Patna: The District Consumer Disputes Redressal Commission, Patna, has directed Reliance Life Insurance Company Limited to refund premiums collected under eight insurance policies, along with 12% annual interest, after finding a deficiency in service.
The commission has also ordered the insurance company to pay Rs 40,000 as compensation for mental and physical harassment and an additional Rs 20,000 towards litigation expenses.
The case concerns Manoj Kumar Choudhary, a resident of Patna City, who had deposited approximately Rs 4,97,873 as premiums for eight insurance policies. He alleged that the policies were sold through inducement and misleading information provided by the insurance company’s agent.
Policyholder Alleges Misleading Information, Seeks Refund
According to the complaint, Choudhary faced financial difficulties and subsequently found it difficult to continue paying premiums. He approached the insurance company seeking cancellation of the policies and a refund of the deposited amount.
However, when the premiums were not refunded, he approached the District Consumer Disputes Redressal Commission, Patna.
During the proceedings, Reliance Life Insurance argued that the complainant had voluntarily purchased the policies and had failed to exercise the cancellation option within the prescribed period.
Commission Finds Discrepancies In Insurance Company’s Records
After examining the documents presented by both parties, the commission observed that the insurance company had failed to provide satisfactory evidence establishing the dispatch and delivery of policy documents for all eight policies.
It also identified discrepancies between the dispatch dates mentioned in the company’s written submission and those recorded in postal tracking reports. Additionally, adequate proof of delivery was not furnished for two policies.
The commission observed that an insurance company cannot deny a premium refund merely because the policyholder did not exercise the cancellation option within the stipulated period when the receipt of the policy documents itself has not been adequately established.
Considering these shortcomings a deficiency in service, the commission ruled in favour of the complainant.
12% Interest, Rs 60,000 Compensation And Costs Ordered
Under the order, Reliance Life Insurance must refund the premiums received under all eight policies with 12% annual interest. The interest will be calculated separately from the respective dates of the first premium payments until the actual date of refund.
The financial directions include:
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Premium refund: Approximately Rs 4,97,873.
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Annual interest: 12% on the premiums from the respective first-payment dates until the refund.
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Compensation: Rs 40,000 for mental and physical harassment.
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Litigation costs: Rs 20,000.
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Compliance deadline: Within 60 days of receiving a copy of the order.
The commission further directed that if the insurance company fails to comply within 60 days, penal interest at the rate of 15% per annum will be payable on the outstanding amount.
The order was passed by Shri Prem Ranjan Mishra, President, and Shri Rajnish Kumar, Member, of the District Consumer Disputes Redressal Commission, Patna.
