Gujarat High Court Upholds
Insurance Ombudsman's Order in DHFL Pramerica Life Insurance Case
In a significant legal
development, the Gujarat High Court, in a judgment dated April 16, 2019, has
upheld the order passed by the Insurance Ombudsman in a case involving DHFL
Pramerica Life Insurance Company Limited and a consumer.
The case pertained to a group of
petitions filed under Article 226 of the Indian Constitution challenging the
order issued by the Insurance Ombudsman. The complaint was raised by the
consumer (respondent No. 2) against the insurance company, alleging that they
were misled into purchasing insurance policies under the pretext of receiving a
beautiful flat in Ahmedabad. The complainant claimed that the policies were
misrepresented as being related to income tax clearance and registration fees
for the flat. Later, when they realized the deception, they requested policy
cancellation, which the company denied as it was beyond the free-look period.
The key arguments made during
the case were as follows:
1. The insurance company argued
that the Ombudsman had exceeded its jurisdiction by addressing issues related
to mis-selling. They claimed that the Ombudsman's duties and functions were
clearly defined and did not include disputes related to mis-selling.
2. The insurance company pointed
out that the regulations in place at the time of policy purchase did not
include provisions for addressing mis-selling complaints, but later regulations
introduced such provisions.
3. The consumer countered by
emphasizing that the insurance company failed to produce voice recordings of
their marketing agents, which would have clarified the circumstances of the
policy purchase.
Ultimately, the court ruled in
favor of the consumer, highlighting several key points:
- The insurance company was
obligated to maintain voice recordings of its marketing agents as per
guidelines on distance marketing of insurance products.
- Since the insurance company did
not produce these records, the Ombudsman was justified in considering the
consumer's claims.
- The court rejected the insurance
company's arguments regarding jurisdiction, asserting that the dispute fell
within the Ombudsman's mandate to protect consumer interests.
- The court also noted that the
free look-in period and expiration of 15 days did not apply in this case due to
the nature of the misrepresentation made by the insurance company.
In
conclusion, the Gujarat High Court upheld the Insurance Ombudsman's order,
which directed the insurance company to refund the premium and other payments
made by the consumer. The court stressed the importance of consumer protection
and the duty of insurance companies to maintain records that can verify the
authenticity of transactions involving their policies. This ruling serves as a
precedent for cases involving mis-selling and consumer grievances within the
insurance sector in India.
Case Details:
Case Name: DHFL Pramerica Life
Insurance Company Limited vs. Office of Insurance Ombudsman & Another
Date of Judgment: April 16, 2019
Court: Gujarat High Court
Case Number: R/Special Civil
Application No. 7460 of 2016 and others (Consolidated)
Judge: Honorable Mr. Justice A.Y.
Kogje
Petitioner: DHFL Pramerica Life
Insurance Company Limited
Respondents: Office of Insurance
Ombudsman and another (Consumers who filed the complaint)
