Holding Tata AIA Life Insurance Co Ltd responsible for mis-selling policies with 10-year premium liability as a one-time premium to a low-income family, the national consumer disputes redressal commission (NCDRC) directed the insurer to refund the premium of Rs2.47 lakh with an interest of 9%pa (per annum).
In
an order last month, the NCDRC bench of air vice-marshal (AVM) J Rajendra (retd) (presiding member) said, "The Lucknow district consumer disputes redressal forum-II issued a well-reasoned order based on evidence and arguments advanced before it. The Uttar Pradesh state consumer disputes redressal commission, after due consideration of the pleadings and arguments, determined that no intervention is warranted on the district forum's order as the complainant was enticed by Tata AIA Life Insurance to enter into the contract of the policies and otherwise, for the stated terms, the complainant had no scope to pay such high premiums."
In June 2009, Lucknow-based Gyan Prakash Singh was approached by an agent of Tata AIA Life Insurance who offered various policies with promising returns. The agent claimed that by depositing a one-time premium, after one and a half years, the refund would increase by one to one and a half times.
Impressed by the promises, Mr Singh bought five insurance policies in his own name, his wife's name and his daughter's name. He also paid a premium of Rs49,900 for each policy. However, after receiving the policies 10 to 15 days later, he and his family were shocked to discover that each policy required premiums to be paid for 10 years, which was not what the agent had conveyed. His income was only Rs1,514 and, thus, he was financially unable to continue paying the premiums.
Mr Singh promptly raised the issue with the insurance company. But no action was taken. Despite sending emails and letters to Tata AIA Life Insurance, he received no meaningful response.
Tata AIA Life Insurance replied that no refund application was submitted within the freelook period and refused to cancel the policy or refund the amount. Mr Singh argued that he refused to accept the policy within a week of receiving it but was ignored by the insurance company which is a deficiency in service and unfair trade practices by OP.
As a partial resolution, Tata AIA Life Insurance sent a cheque for one-fifth of the deposited amount in one of the policies, but Mr Singh refused to deposit it. Aggrieved by the actions of Tata AIA Life Insurance, he filed a complaint before the district forum, seeking a refund of Rs2,47,700, the total amount deposited by him with 12% interest, Rs1 lakh as compensation and Rs25,000 as costs.
Tata AIA Life Insurance neither appeared nor filed a reply before the district forum. On 10 December 2014, the district forum allowed the complaint and directed Tata AIA Life Insurance to pay Rs2.47 lakh with simple interest at 9%pm to Mr Singh after deducting the processing charges. It also asked the insurer to pay Rs10,000 as compensation and Rs5,000 litigation costs.
Aggrieved by the order, Tata AIA Life Insurance filed an appeal before the state commission. The state commission, in its order, mentioned that Tata AIA Life Insurance contended about appointing a counsel, but he did not file a written reply before the district forum. "...the contention of Tata AIA Life Insurance is baseless that after receipt of the notice from district forum appointed their advocate but the advocate in the complaint has not prosecuted the same properly and did not file the written reply due to which the complaint has been decided ex-party..."
It further says, "The agent of Tata AIA Life Insurance told to deposit the amount at one time enticed to take the policy because such a big amount one retired employee and his wife and daughter every year regularly for 10 years cannot deposit. Therefore, after considering the complaint and affidavit filed on behalf of Mr Singh and the documents produced, it is cleared that really the agent of Tata AIA Life Insurance gave the wrong information to them for taking the policy and, after cheating, enticed them to take the policy which is an unfair trade practice."
"It is also manifest from the complaint and the evidence on record that upon showing unwillingness to accept the policy by Mr Sing, one-fifth of the deposited amount was sent by Tata AIA Life Insurance by way of cheque. Remaining four-fifth of the amount has been forfeited. Under the above condition, the deduction made by Tata AIA Life Insurance from the deposited amount of Mr Singh is unjustified because after cheating, he has been enticed to take the policy," the state commission said, while dismissing the appeal.
Aggrieved by the order, Tata AIA Life Insurance filed a revision petition before NCDRC. The counsel for the insurance company contended that the complaint was time-barred as the policies were issued in June and July of 2009, whereas the complaint was filed in 2013. The complainants approached beyond the freelook period, seeking a refund of premiums. The counsel sought to allow the revision petition and set aside the concurrent findings of the fora below and dismiss the complaint.
The bench of AVM Rajendra observed that both the fora considered that there was a deficiency in service on the part of Tata AIA Life Insurance. He says, "It is a well-settled position in law that the scope for revision under Section 21(b) of the Consumer Protection Act, 1986 and now under Section 58(1)(b) of the Consumer Protection Act, 2019 confers very limited jurisdiction on this Commission."
"In the present case, there are concurrent findings of facts and the revisional jurisdiction of this Commission is limited. Both the issues i.e., the freelook period and limitation in filing the complaint, were already dealt with by the fora below. Also, no new ground has been made out by Tata AIA Life Insurance. After due consideration of the entire material, I do not find any illegality, material irregularity or jurisdictional error in the order passed by the state commission warranting our interference in revisional jurisdiction under the Act," NCDRC said.
While dismissing the revision petition, the bench modified the order issued by the district forum and set aside the compensation of Rs10,000 towards mental agony saying that, as per the judgement from the Supreme Court, multiple compensations for singular deficiency are not justifiable.
(Revision Petition No3288 of 2017 Date: 7 November 2024)
I've requested for refund on account of miss selling of Policy on one Premium paid. Total Two Lakhs Nine Thousand.
I'm a Senior Citizen and was enticed and coorced into taking the Policy.
Now Tata AIA is putting every hurdle in the way and not Refunding the paid Premium amount.