Back
2025 Supreme(Online)(SCDRC) 6801
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
PADMA PANDEY, PM, PREETINDER SINGH, M
ASHWANI KUMAR DHINGRA – Appellant
Versus
MAX LIFE INSURANCE COMPANY LIMITED – Respondent
FIRST APPEAL NO. SC/4/A/355/2024
For the Appellants/Petitioners: ASHWANI KUMAR DHINGRA
For the Respondents: SH. RAJNEESH MALHOTRA
Insurance policies must have clear duration terms; failure to communicate them constitutes unfair trade practices under consumer law.
Headnote:(A) Consumer Protection Act - Sections 2(1)(g) and 2(1)(r) - Appeal against dismissal of consumer complaint alleging deficiency in service and unfair trade practice by insurance company - Policy terms regarding duration not adequately communicated - Failure to provide transparent bonus calculation amounts to deficiency in service. (Paras 15, 17, 18)
(B) Judicial oversight - The District Commission’s failure to appreciate evidence resulted in a perverse finding which necessitated appeal acceptance. (Paras 10, 15)
Facts of the case:
Appellant invested in long-term insurance policies under misleading terms regarding duration; upon surrendering, he faced unjustified deductions and lack of clear disclosure regarding bonuses.
Findings of Court:
The Ld. District Commission's order was flawed due to lack of proper examination of evidence and material miscommunication by the insurer.
Issues: Whether the policy's unusually long duration was sufficiently disclosed to the complainant and the justification surrounding bonus payment denials.
Ratio Decidendi: The issuance of life policies for excessive durations without informed consent contravenes basic tenets of fiduciary duty in consumer contracts. Lack of transparency in the surrender process also exemplifies unfair trade practices under consumer law.
Result: The appeal is allowed, the District Commission’s order is set aside, and compensation is awarded to the complainant.
| Table of Content |
|---|
| 1. investment in long-term insurance misrepresented. (Para 3 , 4) |
| 2. lack of clear communication breaches fiduciary duty. (Para 12 , 13) |
| 3. consumer rights under the act protect from unfair practices. (Para 15 , 17) |
…. Respondents BEFORE: MRS. PADMA PANDEY PRESIDING MEMBER PREETINDER SINGH MEMBER PRESENT : Sh. Devinder Kumar, Advocate for the Appellant along Appellant in person.
Sh. Rajneesh Malhotra, Advocate for the Respondents.
PER PADMA PANDEY, PRESIDING MEMBER The present appeal has been filed by the Appellant impugning the order
1.
dated 10.09.2024 vide which the Learned District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (for brevity hereinafter to be referred as “the Ld.
District Commission”), dismissed the Consumer Complaint bearing no.CC/82/2023.
2. For the convenience, the parties are being referred to, in the instant Appeal, as position held in Consumer Complaint before the Ld. District Commission.
3. Before the Ld. District Commission, it was the case of the Complainant that, in the year 2004, agent of the Opposite Parties approached and allured him to invest the amount in their company and on completion of the 20 years i.e. in the year 2024; they will pay the maturity amount along with bonus etc. Upon this, the complainant deposited (cid:0)9,000/- with the Opposite Parties who issued Policy No.246870166 in the name of the Ms.Prem Lata i.e. wife of the complainant. The complainant was again allured by the aforesaid agent and on this, he purchased two more polices on the same terms by depositing his hard-earned money for securing the future of his family and also paid (cid:0)6,600/- & (cid:0)16,500/- as annual premium to the Opposite Parties and they issued Policy No.246870158 in the name of the complainant and Policy No.247504392 in the name of his son –Sh.Tushar Dhingra. As per the directions of the Opposite Parties, the complainant continuously deposited annual premium including govt. taxes from 2004 to 2022, without any default. In the month of July, 2022, the complainant approached Opposite Party No.1 to know about the status of the subject policies and on the enquiry, he was astonished to know that the subject policies were issued for 99 years. It was also informed by the officials of the Opposite Parties namely Mr.Satinder & Ms.Radika that in case of surrender of the subject policies, the OPs will pay the surrender value along with bonus and they have also given the copy of the bonus detail. Accordingly, the complainant surrendered the subject policies with the Opposite Parties but they paid only the surrender amount of Rs.1,00,898/- and Rs.3,29,720/-, without disclosing the calculation. Thereafter, the complainant raised the objection through e-mails dated 17.08.2022, 23.08.2022 & 31.08.2022 and by also sending registered letter dated 22.08.2022 to Opposite Party No.1 with a request to provide the calculation and to supply policy documents. Later on, the Opposite Parties sent email dated 23.11.2022 and intimated the complainant that (cid:0)832/- has been charged on the ground that the subject policies were surrendered during grace period and the said deduction has also been wrongly made by the Opposite Parties. Aggrieved against the aforesaid act, the complainant also approached the Insurance Ombudsman, Chandigarh by filing the complaint but the same was dismissed vide order dated 07.12.2022. Hence, the aforesaid Consumer Complaint was filed before the Ld. District Commission, alleging deficiency in service and unfair trade practice on the part of the Opposite Parties.
4. In the reply filed before the Ld. District Commission, the Opposite Parties while admitting the factum of issuance of the subject policies (as per details culled out in Para 1 (b) of the impugned order), pleaded that the policy holders paid 18 annual premiums qua the policies till July, 2022 and the complainant submitted the policy surrender form (Annexure R-5) and accordingly on his request, an amount of (cid:0)3,29,72
