AVM J. Rajendra Avsm Vsm (Retd), Member

1. By this common order, we propose to dispose of 15 Second Appeals preferred by the Opposite Parties/Appellants, namely Reliance Nippon Life Insurance Co. Ltd, arising out of the common order dated 08.10.2024 passed by the learned State Consumer Disputes Redressal Commission, Chandigarh (State Commission) which upheld the District Consumer Disputes Redressal Commission- II, U.T. Chandigarh ("District Commission") order dated 10.11.2023 partly allowing the complaint.

2. Details of the SAs covered in this order are as under:

“Table”

3. Since the facts and questions of law involved in all the Appeals are similar, these Second Appeals are being disposed of by this common Order. For ease of reference, Second Appeal No. 31 of 2025 is being considered as the lead case, and the facts outlined below are derived from Complaint No. 449/2020.

4. Brief facts of the case, as per the complaint, are that in 2019 the Complainant was approached by the agents of OP for an investment scheme which was supposed to yield high profits. Being allured by the offers made by the agents of OP, the Complainant purchased Policy No. 53449244 namely "Reliance Nippon Life Fixed Saving Increasing Income Plan" which was issued by the OP upon collecting a premium amount of Rs 2,50,000. It was assured to the Complainant that the amount paid in the form of premium shall be invested in the form of an FD and only one time premium of Rs.2,50,000 was needed to be paid. It is the case of the Complainant that initially he was not made aware of the fact that he was required to pay yearly premiums for 5-years to avail the final policy amount, which was to mature after 12 years. He was informed at the time of policy proposal that he was supposed to pay premium only for one year, with a maturity period of 5 years. Thus, it is the case of the Complainant that he was deliberately misled by the agents of OP to obtain money from him. It was only after he received another reminder to pay next yearly premium instalment he got concerned, went to OP Insurer office to inquire and he was told that the policy he purchased was for 12-year period, with yearly premium to be paid by him for a period of 5 years. Being aggrieved of the same, the Complainant filed a CC No. 449/2020 before the District Forum.

5. Upon service of notice, OPs filed their written version, wherein OPs denied all allegations and raised preliminary objections regarding the maintainability of the complaint, alleged concealment of material facts, and contended that the Complainant had not approached Consumer Forum with clean hands. It was contended that the subject policy was duly issued by OPs to the Complainant and that the terms and conditions of the policy were explicit, stipulating that the premium was payable for a period of five years and the policy term was twelve years. The allegation of mis-selling of the policy was specifically denied by the OPs. According to OPs, the Complainant had himself filled in the proposal form, affirmed the correctness of the particulars furnished therein and appended his signatures thereto, thereby evidencing informed consent. OPs asserted that the complaint had been filed with the sole intent of harassing the OPs and securing an undue and unjustified monetary gain. On these grounds, it was prayed that the complaint be dismissed.

6. The District Forum, vide common order dated 10.11.2023 partly allowed the complaint and directed OP Insurance Company as below:

                          "15. Resultantly, we partly allow all the consumer complaint of the complainants. The Opposite Parties are jointly or severally directed to:

                          (a)Refund the entire deposited premium amount(s) to the Respondent along with interest @ 9% from the dates of its deposit till the date of its actual payment in each complaint.

                          (b) To pay Rs.15,000 to the Respondent as compensation on account of mental agony and harassment in each case.

                          (c) To pay Rs.10,000 as costs of litigation in each complaint.

7. Aggrieved by the said order, the OP Insurer filed an Appeal and the learned State Commission vide common order dated 08.10.2024 upheld the District Forum order and dismissed the Appeal as below:

                          "16. In this view of the matter, it is held that the District Commission was right in ordering the appellants to refund the entire amount deposited by the respondents. It is therefore held that the orders dated 10.11.2023 passed by the District Commission-II. U.T., Chandigarh, in all the consumer complaints, referred to above. being based on the correct appreciation of evidence and law on the point, does not suffer from any legality of perversity warranting the interference of this Commission.

                          17. For the reasons recorded above, all these appeals being devoid of merit must fail and the same stand dismissed with no order as to costs. The orders of the District Commission stand upheld."

8. Aggrieved by the State Commission order, OPs have filed SA No. 31 of 2025 before this Commission seeking to:

                          "a. Set aside the Common Order dated 08.10.2024 passed by the State Consumer Disputes Redressal Commission, U.T. Chandigarh (Additional Bench) in F.A No. 93 of 2024; and b. Dismiss the Common Judgment dated 10.11.2023 passed in Consumer Case No. CC/449/2020 by the District Consumer Disputes Redressal Commission - II, U.T. Chandigarh; c. Matter may be remanded back or be heard and the case may be decided on merits providing an opportunity of hearing to the Appellants.

                          d. And pass such other orders as considered appropriate in the circumstances of the case."

9. In SA No. 31/2025, the OP mainly raised the following grounds:

                          a) The State Commission failed to note that the Policy documents, along with covering letter dated 22.03.2019, expressly provided a 15-day Free Look period, during which the Complainant could have raised any grievance or sought cancellation. Despite undisputed receipt of all documents, no objection was raised within the stipulated period, amounting to acceptance of the Policy terms and waiver of any subsequent challenge.

                          b) The State Commission failed to note that all Policy documents were duly furnished to the Complainant in strict compliance with the IRDAI (Protection of Policyholders‟ Interests) Regulations, 2002, and erred in accepting the misleading plea that adequate information was not provided, despite the absence of any supporting evidence.

                          c) The State Commission wrongly concluded that the Policy was issued under pressure or without proper understanding, ignoring the fact that the Policyholder paid only the initial premium and thereafter defaulted in payment of subsequent annual premiums, notwithstanding the clear disclosure of the premium schedule and terms of payment in the Policy kit.

                          d) The State Commission failed to consider that the Policyholder consciously opted for yearly mode of premium payment. He was required to pay Rs.2,44,620 per year for 5 years to avail benefits continuously. His admitted default attracted Clause 4.3 relating to discontinuance of payment of premium, resulting in Policy lapse, strictly in terms of the contract. Further, it failed to note the binding customer declarations affirming free consent and understanding of terms, as well as the settled law that no relief can be granted beyond the terms of an insurance contract.

10. The learned counsel for OP reiterated the grounds of Appeal and contended that the policyholder, having admittedly received the policy documents in compliance with Clauses 4(2) and 6(1) of the IRDAI (Protection of Policyholders‟ Interests) Regulations, 2002, could not have disputed the policy or its terms beyond the 15-day Freelook period expressly notified in the covering letter dated 22.03.2019. The failure to raise any objection within the stipulated period amounted to acceptance of the policy and conclusion of the contract. He argued that the State Commission erred in holding that the policy was obtained under pressure or without understanding, ignoring that the policyholder paid only the initial premium and thereafter defaulted in payment of subsequent annual premiums, despite clear disclosure of the premium payment term of five years. He further argued that the impugned order proceeded on an erroneous factual premise by recording the policy term as 24 years, whereas the policy clearly stipulated a term of 12 years with premium payment limited to the first five years. The learned counsel asserted that the policyholder had consciously opted for yearly mode of premium payment and was required to pay Rs. 2,44,620 per annum, but failed to pay the renewal premium due on 22.03.2020 even during the grace period, resulting in lapse of the policy strictly in terms of Clauses 3.3.4 and 4.3.1 of the policy. The OP, having acted strictly in accordance with the contract, could not be faulted for the consequences of the policyholder‟s own default. It was further argued that the policyholder and the Life Assured, being educated individuals, had signed the proposal form and customer declaration after being fully informed of the product name, policy term, premium payment term and benefits, thereby negating any allegation of mis-selling or coercion. Insurance being a contract governed by its terms, no relief beyond the policy conditions could be granted. In the absence of any deficiency in service, the directions to refund premium with interest and compensation amounted to rewriting the contract and were legally unsustainable. He sought that the findings of State Commission be set aside and relied on Mohan Lal Benal Vs ICICI Prudential Life Insurance Co. Ltd. (RP No. 2870/2012 Decided on 16.10.2012); Harish Kumar Chadha Vs Bajaj Allianz Life Insurance Co. Ltd. (Decided on 07.10.2013 in RP No. 3271 of 2013); Shrikant Murlidhar Apte vs. LIC of India, RP no. 634 of 2012 decided on 02.05.2013; Kishor Chandrakant Rathod Vs. The Managing Director, ICICI Prudential Life Insurance Co. Ltd & Anr (Decided by the NCDRC on 21.05.2014 in RP No.3390 of 2013); Prema & Ors Vs. LIC of India, IV (2006) CPJ239 (NC); A.V. Cottex Limited Vs. The Oriental Insurance Company Limited, [2017 (2) CPR 696 (NC)]; Export Credit Guarantee Corporation of India Ltd. V/s Garg Sons International [2013 (I) Scale410)] in support of his arguments.

11. On the other hand, the learned counsel for the Complainant reiterated the facts of the case as stated in the complaint and argued that the conduct of the OP was unworthy of reliance. He asserted that the agent of OP obtained the Complainant‟s signatures on blank proposal - related papers, without filling in material particulars, thereby taking undue advantage of his good faith. It was averred that OP neither disclosed nor satisfactorily explained how the proposal form came to be filled, nor was the completed proposal form properly furnished to him. He further argued that false and incorrect particulars were recorded in the proposal documents, wherein the Complainant‟s annual income was shown as Rs. 15,00,000 and his occupation as "Professional Engineer", whereas he was in fact a Retired Accountant from Government service, drawing pension of about Rs. 35,000 per month and with annual income of approximately Rs. 5,00,000. At no stage he was financially capable of paying an annual premium of around Rs. 2,50,000 for five years. The learned counsel asserted that the agent of OP deliberately suppressed the true nature, terms and financial implications of the policy with the sole motive of earning his commission. Had these facts been disclosed, the Complainant would never have purchased the policy. He asserted that, being a Govt pensioner who is dependent on limited income for household expenses, the policy itself reflected clear mis-selling and unfair trade practices by the OP. He argued that similar complaints against OP were pending before various fora, indicating a pattern of mis-selling. He relied on New India Assurance Co. Ltd Vs. Smt. Usha Yadav & Ors 2008 (3) RCR (Civil); Dharmendra Goel Vs Oriental Insurance Co Ltd Il (2008) CPJ 63 (SC); Lucknow Development Authority Vs. M.K Gupta, Il (1993) CPJ 7 (SC); Isnar Aqua Farms V/s United India Insurance Go. Ltd., SC 616 2023 in support of his arguments.

12. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned counsels for both the parties.

13. It is undisputed that the Complainant was issued Policy No.53449244 viz. „Reliance Nippon Life Fixed Saving Increasing Income Plan‟, in March 2019 upon payment of an initial premium of Rs.2,50,000. As per express terms, the policy tenure was for 12 years with annual premium payment for a term of 5 years. It is also an admitted position that the Complainant paid only the first premium and thereafter defaulted in subsequent premiums, leading to lapse/ discontinuance of the policy, in terms of the policy conditions. The District Forum, vide common order dated 10.11.2023, partly allowed the complaints and directed for refund of premium with interest, compensation and costs, which was affirmed by the State Commission on 08.10.2024.

14. The OPs/Appellants contended that there was no mis-selling or deficiency in service whatsoever, as all policy documents, including the Freelook option, were duly furnished in compliance with the IRDAI Regulations duly notified. The Complainant, having failed to exercise the Freelook option, was bound by the contract entered into between the parties. The OPs asserted that the policy in question had lapsed solely due to the admitted default of the Complainant and that the fora below have grossly erred in granting relief to the Complainant entirely contrary to the policy terms agreed upon.

15. The Complainant, on the other hand, asserted that the policy was issued to him through misrepresentation and mis-selling by the agents of the OP with incorrect particulars recorded in the proposal form, rendering the contract vitiated. He supported the concurrent findings in the matter.

16. The main issue to be determined in the present case is whether the fora below were justified in holding the OPs guilty of deficiency in service/mis-selling and servicing of the policy in question? Whether the directions of District Forum, as affirmed by the State Commission, for refund of the premium with interest, compensation and costs are appropriate?

17. There are concurrent findings recorded by the both the fora below, and both the learned counsels advanced detailed arguments is support of respective contentions. At the outset, it is necessary to note certain foundational facts that are undisputed. The following are the basic details of the 15 complainants who have been issued the said policies by the OP insurer:

                          S.No. SA No. CC No. FA no. Name of policy Holder Age on entry (in yrs) 1 31/2025 449/2020 93/2024 Mr. BalKrishan Sharma 68 2 32/2025 393/2021 95/2024 Mr.Harish Malhotra 54 3 33/2025 392/2021 96/2024 Mr.Harish Malhotra 55 4 48/2025 376/2021 90/2024 Mr. Col. Daljeet Singh 76 Cheema 5 49/2025 375/2021 91/2024 Mr. Col. Daljeet Singh 76 Cheema Bhattacharjee 7 60/2025 374/2021 88/2024 Mr. Col. Daljeet Singh 76 Cheema Bhattacharjee 9 62/2025 373/2021 89/2024 Mrs. Harbhajanjeet Kaur 76 Cheema 10 63/2025 377/2021 92/2024 Mr.Daljeet Singh 76 Cheema 11 64/2025 414/2021 97/2024 Mrs.Amita Bhattacharjee 70 Bhattacharjee

18. It is the specific contention of the Complainant that the policy was mis-sold to him by giving false assurances and promises that the amount is safe and will be kept in the bank and misled him to deposit Rs.2,50,000 for a period of one year and get the maturity value after five years. Being misled by the agents of OP, the Complainants who is a senior citizen of about 70 years acted upon the assurance of OP. It is thus evident that the Complainant who was 68 years of age at the time of being issued the policy paid the premium of Rs.2,50,000, being under the impression that the same would be returned with interest after five years. It is unlikely that a prudent person of 68 years of age would invest in a policy payable after 12 years. It is the specific contention of the Complainant that the proposal was obtained by the agents of OP, after taking his signature on blank form without explaining the details to reasonable satisfaction. They incorrectly filled the details in the proposal documents, wherein his annual income was shown as Rs.15,00,000 and occupation as "Professional Engineer". Whereas, he is a Retired Accountant from Govt service, drawing pension of Rs.35,000 per month. With annual income of Rs.5,00,000, at no stage, he was financially capable of paying an annual premium of around Rs.2,50,000 for five years and wait for 12 yrs thereafter. Had this been disclosed, he would never have purchased the policy, dependent on limited income for household expenses. Thus, the policy itself reflects clear mis-selling and unfair trade practice. Thus, the undisputed factual errors in the proposal form and the contentions of the Complainants deserve due consideration. The District Forum and the State Commission have gone into detailed evaluation of the facts and evidence and held OP liable for deficiency in service and unfair trade practice in this regard. There are concurrent orders in the matter. We also place reliance upon the ratio in „Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd., (2011) 11 SCC 269.

19. Hon‟ble Supreme Court in „Sunil Kumar Maity vs SBI & Anr Civil Appeal No. 432 OF 2022 Order dated 21.01.2022 observed:-

                          "9. It is needless to say that the revisional jurisdiction of the National Commission under Section 21(b) of the said Act is extremely limited. It should be exercised only in case as contemplated within the parameters specified in the said provision, namely when it appears to the National Commission that the State Commission had exercised a jurisdiction not vested in it by law, or had failed to exercise jurisdiction so vested, or had acted in the exercise of its jurisdiction illegally or with material irregularity. In the instant case, the National Commission itself had exceeded its revisional jurisdiction by calling for the report from the respondent-bank and solely relying upon such report, had come to the conclusion that the two fora below had erred in not undertaking the requisite in-depth appraisal of the case that was required. ....."

20. Similarly, Hon'ble Supreme Court in Rajiv Shukla Vs. Gold Rush Sales and Services Ltd. (2022) 9 SCC 31 has held that:-

                          As per Section 21(b) of the Act the National Commission shall have jurisdiction to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised its jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity. Thus, the powers of the National Commission are very limited. Only in a case where it is found that the State Commission has exercised its jurisdiction not vested in it by law, or has failed to exercise the jurisdiction so vested illegally or with material irregularity, the National Commission would be justified in exercising the revisional jurisdiction. In exercising of revisional jurisdiction the National Commission has no jurisdiction to interfere with the concurrent findings recorded by the District Forum and the State Commission which are on appreciation of evidence on record.

21. At the same time, it is also and admitted position that that the policy in question was duly issued in favour of the Complainant and the complete policy documents along with covering letter was dispatched by the OP and delivered to the Complainant, as is evident from the postal receipt placed on record. It is a matter of record that the policy stipulated a term of 12 years with premium payment for five years. The policy document contained a Freelook provision enabling the policyholder to review the terms and seek cancellation within the stipulated period. The said Freelook clause reads as under:

                          "4.1. Freelook In the event, you are in disagreement with the terms, features and conditions stipulated in the policy document, you may opt out of this plan, by stating the reasons of your disagreement in writing and return the policy to the Company within 15 days (30 days if policy is purchased through Distance Marketing channel of its receipt, for cancellation. You are requested to take appropriate acknowledgement of your request letter and return of policy. In which event, the Company will refund the premium paid subject to a deduction of a proportionate risk premium for a period of cover and expenses incurred by the Company on your medical examination, if any, and stamp duty charges."

22. Thus, while the Complainant alleged mis-selling of the policy and the corroborated the assertion to the satisfaction of the District Forum and state Commission, he also had scope to avail freelook option to cancel the policy and seek refund within the time stated thereat, which he failed to exercise. Thus, after due consideration of the entire facts and circumstances of the case, including the arguments advanced by the learned counsels for both the parties as well as the well reasoned orders of the District Forum dated 10.11.2023 and State Commission dated 08.10.2024, the order of the District Forum in CC No.449 of 2020 dated 10.11.2023 as upheld by the learned state commission in FA No.93 of 2024 dated 08.10.2024 is modified as below:

ORDER

                          A. The Opposite Parties are jointly or severally directed to refund the entire deposited premium amount(s) to the Complainants, within a period of 60 days from the date of this order. In the event of default, the OPs are liable to pay the Complainant interest @ 12% per annum on the amount deposited, for the period of delay.

                          B. The orders to pay Rs.15,000 to each of the Complainants as compensation on account of mental agony and harassment in each case; and Rs.10,000 as costs of litigation in each Complainant are set aside.

23. With above directions Second Appeal Nos. 31 to 33, 48 to 50, 60 to 64, 66 to 68 and 70 of 2025 are disposed of.

24. There shall be no order as to costs. All pending Applications, if any, are also disposed of accordingly.