh. N.K. Kumra, Auth. Rep. For respondent No.2 : Ex parte.

JUSTICE DAYA CHAUDHARY, PRESIDENT

The appellants/opposite parties No.1 & 2-Bharti AXA Life Insurance Company Limited & another have approached this Commission by way of filing the present appeal under Section 41 of the Consumer Protection Act, 2019 to challenge the impugned order dated 06.04.2021 passed by the District Consumer Disputes Redressal Commission, Patiala (in short, "the District Commission") in Consumer Complaint No.156 of 2018, whereby the said complaint filed by respondent No.1/complainant-Gangu Ram Kumra was allowed with the direction issued to the opposite parties to refund an amount of ₹2,50,000/- to the complainant along with interest at the rate of 4% per annum from the date of deposit till actual payment. The compliance of the order was directed to be made within a period of 45 days from the date of receipt of the certified copy of the order.

2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.

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3. Briefly, the facts of the case as made out in the complaint are that opposite party No.3, who represented himself to agent of opposite parties No.1 & 2, allured the complainant about the scheme of opposite parties. Believing his representation, the complainant deposited an amount of ₹1,30,000/- by way of a cheque in the name of his grandson namely Yatish Kumra and made his son Narinder Kumra as nominee. A booklet was issued but the same was never read over to the complainant. Further, on the asking of opposite party No.3, the complainant gave a cheque of ₹1,20,000/- to him, who issued the receipt and got signatures of the complainant on some blank papers. It is further mentioned in the complaint that from the month of August, 2016 onwards, the complainant had been receiving messages that the premium amount of ₹1,29,999/- was due against the policy allegedly purchased by him from the opposite parties. One such message was received in the month of October, 2016 for payment of premium of ₹1,19,999/-. The complainant enquired the matter and he came to know that two insurance policies were issued having premiums of ₹1,29,999.06 and ₹1,19,998.95 respectively, which were valid for a period of 12 years and in case of non-deposit premium, the policies were to be lapsed. The complainant never purchased any such policies and he made a request to the opposite parties for refund of the amount deposited by him by way of cancelling the alleged policies as the same were issued by way of fraud but no result.

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4. In the complaint, the complainant prayed for issuance of directions to the opposite parties to refund the amount deposited by him i.e. ₹1,20,000/- and ₹1,30,000/- in the name of Yatish Kumra and Narinder Kumar Kumra respectively along with interest at the rate of 18% per annum from the date of deposits till actual payment and to pay ₹50,000/- towards compensation for causing unnecessary harassment and mental agony besides ₹5,000/- towards costs of litigation.

5. The complaint was contested by the appellants/opposite parties No.1 & 2 by filing joint reply thereto, whereas opposite party No.3 did not appear before the District Commission despite his service and was proceeded against ex parte, vide order dated 18.10.2018.

6. Said complaint filed by the complaint was allowed by the District Commission vide impugned order dated 06.04.2021, with aforesaid directions.

7. Said impugned order dated 06.04.2021 passed by the District Commission has been challenged before this Commission by way of filing the present appeal, by raising various grounds.

8. Mr. K.S. Cheema, learned counsel for the appellants/opposite parties No.1 & 2 submits that the allegations made in the complaint are against opposite party No.3, who is neither the employee nor advisor of the Insurance Company. He was not linked with the working of the Insurance Company in any manner. Learned

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counsel further submits that respondent No.1/complainant has not obtained the policies through any of the agents/employees of the appellants. For the policies, in dispute, the policy holder had availed the services of an independent broker (respondent No.3), who has no concern with the Insurance Company. He further submits that an Insurance Broker is an independent entity licensed by the Insurance Regulatory & Development Authority (IRDA), who advise the customers on their own and thereafter arrange an insurance policy from any Insurance Company as per their own judgment and as per customer's choice. The Insurance Companies do not have any administrative control over the Insurance Brokers, as they are governed by the provisions of IRDA. Respondent No.1/complainant has failed to make said broker as party in the complaint and therefore the complaint was liable to be dismissed on this ground alone being a case of mis-joinder and non-joinder of proper parties. Learned counsel further submits that the respondent/complainant has not placed on record all documents, from which it is clear that he applied for cancellation of policy after receiving the documents. It is mentioned in the complaint that the complainant had received the booklet of policy documents but did not open the same as he had faith in the Company. As per terms and conditions of the policy, if the policy is not suitable, the policy holder may get his/her policy cancelled by returning the policy and policy documents within a period of 15 days, which is called

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as 'Free Look Period'. In such like situation, the Company returns the premium paid to the policy holder after making certain deductions, as specified therein. In the present case, the policy was despatched to respondent No.1/complainant and the same was duly received by him. All documents including the policy were kept but he did not get the policy cancelled within the "Free Look Period". Learned counsel has relied upon various judgments in support of his contentions, which are mentioned as under:

i) General Assurance Society Limited v. Chandumull Jain & Anr.1966 AIR 1644, 1966 SCR (3) 500;

ii) Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. (2010) 10 SCC 567;

iii) Export Credit Guarantee Corporation of India v. Garg Sons International 2013 (1) SCALE 410;

iv) Ravneet Singh Bagga v. KLM Royal Dutch Airlines (2000) 1 SCC 66;

v) Sitaram v. Santanu Prasad AIR 1966 SC 1697;

vi) Oriental Ins. Co. Ltd. v. Munimahesh Patel 2006 (2) CPC 668 (SC);

vii) Reliance Life Insurance Co. Ltd. v. Madhavacharya R.P. No.2011 of 2009 decided vide order dated 02/02/2010 (NC);

viii) Shrikant Apte V. LIC R.P. No.634 of 2012 decided on 02.05.2015 (NC);

ix) Kishore Chandrakant Rathod v. MD ICICI Prudential Life Ins. Co. RP No.3390 of 2013 decided on 21.05.2014 (NC);

x) Mohan Lal Benal v. ICICI Prudential Life Ins. Co. RP No.2870 of 2012 decided on 16.10.2012 (NC);

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xi) Life Ins. Corporation of India v. Siba Prasad Dash IV (2008) CPJ 156 (NC);

xii) Reliance Industries Ltd. v. United India Ins. Co. Ltd. 1998 CPJ 13; and

xiii) Jayantilal Keshavlal Chauhan v. National Ins. Co. Ltd. 1994

(1) CPR 396.

9. Mr. N.K. Kumra, Authorized Representative of respondent No.1/complainant has opposed the contentions raised by learned counsel for the appellants. He further submits that the amount was deposited with the appellants only on the allurement made by opposite party No.3, who is their agent. Said agent suggested one scheme of Bharti AXA Life Insurance, stating that the amount could be invested in a fixed deposit and the complainant would have got double of the invested amount after a period of five years. However, the complainant paid an amount of ₹1,30,000/- and ₹1,20,000/- to the said agent. Only a booklet was received by the complainant but the same was never read over by him as he was having faith in the said agent. Said agent also got signed some blank papers from the complainant. Later on, the complainant received messages for payment of further premiums. On inquiry, he came to know that two policies were fraudulently issued by the appellants for a period of 12 years. It has also been submitted that opposite party No.3-S.K. Pathak, who was an agent of the appellants was arrayed in the complaint as well as appeal but he has failed to appear before the District Commission as well as before this Commission. The appellants have not filed any affidavit of said agent

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to rebut the averments of the complainant. The complainant was never in a position to purchase such policies for such a huge premium, especially being a retired person. The request of the complainant for cancellation of the policies and refund the premium amount was not accepted by the opposite parties.

10. Heard arguments of learned counsel for the appellants as well as the Authorized representative of respondent No.1/complainant. Respondent No.2/opposite party No.3 has not appeared in the appeal despite his service and he has been proceeded ex parte, vide order dated 04.08.2021. We have also perused the impugned order, written submissions of the parties and all other documents available on the file.

11. Facts relating to filing of the complaint by the complainant Gangu Ram Kumra and allowing the complaint vide impugned order dated 06.04.2021 are not disputed.

12. The appellants/opposite parties No.1 & 2 have challenged the impugned order dated 06.04.2021 passed by the District Commission before this Commission mainly on the ground that the District Commission has failed to appreciate that on the basis of proposal form, the policies were issued to respondent No.1/complainant and allegations are against opposite party No.3, who is neither the employee nor advisor of the Company and he was not having any link with the Company, as the Insurance Broker being an

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independent entity licensed by IRDA is having no administrative control over the appellants. Even the complainant has not made the agent/broker as party in the complaint and as such the complaint should have been dismissed on the ground of mis-joinder and non- joinder of parties.

13. It is settled principle of law that if any person signs any document, it is presumed that he or she has signed the documents after reading and understanding the same properly. As per terms and conditions of the policy, in case the policy was not suitable to the insured/policy holder, he or she could have got cancelled it by returning the policy and other documents within a period of 15 days, which is called "Free Look Period" from the date of receipt of the policy. In such situation, the Company would have returned the premium paid by the policy holder after making certain deductions, as mentioned therein.

14. In the present case, the policy along with policy documents was despatched to respondent No.1/complainant and the same was duly received by him. This fact has been admitted by him in the complaint. However, the policy holder after receipt of the policy and other documents did not make any effort to approach the Insurance Company (appellants) for cancellation within the "Free Look Period".

It clearly shows that the policy holder/complainant has accepted the said policy and its documents with all terms and conditions.

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Respondent No.1/complainant has also not placed on record any document to show that he approached the Company with any such request. As per IRDA Regulations, the complainant could have availed the opportunity to review/cancel the policy within the "Free Look Period". There were certain terms and conditions along with the policy, as has been admitted by the complainant in the complaint. The complainant could have read over the contents of the documents i.e. policy and other terms and conditions. As per judgments of case Prema & Ors. v. Life Insurance Corporation of India IV (2006) CPJ 239 (NC) and Kishore Chandrakant Rathod v. MD ICICI Prudential Life Ins. Co. RP No.3390 of 2013 decided by the Hon'ble National Commission vide order dated 21.05.2014, the onus was on the complainant to read all the contents of both the documents i.e. policy and terms and conditions thereof. It has further been held that the complainant is estopped from raising the issues/grievances with respect to refund of premium of the said policy. The complainant is also bound by the policy contract but he gave up/relinquished/ waived off his right by not exercising the "Free Look Period" option.

15. In other judgments of the Hon'ble National Commission of case Mohan Lal Benal v. ICICI Prudential Life Ins. Co. RP No.2870 of 2012 decided on 16.10.2012 and R.P. No.3271 of 2013 (Harish Kumar Chadha v. Bajaj Allianz Life Insurance Co. Ltd.) decided on 07.10.2013, it has been held that in case the insured/complainant is

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not satisfied with the policy taken, then he/she should avail the option of returning the policy with a period of 15 days of receipt i.e. "Free Look Period".

16. In the present case, the District Commission has failed to appreciate that it was not an act of 'deficiency in service' on the part of appellants/opposite parties No.1 & 2, as alleged or otherwise within the meaning of the Consumer Protection Act. Moreover, the complainant was supposed to read each and every term and condition of the policy but did not do so despite receipt of policy and its terms and conditions.

17. The District Commission has allowed the complaint on flimsy grounds and the findings recorded by the District Commission are also in violation of law laid down by the Hon'ble Supreme Court as well as Hon'ble National Commission as well as State Commissions in a number of judgments. Without recoding any categorical finding to make out a case of 'deficiency in service', the complaint filed by respondent No.1/complainant has been allowed. The District Commission has also not taken into consideration certain material and relevant facts and also the legal proposition of law, which are not only material and relevant but also go to the root of the matter. As per the terms and conditions of the policy, the benefits were not payable, as the policy lapsed as only one premium in each policy was paid and thereafter nothing was paid. The District Commission has observed in

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the impugned order that an amount of ₹1,30,000/- was deposited in the month of July, 2015 vide receipt Ex.C-2 and an amount of ₹1,20,000/- was deposited in July, 2016 vide receipt Ex.C-10 and thereafter, no premium was deposited. Thereafter, it has been observed that the Insurance Company cannot withhold the hard earned money of the complainant and it is liable to refund the amount so deposited by the complainant. These observations have been made on its own but that is not the part of the terms and conditions. It appears that the District Commission has not properly appreciated the documents produced by the parties and without any application of mind, the observations have been made, which are contrary to terms and conditions of the policy. The terms and conditions of the policy are to be interpreted between the lines but the same have not been done by the District Commission and we are of the view that the impugned order has been passed without any application of mind and contrary to the terms and conditions of the Insurance Policy.

18. Hon'ble Supreme Court of India has also held in cases of General Assurance Society Limited v. Chandumull Jain & Anr.1966 AIR 1644, 1966 SCR (3) 500 and Export Credit Guarantee Corporation of India v. Garg Sons International 2013 (1) SCALE 410 that while construing the terms and conditions of an insurance contract, paramount importance must be given to the words in which the contract has been expressed by the parties and the same must be

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interpreted as expressed, without any addition, deletion or exclusion, since it is not for the Court to make out a new contract. However, reasonable, if the parties have made it otherwise.

19. In one more judgment of the Hon'ble Apex Court of case Suraj Mal Ram Niwas Oil Mills (P) Ltd. v. United India Insurance Co. (2010) 10 SCC 567 as well as judgment of Hon'ble National Commission of case Reliance Life Insurance Co. Ltd. v. Madhavacharya R.P. No.2011 of 2009 decided vide order dated 02/02/2010, it was held that the insurance between the insurer and insured is a contract between the parties, the terms of agreement including applicability of the provisions and also its exclusions had to be strictly construed to determine the extent of liability of the insurer.

20. In view of the facts and law as discussed above, the order passed by the District Commission is not only contrary to the law but contrary to terms and conditions of the contract of insurance entered between the parties. The same is not sustainable in the eyes of law.

21. Accordingly, we allow the present appeal and set aside the impugned order dated 06.04.2021 passed by the District Commission. Resultantly, the complaint filed by respondent No.1/complainant is dismissed.

22. The appellants had deposited a sum of ₹1,54,500/- at the time of filing of the appeal. Said amount, along with interest which has accrued thereon, if any, shall be remitted by the Registry to appellant

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No.1 by way of a crossed cheque/demand draft after the expiry of limitation period in accordance with law.

23. The appeal could not be decided within the statutory period due to heavy pendency of court cases and pandemic of COVID-19.

(JUSTICE DAYA CHAUDHARY)

PRESIDENT

(URVASHI AGNIHOTRI)

MEMBER

February 09, 2022. (Gurmeet S)