BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE
Dated this the 18th of March 2011
PRESENT
SMT. ASHA SHETTY : PRESIDENT
SMT.LAVANYA M. RAI : MEMBER
SRI. ARUN KUMAR K. : MEMBER
COMPLAINT NO.95/2010
(Admitted on 12.03.2010)
Smt.Jyothi Sudhir,
Aged about 46 years,
Wo. Late K.Sudhir Kumar Jain,
Presently RA. Shri Bhagavathi Ashish,
Near TVS Suzuki Show Room,
1 Cross, Neharu Nagar,
Sagar 577 401. …….. COMPLAINANT
(Advocate for the Complainant: Sri.B.Jinendra Kumar).
VERSUS
1. LIC Mutual Fund Asset
Management Company Ltd.,
Industrial Assurance Building,
4 Floor, Opp Churchgate Station,
Mumbai 400 020.
2. The Area Manager,
LIC Mutual fund Area Office,
No.5, Ground Floor,
Popular Building, K.S. Raod Road,
Mangalore. ……. OPPOSITE PARTIES
(Advocate for the Opposite Parties: Sri.M.S.Krishna Prasad).
***************
ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:
1. This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs.
The brief facts of the case are as under:
The Complainant submits that, Opposite Party No.1 is the registered Company and Opposite Party No.2 is the Area Manager of Opposite Party No.1. Complainant stated that, her husband was working as a Developmental Officer in New India Assurance Company, Mangalore, at that time she and her husband taken LIC Mutual Fund ULIS Policy bearing No.LIC M7 ULIS Account No.5368450155 with a risk coverage of Rs.4,80,000/- and regularly paying the monthly installment of Rs.4,000/- out of which Rs.174.40 was being appropriated towards risk coverage/mortality charges and the balance of Rs.3,825.60 towards mutual fund units. It is stated that, her husband Mr.K.Sudhir Kumar Jain expired on 15.03.2009, after the death of her husband she being the nominee approached the Opposite Party with all necessary documents. The Opposite Party by their letter dated 22.06.2009 informed the Complainant that there is one SIP rejection for installment dated 15.07.2008 and as such no insurance claim could be entertained and that all premium paid after this unpaid installment are being refunded along with re-purchase value of Units. It is stated that, at no point of time the Opposite Parties have informed about the default in payment of installment of 15.07.2008 nor the lapse of the policy. It is stated that, the Opposite Parties have collected the installments upto 16.03.2009. The Opposite Party No.2 having collected the risk premium upto 16.03.2009 cannot deny the liability. The Complainant further submits that, she issued a legal notice dated 12.01.2010 but the Opposite Parties not complied the demand made therein and hence the above complaint filed under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Parties to pay a sum of Rs.4,80,000/- along with interest at the rate of 18% p.a. and also claimed Rs.2,00,000/- as compensation and cost of the proceedings.
2. Version notice served to the Opposite Parties by RPAD. Opposite Parties appeared through their counsel filed version stated that, the death of K.Sudhir Kumar Jain was reported to the Opposite Party subsequent to 16.03.2009 and they are not aware of the death on 15.03.2009. It is stated that, the policy holder was suffering from Diabetes Mellitus, Hypertension and Adeno Carcinoma of the Liver prior to submitting the proposal. He had taken treatment for the said ailment in Yenepoya Hospital, Mangalore but in the proposal form he had suppressed these facts and stated that, the deceased was suppressed the facts and not disclosed the material facts with regard to the health while submitting the proposal form.
It is further stated that, the life assured was informed with regard to the defaulting payment of installment on 15.07.2008. The Registrar of the Opposite Party by name M/s. Karvy Computer Share Pvt. Ltd had informed the life assured about the rejection of his E.C.S mandate for the installment due 7/2008 vide letter dated 21.07.2008 and also contended that, the life assured would have come to know about the gap in the installments through the statement of accounts sent by the Registrar and also from his bank account. It is stated that, there was no valid contract of insurance. The Mutual Funds ULIS Insurance benefits are payable only when the contributions under the scheme are made in time and upto date. The installment 7/2008 was not paid and remained unpaid, the policy was in lapsed condition and there was no insurance cover available at the time of death of the policy holder. It is stated that, the rules and regulations pertaining to the said policy, if the policy is not revived it within one year will not be eligible for any insurance coverage. At the time of death of the life assured, there was no insurance cover, the premium at the rate of 174.40 was paid together with re-purchase value of the units. The total amount payable will be Rs.51,746.21, accordingly the claim discharge form along with a letter dated 22.06.2009 was sent to the Complainant but there was no response and contended that there is no deficiency and prayed for dismissal of the complaint.
3. In view of the above said facts, the points now that arise for our consideration in this case are as under:
- Whether the Complainant proves that the Opposite Parties committed deficiency in service?
- If so, whether the Complainant is entitled for the reliefs claimed?
- What order?
4. In support of the complaint, Smt.Jyothi Sudhir (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on her. Ex C1 to C4 were marked for the Complainant as listed in the annexure in detail. One Sri.S.Dev Anand (RW1), Area Manager of Opposite Party No.2 filed counter affidavit and answered the interrogatories served on him. One Dr.Udaya B. Nayak (RW2) – Consultant Physician – summoned witness of the Opposite Party was examined and cross-examined by the learned counsel for the parties. Ex R1 to R14 were marked for the Opposite Parties as listed in the annexure. The Complainant produced notes of arguments along with citations. Opposite Parties also filed notes of arguments.
We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:
Point No.(i): Affirmative.
Point No.(ii) & (iii): As per the final order.
Reasons
5. Point No. (i) to (iii):
The facts which are not in dispute is that, the Complainant is the wife/nominee of the insured Mr.K.Sudhir Kumar Jain who had taken a LIC Mutual Fund ULIS–Policy bearing No.LIC M7 ULIS Account No.5368450155 with a risk coverage of Rs.4,80,000/- and was regularly paying monthly installment of Rs.4,000/- per month. The above policy commenced from 28.11.2007 and the maturity date is 28.11.2017. In the above said policy, Jyothi Sudhir i.e., the Complainant was the nominee and mode of payment opted by the insured is monthly payment. Further it is admitted that, the insured Sudhir Kumar expired on 15.03.2009 leaving behind the Complainant is the legal heir as well as nominee. Further it is admitted that, the payment of the premium was regular except a monthly premium on 15.07.2008. It is also admitted that, except 15.7.2008 the Opposite Parties have collected subsequent installments upto 16.03.2009 in this policy.
Now the point in dispute between the parties before this FORA is that, according to the Complainant, her husband Mr.Sudhir Kumar expired on 15.03.2009 and even on 16.03.2009 the Opposite Parties have debited a sum of Rs.4,000.- i.e., the monthly premium payment to the Complainant’s husband account. It is stated that, the Opposite Parties having collected the risk premium from the insured from 28.11.2007 upto 16.03.2009 not honoured the claim but the claim was repudiated from their letter dated 22.06.2009 stating that there is one SIP rejection for installment dated 15.07.2008 hence the amount is not payable and refunded the re-purchase value of the units which is not correct and further contended that, at no point of time the Opposite Parties have informed about the default in payment of installment of 15.07.2008 nor of the lapsing of the policy. On the other hand, the Opposite Parties have collected subsequent installments, there was no default and the policy had not been lapsed hence came up with this complaint before this Forum denying the version with regard to the suppression of material facts with regard to the health.
On the contrary, the Opposite Parties contended that, the installment dated 15.07.2008 was not paid and remained unpaid, the policy was in lapsed condition and there was no insurance cover available at the time of death of the insured Mr.Sudhir Kumar and further took a contention that, there was suppression of material facts regarding the health condition of the deceased ULIS holder and he was suffering from Diabetes Mellitus, Hypertension and Adeno Carcinoma of the liver prior to submitting the proposal and even in this count also the insured is guilty of suppression – very and Suggenstio-falsi and contended that the rejection is valid.
In order to substantiate the case of the Complainant, filed oral evidence by way of affidavit and produced Ex C1 to C4. Opposite Parties also filed oral evidence by way of affidavit and examined RW1 i.e., Area Manager of the Opposite Party No.2 and RW2 i.e., Dr.Udaya B. Nayak – Consultant Physician and produced Ex R1 to R14.
On scrutiny of the oral as well as documentary evidence, we find that, the Complainant is the nominee under the Mutual Fund ULIS Policy bearing No.LIC M7 ULIS Account No.5368450155. The insured Mr.Sudhir Kumar was her husband expired on 15.03.2009. There is no dispute with regard to the sum insured and the mode of payment i.e., monthly payment of Rs.4,000/-, the commencement of the policy i.e., 28.11.2007 are not in dispute. But we find that, during the continuation of the policy, the insured Mr.Sudhir Kumar committed default in payment of one installment i.e., installment dated 15.07.2008. Except the above, rest of the monthly installments were paid regularly, in other words, the Opposite Parties i.e., LIC Mutual Fund Asset Management Company Limited have collected entire installments except installment of 15.07.2008. Opposite Parties having collected the entire installments i.e., commenced from 28.11.2007 till the date of death of the insured i.e., 15.03.2009 is not disputed. The only contention of the Opposite Parties is that, the one installment dated 15.07.2008 was not paid by the insured and hence the policy was lapsed.
However, it could be seen on record that, the insured was admittedly expired on 15.03.2009. The monthly premium has been paid through Electronic Clearing Service through the Corporation Bank, Kankanady Branch, Mangalore, the insured paid all the premiums from 27.11.2007 till the date of his death except 15.07.2008. When that being the case, we are very surprise to note that, how the Opposite Parties treat the policy was in lapsed condition. We do not agree with the Opposite Parties because the Opposite Parties have received the subsequent installment from 15.07.2008. If the policy was lapsed condition, then why did they receive subsequent installments upto the date of death of the insured. It is admitted fact that, the Opposite Party has collected the premium for more than seven months pursuant to the non-payment of the premium on 15.07.2008, if at all the policy was lapsed then why did they collected the rest of the installments. Since the Opposite Parties collected the subsequent premium for more than seven months now they cannot contend that the policy was lapsed condition. The subsequent payment received by the Opposite Parties should have adjusted towards the unpaid premium instead of keeping the one installment in isolation and running the policy by this way. Therefore, we do not agree with the Opposite Party that the policy was in lapsed condition. Further we have noticed that, the Opposite Parties not informed the default of unpaid premium dated 15.07.2008 to the insured. No doubt, the Opposite Parties took a contention that, they have informed the above matter to the Registrar M/s.Karvy Computer Share Pvt. Limited who had sent the letter dated 21.07.2008 to Mr.Sudhir Kumar i.e., the insured and produced Ex R8. The above said letter marked subject to the objection by the Complainant’s counsel. When that being the case, the Opposite Parties should have produced any other corroborative evidence to show that the Opposite Party has informed the Registrar M/s.Karvy Computer Share Pvt. Limited and in turn they have informed the insured. The Ex R8 is the letter produced by the Opposite Parties do not reveal that whether it has been served to the insured or not. The Opposite Parties while answering the interrogatories stated that, they have informed M/s.Karvy Computer Share Pvt. Limited to inform the same to the insured. The Opposite Parties produced the Ex R8 except that nothing has been placed on record to corroborate the Ex R8 atleast inward/outward register or postal acknowledgement to show that the default notice was sent to the insured. In the absence of the same, we hold that, the Opposite Parties not intimated the unpaid installment to the insured in this case. Further we have noticed that, under Section 50 of the Insurance Act, the Opposite Parties shall issue a notice to the insured in case of default of installment.
The Section 50 of the Insurance Act reads thus:-
Notice of options available to the assured on the lapsing of a policy – An insurer shall, (before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable but not paid), give notice to the policy holder informing him of the options available to him.
But in the instant case, the Opposite Parties not issued the default notice it is mandate, on the other hand, the Opposite Parties have collected the subsequent installment even though there is a default in collecting monthly installment dated 15.07.2008. We further observed that, the Opposite Parties should have adjusted the installment of 15.07.2008 while collecting the subsequent monthly installments. Hence, the policy cannot be treated as lapsed and the policy was in force till the death of the insured in this case.
In a case reported in State Consumer Disputes Redressal Commission, Maharashtra; 1998 (1) CPR 717 in Life Insurance Corporation of India versus Shri Basling Appa V. Chitmagarekar and another held that,
Consumer Protection Act, 1986 – Section 15 – Lapse policy – Insurance under salary saving scheme (with accident benefit) – Heirs of insured claiming insurance amount – Repudiated by LIC as non-payment of premium for 7 months results in lapse of policy – complaint – District Forum directing LIC to pay Rs.1,00,000/- to Complainant – Appeal – Fact that premium of 25 months pursuant to default in payment collected by LIC without asking for arrears of premium of 7 months – Amounts to waiver of repudiation of insurance amount – Arrears of premium of 7 months also held to have been waived – Order of District Forum – proper.
The principles laid under the above case is applicable to the case on hand.
The another point raised by the Opposite Parties is that, the insured has left the proposal form (health questionnaire) as blank and suppressed the material facts with regard to the health condition. In order to substantiate the above points, the Opposite Parties produced the hospital records i.e., Ex R9 stating that the insured had taken treatment for Diabetes Mellitus, Hypertension and Adeno Carcinoma of the liver prior to submitting the proposal and these facts have been suppressed by him and also examined Dr.Udaya B.Nayak i.e., RW2. On scrutiny of the hospital records issued by the Yenepoya Hospital as well as the evidence of RW2 reveal that, the insured was admitted to the above said hospital on 13.07.2007 and discharged on 15.07.2007 and the doctors of the said hospital diagnosed Hypertension, Diabetes Mellitus and Vertebrobasilar Insufficiency i.e., prior to the date of the commencement of the policy. Except the above disease, nothing has been placed on record to show that the insured was suffering from Adeno Carcinoma of the liver prior to the commencement of the policy. No doubt, the hospital records i.e., the discharge summary issued by the Yenepoya Hospital dated 29.10.2008 shows that, the insured was admitted to the said hospital on 29.10.2008 and discharged on 07.11.2008, at that time he has been diagnosed as Metastatic Carcinoma with Primary Unknown – Chemotherapy Cycle 1. That means, the CA has been primarily diagnosed on 29.10.2008 admission and not before. And further it is made very clear that, the insured had a problem of Metastatic CA with Primary diagnosed during the existence of the policy and not before. Subsequently, the insured once again admitted to the hospital on 17.11.2008 and discharged on 12.12.2008 and took Chemotherapy treatment for Hepatic CA. Even the above said treatment also taken during the existence of the policy and not before. Once again, the insured admitted to the Yenepoya Hospital on 20.12.2008 and discharged on 31.12.2008. The final diagnosis shows that, he had a Metastic Adeno CA. Finally, the insured was admitted to Fr.Muller Medical College Hospital Mangalore on 24.02.2009 and expired on 15.03.2009 with the disease of Adeno Carcinoma of Liver. The above medical records reveal that, before the commencement of the policy the insured had no symptoms of Adeno Carcinoma of liver but he had Hypertension and Diabetes Mellitus. The Hypertension and Diabetes Mellitus is not a permanent disease and non-disclosure of the above disease until and unless he has undergone for operation or any serious treatment with regard to the above disease, the non-disclosure of the above disease will not amounts to suppression of the illness. The insured in this case died not due to Hypertension or Diabetes Mellitus, there is no nexus between the death of the insured and the Hypertension and Diabetes Mellitus. No doubt, the above diseases affect the life span of the person if it is not maintained but the Hypertension and Diabetes Mellitus is not the serious disease. In our opinion, non-disclosure of the Hypertension and Diabetes Mellitus in the instant case cannot be termed as a suppression of illness. No evidence produced to prove that, the Complainant had a Metastic Adeno Carcinoma or he had knowledge of his problem earlier or suppressed at the time of policy issued. In the instant case, the insured expired due to Adeno Carcinoma of the liver on 15.03.2009 and the case sheets issued by the hospital authority made very clear that, the insured has taken treatment for suspected Adeno Carcinoma with Primary on 29.10.2008 and the policy in question was obtained on 28.11.2007 i.e., almost all a year back and the insured was not aware of the above disease. It is also shown to us that, there is no nexus between the cause of death and the Hypertension and Diabetes Mellitus which was suffered by the insured while obtaining the policy. The Opposite Parties have miserably failed to prove that there is suppression with regard to the illness but on the other hand, the medical records as well as the evidence of the doctor proved that the insured died due to Adeno Carcinoma of the liver and not due to Hypertension and Diabetes Mellitus. The above said disease caused during the pendency of the policy and not before obtaining the policy. Further we observed that, the disease of cancer is such that, it will not come to know until and unless some symptoms appear in his or her body. Even in this case, the insured died due to Carcinoma i.e., the cancer of the liver but the insured was not aware of the above said disease at the time of obtaining the policy. Under that circumstances, the Opposite Party is not correct in repudiating the claim under the ground of suppression of material facts regarding the health condition.
In view of the foregoing reasons, we hold that, the repudiation of the claim in this case is not justified and the citations relied by the Opposite Parties not applicable to the case on hand. Under that circumstances, we hereby direct the Opposite Parties i.e., LIC Mutual Fund Asset Management Company Limited to pay Rs.4,80,000/- i.e., the sum insured along with all benefits available in the policy to the Complainant less amount paid if any with interest at 12% p.a. from the date of repudiation till the date of payment and also pay Rs.1,000/- as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.
6. In the result, we pass the following:
ORDER
The complaint is allowed. We hereby direct the Opposite Parties i.e., LIC Mutual Fund Asset Management Company Limited to pay Rs.4,80,000/- (Rupees four lakh and eighty thousand only) i.e., the sum insured along with all benefits available in the policy to the Complainant less amount paid if any with interest at 12% p.a. from the date of repudiation till the date of payment and also pay Rs.1,000/- (Rupees one thousand only) as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.
The copy of this order as per the statutory requirements be forwarded to the parties free of charge or sent to the parties under postal certificate and thereafter the file shall be consigned to the record room.
(Page No.1 to 16 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 18th day of March 2011.)
PRESIDENT MEMBER MEMBER
ANNEXURE
Witnesses examined on behalf of the Complainant:
CW1 – Smt.Jyothi Sudhir – Complainant.
Documents produced on behalf of the Complainant:
Ex C1 – 22.06.2009: Letter of the Opposite Party to the Complainant.
Ex C2 – 12.01.2010: Lawyer’s notice issued to the Opposite Party on behalf of the Complainant.
Ex C3 – : Postal receipt.
Ex C4 – : Postal acknowledgement.
Witnesses examined on behalf of the Opposite Parties:
RW1 – Sri.S.Dev Anand, Area Manager of Opposite Party No.2.
RW2 – Dr.Udaya B. Nayak – Consultant Physician – summoned witness of the Opposite Party.
Documents produced on behalf of the Opposite Parties:
Ex R1 – : LIC Mutual Fund forms and brochure (Original).
Ex R2 – 21.04.2009: Letter of the Complainant along with death certificate.
Ex R3 - : Statement of accounts sent to the deceased.
Ex R4 – 22.05.2009: Letter of the Complainant to the Opposite Party.
Ex R5 – 03.03.2010: Reply of the Opposite Party to the Complainant’s advocate.
Ex R6 – 22.06.2009: Letter of the Opposite Party to the Complainant.
Ex R7 – 23.03.2010: Letter of New India Assurance Co (employer of the deceased) to the LIC Mutual Fund.
Ex R8 – 21.07.2008: Letter of the Opposite Party to the Complainant.
Ex R9 - : Medical records of the deceased.
Ex R10 - : Case records produced by Yenepoya Hospital pertaining to the deceased Mr.Sudhir K. Jain.
Ex R11 - : Original LIC Mutual Fund ULIS application submitted by Sudhir Kumar Jain.
Ex R12 - : Copy of the SIP application.
Ex R13 - : Proof of quarterly sent to SOA through UCP.
Ex R14 - 21.07.2008: Letter of Karvy Computershare Pvt. Ltd.
to Sudhir Kumar Jain.
Dated:18.03.2011 PRESIDENT
