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KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, THIRUVANANTHAPURAM
K. Surendra Mohan, President, Ajith Kumar D., Presiding Member, Ranjit R., Member, Beena Kumary A., Member and Radhakrishnan K.R., Member
Shahul Hameed – Appellant
versus
HDFC Standard Insurance – Respondent
First Appeal No.A/656 of 2017
Decided on 14.3.2023
For the Appellant:Arun Valenchery and E.S. Amina Bhanu, Advocates
For the Respondent:Saji Isaac K.J., Advocate
Headnote:
A. Consumer Protection Act, 1986 – S.15[Consumer Protection Act, 2019 – S.41] – Appeal - Services – Insurance – Repudiation of Claim – CPC, 1908 – S.11 – Res Judicata – Dismissed for Default – Fresh Compliant – Same Cause of Action - Admittedly, the complainant had earlier filed a complaint against the opposite party as C.C. No. 119/2013. It was dismissed for default. The complainant again filed a fresh complaint against the very same opposite party for the very same cause of action and relief as C.C. No. 671/2013 instead of filing a petition to restore the previous complaint. According to the complainant he has filed the complaint as there is no provision under the Consumer Protection Act for restoration of the complaint. Therefore, since the first complaint was dismissed for default and not on the merits, the second complaint is not hit by principle of resjudicata. [Para 10].
B. Consumer Protection Act, 1986 – S.15[Consumer Protection Act, 2019 – S.41,69 ] – Appeal - Services – Insurance – Repudiation of Claim – Limitation – Complaint if barred - On perusal of complaint it is seen that the opposite party had sent a letter dated 17.09.2007 to the complainant intimating the lapse of the policy due to non-payment of premium and hence the policy had become paid up. The complainant again received a statement dated 30.11.2012 from the opposite party which is marked as Ext. A3, in which it is stated that the opposite party had deducted charges under various heads like mortality charges amounting to Rs. 24,267.64, extra life benefit charges amounting to Rs. 14,497.33 and administrative charges amounting to Rs. 237.25 and tax amounting to Rs. 4,494.26 from the above policy. These deductions are challenged in the complaint. Hence the cause of action to file the complaint arose only on 30.11.2012 and the complaint filed on 28.09.2013 was absolutely maintainable and not barred by limitation. [Para 11].
C. Insurance Act - S. Sec. 2(ii) - “ULIP” - IRDA Investment Regulations 2010 – Rg. 3(iii) - ULIP is an insurance contract falling within the ambit of life insurance business. Life insurance business is defined under Sec. 2(ii) of Insurance Act interalia to mean “business of effecting contracts of insurance upon human life” or “Happening of any contingency depending on human life”. The said definition indicates that the policy is dependent on happening or non-happening of an event linked to human life. Unit linked life insurance business is defined in IRDA Investment Regulations 2010. Regulation 3 (iii) states “Every insurer shall invest and at all times keep invested his segregated funds of unit linked life insurance business as per pattern of investment offered to and approval by the policy holders”. Unit linked business is defined in IRDA (Registration of companies) Regulation 2001 which means life insurance contract or health insurance contract under which benefits are wholly or partly to be determined by reference to the underlying assets or any approved index. [Para 15].
D. Consumer Protection Act, 1986 – S.15[Consumer Protection Act, 2019 – S.41,69 ] – Appeal - Services – Insurance – Repudiation of Claim – ULIP – Combination of products - Complaint Maintainability - speculative business - whether it will come under the purview of commercial transaction or not - Whether the investible premium under the unit linked policy which the complainant has taken is invested in units which are exposed to capital market, a speculative business, and whether it will come under the purview of commercial transaction or not - There are two components of ULIP one is the insurance component where risk of life insurance portion vests with the insurer and the other is investment component where risk lies with the investor. This establishes that conclusively ULIPs are combination products and the investment component need to be registered and regulated by SEBI – Therefore, it can be concluded that it is unreasonable to hold that ULIP is a mutual fund product simply because the requirements under the SEBI guidelines are fulfilled. It is undisputed that ULIPs contain insurance and investment parts but it has also to be understood that both the insurance and investment parts are currently regulated by IRDA – On facts, the complaint is maintainable -Appeal is allowed, impugned order is set aside. [Paras 18 to 21].
Result: Appeal allowed.
JUDGMENT
Ranjit R., Member—The complainant in C.C. No. 671/2013 of the Consumer Disputes Redressal Forum, Ernakulam (District Forum for short) is the appellant. This appeal is filed against the order dated 30.11.2016 dismissing the complaint finding that the complaint was not maintainable. According to the appellant, the judgment of the District Forum is wrong and liable to be set aside.
2. For the sake of convenience, the parties are referred to herein in accordance with their status before the District Forum.
3. According to the complainant, he had taken a HDFC Unit Linked Young Star Plan Life Policy having number 10090868 on 30.11.2004 for a sum assured of Rs. 14,80,000/- from the opposite party. The period of the premium was 15 years and the complainant had to pay the premium for a minimum period of 3 years to keep the policy alive. The complainant had to pay Rs. 37,000/- as quarterly premium and the opposite party used to deduct an amount of Rs. 1,928.46 towards life risks charges and Rs. 15/- towards policy charges with tax. The complainant paid 14 quarterly premiums from the beginning without any break which amounted to Rs. 5,18,000/-. Thereafter the complainant had stopped payment of the premium due to the poor performance of the fund. On 17.09.2007 the complainant was informed by the opposite party that the policy was lapsed due to non-payment of the subsequent premiums and the policy had become paid up resulting in cancellation of all the benefits under the policy. On 30.11.2012 the complainant received a summary statement wherein it was stated that even after the policy had become paid up, the insurance company was deducting charges like mortality charges of Rs. 24,267.64, extra life benefit charges Rs. 14,497.33 and administrative charges Rs. 237.25 and with tax amounting to Rs. 4,494.26, the total of which amounted to 43,496.48 p.a. from the outstanding amount available in the above said policy which is against the terms and conditions of the policy and insurance claim. The complainant therefore issued a legal notice on 21.12.2012 to the opposite party calling upon them to rectify the mistake. But the opposite party replied that they had the right to deduct the same. The clauses relied on by the opposite party in the reply notice are applicable only to a live policy and not for a paid up policy. The complainant had earlier filed C.C. No. 119/2013, which was dismissed for default. Thereafter the complainant filed a fresh complaint as C.C. No. 671/2013 for the same relief.
4. The opposite party filed version contending that the complaint was not maintainable. The complaint was barred by law of limitation. The policy taken by the complainant was a speculative investment and was for speculative gain and hence the complaint would not lie before a Consumer Forum. The complainant had filled the proposal after going through the terms and conditions and understanding the same. The terms of the policy are binding on both parties. The complainant was liable to pay the amount under the policy under the terms and conditions, and the opposite party was entitled to deduct the charges as stated in the conditions of the policy. There was no cause of action for the complaint and the complaint was liable to be dismissed.
5. The District Forum heard the question regarding maintainability of the complaint. The opposite party in their version challenged the maintainability of the complaint on the following grounds.
(a) The complaint was barred by principle of resjudicata.
(b) The complaint was barred by limitation.
(c) Since the policy taken by the complainant was a speculative investment, the complaint was not maintainable.
6. The District Forum after hearing both the parties held that the complaint was maintainable. Thereafter evidence was taken. Complainant was examined as PW1 and his documents were marked as Exts. A1 to A5. Opposite party filed proof affidavit and their document was marked as Ext. B1. After the close of evide
