JUDGMENT JUSTICE R. K. PATRA, PRESIDENT — The grievance of the com¬plainant is that the opposite party-insurance company in the name of selling “KEYMAN INSURANCE POLICY” issued two individual/per¬sonal policies by adopting unfair trade practice. 2. The case of the complainant is that it is a partnership firm registered under the Indian Partnership Act, 1932 comprising three partners. E.Sadashiv Rao is its Managing Partner and his two sons - E. Suresh Kumar and E. Sridhar and other partners. The complainant deals in gold jewellery at Bhubaneswar. All the partners are fully insured for their lives with the Life Insur¬ance Corporation of India. In March 2002, one Nilotpal Chatterjee, on behalf of the opposite party-insurance company, approached the Managing Partner of the complainant and persuaded him to take “KEYMAN INSURANCE POLICY” on the partnership firm. He assured that the partnership firm could be insured as the benefi¬ciary with the Managing Partner (E.Sadashiv Rao) as the ‘KEYMAN’ and in any event or happening to the Managing Partner, the sum assured would be paid to the firm. He also gave out that the partnership firm could avail the benefit of deduction of premiums paid as an expenditure from the profits of the firm under Section 37(1) of the Income Tax Act, 1961. The Managing Partner of the complainant filled up the form for “KEYMAN INSURANCE POLICY” by paying the first premium of rupees 88,358/- on 31.03.2002. After some time, the opposite party-insurance company requested that the ‘KEYMAN’ may be changed to other partners i.e. E.Suresh Kumar and E.Sridhar. It got the forms filled up by them on the plea that they face greater risk because of their frequent travel and they must be covered. The amount of Rupees 88,358/- paid earlier by the Managing Partner was adjusted as premiums for the policies of E.Suresh Kumar and E.Sridhar. When it came to light that the “KEYMAN INSURANCE POLICY” is not applicable to a partnership firm, the complainant asked the opposite party-insurance company to refund the premiums already paid by the two partners. Accord¬ing to the complainant, there was no need for the other partners to take policy as they have already insured their lives with the L.I.C. The opposite party-insurance company instead of refunding the premiums, tried to amend the policy to give a picture of partnership insurance which is nothing but a kind of eye wash. Accord¬ing to the complainant, there was no need for the other partners to take policy as they have already insured their lives with the L.I.C. The opposite party-insurance company instead of refunding the premiums, tried to amend the policy to give a picture of partnership insurance which is nothing but a kind of eye wash. The prayer of the complainant is for refund of all the premiums paid with interest together with compensation, cost etc. 3. The opposite party-insurance company has filed written version denying each and every allegation of the complainant. It’s stand is that tax benefit of any insurance policy is second¬ary, the primary benefit being the risk covered under the policy. It asserts that a “KEYMAN INSURANCE POLICY” can also be issued in case of a partnership firm and the premiums paid under the “KEYMAN INSURANCE POLICY” are deductible under Section 37(1) of the Income Tax Act. 4. Before going into the merit of the case, it is appro¬priate to decide whether the complainant is a partnership firm registered under the Indian Partnership Act, 1932. The opposite party - insurance company alleges that it is not a registered partnership firm. Annexure-20 to the rejoinder is the acknowl¬edgement of the Registrar of Firms certifying that the complain¬ant (E.Sadashiv & Sons) was registered under the Indian Partner¬ship Act, 1932. Annexure-21 is the deed of reconstitution of the partnership firm. By this deed, remuneration, interest and capital to the partnership were only provided, without effecting any change in the constitution of the partnership. From the above documents, the conclusion is irresistible that the complainant is a partnership firm duly registered under the Indian Partnership Act, 1932. The opposite party-insurance company should not have taken such reckless and irresponsible plea. 5. There can be no dispute that in policy No. 0000305438 (Annexure-10), the life assured is E.Suresh Kumar. The sum as¬sured is Rupees 15,00,000/-. In the column of ‘nominee’, name of E.Sushma finds place. Similarly, in policy No. 0000292543 (Annexure-11), the life assured is E.Sridhar. The sum assured is rupees 16,00,000/-. His nominee is Madhusmita Patra. A bare perusal of both the policies would unmistakably show that they are individual/personal policies of E.Suresh Kumar and E.Sridhar and has got nothing to do with any partnership firm. 6. Similarly, in policy No. 0000292543 (Annexure-11), the life assured is E.Sridhar. The sum assured is rupees 16,00,000/-. His nominee is Madhusmita Patra. A bare perusal of both the policies would unmistakably show that they are individual/personal policies of E.Suresh Kumar and E.Sridhar and has got nothing to do with any partnership firm. 6. The specific allegation of the complainant is that Nilotpal Chatterjee-the agent of the opposite party-insurance company persuaded the Managing Partner of the complainant to take “KEYMAN INSURANCE POLICY” on the partnership firm on the ground that in any event or happening to the ‘KEYMAN’ i.e. the Managing Partner, the sum assured would be paid to the partnership firm which would also get tax benefit under the Income Tax Act. Annex¬ure-1 is the note made by the aforesaid Agent-Nilotpal Chatterjee. In letter dated 16.04.2002 (Annexure-2), Manoranjan Sahoo, Branch Manager of the opposite party-insurance company congratulated the complainant for taking the “PARTNERSHIP FIRM KEYMAN INSURANCE POLICY”. It is relevant to extract the entire letter; “Dr. 16.04.2002. To The Signatory Authority, M/s. Epari Sadashiv & Sons, Janpath, Bhubaneswar. Sub : Partnership Firm Key Man Policy. Dear Sirs, We congratulate to you for taking interest for partnership firm policy from our organization on your partners. But we under¬stand that the policy is as Save Care Economy. So please give us the consent for the same and confirm us that there is no nomination as the firm is automatically nominat¬ed for the same. With warm regards, Mr. Manoranjan Sahoo, Branch Manager, Allianz Bajaj Life Insurance Co. Ltd., Bhubaneswar.” Later, when the opposite party-insurance company requested the complainant that the ‘KEYMAN’ be changed to other partners (E.Suresh Kumar and E.Sridhar) and got two forms filled up by them, the complainant rightly doubted the bona fides of the opposite party-insurance company and sought clarification in its letter dated 04.11.2003 (Annexure-14). Clarification was sought on two grounds; (i) whether the insurance is a "PARTNERSHIP FIRM KEYMAN INSURANCE POLICY” ? (ii) whether premiums paid on the said policy are deductible as an expenditure from the income/profit of the partnership firm under Section 37(1) of the Income Tax Act ? The opposite party-insurance company in its letter dated 05.11.2003 replied to the query by simply saying that the premium paid is deductible as general business expenditure, but it kept mum to the query as to whether the insurance is a “PARTNERSHIP FIRM KEYMAN INSURANCE POLICY”. The opposite party-insurance company in its letter dated 05.11.2003 replied to the query by simply saying that the premium paid is deductible as general business expenditure, but it kept mum to the query as to whether the insurance is a “PARTNERSHIP FIRM KEYMAN INSURANCE POLICY”. The silence maintained by the opposite party-insurance company with regard to the second query is deliberate and intentional. 7. The complainant asserts that “KEYMAN INSURANCE POLICY” is only available to a company and not to a partnership firm. The opposite party in its written version claims that “KEYMAN INSURANCE POLICY” can also be issued in case of a partnership firm. The above stand taken by the opposite party is fallacious and untenable in the face of its own documents (Annexures-18 and 19). Annexure-18 is a set of guidelines issued by the opposite party-insurance company on 17.10.2002. It says that “KEYMAN INSURANCE” is an insurance purchased by a business on the life of an employee of a company. For the sake of convenience, we extract its relevant portion; “Keyman Insurance Keyman insurance is an insurance purchased by a business on the life of an employee whose continued participation in the business is important to the firm’s success and whose death or disability would cause financial loss to the company. The purpose of keyman insurance is to compensate the company for the loss it would incur due to the death of a important employee. The points that needs to be considered while determining the amount of keyman insurance are : *. The effect the company will have on its profits if a Keyperson dies. *. xxx xxx xxx *. xxx xxx xxx *. The cash position of the company. *. xxx xxx xxx *. xxx xxx xxx *. xxx xxx xxx *. xxx xxx xxx” Annexure-19 is another set of guidelines issued by the opposite party-insurance company with regard to partnership insurance. It says as follows : “A partnership firm is not a corporate entity by itself but it is a business which is jointly owned by several parties. xxx xxx xxx xxx Features of partnership insurance are : *. Life assured are the partners of the firm. *. Nomination is not allowed. *. Assignment not allowed - except in the case of dissolu¬tion of partnership other than due to death of the partner. *. xxx xxx xxx xxx Features of partnership insurance are : *. Life assured are the partners of the firm. *. Nomination is not allowed. *. Assignment not allowed - except in the case of dissolu¬tion of partnership other than due to death of the partner. *. No loan.” From the above guidelines, we are inclined to hold that “KEYMAN INSURANCE POLICY” does not extend to a partnership firm like the complainant. 8. The complainant lodged a complaint against the opposite party-insurance company with the Insurance Regulatory and Development Commission of India. To avoid any adverse comment from the aforesaid Commission and with a view to cover up its laches and misdeed issued clarification vide letter dated 18.11.2003 (Annexure-16) saying that the policies were issued to E.Suresh Kumar and E.Sridhar under partnership insurance. Such clarification is travesty of truth. 9. ‘Unfair Trade Practice’ has been defined in Section 2(r) of the Consumer Protection Act, 1986 as follows : It means “a trade practice which for the purpose of promoting the sale, use or supply of any goods, or for the provision of any service, adopts any unfair method, or unfair or deceptive prac¬tice including any of the following practices, namely : (1) the practice of making any statement, whether orally or in writing or by visible representation which : (i) ................. (ii) falsely represents that the services are of a particular standard, quality or grade; (iii) ..................... (iv) Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which such goods or services do not have; (v) ................... (vi) Makes a false or misleading representation concerning the need for or the usefulness of any goods or services.” 10. Considering the facts and circumstances, we have no hesitation to hold that the opposite party-insurance company adopted ‘unfair trade practice' with the complainant. As the partners are not interested to continue their policies, we hereby direct the opposite party-insurance company to forthwith cancel both the policies No. 0000305438 and No. 0000292543 and refund all the premiums paid from 31.03.2002 till date with interest @9% per annum from the dates of individual payments. The opposite party-insurance company shall also pay compensation of Rupees 50,000/- to the complainant for having adopted ‘unfair trade practice’. This order shall be complied with by the opposite party-insurance company by 30.11.2007, failing which interest @12% shall be payable. 11. The opposite party-insurance company shall also pay compensation of Rupees 50,000/- to the complainant for having adopted ‘unfair trade practice’. This order shall be complied with by the opposite party-insurance company by 30.11.2007, failing which interest @12% shall be payable. 11. In the result, the complaint is allowed with cost of Rupees 10,000/- which shall be deposited in the Head of Account 1456-Civil Supply 800-other receipts 991140-Civil Supply for contribution to State Consumer Welfare Fund. Petition allowed.