In The District Consumer Forum

University Institute of Legal Studies, Intra Department Moot Court Competition 2 !"

Ashok Kumar Complainant v#

IBI Bank $espondent !

Memorial For Respondent

Table of Contents
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Arguments Advanced
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INDIAN CASES: !; 2rishnappa v# Shivappa, "! 4# "6" ) 6 4em# L# $# 5" 2; United +rovinces -s# 'ti<a 4egum, 'I$ !63! FC !5=29; "; Deputy Commissioner of /ardoi v# $ama 2rishna 3; 4enaras 4an> Ltd# -s# 4hag?an Das#, 'I$ !638 'LL !9@ 7; Suresh Chandra vs# $am -ilas Mahesh?ari, II =2 5; &aBa 2umar -s# $adhayshyam, 'I$ !6"! +C 226# 8; ChuBa Temsu -ersus &angponger 9; Di?a>ar -s# State of M+#, !693 Supp SCC 2!3@ 6; +ritam Singh -s# State of +unAaB !66"="; $$$ 733=+C/; ! ; Chief Conservator of Forests -s# Collector, 'I$ 2 " SC !9 7=!9! ; !!; Smt# +ushpa Meena -s# Shah %nterprises !66 $LT +art III, 76# !2; Cheema %ngineering Services v# $aAan Singh =!668;! SCC !"! !"; ,angadhar v# UTI, !663 =2; C+$ 383 =/;# !3; $am &arayan v# Larsen C TouBro, =!66"; C+0 " =&C; !66" =!; C+$ ! 5 !7; MDs# /arsolia Motors -ersus MDs# &ational Insurance Co# Ltd !5; State 4an> of India v# Shyama Devi, 'I$ !689 SC !25" !8; +irthi Singh 'nd 'nr# vs 4inda $am 'nd (rs, 'I$ !698 + / 75 !9; /arshad 0# Shah v# LIC of India, III =!668; C+0 6 =SC; !6; $ashee Industries Ltd# v# %Eport Credit ,uarantee Corpn# (f India Ltd#, =2 S#C#C# !"9 2 ; Tha?ardas +herumal v# Union of India, '#I#$# !677 S#C# 359 at p# 385) =!677; 2 S#C#$# 39# 2!; $alli 4ros v# 4hag?an Das +armeshiri Das, '#I#$# !637 Lah# "7 at p# 3 ) I#L#$# =!633; Lah# 789# 22; 4ai /ira Devi -# (fficial 'ssignee of 4omBay ='I$ !679 SC 339, 372;, Sumati 4ala -# &#2# Das= 'I$ !687 ,au 3"; 2"; SuBramaniam -s# M#L#$#M# Lutchman='I$ !62" +C 7 ;# 23; ,uruBasappa -s# ,uru Lingappa# 27; $oop 2umar -s# Mohan Thedani 'I$ 2 " SC 23!9) =2 2;5 SCC 767# 6; ! !; C+0 73" =,uAarat SCD$C;

25; $amdip Sharma -s# 4aldeo Singh 'I$ !688 +at 2"3) !688 4L0$ " 9# 28; ShuAaatamnd 2han -s# ,ovind Behari 'I$ !6"3 'll# ! 29; -irse -s# 4al?ant 2 9=3; ICC 8 2 =+C/;# 26; U# Sin -s# U Tun Si 'I$ !6"7 $ang 38"# " ; 4ishunath (Aha -S# S# +ragasho 0ha 'I$ !623 'll 932@ "!; Din>er $ai -s# Su>hdayal 'I$ !638 4om# 26" "2; ,eneral 'ssurance Society Ltd# v# Chandumull 0ain ""; $a>esh Chanana vs# /DFC Standard Life Insurance Co# Ltd# "3; Smt# +ushpa Meena -s# Shah %nterprises !66 $LT +art III, 76# "7; 0iyaAeerao Cotton Mills Ltd# -s# &e? India 'ssurance Co# LTD "5; +annalal -s# 4an> of India "8; 0#2 Synthetics Ltd# v# Smt# 'nita 4hargava, !665=!; C+C 39 .#4engal "9; $eliance Industries Ltd# vDs United India Insurance Company Ltd, =!669; I C+0 !" =&C; "6; Devappa 2anchan -s# (riental Insurance Co#, =!662; C+$ 386=39 ;=2ant;# 3 ; Delhi Transport Corporation %mployees +rovident Fund Trust vs# (rissa Small Industries and 'nr 3!; $amesh -s# MDs 's>o> Financial Corporation 32; 0acoB v# 4an> of India, 'I$ =!668; 'll# !65 3"; /imatlal $atilal v# State of ,uAarat, !68! CrL0 !57 =,uA;, 33; ,oBardhan v# State, 'I$ !676 'll 7"# 37; $aA Mali> v# (verseas Financial Corporation, 'I$ 2 35; -#&# Shri>hande vs# 'nita Sena Fernandes 38; Sh# ShamBhu &ath vs# /DFC Standard Life Insurance Company Limited 39; State 4an> of India vs# MDs 4#S# 'gricultural Industries 36; +ushpaBen 4al?antrai vs# &and>umar $amanlal= 'I$ 2 367# 7!; 4al?ant Singh -s# 0agdish Singh 72; $am Chandra Singh v# Savitri Devi, =2 "; 6 S#C#C "!6 at p# "26 7"; Smt# Shrisht Dha?an v# M D s Sha? 4rothers, 'I$ !662 S#C# !777# 73; *og $aA v# 2uldeep $aA ,upta, 'I$ !66! 0# C 2# 25# ii 3 =&(C; "92 =,uA; 7 ; 'Ait Singh Tha>ur Singh v# State of ,uAarat, 'I$ !69! SC 8"" =8"7;) =!69!; ! SCC 2 'll# !95# #

77; /aAra 4ai v# 0adavBai, 'I$ !695 M#+# ! 5 75; 2amal 2ant vs# +ra>ash Devi 78; 'fsar Shai>h v# Soleman 4iBi, ='I$ !685 SC !5";, 79; Suguna v# -inod ,# &ehemid, 2 9 =2; CTC 3"" =Mad; 76; ,rasim Industries Limited -s# 'ggar?al Steel, =2 ! ; ! SCC 9" 5 ; /orsfall v# Thomas =!952; ! /# C C# 6 ) !" $#$# "63@ Smith v# /ughes, L#$# =!98!; 5 F#4# 768# 5!; .illiam Charles 4inns v# .# C T# 'very Ltd#, '#I#$# !6"3 Cal# 889 at p# 886 52; SuBhash Chandra Dass MushiB v# ,anga +rasad dass MushiB ) 'I$ !658 SC 989 5"; Mst# Chand >aur and others v# Mst# 0i?i and another 53; /arihar +rasad Singh and others v# 4almi>i +rasad Singh and others# 57; 2e?al 2rishnan and others v# Smt# 2rishna Devi and others# 55; Union of 4an> vs# MDs# Seppo $ally (* 58; +oonam 4ishnoi vs# 4aAaA 'llianG Life Insurance Co# Ltd# ENGLISH CASES: !; /enderson -s# 'rthur# 2; /onorary Secretary, %legance MemBers 'ssn -s# +harthane Construction Co +vt ltd# "; 2ylr Bay Ltd# v# Under?riters, 2 5# 3; /orsfall v# Thomas =!952; ! /# C C# 6 ) !" $#$# "63@ 7; Smith v# /ughes, L#$# =!98!; 5 F#4# 768# BOOKS, AR ICLES, !O"RNALS, REA ISES AND DIGES S: !; Consumer +rotection 'ct, !695 2; Code of Civil +rocedure, !6 9 "; Insurance 'ct, !6"9 3; Indian Contract 'ct, !982 7; Indian %vidence 'ct, !982 5; Sale of ,oods 'ct, !6" 8; $eports of cases argued and determined in the Court of 'ppeals and Court of %rrors of South Carolina, on appeal from the courts of la?, -olume 3#

iii

9; SanAiva $o?Hs Commentary on The Indian Contract 'ct, !982 'nd Tenders, ='CT &(# I: (f !982;, Delhi La? /ouse, !!th %dition, 2 6; Lea>es La? of Contracts, -ol# I, %dition II, 2 ! ; StoryHs La? of Contracts, -ol# !, %dition III, 2 8# 9# 6,

!!; Mindy ChenI.ishart, Contract La?, Indian %dition, II %dition, 2 ! !2; M#C# 4handari, JLa? of ContractJ, 'sho>a La? /ouse, &e? Delhi =India;, Third %dition 2 9# 6# !"; $atanlal and DhiraAlal, The La? of %vidence, 2" rd %dition, 2 ! !3; T'*L($, Contract 'ct, !2th %dition, 2

iv

IDEN IFICA ION OF CON EN IONS:

!; .hether &ecesary parties have Aoined the complaint1 2; .hether the 'sho> is a consumer1 "; .hether complaint at Bar is maintainaBle in this forum1 3; .hether complaint is time Barred1 7; .hether Burden of proof lies on complainant1 5; .hether the complainant followed grievance redressal procedure mandated by IRDA? 8; .hether Investment manager ?as acting in personal capacity1 9; .hether terms and conditions are Binding on complainant1 6; .hether advice given By Mr# : is of some legal importance1 ! ; .hether the fraud has Been committed1 !!; .hether there has Been any deficiency in service1 !2; .hether it ?as necessary for the complainant to deinvest in earlier policy1 !"; .hether the complainant is entitled for compensation1

S A EMEN OF FAC S
!# 'sho> 2umarI ' $etired Chief %ngineer from State services and a resident of Chandigarh# 2# 'sho> retiredI 0uly, 2 ! , $eceived a good amount of retiral Benefits on (ctoBer, 2 ! # "# 'sho> returned the earlier investment of a dead loc> period of " years# $eceived $s#23," # $efund ?as credited on 8th (ctoBer, 2 ! #
th

3# 'sho> purchased the ne? policy on ! of $s#7 ,

(ctoBer, 2 ! # (ne time Investment

7# 'sho> received the ne? policy document By registered post on 22nd (ctoBer, 2 ! # /e ?as shoc>ed to find out that the policy ?as not a one time investment rather an every year investment for ! years# 5# 'sho> returned the policy ?ith a re<uest of refund on 2" rd (ctoBer, 2 ! and mentioned in his letter addressed to the Ban> that he ?as misled that it is a one time investment policy# 8# $e<uest ?as ac>no?ledged By I4I 4an> on 29th (ctoBer, 2 ! # 9# &othing ?as heard from the 4an> till three months# 6# 'sho> forced to send a strong reminder to the head office and M$# : on "! st 0anuary, 2 !!# ! # 'sho> received $s#39,7 from the 4an> on "rd FeBruary, 2 !!#

vi

S"MMAR# OF $LEADINGS:
!; .hether &ecesary parties have Aoined the complaint1 In the present case Complainant has neither impleaded Mr# :, Investment Manager, as a party nor has he impleaded the company, in ?hose units the Ban> has invested the amount of complainant, as a party# The Ban> Being merely a collecting agent of the company could not Be held liaBle for deficiency in service# In the aBsence of these t?o parties no effective decree can Be passed as these parties form the essence of constitution of this complaint# Therefore, in the aBsence of these parties a complaint cannot Be decided, hence, this complaint shall Be dismissed# 2; .hether the 'sho> is a consumer1 That as soon as the amount is invested, the investor gets units ?hich are in the nature of share certificates and he is entitled to share in profits# Therefore, it is a commercial purpose# It is ?ell settled that ?hen the eEpression KCommercial +urposeH has not Been defined in the 'ct, its common parlance meaning should Be given and according to that a commercial purpose is that purpose, the oBAect or aim of ?hich is to ma>e profit# Therefore he does not fall under the amBit of ?ord consumer of the act# "; .hether complaint at Bar is maintainaBle in this forum1 The present complaint filed is not at all maintainaBle as the complainant has no Aurisdiction to file the complaint in this present forum# It involves alot of complicated issues to Be decided# the complainantHs case involves a determination of compleE <uestions of la? and fact ?hich cannot Be satisfactorily determined By the Consumer Forum in the time frame provided under the 'ct it ?ould Be Better for the complainant to see> redress of his grievances in a civil court# In the +resent complaint there is no clear and cogent evidence ?hich could Be relied upon# The act does not contemplate the determination of complicated issues of fact involving ta>ing of elaBorate oral evidence and adducing of voluminous documentary evidence and a detailed scrutiny and assessment of such evidence By the Consumer $edressal Forum# 3; .hether complaint is time Barred1 Complaint has Been filed after a gap of 2 years and !9 days from the cause of action# vii

Limitation prescriBed under Section 23' is 2 years# Complaint is Barred By limitation# If complaint is time Barred yet consumer forum decides it on merits, the forum ?ould Be committing an illegality I 'ggrieved party ?ould Be entitled to have such an order set aside# 7; .hether Burden of proof lies on complainant1 The complainant has asserted the affirmative of the issue# Thus, according to Sec# ! !, the Burden of proof should Be placed on the complainant# 'ccording to Sec# ! 2, a test for ascertaining on ?hich side the Burden of proof should lie is held# The Burden of proof should lie on the complainant as he ?ould fail if no evidence at all ?ere given# 5; .hether the complainant followed grievance redressal procedure mandated by IRDA? The matriE of consumer protection for aggrieved consumers of insurance in order of access is as follo?s) =a; ,rievance redressal cell =B; I$D' ,rievance Cell D Director of +uBlic ,rievances =only for puBlic sector insurance companies;# =c; Insurance (mBudsman) =d; Consumer courts under C(+$' =e; Civil courts# 4ut the complainant directly approached consumer court# 8; .hether Investment manager ?as acting in personal capacity1 All the previous investment suggestions were beneficial and fruitful for the complainant and thus he opted for the present insurance policy also as he had great conviction and confidence. This clearly proves that manager gave a mere opinion and acted as an agent of the complainant. His advice to purchase the policy document was not exercised within his course of employment but fell under the category of fiduciary relationship shared by both of them. Also the complainant handed over the che!ue to manger for encashment. This clearly proves that manager acted in personal capacity which falls outside the course of employment. employment. Thus manager was clearly not acting within the course of

viii

9; .hether terms and conditions are Binding on complainant1 The ?hole point of a document in ?riting is to eEclude speculation as to ?hat ?as and ?hat ?as not agreed to, ho? much ever the matter might have Been raised By one of the parties during the stage of negotiation# ! The complainant on signing the prescriBed form cannot Bring up the issue that the terms agreed to orally ?ere different from the terms mentioned in the policy document received# ' contract is not voidaBle merely Because it ?as caused By one of the parties to it Being under a mista>e as to a matter of fact# 6; .hether advice given By Mr# : is of some legal importance1 In the present case respondent no# ! Aust provided statement of opinion as regard to deinvestment in the first policy and even in regard to the nature of policy Being issued to him# Since it ?as Aust a statement of opinion it is not sufficient to prove a misrepresentation in this case#(Bviously it ?ould Be unreasonaBle to treat opinions provided By investment manager in the same manner as truths, as opinions are purely Based on personal Beliefs ?ith no additional foundation#

! ; .hether the fraud has Been committed1 In case it appears from the facts that even though there ?as a false statement But the complainant has means to >no? the correct position and ought to have >no?n the truth, there is no fraud# The complainant ?as an educated man and had all the means to >no? the contents of the document# /e cannot simply raise the matter declaring that his signatures ?ere oBtained By a false statement# /ereBy, no fraud shall arise in this case# !!; .hether there has Been any deficiency in service1 The complainant had opted for regular investment plan as he signed the signed the prescriBed form for the purchase of the said plan# In vie? of this, it is contended that the allegations contained in the complaint that the complainant too> single premium insurance policy of $s#7 , of respondents# did not survive# 's a result of the aBove discussion, it is contended that the complainant has failed to prove any deficiency in service on the part

Tha?ardas +herumal v# Union of India, '#I#$# !677 S#C# 359 at p# 385) =!677; 2 S#C#$# 39#

iE

!2; .hether it ?as necessary for the complainant to deinvest in earlier policy1 The complainant Being a ?ell educated man and a routine investor, investing in various policies of respondent Ban>, for the past ten years for taE saving purposes as ?ell as for long term investments, ?as very much a?are of the rules and regulations of respondent Ban># The complainant ?as a retired Chief %ngineer from State Services and also he received a good amount of retirement Benefits as mentioned aBove, so it ?as easy for him to invest in the ne? said insurance scheme ?ithout having to ?ithdra? money from the first policy# !"; .hether the complainant is entitled for compensation1 The complainant has filed a false complaint and thus the case must Be dismissed# The complainant also has not undergone any harassment or suffered any mental agony# /ad he suffered this much, he ?ould not have ?aited for 2 years and !9 days to file the complaint# Moreover, he ?ould have approached the respondent Ban> soon after getting the refund of $s# 39,7 #

%& ARG"MEN S AD'ANCED:

2# (HE HER NECESSAR# $AR IES HA'E !OINED HE COM$LAIN )

The presence of opposing parties is one of the essential re<uirements of any civil suit as has Been held in the case of Krishnappa v. Shivappa2 # 4ut all parties are not necessary for the suit to Be adAudicated upon# Therefore, necessary and nonInecessary parties have to Be distinguished Bet?een# K Necessary PartiesH are those parties from ?hom relief is claimed and ?hose presence is indispensaBle to the constitution of suit "# KNon-necessary PartiesH are those parties ?ho may Be party to the suit, But from ?hom no relief has Been claimed# The presence of necessary parties is oBviously re<uired for the court to adAudicate and pass an effective and complete decree granting relief to the complainant# In the aBsence of necessary parties, the court may dismiss the suit, as it shall not Be aBle to pass an effective decree#

The Code of Civil +rocedure, the procedural la? relating to civil suits can Be classified into t?o parts, LBody of the CodeL and LRu esL# The latter deals ?ith nonIAoinder of parties# (rder !, $ule 63 lays do?n the procedure to Be follo?ed in cases of nonIAoinder of parties# The Code provides for compulsory Aoinder of all those parties necessary for the court to decide the suit, and conse<uently grant relief to the complainant#

' necessary party is a party ?ithout impleading ?hom, a claim cannot Be legally settled By court# In other ?ords, in the aBsence of a necessary party, no effective and complete decree can Be passed By the court# T?o tests 7 have Been laid do?n for determining the <uestion ?hether a particular party is a necessary party to a proceeding 5)

a; There has to Be a right of relief against such a party in respect of the matters involved in the suit#

2 " 3 " 5

"! 4# "6" ) 6 4em# L# $# 5" United +rovinces -s# 'ti<a 4egum, 'I$ !63! FC !5=29; Code of Civil +rocedure, !6 9 Deputy #ommissioner of Hardoi v. Rama $rishna 4enaras 4an> Ltd# -s# 4hag?an Das#, 'I$ !638 'LL !9@

B;The court must not Be in a position to pass an effective decree in the aBsence of such a party#

K&onIAoinderH means an omission to Aoin some person as a party to a complaint, ?hether as complainant or as respondent ?ho ought to have Been Aoined according to the la?# &onI Aoinder of parties refers to a situation in ?hich those parties ?hose presence is essential and in ?hose aBsence no effective decree can Be passed By the court, have not Been impleaded# They are those parties ?ho should have Been Aoined under (rder !, $ule ! =2; of the Code# In contrast, presence of proper parties is needed only for the courtJs convenience in deciding the dispute# The court shall in their presence only Be aBle to decide the dispute completely and effectively#

!he ru e of indispensa" e party #as "ased on the premise that a court shou d do $comp ete %ustice or none at a . $ In the present case Comp ainant has neither imp eaded respondent &r. '( Investment &ana)er( as a party nor has he imp eaded the company( in #hose units the respondent "ank has invested the amount of comp ainant( as a party. !he respondent "ank "ein) mere y a co ectin) a)ent of the company cou d not "e he d ia" e for deficiency in service.* In the a"sence of these t#o parties no effective decree can "e passed as these parties form the essence of constitution of this comp aint. + !herefore( in the a"sence of these parties a comp aint cannot "e decided( hence( this comp aint sha "e dismissed.

Chu"a !emsu ,ersus Nan)pon)er-I (rder ! and $ule 6 M It ?as held that ?here &ecessary party is not added a suit has to Be dismissed Because effective order cannot Be passed and conse<uently no relief can Be granted to the parties on record#

!hou)h the ru e - of order . of the Code mandates that no suit sha "e defeated "y reason of the mis%oinder or non %oinder of parties yet it is important to notice that the proviso thereto c arifies that nothin) in that ru e sha app y to non %oinder of a necessary party and hence the present comp aint is ia" e to "e dismissed ./# Since all the charges are against respondent
8 9 6 ! Suresh Chandra vs# $am -ilas Mahesh?ari, II =2 !; C+0 73" =,uAarat SCD$C; &aBa 2umar -s# $adhayshyam, 'I$ !6"! +C 226# !663=2; CivCC 5 8 : !663 'I$ =,auhati; !! Di?a>ar -s# State of M+#, !693 Supp SCC 2!3@

Mr# : and moreover the respondent Ban> Being merely a collecting agent of the company no adverse order can "e passed in the a"sence of these necessary parties i.e.( respondent &r. '(investment mana)er( and company... Therefore, care must have Been Be ta>en By the complainant to ensure that the necessary parties are Before the court, complaint or proceedings ?ill have to fail# other?ise the

!! +ritam Singh -s# State of +unAaB !66"="; $$$ 733=+C/;

"

3.

(HE HER ASHOK IS A CONS"MER)

It is contended that the complaint is not maintainaBle under the Consumer +rotection 'ct, !695, =C#+# 'ct for Brief; as investing amount in ULI+ !2 is a Kcommercial activityH !"#

The <uestion, therefore, ?hich re<uires consideration is ?hether the investment made By the Complainant is for Kcommercial purposeH# For this purpose, reliance is placed on the I$D' Circular!3, ?hich is as under)

N'll ULI+ pension D annuity products shall offer a minimum guaranteed return of 3#7 per cent per annum or as specified By I$D' from time to time, on the maturity date# This guaranteed return is applicaBle on the maturity date, for policies ?here all due premiums are paid#O#

It

is

therefore, contended that the

Corporation

is

estaBlished

to

ac<uire

holding, management and dispose of securities#That as soon as the amount is invested, the investor gets units ?hich are in the nature of share certificates and he is entitled to share in profits# Therefore, it is for a commercial!7 purpose# It is ?ell settled that ?hen the eEpression KCommercial +urposeH has not Been defined in the 'ct, its common parlance meaning should Be given and according to that a commercial purpose is that purpose, the oBAect or aim of ?hich is to ma>e profit#!5 The Investment Manager of I4I 4an>, respondent Mr#:, ?ho earlier also used to advise him regarding investment decisions, advised him to invest in one of the apparently lucrative Insurance scheme sponsored and managed By the respondent I4I 4an>, on the re<uest of complainant himself# !8
!2 Unit Lin>ed Investment +lan !" Section 2=d; Consumer +rotection 'ct !695, Phires or avails ofQ any services for a consideration ?hich has Been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any Beneficiary of such services other than the person ?ho Phires or avails ofQ the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, ?hen such services are availed of ?ith the approval of the first mentioned person PBut does not include a person ?ho avails of such services for any commercial purposeQ@ !3 I$D' Circular &o#I IRDA/ACT/CIR/ULIP/102/06/2010 !7 +rofit is the main aim to prove a purchase for commercial purpose I If profit is not intended the purpose cannot Be called commercial I 2 7=!; C+C 7" &#C# !5 Smt# +ushpa Meena -s# Shah %nterprises !66 $LT +art III, 76# !8 +roposition +age !

The Burden of proof that complainant is a consumer, ?ho purchased a Bric> machine, is on the complainant that it has Been purchased for selfIemployment# !9

In 0an)adhar v. 1!I(!6 the complainant applied for &aster 0ain--2 1nits. The complainant insisted that he should have Been allotted By " #6#62# This issue ?as suBstantiated ?ith reliance on the oBservations made in the case of Ram Narayan v. 2arsen 3 !ou"ro2 , may BoomIrang upon stand ?ith oBservation therein that, if the complainant had purchased the units, then the transaction could Be for aNCommercia Purpose4 and, therefore, he ?ould not Be a consumer as defined under Section 2 =!;=d; =i; of the C+'#

In this vie? of the matter, a person ?ho ta>es insurance policy to cover the envisaged ris> does not ta>e the policy for commercial purpose# 4ut as the complainant has ta>en ULI+ +olicy, he intends to generate profit# 2!

!9 Cheema %ngineering Services v# $aAan Singh =!668;! SCC !"! !6 !663 =2; C+$ 383 =/;# 2 =!66"; C+0 " =&C; !66" =!; C+$ ! 5 2! MDs# /arsolia Motors -ersus MDs# &ational Insurance Co# Ltd

3#

(HE HER COM$LAIN IS MAIN AINABLE IN CONS"MER FOR"M)

It is ?ell settled that ?hen the eEpression KCommercial +urposeH has not Been defined in the 'ct, its common parlance meaning should Be given and according to that a commercial purpose is that purpose, the oBAect or aim of ?hich is to ma>e profit# 22 The Investment Manager of respondent I4I 4an>, respondent Mr#:, ?ho earlier also used to advise him regarding investment decisions, advised him to invest in one of the apparently lucrative Insurance scheme sponsored and managed By the respondent I4I 4an>, on the re<uest of complainant himself#2" It is therefore, contended that the Corporation is estaBlished to ac<uire holding, management and dispose of securities#That as soon as the amount is invested, the investor gets units ?hich are in the nature of share certificates and he is entitled to share in profits# Therefore, it is for a commercial purpose 23# Since the Complainant availing commercial service, complaint under C+ 'ct not maintainaBle as claimant is not a consumer uDs 2 =!; =d; of the 'ct#27

The present complaint filed is not at all maintainaBle as the complainant has no Aurisdiction to file the complaint in this present forum# It involves alot of complicated issues to Be decided# the complainantHs case involves a determination of compleE <uestions 25 of la? and fact ?hich cannot Be satisfactorily determined By the Consumer Forum in the time frame provided under the 'ct it ?ould Be Better for the complainant to see> redress of his grievances in a civil court#28 In the +resent complaint there is no clear and cogent evidence ?hich could Be relied upon# The act does not contemplate the determination of complicated issues29 of fact involving ta>ing of elaBorate oral evidence and adducing of voluminous documentary evidence and a detailed scrutiny and assessment of such evidence By the Consumer $edressal Forum#26

22 Smt# +ushpa Meena -s# Shah %nterprises !66 $LT +art III, 76# 2" +roposition +age ! 23 +rofit is the main aim to prove a purchase for commercial purpose I If profit is not intended the purpose cannot Be called commercial I 2 7=!; C+C 7" &#C# 27 2 ! =!; C+C 528 U#+# 25 2 ! =!; C+C "!7 (rissa 28 +annalal -s# 4an> of India 29 J.K Synthetics Ltd. v# Smt. Anita Bhargava, !665=!; C+C 39 .#4engal 26 Industrial +roducts -s# +&4

This is a matter in respect of ?hich the complainant should see> his redress Before a Civil Court in as much as there had Been no deficiency in service on the part of the Insurance Company, as has Been held in the case of 5iya%eerao Cotton &i s 2td. ,s. Ne# India Assurance Co. 2!6#" 's mandated By I$D', deductions that can Be made By the insurer for cost incurred during health chec>Iup, charges to?ards stamp duty and mortality charge for interim period# In addition to these deductions, in case of ULI+s, the fluctuations in the amount of already allocated units ?ill Be adAusted in the settlement# /ere, the insurer ?ill have to repurchase the units on the date of cancellation to redeem money and pay the value of units on the cancellation# "! So, deductions are on account of provisions that has Been made mandatory By the I$D' regulations and respondent Ban> has nothing to do ?ith these deductions# 's regard to delay in refund of money is concerned, certain procedure has to Be follo?ed By the respondent Ban>, a re<uest for cancellation of policy has to Be sent to +olicy Issueing Department of the respondent Ban># Its a long procedural process and the respondent Ban> has no role to play in that#

Complainant is also claiming compensation due to delay in refund of premium and the complaint is accompanied ?ith documents containing general terms and conditions for the scheme of the insurance, memorandum of understanding and other documents, so it is not a case to Be decided in summary Aurisdictions Because it re<uires great deal of evidence Both oral and documentary and raise compleE <uestion of la? and facts# "2

Complainant has charged allegations of fraud and cheating against the respondents# 2eeping in vie? the procedure follo?ed in this Commission, it is contended that the <uestions of fraud, cheating and conspiracy cannot satisfactorily resolved and adAudicated here and the proper Forum for dealing ?ith such <uestions ?ould Be a competent Civil Court# "" Matter of fraud and cheating cannot Be gone into under Consumer +rotection 'ct# +arties are to Be relegated to Civil Aurisdiction for necessary relief# "3

" "! "2 "" "3

.--27.8 CPR .29 7.29(.2:8 ; I 7.--28 CP5 2-2; .--2 CPC *+7NC8 I$D' Circular &o# 23DT,FD 8I 9, 2 8 /onorary Secretary, %legance MemBers 'ssn -s# +harthane Construction Co +vt ltd# $eliance Industries Ltd# vDs United India Insurance Company Ltd, =!669; I C+0 !" =&C; 2 3=!; C+C 589 Chd

The complainant himself had stated in his complaint that his signatures ?ere oBtained on the prescriBed form# The allegation of the complainant ?as that the signature on said document ?as oBtained from him either By misrepresentation or fraud, the complaint is not maintainBle in this forum as the <uestion ?hether the signatures on policy document ?ere oBtained from the complainant By misrepresentation or fraud ?as a matter to Be decided By the civil court# "7

It ?as held in the case of 6e hi !ransport Corporation <mp oyees Provident =und !rust vs. >rissa Sma Industries and Anr"5 that complaint is not maintainaBle since they ?ere engaged in trading of securities ?hich amounts to commercial activity# Secondly, in vie? of Securities and %Echange 4oard of India 'ct, !662 =for short Securities 'ct;, Consumer Forum has no Aurisdiction to adAudicate upon such disputes Bet?een the parties# In support, learned counsel has relied upon a decision of this Commission#

"7 Devappa 2anchan -s# (riental Insurance Co#, =!662; C+$ 386=39 ;=2ant;# "5 III =2 8; C+0 "!5 =&C;#

7#

(HE HER HE COM$LAIN IS IME BARRED )

?e #ho comes into e@uity must come #ith c ean hands. This maEim Bars relief for anyone liaBle of improper conduct in the matter at hand# It operates to prevent any affirmative recovery for the person ?ith Lunclean hands,L no matter ho? unfairly the personJs adversary has treated him or her# Complaint at the Bar is Barred By limitation ?hich is 2 years since the last cause of action arose on "#2#2 !! and the complaint ?as filed on "#2#2 !! i#e#, !9 days Beyond limitation period as defined in the act"8# Consumer Forums do not have the Aurisdiction to entertain a complaint if the same is not filed ?ithin 2 years from the date on ?hich the cause of action has arisen#"9

Complainant filed complaint at Bar, against Before Consumer Forum claiming compensation on account of different charges# Complaint, ho?ever, has Been filed after a gap of 2 years and !9 days from the cause of action# Limitation prescriBed under Section 23' is 2 years# Complaint is Barred By limitation# If complaint is time Barred yet consumer forum decides it on merits, the forum ?ould Be committing an illegality I 'ggrieved party ?ould Be entitled to have such an order set aside#"6

In the case of Sh. Sham"hu Nath vs# ?6=C Standard 2ife Insurance Company 2imited(3 the complainant is that one Sh# ,urcharan Singh, ?ho ?as the agent of the (+s at the relevant time, approached the complainant and persuaded him to invest a sum of $s#2 , DI in a product of (+s >no?n as K*oung Star +olicyH# 'ccording to the complainant, he ?as told By Sh# ,urcharan Singh that as per the terms of the said policy, he ?as re<uired to pay a sum of $s#2 , $s#2 , DI as one time premium and he ?ould receive the assured amount after the DI to Sh# ,urcharan Singh and filled the proposal form# Thereafter, the complainant completion of the term of the policy# So, according to the complainant, he paid a sum of received the policy along ?ith the letter and the proposal form# 'fter going through the said policy, he found that the policy sent to him ?as not the same, ?hich ?as offered to him By Sh# ,urcharan Singh and for ?hich the premium ?as paid By him# The policy issued ?as of
"8 "9 "6 3 Section 23', Consumer +rotection 'ct, !695 -#&# Shri>hande vs# 'nita Sena Fernandes State 4an> of India vs# MDs 4#S# 'gricultural Industries Complaint Case &o)797 of 2 !!

a product >no?n as K*oung Star IIH# 's per the terms and conditions of this policy, the complainant ?as re<uired to pay premium of $s#2 , DI for ! years on yearly fre<uency# It ?as held that the complaint alleging deficiency in service or unfair trade practice could have Been filed ?ithin a period of t?o years thereafter# The present complaint ?as filed much after the eEpiry of period of limitation of t?o years# /ence, the complaint is Barred By limitation# So, the complaint deserves dismissal of this score alone#

In the present complaint, Forum is not re<uired to ta>e into consideration the merits of the case# Merits of the case cannot Be decided unless the delay is condoned and the matter is ta>en up for hearing after condonation of delay# Thus, the main issues cannot Be decided unless delay is condoned By the Court and the matter is ta>en up for hearing after condonation of delay# Thus, the main issues cannot Be decided unless delay is condoned By the Court and the matter is ta>en up for hearing on its merits# 3!

Last Cause of action arose on "#2#2 !!, ?hen refund ?as credited in the accout of complainant# Complaint at Bar filed on 2!#2#2 !"# Complaint is liaBle to Be dismissed as time Barred#32 &o event or circumstance arising after the eEpiry of limitation can constitute sufficient cause#3" In the case of Ba #ant Sin)h ,s. 5a)dish Sin)h33, there ?as delay in filing of application of 33 days Beyond limitation period, it ?as held that applicant did not come to Court ?ith clean hands#

The principle of finality of litigation cannot Be pressed to the eEtent of such an aBsurdity that it Becomes an engine of fraud in the hands of dishonest litigants# The Courts of la? are meant for imparting Austice Bet?een parties# (ne, ?ho comes to the Court, must come ?ith clean hands# That most often than not, process of the Court is Being aBused# +ropertyI graBBers, taEIevaders, Ban>IloanIdodgers and other unscrupulous persons from all ?al>s of life find the Court process a convenient lever to retain the illegal gains indefinitely# ComplainantJs case is Based on falsehood and is Barred limitation, therefore he has no right to approach the this Forum#37
3! 32 3" 33 37 +ushpaBen 4al?antrai vs# &and>umar $amanlal= 'I$ 2 3 =&(C; "92 =,uA; 2 6=2; C+C ! S#C# 'Ait Singh Tha>ur Singh v# State of ,uAarat, 'I$ !69! SC 8"" =8"7;) =!69!; ! SCC 367# 2 ! =62; 'IC ! " $am Chandra Singh v# Savitri Devi, =2 "; 6 S#C#C "!6 at p# "26

5#

(HE HER B"RDEN OF $ROOF LIES ON HE COM$LAINAN )

The Burden of proof is often associated ?ith the Latin maEim semper necessitas pro"andi incum"it ei @ui a)it, the Best translation of ?hich seems to Be) Lthe necessity of proof al?ays lies ?ith the person ?ho lays chargesO#

/e ?ho does not carry the Burden of proof carries the Benefit of assumption, meaning he needs no evidence to support his claim# Fulfilling the Burden of proof effectively captures the Benefit of assumption, passing the Burden of proof off to another party# 35

Mere eEistence of relationship Bet?een the complainant and respondent Mr# :, ?hereBy one person is in dominant position, is not sufficient to prove undue influence and ?ould not ma>e contract unconscionaBle# Court must consider relationship as ?ell as attending circumstances# 4urden of proving such relationship and use of actual dominant position to oBtain unfair advantage ?as on the complainant# 38

.hen a ?ritten contract has Been signed By Both the parties, the party alleging that it has Been erroneously recorded and that he signed it under a mista>e, must estaBlish the fact Beyond all douBt#39

The complainant must estaBlish the facts relating to his plead that he signed the contract under undue influence# /e cannot Aust proclaim that he signed the policy under a mista>e# /e has to have a valid proof#

The Burden of proof lies on the party ?ho suBstantially asserts the affirmative of the issue and not upon the party ?ho denies it# It is But reasonaBle and Aust that the suitor ?ho relies upon the eEistence of a fact, should Be called upon to prove his o?n case# 36 The complainant can estaBlish the affirmative facts of the case and thus he must come for?ard and ta>e the Burden of proof#
35 $atanlal and DhiraAlal, The La? of %vidence, 2" rd %dition, 2 ! , p# !!83 38 Shivadas Lo>nath Singh v# ,ayaBai Shan>ar Sur?ase, !66" Mah L0 !52" =D4;# 39 .illiam Charles 4inns v# .# C T# 'very Ltd#, '#I#$# !6"3 Cal# 889 at p# 886 36 T'*L($, !2th %dition, S# "53, p# 272#

!!

The party on ?hom the onus of proof lies must, in order to succeed, estaBlish a prima facie case# /e cannot, on failure to do so, ta>e advantage of the ?ea>ness of his adversaryJs case# /e must succeed By the strength of his o?n right and the clearness of his o?n proof# 7 The case ?ill only Be encouraged if the complainant is aBle to prove that his signature ?as ta>en under undue influence#

Merely Because the parties ?ere nearly related to each other no presumption of undue influence can arise# .hether By la? of India or la? of %ngland, more than mere influence must Be proved so as to render influence, in the language of the la?, NundueO# 7!

The complainant has asserted the affirmative of the issue# Thus, according to Sec# ! ! 72, the Burden of proof should Be placed on the complainant# 'ccording to Sec# ! 2, a test for ascertaining on ?hich side the Burden of proof should lie is held# The Burden of proof should lie on the complainant as he ?ould fail if no evidence at all ?ere given# If he fails to prove the liaBility of respondent Ban> on grounds of misrepresentation, undue influence and fraud, respondent Ban> ?ill Be successful# /ence, the onus must Be cast on the complainant and such allocation ?ould Be correct# If the ?rong allocation of onus is allo?ed to remain on respondent Ban>, then there is every li>elihood of the complainant to succeed ?ithout giving any evidence in respect of this issue# 'ccording to Sec# !!77", ?rongly casting the Burden of proof on respondent Ban> in respect of this issue, is a palpaBle or a gross error, ?hich ?ill materially affect the ultimate decision of the Court on this issue# 73

Section "77 says that there should Be appreciation of evidence, i#e#, the oral evidence of too old incident is to Be assessed ?ith great care#75 The complainant is giving oral evidence relating to an event that too> place 2 years and !9 days ago# ItJs after a long lapse of time and so must Be ?eighed and handled ?ith due care# The Burden of proof must lie on the complainant in order to estaBlish the case from his part#
7 7! 72 7" 73 Sec# ! ! of The La? of %vidence, !982# SuBhash Chandra Dass MushiB v# ,anga +rasad dass MushiB, !658 =!; SC.$ 28! ) 'I$ !658 SC 989 %vidence 'ct, !982# Civil +rocedure Code# Mst# Chand >aur and others v# Mst# 0i?i and another Civil .rit no# 3"8 of !658# DDd# 27#"#!659, +unAaB and /aryana /igh Court 77 %vidence 'ct, !982# 75 /arihar +rasad Singh and others v# 4almi>i +rasad Singh and others#

!2

Insured claiming liaBility of the insurer must prove the same# The insurer ?ill not Be held liaBle if the insured did not controvert the same By producing evidence# 78 The complainant in order to prove that respondent Ban> should Be held liaBle must provide proper evidence and only then ?ill the decision of the Court favour him#

78 2e?al 2rishnan and others v# Smt# 2rishna Devi and others#

!"

8# (HE HER COM$LAINAN

HAS FOLLO(ED GRIE'ANCE REDRESSAL

$ROCED"RE AS MANDA ED B# IRDA)

' N,rievanceDComplaintO is defined as any communication that eEpresses dissatisfaction aBout an action or lac> of action, aBout the standard of serviceDdeficiency of service of an insurance company andDor any intermediary or as>s for remedial action# 79

$egulation 7 of I$D' and $egulations for +rotection of +olicyholders Interests, 2

provides for insurers to have in place speedy and effective grievance redressal systems, and in terms of the 'uthorityHs po?ers and functions as enunciated in Section !3 of I$D' 'ct, !666#76

The insurance sector in India =Both life insurance and general; is governed By the Insurance $egulatory and Development 'uthority, set up By an 'ct of +arliament in !666 NRto protect the interests of the holders of insurance policies, to regulate, promote, and ensure orderly gro?th of the insurance industryRO# FuasiIlegislative po?ers, in the form of regulation and ruleIma>ing authority, are conferred upon the regulator, suBAect to +arliamentary oversight# The I$D' also passes regulations from time to time regulating Both suBstantive as ?ell as procedural aspects of the aBove consumer protection structure#

The matriE of consumer protection for aggrieved consumers of insurance in order of access is as follo?s)5

a;

,rievance redressal cell ?ithin each of the life and nonIlife companies Mandated By I$D' =+rotection of +olicyholdersH $egulations;, 2 2#I +olicyholders ?ho have complaints against insurers are re<uired to first approach the ,rievanceDCustomer Complaints Cell of the concerned insurer#

79 I$D' Circular &o# ) "DC'D,$-D*+4D! I!! , 2 ! 76 I&SU$'&C% $%,UL'T($* '&D D%-%L(+M%&T 'UT/($IT*, Nhttp)DD???#policyholder#gov#inDuploadsDC%DocumentsD,uidelinesS2 onS2 ,rievance S2 $edressal#pdfO, accessed on !8 th feB 2 !" at 8#"" +M 5 0ayanth Srinivasan, %volution of Consumer +rotection La?s in India M +art 2, Nhttp)DD???#ifmr#co#inDBlogD2 !2D 3D "DevolutionIofIconsumerIprotectionIla?sIinIindiaIpartI2DO, accessed on !8th feB 2 !" at 8#3! +M

!3

B;

I$D' ,rievance Cell D Director of +uBlic ,rievancesI These remain the second port of call, coming into play in practice only after the consumer has sought redress through the inIhouse grievance cells# If policy holders do not receive a response from insurer=s; ?ithin a reasonaBle period of time or are dissatisfied ?ith the response of the company, they may approach the ,rievance Cell of the I$D'# The complaints need to Be sent to the ,rievance Cell of the I$D'# The latter, the Director of +uBlic ,rievances entertains complaints against the puBlic sector insurance companies =including LIC, ,IC, United India, &ational, &e? India, (riental; and is Based ?ithin the CaBinet Secretariat of the ,overnment of India# 5!

c;

Insurance (mBudsmanI First created By ,overnment of India notification in !669# There are !2 such (mBudsman in India# Insured is necessarily re<uired to first approach the concerned insurer, failing ?hich he may approach these (mBudsman# If the grievance is not redressed, insured are advised to approach the Insurance (mBudsmen#

d;

Consumer courts under C(+$'

e;

In case the claimant is not satisfied ?ith decision of (mBudsmen, appeal can Be filed at the appropriate Audicial forum li>e civil courts and consumer courts#

I$D' through its official circular has made it mandatory to follo? the aBove matriE in suBmitting a complaint# Complainant ?as supposed to first register a complaint ?ith internal ,rievance $edressal Cell of the insurance company# In case of negligence on the part of companyJs redressal cell, he could register a complaint ?ith I$D' ,rievance cell and thereafter ?ith Insurance (mBudsman# Consumer Forum and Civil Courts come at last# Complainant ?ithout follo?ing manadatory hierarchy directly registered a complaint ?ith consumer forum#

5! I$D' Circular &o# ) 3DF'D,$-DT+4D!!I!2 , 2 !!

!7

9#

(HE HER CA$ACI # )

HE IN'ES MEN

MANAGER (AS AC ING IN $ERSONAL

The complainant being a layman developed complete and faithful trust on respondent %r. & manger as he was helped with all his investment decisions for the past '( years by respondent %r. & manager. All the previous investment suggestions were beneficial and fruitful for the complainant and thus he opted for the present insurance scheme also as he had great conviction and confidence. This clearly proves that respondent %r. & manager gave a mere opinion and acted as an agent of the complainant. His advice to purchase the policy document was not exercised within his course of employment but fell under the category of fiduciary relationship shared by both of them. Also the complainant handed over the che!ue to respondent %r.& manger for encashment. This clearly proves that respondent %r. & manager acted in personal capacity which falls outside the course of employment. The fact that one man is in a legal sense the )agent) of another does not in itself render the )principal) liable for any and every tort which the servant may commit. The principal will only be held liable for such torts which are committed by the agent in the course of employment. An act is only deemed to be within the course of employment when the agent executes the orders of the principal. Thus respondent %r.& manager was clearly not acting within the course of employment.

In the case of State 4an> of India v# Shyama Devi 52, The Supreme Court held that the appellant Ban> ?as not liaBle to ma>e good the loss caused to the complainant the act of an employee of the Ban>, ?hile the latter ?as acting as an agent of the complainant and not ?ithin the scope of his employment ?ith the Ban># In this case the complainant, a client of the Ban>, paid certain amount to an employee of the Ban> for crediting it to her account# The onus ?as on the client to sho? that she paid the amount to the employee of the Ban> and ?as received By that employee in the course of the employment ?ith the Ban># In such a case the false and fraudulent entry aBout the deposit of the amount in the pass Boo> of the complainant could not shift the onus on the Ban> to prove the contrary# Conse<uently, the Ban> ?as not liaBle to ma>e good the loss caused to the complainant By the act of the
52 'I$ !689 SC !25"

!5

employee Because the latter in such a case ?ould Be deemed to have acted as an agent of the complainant and not ?ithin the scope of his employment ?ith the Ban>#

Insurance 'ct, !6"95" says that the Insurance 4ro>er is entitled to receive commission on every policy he is aBle to ma>e the customers purchase# In this case, respondent Mr#:, manager sa? his Benefit of gaining commission and thus he opted for selling the policy document to the complainant# /e enacted this part completely for his o?n Benefit# /e ?as a?are of the fact that if he is aBle to sell the policy, he ?ould Be aBle to mint money# $espondent Ban> is not responsiBle for the action done By, respondent Mr#:, manager# The master ?ould not Be liaBle if the ?rong ?as committed not for his But for the servantHs o?n Benefit#53

The complainant had entrusted, respondent Mr#:, manager, ?ho had Been advising him for ! years, for encashment and utilisation By respondent Ban># $espondent Mr# :, manager ?as not said to have Been acting in due course of his employment or as an agent of respondent Ban># 57

In vie? of the eEpress prohiBition in the $ulesD$egulations ?hich ?ere puBlished in the ,aGette of India, it is not possiBle to infer an implied authority By the Ban> authoriGing its agent i#e#, manager, to collect premium on Behalf of Ban># Further it cannot Be said that manager had the eEpress authority to receive the premium on Behalf of Ban># Thus it is contended that, respondent Mr# :, manager in receiving the Bearer che<ue from the complainant on account of premium of the policy of respondent Ban> ?as not acting as an agent of respondent Ban>, nor could it Be deemed that respondent Ban> had received the premium on the date the Bearer che<ue to?ards the premium ?as received By respondent Ban>#55 /ence the present complaint is not maintainaBle#

5" Section ! , Insurance 'ct, !6"9 53 4ar?ic> v# %nglish 0oint Stoc> 4an>I In this case, the Ban> manager made a fraudulent representation to the complainant ?ho, on the strength of it, supplied goods on credit to a customer of the Ban> and suffered loss@ and in doing so the manager acted in the Ban>Hs interest and for realiGing the Ban>Hs dues from that customer# 65 Pirthi Singh And Anr. vs Binda Ram And Ors, AIR 1987 P H 56 55 /arshad 0# Shah v# LIC of India, III =!668; C+0 6 =SC;

!8

If the terms of contract of employment of the agent are not eEplicit, although it may appear that the party is an agent, he ?ill Be deemed to have contracted in his personal capacity# 58

58 $eports of cases argued and determined in the Court of 'ppeals and Court of %rrors of South Carolina, on appeal from the courts of la?, -olume 3#

!9

6#

(HE HER

ERMS

AND

CONDI IONS

ARE

BINDING

ON

COM$LAINAN )

It is a ?ellIsettled rule of construction that ?ords in a contract =the +olicy herein; are to Be understood in their ordinary meaning# /ence, the correct approach is to consider the policy of insurance By the reference to its terms# The complainant should have read the given terms and conditions Before signing the prescriBed form#59

The ?hole point of a document in ?riting is to eEclude speculation as to ?hat ?as and ?hat ?as not agreed to, ho? much ever the matter might have Been raised By one of the parties during the stage of negotiation#56 The complainant on signing the prescriBed form cannot Bring up the issue that the terms agreed to orally ?ere different from the terms mentioned in the policy document received# ' contract is not voidaBle merely Because it ?as caused By one of the parties to it Being under a mista>e as to a matter of fact# 8

.hen the contract had Been reduced to ?riting, the previous offers made By respondent Mr# : and acceptances By the complainant lose all importance and the only contract Bet?een the parties is the ?ritten contract ?hich thenceforth Becomes eEclusive evidence of the terms# 8!

Section 6282 says that oral evidence cannot control ?ritten evidence# .hen the terms of any such contract, grant or other disposition of property, or any matter re<uired By la? to Be reduced to the form of a document, have Been proved according to the last section, no evidence of any oral agreement or statement shall Be admitted, as Bet?een the parties to any such instrument or their representativesJ interest, for the purpose of contradicting, varying, adding to, or suBtracting from, its terms# Section 6!8" forBids proving the contents of a ?riting other?ise than By ?ritten itself# This is Based on the NBest evidenceO rule# Section 62 prevents admission of oral evidence for the purpose of varying the contract as Bet?een

59 56 8 8! 82 8"

$ashee Industries Ltd# v# %Eport Credit ,uarantee Corpn# (f India Ltd#, =2 6; ! S#C#C# !"9 at p# !35# Tha?ardas +herumal v# Union of India, '#I#$# !677 S#C# 359 at p# 385) =!677; 2 S#C#$# 39# Sec# 22 of Indian Contract 'ct !982, Contract caused By mista>e of one party as to matter of fact# $alli 4ros v# 4hag?an Das +armeshiri Das, '#I#$# !637 Lah# "7 at p# 3 ) I#L#$# =!633; Lah# 789# Indian %vidence 'ct, !982 %cidence 'ct, !982

!6

the parties to the contract# (nce the document is produced to prove the terms under section 6! that the provisions of section 62 come to play#

Cardinal rule of evidence is that ?here ?ritten document eEists it shall Be produced as Being the Best evidence of its contents#83 (ral proof cannot Be suBstituted for the ?ritten evidence#87 The complainant cannot come for?ard ?ith the plead By providing an oral evidence ?hen there is clearly an accepted and signed contract By the complainant# (nly the ?ritten document ?ill Be attended#

If the document is clear and unamBiguous evidence of surrounding circumstances as to intention of parties is not admissiBle# 85 The general and most infleEiBle rule is that in case of a ?ritten instrument any other evidence is eEcluded either as a suBstitute for such instrument or to contradict or alter the ?ritten contract #88 If a transaction is reduced to, or recorded in, ?riting either By re<uirement of la?, or By agreement of the parties, the ?riting Becomes the eEclusive memorial thereof, and no evidence is admissiBle to prove the terms of the transaction eEcept the document itself or secondary evidence of its contents# 89

.hen language used in a document is plain in itself, and ?hen it applies accurately to eEisting facts, evidence may not Be given to sho? that it ?as not meant to apply to such facts#86 Documentary evidence is the Best evidence and ?ithholding of such evidence dra?s adverse inference#9 ' document is proper evidence of its o?n contents ?here the said contents are in issue and all derivative evidence is inadmissiBle# .ith a document of contract Bet?een parties, the document alone is the repository of the terms of contract# 9!

83 87 85 88 89 86 9 9!

4ai /ira Devi -# (fficial 'ssignee of 4omBay ='I$ !679 SC 339, 372;, Sumati 4ala -# &#2# Das= 'I$ !687 ,au 3"; M# SuBramaniam -s# M#L#$#M# Lutchman='I$ !62" +C 7 ;# ,uruBasappa -s# ,uru Lingappa# $oop 2umar -s# Mohan Thedani 'I$ 2 " SC 23!9) =2 2;5 SCC 767# $amdip Sharma -s# 4aldeo Singh 'I$ !688 +at 2"3) !688 4L0$ " 9# ShuAaatamnd 2han -s# ,ovind Behari 'I$ !6"3 'll# ! # -irse -s# 4al?ant 2 9=3; ICC 8 2 =+C/;# U# Sin -s# U Tun Si 'I$ !6"7 $ang 38"#

Contract might Be oral and no ?riting ?as necessary# 4ut if it is reduced to the form of a document the terms of contract have to Be proved By document alone# 92 /ence, the terms and conditions mentioned in the policy document ?ill alone Be applicaBle#

.herever on the face of the policy ?ords to the effect NFor conditions see Belo?O are printed the complainant concerned is as a matter of la? held to Be Bound By the conditions suBAect to ?hich the contract is issued ?hether he ta>es care to read the conditions or not# 9"

Constitution Bench has oBserved that the policy document, Being a contract has to Be read strictly, and that in interpreting documents relating to a contract of insurance, the duty of the court is to interpret the ?ords in ?hich the contract is eEpressed By the parties, Because it is not for the court to ma>e a ne? contract# 93

.hile a fiduciary is re<uired to eEercise care in recommending investments, he or she is not a guarantor of the investment# (ften an investment is suBAect to mar>et and economic forces ?hich cannot Be foreseen# The parole evidence rule states that if the contract is ?ritten then that ?riting is the ?hole contract and the parties cannot adduce eEtrinsic evidence, and especially oral evidence, to add to vary or contradict that ?ritingH as held in the case of /enderson -s# 'rthur#97 'n accountant is not liaBle for losses caused By events ?hich cannot reasonaBly Be foreseen# respondent Mr# :, Being a fiduciary, ?as acting as an agent of the complainant# 'fter his recommendation ?as paid heed to, the complainant should have made an effort to read the terms and conditions provided, Before signing the prescriBed form#

In the Sh. Rakesh Chanana vs# ?6=C Standard 2ife Insurance Co. 2td.+A, the complainant pleaded that, Ms &oopur ,oel and 'shish Both representatives of /DFC Standard Life Insurance Co#Ltd#D(+ =in short the company;, approached him and insisted upon him for having a life insurance policy# The complainant agreed to purchase the policy as per terms
92 4ishunath (Aha -S# S# +ragasho 0ha 'I$ !623 'll 932@ Din>er $ai -s# Su>hdayal 'I$ !638 4om# 26"

9" SanAiva $o?Hs Commentary on The Indian Contract 'ct, !982 'nd Tenders, ='CT &(# I: (f !982;, Delhi La? /ouse !!th %dition, 2 6, p# 2 7 93 ,eneral 'ssurance Society Ltd# v# Chandumull 0ain 97 !6 8 ! 24 ! 95 Complaint Case &o# 2"! of 2 !

2!

and conditions told By the representatives# The application form ?as filled and he paid the premium of $s#7 , DI# The +olicy ?as issued to him along?ith the terms and conditions of the policy# That policy ?as K/DFC Savings 'ssurance +olicyO# 'fter reading the policy and its condition, the complainant came to >no? that the terms and conditions as told By the representatives of the company, ?ere not in the policy document# It ?as held that the allegations of the complainant that the representatives of the company played fraud upon him, had got no merit# The complaint ?as reAected#

22

! #

(HE HER AD'ICE

GI'EN

B# MR&

IS

OF SOME

LEGAL

IM$OR ANCE)

In the present case respondent Mr# : Aust provided statement of opinion as regard to deinvestment in the first policy and even in regard to the nature of policy Being issued to him# Since it ?as Aust a statement of opinion it is not sufficient to prove a misrepresentation in this case#98 .here a statement is not made of a fact But only as an opinion it is not misrepresentation#99 (rdinarily, a na>ed statement of opinion is not a representation, on ?hich a Buyer is legally entitled to rely#96 (Bviously it ?ould Be unreasonaBle to treat opinions provided By, respondent Mr# :, investment manager in the same manner as truths, as opinions are purely Based on personal Beliefs ?ith no additional foundation# 6

' fact is a statement that can Be proven By direct eEperience or oBAective verification# This evidence may Be in the form of the testimony of ?itnesses, agreedIupon oBservations, the ?ritten records of such testimony and oBservations, or the result of research or investigation#

' statement of fact can theoretically Be chec>ed for accuracy# The ground of this rule is proBaBly the impracticaBility of attempting to discover By means of the rules of la?, the real opinion of the party ma>ing the representation, and also, Because a mere eEpression of opinion does not alter facts, though it may Bias the Audgement#
6!

'n opinion is a statement of

Belief or Audgment that cannot Be oBAectively proven true or false# (pinions usually eEpress the feelings, preferences or Biases that a person has aBout a suBAect#

.here the opinion of an eEpert is receivaBle, the grounds or reasoning upon ?hich such opinion is Based may also Be in<uired into# (pinion is no evidence, unless the reason is assigned for such opinion#62

98 $amesh -s# MDs 's>o> Financial Corporation 99 Lea>es La? of Contracts, -ol# I Sec# 7!! , p# 522I%# 96 /aGard v# Ir?in, !9 +ic># $# ! 7@ Collins# v# %vans, 7 'dolph C %ll# =&#S#; 9 3 at p# 92 # 6 0acoB v# 4an> of India, 'I$ =!668; 'll# !65 6! StoryHs La? of Contracts, -ol# ! , Sec# 7!! p# 522# 62 /imatlal $atilal v# State of ,uAarat, !68! CrL0 !57 =,uA;, ,oBardhan v# State, 'I$ !676 'll 7"#

2"

The complainant carelessly relied on respondent Mr# :Js erroneous statement aBout the policy ?ithout chec>ing the policy itself# $espondent Mr# :Js statement is simply a negotiating position or an opinion containing no implication of a reasonaBle Basis since this ?as a commercial negotiation Being conducted By eEperienced professionals on Both sides# 4oth had e<ual access to the papers and ?ere ?ell aBle to form their opinions# 6"

Statements of opinion or Belief are not statements of fact and are not actionaBle Aust Because they turn out to Be inaccurate# 63

.here the facts are e<ually ?ell >no?n to Both the parties, ?hat one of them says to the other is fre<uently nothing But an eEpression of opinion# 67 The complainant had Been purchasing investment plans routinely for the past ! years# /e definitely had investment eEperience# /e had the potential to confirm the facts and Base his decision himself therefore#

6" 2ylr Bay Ltd# v# Under?riters, 2 5# 63 Contract La?, Mindy ChenI.ishart 67 $aA Mali> v# (verseas Financial Corporation, 'I$ 2

2 'll# !95#

23

!!#

(HE HER HE FRA"D HAS BEEN COMMI

ED )

In order to constitute fraud, it is necessary that there should Be a statement of fact ?hich is not true# Mere eEpression of opinion is not enough to constitute fraud# 65

Fraud is essentially a <uestion of fact, and the complainant ?ho alleges that has to prove the same#68 Merely ma>ing a mention of fraud or misrepresentation in the pleadings is not enough#69

In case of sale of policies, the rule is caveat emptor( i#e#, Buyer Be?are, ?hich means that it ?as the duty of the complainant to Be careful ?hile purchasing the policy, and there is no implied condition or ?arranty By the respondent Mr# : as to the characteristics of the policy for any particular purpose#66

%ven assuming that the relations Bet?een the complainant and respondent Mr# : ?ere friendly or close on that Basis it cannot Be readily inferred that respondent Mr# : ?as in a dominating position or that he ?as eEerting any undue influence or ?as trying to ta>e undue advantage of the complainantJs position and thus ?anted to practice fraud upon him# It is unli>ely that the complainant even after coming to >no? of the alleged fraud ?ould have ?aited for such a long period and in order to Austify the delay he has introduced a peculiar case in his notice, ?hich is not consistent ?ith the pleadings# !

The general rule of la? is that a party of full age and understanding is normally Bound By his signature to a document ?hether he reads it or understands it or not# %<uity does not save people from the conse<uences of their o?n folly, But ?ill save them from Being victimiGed By other people# .henever a person of full age and understanding puts his signatures to a legal document ?ithout ta>ing the trouBle of reading it or ?ithout as>ing the document to Be read and eEplained to him But signs it relying on the ?ord of another as to its character,
65 68 69 66 ! Sec !8 of The Indian Contract 'ct, !982# Smt# Shrisht Dha?an v# M D s Sha? 4rothers, 'I$ !662 S#C# !777# *og $aA v# 2uldeep $aA ,upta, 'I$ !66! 0# C 2# 25# Sec !5 =Indian; Sale of ,oods 'ct, !6" # /aAra 4ai v# 0adavBai, 'I$ !695 M#+# ! 5 at p# !!!

27

content or effect, he cannot Be heard to say that it ?as not his document# It ?as settled la? that a vague and general plea of undue influence ?ill not Be sufficient ?hen the complainant comes for?ard ?ith an action to set aside a contract on that ground or for fraud# ! !

The complainant ?as a ?ell educated man# /e is Bound By the policy as he had signed the policy ?hether or not he has read the terms and conditions# The document Became a legal contract immediately after the complainant signs the document#

.hile it ?as true Kundue influenceH, KfraudH, KmisrepresentationH are cognate vices and may, in part, overlap in some cases, they are in la? distinct categories, and are in vie? of (rder -I, $ule 3, read ?ith (rder -I of the Code of Civil +rocedure, re<uired to Be separately pleaded, ?ith specificity and precision# ' general allegation that the complainant ?as a simple old man of siEtyIfive years ?ho had reposed great confidence in respondent Mr# : ?as much too insufficient to amount to an averment of fraud# ! 2

In case it appears from the facts that even though there ?as a false statement But the complainant has means to >no? the correct position and ought to have >no?n the truth, there is no fraud# In Kama Kant vs# Prakash 6evi, the complainant, 2amal 2ant filed a suit against his mother, +ra>ash Devi and some others see>ing cancellation of a a trust deed on the ground that his signatures to it ?ere oBtained By fraud By falsely telling him that it ?as a general po?er of attorney# Under these circumstances, it ?as held that there ?as no fraud in this case#! " The complainant ?as an educated man and had all the means to >no? the contents of the document# /e cannot simply raise the matter declaring that his signatures ?ere oBtained By a false statement# /ereBy, no fraud shall arise in this case#

.hen a person signs a document, there is a presumption, unless there is proof of force or fraud, that he has read the document properly and understood it and only then he has affiEed his signatures thereon, other?ise no signature on a document can ever Be accepted# There is no allegation of force or fraud in this case ! 3

! !M#C# 4handari, JLa? of ContractJ, 'sho>a La? /ouse, &e? Delhi =India;, Third %dition 2 9# p# !56 ! 2'fsar Shai>h v# Soleman 4iBi, ='I$ !685 SC !5";, Suguna v# -inod ,# &ehemid, 2 9 =2; CTC 3"" =Mad; '(* + AIR ',-. Ra/. -,0

25

The respondent Mr# : supplied the form to the complainant# /ad the complainant eEamined the form, he ?ould have Been a?are of its terms and conditions and then he ?ould have Been Austified in reAecting it# The complainant cannot call for fraud in such a case as the complainant ?as given an opportunity to eEamine the form# If he neglects to do so, respondent Mr# : cannot Be considered liaBle for fraud# ! 7

! 3,rasim Industries Limited -s# 'ggar?al Steel, =2 ! ; ! SCC 9" at +g# 93 ! 7/orsfall v# Thomas =!952; ! /# C C# 6 ) !" $#$# "63@ Smith v# /ughes, L#$# =!98!; 5 F#4# 768#

28

!2#

(HE HER HERE HAS BEEN AN# DEFICIENC# IN SER'ICE )

's per S# 2=!;=g;! 5 of the 'ct, deficiency means inade<uacy in the <uality of service, underta>en to Be performed By a person in pursuance of a contract#

There ?as delay in refund premium amount By the respondent Mr# :# The delay ?as on the ground that the principal investment amount ?as to Be further invested By the I4I Ban> i#e#, respondent Ban>, in private securities# ' re<uest for cancellation of units ?as sent to the company ?hose units ?ere purchased# There ?as procedural delay in the refund of money# The respondent Ban> cannot Be held liaBle for deficiency in its service as it Aust acted a mediatory Bet?een customer and the company# ! 8 Therefore, there is no deficiency in service as defined in clause =g; of Section 2 of the 'ct#

's regard to <uestion of deductions is concerned, deductions are not unfair# It ?as clearly mentioned in the policy document, that even if the policy is cancelled ?ith in free loo> period, principal amount ?ill Be suBAected to deduction of administrative charges and any fluctuations in the stoc> mar>et since the Insurance policy ?as a unit lin>ed plan, therefore stoc> mar>et fluctuations ?ill also affect the principal amount#

The complainant had opted for regular investment plan as he signed the signed prescriBed form for the purchase of the said plan# In vie? of this, it is contended that the allegations contained in the complaint that the complainant too> single premium insurance policy of $s#7 , did not survive# 's a result of the aBove discussion, it is contended that the complainant has failed to prove any deficiency in service on the part of respondents#

It is evident from proposal forms, duly signed By the complainants that they filled up and signed the same for oBtaining the Unit Lin>ed +olicies# Under these policies, the fre<uency of premium, as mentioned, in the proposal forms ?as re<uired to Be paid regularly# that the complainant ?as signatories to the said proposal forms and received the insurance policy C
! 56eficiency means any fau t( imperfection( shortcomin) or inade@uacy in the @ua ity( nature and manner of performance #hich is re@uired to "e maintained "y or under any a# for the time "ein) in force or has "een undertaken to "e perormed "y a person in pursuance of a contract or other#ise in re ation to any serviceB ! 8Union of 4an> vs# MDs# Seppo $ally (*

29

other documents and, thus, he could not claim that he ?as not satisfied ?ith terms, ?hich he had already accepted#! 9

Considering the aforesaid circumstances and the fact that terms and conditions ?ere received By the complainant and he did not file any ?ritten complaint against the respondents for a long period# That the allegations of the complainant that the representatives of the company played fraud upon him, has got no merit# (ther?ise also, the complainant has not produced any proof regarding the terms and conditions, ?hich ?ere told to him By the representatives of the insurance company# /is mere allegations that he ?as told aBout the life insurance policy ?ith details, has got no meaning# The policy and its terms and conditions ?ere duly communicated to the complainant# /e accepted the same ?ithout raising any ?ritten oBAection# Therefore present complaint is liaBle to Be dismissed# ! 6

! 9 +oonam 4ishnoi vs# 4aAaA 'llianG Life Insurance Co# Ltd# ! 6Shri $a>esh Chanana -s# /DFC Standard Life Insurance Co#Ltd#

26

!"#

(HE HER I

(AS NECESSAR# FOR

HE COM$LAINAN

DEIN'ES IN HE EARLIER $OLIC#)

Chief %ngineers are normally on the topItier of the engineering department of an organiGation# Candidates are hired for the position of Chief %ngineer in different industries li>e automotive, commercial real estates, construction, pipeline, gas and petroleum#

The minimum +ay scale for the position of Chief %ngineer in ,overnment AoBs in India is $s#6" I"39 plus a ,+ of $s#35 # This is the minimum pay scale offered for this position@ ho?ever, some organiGations offer a higher pay scale for Chief %ngineers#

There is difference in pay scale for the position of Chief %ngineer in government organiGations# The complainant, Chief %ngineer in State Services, is assumed to Be entitled to a salary of $s#"7, and a ,rade pay of $s#9, #

The complainant Being a Chief %ngineer in State Services received a good amount of retirement Benefits# /e ?as entitled to dearness allo?ance, $s# 8,77,3 gratuity and also leave encashment as he ?as a retired state employee# The complainant ?as entitled for gratuity of as he ?as in service for ! years he ?as entitled for !2 times of the Basic and dearness allo?ance# 'lso Being a state government employee he ?as entitled for leave encashment ?hich is sho?n as follo?s)

+ay ,rade +ay D' T 57S Total Calculation for " 8 67 : " D" " daysR 8 67

"7 9 2867 8 67

Total Leave Salary admissiBle U $s#8, 6,7 =$upees Seven La>h &ine Thousand and Five /undred (nly; The complainant, a retired Chief %ngineer from State Services, received good amount of retirement Benefits# .hen the complainant ?as advised By the investment manager respondent Mr# : that the earlier policy had no gro?th potential, it ?as the duty of the complainant to ma>e sure ?hether the statement ?as true or not# The complainant should have >no?n that the earlier policy ?as ?ith a loc> in period of three years and the complainant had ?ithdra?n the money after 2 years due to ?hich he assumed that he ?as penaliGed By respondent Ban># /ad the complainant >ept the money in the earlier policy for one more year, he could have avoided the deductions# The complainant Being a ?ell educated man and a routine investor, investing in various policies of respondent Ban>, for the past ten years for taE saving purposes as ?ell as for long term investments, ?as very much a?are of the rules and regulations of respondent Ban># The complainant ?as a retired Chief %ngineer from State Services and also he received a good amount of retirement Benefits as mentioned aBove, so it ?as easy for him to invest in the ne? said insurance scheme ?ithout having to ?ithdra? money from the first policy#

"!

%+& (HE HER HE COM$LAINAN IS EN ILED FOR COM$ENSA ION: &o, the complainant is not entitled for compensation# There ?as no deficiency in service on respondent Ban>Js part so there should Be no unfit deductions# They ?ere Aust enacting the role of a mediator Bet?een the complainant and the company in ?hose private securities they invested in for the Benefit of the complainant# The complainant claiming the loss of $s# 8 should not Be considered as he had complete >no?ledge of the dead loc> period of " years for his earlier plan# /is claim for the loss of the insurance scheme of $s# !,7 must not Be compensated for, as respondent Ban> had no role to play regarding this# They ?ere simply a mediator and it ?as very ?ell mentioned in the terms and conditions that there ?as a free loo> period of !7 days and the refund ?ould Be given after the deductions related to the the administrative charges and any fluctuations in the stoc> mar>et as it ?as a unit lin>ed plan# It ?as a frivolous complaint filed against respondent Ban>Js officials# It thus affected the good?ill of the respondent Ban># It ?as simply a ?ay of the complainant to mint money# The complainant has filed a false complaint and thus the case must Be dismissed# The complainant also has not undergone any harassment or suffered any mental agony# /ad he suffered this much, he ?ould not have ?aited for 2 years and !9 days to file the complaint# Moreover, he ?ould have approached the respondent Ban> soon after getting the refund of $s# 39,7 #

.here the innocent representation has the effect of inducing the representee to enter into the contract, then the representee is entitled to rescind the contract, But he is not entitled to damages#!! The complainant can only rescind the contract But he cannot claim any damages or compensation#

!! Cheshire and Fifoot on Contracts, $escission, p# 2

=!635 %d#;

"2

$RA#ER .herefore, in the light of the issues raised, arguments advanced, reasons given and authorities cited, it is humBly prayed Before the /onJBle District Consumer Disputes $edressal Forum) !# That the continuation of proceedings against the respondent is unAustified and is an aBuse of la?# 2# That the respondent is not liaBle as no charges have Been proved# "# That the evidence is not upto mar> to ma>e the respondent liaBle# 3# That the present complaint Be dismissed# 7# That heavy cost Be imposed on complainant on account of filing frivoulous complaint#

'nd any other relief that this /onHBle Forum may Be pleased to grant in the interest of Austice, e<uity and good conscience#

Counsel for $espondent

""