[It is not uncommon to find that an ignorant consumer, in his misplaced enthusiasm to seek relief under the Consumer Protection Act, ventures to approach the District Forum, even for inadmissible reliefs.  The following case very well illustrates how an hapless consumer who had taken an Insurance Policy, without understanding the terms of the Policy, finally ended up pursuing his case for over 5 years in the 3-tier quasi-judicial machinery, getting flattering verdicts from both the District Forum and the State Commission, which is finally negated by the National Commission.  Incidentally, this Revision Petition would not be possible after the proposed amendments to the CP Act.  Let the bureaucracy which puts forward such illogical amendments understand the implications. – Chief Mentor]


M/S. RELIANCE LIFE INSURANCE CO. LTD.,
MG Palace, Gopi Circle,
Shimoga, Karnataka                                                ...........Petitioner(s)
                                                 Versus    
K.S. ESHWARAPPA
S/o Shri Sharanappa,
R/o. Jayalakshmi Gundappa Shed, Malleshwara Nagar,
Main Road,
Shimoga, Karnataka                                               ...........Respondent(s)

BEFORE :
HON’BLE MR. JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER

PRONOUNCED ON    21st  JANUARY, 2015

 
PER JUSTICE K.S. CHAUDHARI, PRESIDING MEMBER
    
These revision petitions arise out of single order of State Commission, hence decided by common order.

2.    Revision petition No. 555/2011 has been filed by the petitioner/opposite party and revision petition no. 1004/2011 has been filed by the petitioner/opposite party against order dated 26-11-2010 passed by the learned State Consumer Disputes Redressal Commission, Karnataka (in short, ‘the State Commission’) in Appeal No. 1252/2010 – Reliance Life Insurance Co. Ltd. & Anr. Vs. E.S. Eashwarappa, by which while dismissing appeal, order of District Forum allowing complaint was upheld.

3.    Brief facts of the case are that complainant/respondent obtained life insurance policy no. 12439010 from opposite party/petitioner with understanding that policy has been issued to him on single premium basis.  After one year, on receipt of premium notice he came to know that investment made by him was erroneously treated on regular premium basis though he obtained insurance policy on single premium payment.  Alleging deficiency on the part of the opposite party, complainant filed complaint before District with prayer to refund premium amount.  Opposite party resisted complaint and submitted that complainant obtained policy for Reliance Automatic Investment Plan on early premium basis.  It was further submitted that policy was issued to the complainant with risk commencement date 09-09-2008 with sum assured of Rs.50 lakhs for 10 years.  Terms and conditions were duly explained to him and complainant filled proposal form for issuance of policy and thereafter policy was issued to him.  It was further submitted that as per Section 6(2) of IRDA Regulations, complainant was free to avail free look cancellation or modification of policy within 15 days of the receipt of the policy document, but as complainant had not applied for cancellation of policy within stipulated period now policy cannot be cancelled and he is not entitled to refund of premium and prayed for dismissal of complaint.  Learned District Forum after hearing both the parties allowed complaint and directed opposite party to refund Rs.9,99,999/- with 12% p.a. interest and further allowed Rs.10,000/- towards litigation expenses.  Opposite parties filed appeal before State Commission, which was dismissed by learned State Commission vide impugned order against which these revision petitions have been filed.

3.    Heard learned Counsel for the parties and perused record.

4.    Learned counsel for the petitioners submitted that in spite of proof by the petitioner that respondent obtained regular policy with yearly premium, learned District Forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal, hence revision petition be allowed and impugned order be set aside.  On the other hand, learned counsel for the respondent submitted that order passed by learned State Commission is in accordance with law, hence revision petition be dismissed.

5.    The core question to be decided in this case is whether complainant obtained policy on the basis of single premium or on the basis of yearly premium.  Perusal of proposal form for Reliance Automatic Investment Plan clearly reveals that complainant opted for policy on regular basis and premium was to be paid yearly.  He submitted proposal form on  20-08-2008 and also signed letter  dated 21-08-2008, which was addressed by him to Manager, Reliance Life Insurance Co. Ltd., in which his declarations runs as under:---

“I hereby declare that have gone through and understood the Benefit Illustration in detail and released the proposal form and the cheques dated much earlier only after understanding the BI.”

6.    This declaration makes it clear that he had gone through BI (Benefit Illustrations) in detail and only after understanding benefit illustrations, he submitted proposal form along with cheque of Rs.9,99,999/-.  Perusal of benefit illustrations for Reliance Automatic Investment Plan clearly reveals that for a period of 10 years premium @ Rs.9,99,999/- yearly was to be paid in which it has specifically been mentioned that if 6% interest rate is assumed his refund will be Rs. 11,611,876/- and if 10% interest is assumed his refund will be Rs.14,459,720/-.  This benefit illustration also bears complainant’s signature and in such circumstances by no stretch of imagination it may be presumed that complainant opted for one time premium plan, but it can be inferred that he opted for insurance policy with yearly premium for a period of 10 years.

7.    Complainant by letter dated 29-08-2009 i.e. after one year of obtaining policy intimated to the opposite party that he was under impression that he has invested in single premium.  He has specifically not mentioned that he never obtained policy with yearly premium.  In this letter he has also mentioned that as he was out of station for business purpose during delivery of policy document, he could not read document and on the faith of opposite party as well as Manager, he did not read it.  Thus, it become clear that he received policy document well in time but either he intentionally did not read it or if read, for the purpose of taking benefit he denied that on account of good faith, he did not read the document.  As per policy, free look period was provided to the complainant and in case this policy was not issued as per his instructions or he was not interested in continuing the policy, he could have availed free look period and could have requested for cancellation of policy and refund of premium.

8.    As complainant himself obtained policy with yearly premium and after receiving policy, he did not avail free look period for cancellation of policy, after lapse of one year, he was not entitled to cancellation of the policy and get refund of premium.  Learned State Commission wrongly observed that in the application form that complainant opted for single premium whereas proposal form clearly reveals that payment was to be made regularly on yearly basis.

9.    In the light of above discussion it becomes clear that learned District Forum committed error in allowing complaint and learned State Commission further committed error in dismissing appeal and revision petitions are to be allowed.

10.    Consequently, revision petitions filed by the petitioner are allowed and impugned order dated 26-11-2010 passed by learned State Commission in Appeal No. 1252/2010 – Reliance Life Insurance Co. Ltd. & Anr. Vs. E.S. Eashwarappa and order dated 26-02-2010 passed by learned District Forum in Complaint No. 170/2010 – K.S. Eshwarappa Vs. M/s Reliance Life Insurance Co. Ltd. & Anr. are set aside and complaint stands dismissed with no order as to costs.

11.    If premium has been refunded by the petitioner to the respondent, petitioner is entitled to recover refunded premium from the respondent.