BEFORE THE DISTRICT FORUM:KURNOOL
Present: Sri K.V.H. Prasad, B.A., LL.B., President
Sri R.Ramachandra Reddy, B. Com., LL.B., Member
Friday the 2nd day of June, 2006.
C.C No.180/2005
Smt. M.Lakshmi, W/o Late Mangali Madhusudhan, Age 28 years,
H.No.41/344Q, Upstairs, Mangali Street, Kotha Peta, Kurnool.
. . . Complainant
-Vs-
1. Branch Manager,
Life Insurance Corporation of India Ltd., Kurnool.
2. Divisional Manager, Life Insurance Corporation of India Ltd.,
P.B.No.10, College Road, Kadapa - 516 004.
. . . Opposite parties
This complaint coming on this day for Orders in the presence of Sri. P.Siva Sudarshan, Advocate, Kurnool for complainant and Sri. S.Viswanatha Reddy, Advocate, Kurnool for opposite parties No.1 and 2, and stood over for consideration, till this day, the Forum made the following.
O R D E R
(As per Sri.R.Ramachandra Reddy, Hon’ble Member)
1. This Consumer Case of the complainant is filed under sections 11 and 12 of C.P. Act, 1986 seeking a direction in favour of the complainant from the opposite parties to pay her the insurance amount of Rs.1,00,000/- with interest at 24% per annum from the date of the deceased i.e.29-4-2003 till the date of realization, Rs.20,000/- towards mental agony and to pay Rs.2,000/- towards costs of the complaint.
2. The brief facts of complainant’s case are that her husband Mangali Madhusudhan S/o G.Govindu insured his life in policy No.653094861 for Rs.1,00,000/-. The policy holder Mangali Madhusudhan died on 29-4-2003 due to heart attack and death is natural one. After the death of her husband she submitted the claim form to opposite parties as nominee of the above policy. But opposite parties did not pay the policy amount. She requested the opposite parties number of times for payment of the said amount. But the opposite party No.2 on 12-11-2003 in his reply falsely alleged that her husband withheld the correct information regarding the health at the time of contract of insurance. Hence, they repudiated the claim of her on 12-11-2003. As alleged by opposite parties her husband never suffered from the disease of peptic ulcer in their claim repudiation letter. Whereas her husband was died due to heart attack. It has no connection with alleged disease, the opposite parties wantenly not paying the claim amount without any reasonable and lawful cause. The opposite parties are liable to pay the policy claimed amount. This conduct of the opposite parties in repudiating the claim of the complainant is certainly amounting to deficiency of service ensuing mental agony to the complainant.
3. In pursuance of the service of the notice of this Forum as to the case of the complainant the opposite parties No.1 and No.2 filed its written version and sworn affidavit and denied any of its liability as the assured suppressed the pre-existing disease.
4. The written version of the opposite parties No.1 and No.2 admitted that the deceased life assured M.Madhusudhan submitted the proposal dated 14-2-2003 to the Branch office, Kurnool (opposite party No.1) seeking insurance on his own life for a sum assured of Rs.1,00,000/- under plan and term 14-20 and opted to pay the premia under Quarterly mode, and the deceased life assured M.Madhusudhan had nominated his wife i.e. the complainant, M.Lakshmi under section 39 of Insurance Act, 1938. He declared himself to be quite healthy as per his statements and replies to question No.s 11(a) to (i) and signed the declaration at the foot of the said proposal, that all his statements regarding health as also other particulars, from the basis of the contract of insurance and agreed therein that if any untrue averments were to be found in his statement, the contract of insurance shall be absolutely null and void, and that all the moneys paid in respect there of shall stand forfeited to the corporation. Accordingly, basing on his statements and declaration, the risk of his life was accepted and policy No.653094861 was issued with 5-2-2003 as date of commencement under plan term 14-20 for a sum assured of Rs.1,00,000/- under quarterly mode with premium of Rs.1,292/-as sought by the deceased life assured M.Madhusudhan. The deceased life assured declared himself to be quite healthy, as per his answers to the question No.11 in the proposal dated 14-2-2003 and answered negatively all the questions in column No.4 of the Medical Examiner, put forth by the doctor, on 14-2-2003, as regards his health and that he did not suffer from any illness or ailments and was not hospitalized. The medical examination basically depended on the statements and replies to the queries given by the deceased to the doctor and in his proposal dated 14-2-2003 and such an examination reveals only the patient defects, as observed by the doctor, but not the latent defects of the deceased life assured, who underwent such a medical examination, unless and until the person undergoing the medical examination reveals the true and factual state of his health and illness or disease he suffered prior to the proposal. The nominee/complainant informed that the life assured expired on 29-4-2003 and preferred the claim. As the death claim arose within 2 years from the date of commencement of policy, the claim was treated as an early claim and investigation was conducted. During the investigation it was revealed that the deceased life assured was not in good health prior to the date of proposal and was suffering from Gastritis (Peptic ulcer) since 1 year from the date of his first consultation i.e. from 5-11-2002 and had taken treatment from Dr.A.Ahmed Ali, Kurnool for burning sensation in stomach and vomiting and pain in abdomen from 5-11-2002 to 18-1-2003. The deceased life assured was also treated for such ailments by Dr.Siva Rajappa, MD, Kurnool. Since the deceased life assured has suppressed the material information about the state of his ill health before the date of proposal and had the deceased life assured disclose the true and correct information in the proposal, it would have affected the decision of the opposite parties. As mentioned above, the health of the deceased life assured not well and the material fact of the illness and treatment was not revealed in the proposal dated 14-2-2003, the claim was repudiated by the opposite party No.2 by a speaking order dated 12-11-2003 in view of his misstatements and misrepresentations of health since the contract of the insurance is a contract of utmost good faith and any false statement regarding the material point of ill-health vitiates the contract. In the said speaking order dated 12-11-2003 giving an option to appeal to their Zonal Office, Hyderabad if she is dissatisfied with their decision. On the receipt of the repudiation letter in the above claim, the complainant made a representation to the opposite parties, Zonal Office, Hyderabad. The Zonal Office claims review committee consists of a retired High Court Judge. The said committee upheld the repudiation of the opposite party No.2. On 26-3-2004 and the same was communicated to the complainant vide their letter dated 26-3-2004. Aggrieved with the rejection of the claim by the opposite party’s Zonal Office, Hyderabad the complainant approached the Insurance Ombudsman, Hyderabad on 2-5-2004 for considering the claim. After hearing the case on perusing all the documents submitted by both sides, the Insurance Ombudsman, Hyderabad held that “the decision of the opposite party No.2 is legal, correct, proper and justified in the case on hand and does not call for his intervention with the decision of the opposite parties”. Hence there is no deficiency on the part of the opposite parties and question of payment of any amount or interest or compensation doesn’t arise and it is therefore prayed that the Hon’ble Forum may be pleased to dismiss the case with costs against this opposite parties in the interest of justice.
5. In substantiation of the case averments while the complainant side has relied upon the documentary record in Ex.A1 to A5 besides to the sworn affidavit of the complainant in reiteration of its case. The opposite parties No.1 and No.2’s side have relied upon the documentary record in Ex.B1 to B6 besides to the sworn affidavit of the opposite parties No.1 and No.2 in reiteration of its case. Further, the complainant and opposite parties exchanged between them interrogatories and their replies along with written argument of the complainant referring citations and the written argument of opposite parties for the appreciation of their case.
6. Hence, the point for consideration is whether the complainant has made out the alleged deficiency of service in the conduct of the opposite parties towards her entitling her for the reliefs sought?
7. The Ex.A1 is an attested Xerox copy of the medical policy No.653094861 which commences from 15-2-2003 with term plan 14-20 for Rs.1,00,000/- issued by the opposite party No.2. The mode of payment mentioned in it as quarterly and the date of maturity as 15-2-2023. The said policy is an Endowment Assurance with profits + acc. benefit and mentioned the complainant/wife of the insured by name M.Lakshmi is the nominee. The Ex.A2 is the letter dated 11-12-2003 of repudiation of the claim of the complainant sent by the opposite party No.2 under registered post with acknowledgement due to the complainant wherein the opposite party No.2 states that all the answers given by deceased in the proposal form at Sl.No.11 were false and they (LIC) hold indisputable proof to show that he has suffered from PEPTIC ULCER and the opposite party No.2 had consulted a medical man and the deceased had taken treatment from hospital prior to date of proposal. He (deceased) did not however, disclose those facts in his proposal. Instead he gave false answers there in as stated above, hence, in terms of the policy contract and the declaration contained in the form of proposal for assurance and in terms of said acceptance letter on the policy contract, they repudiate the claim. The Ex.A3 is an original death certificate issued by The Kurnool Municipal Corporation of the complainant’s husband (insured). The date of death is mentioned in it as 29-4-2003. The Ex.A4 is the certificate of HOSPITAL TREATMENT of the deceased issued by Dr.Ch.Nagabushana Rao, Civil Asst. Surgeon, Govt. General Hospital, Kurnool without date under his signature wherein it is only mentioned that the complainant husband was brought dead to cot on 29-4-2003 at 9.45PM and history given by his relatives that due to chest pain suddenly collapsed at his house and at Sl.No.6 of the said exhibit the said doctor mentioned that brought dead cot, with ? mentioned Myocardial Infraction (M.I). The Ex.A5 is the MEDICAL ATTENDENCE CERTIFCATE of the deceased (complainant’s husband) issued by Dr.Ch.Nagabushana Rao on 26-8-2003 the same is attested by Dr.M.Subbarayudu both are Civil Asst. Surgeons of Govt. General Hospital, Kurnool wherein the apparent age is mentioned as 32 years, the date of death and time mentioned as 29-4-2003, 9.45PM respectively. The exact primary cause for the death of the complainant’s husband at Sl.No.5 (a) kept blank and at 5(b) noted with ? M.I. For the question of Sl.No.9 (a) i.e. “Were you deceased’s usual medical attendant? “ the answer for the said question the doctor who issued the said certificate said “No”
8. The Ex.B1 is the proposal for Insurance ON OWN LIFE dated 14—2-2003 as to the personal history of the complainant’s husband along with MEDICAL EXAMINER’S CONFIDENTIAL REPORT as the said policy being a medical one. The concerned panal doctor Dr.D.Vadiraj, M.B.B.S has to give his findings for the question No.16, after examining the insured. Accordingly, the said doctor agreed that no other adverse features in health or habit, past or present which he consider relevant. It reveals that the insured has in good health at the time of taking policy (medical). The Ex.B2 is the original medical policy pertaining to the complainant’s husband which is nothing but Ex.A1. The Ex.B3 is the CLAIM ENQUIRY REPORT which was given by the B.O Claims Department, Investigator. For column No.1 which reads as “State the names and address of the persons of whom enquiries were made and information obtained (persons living in the neighborhood of the place where the deceased had lived or died, his intimate friends and collegues in office, business or profession & give a summary of specific questions you asked and answers you received or attach written statement of the persons obtained over their signature.” The information obtained by the said investigator for the above was “Enquiries made from the neighborers of the DCA. The DCA was not in good health at the time of taking policy. Written statements enclosed (3 statements). But as stated in it, the said investigator did not enclose the alleged three written statements. For column No.5 which reads as “Relationship, if any, of the life assured with the Agent, Development Officer and Medical Examiner and whether any of them has got a pecuniary interest in the claim amount” and information obtained by the said investigator for the above was that “Agent: The DCA is a relative of the Agent and the Agent knows well about the health and habits of the DCA.” For column No.10 which reads as “Give a short history of the last illness of the deceased including the cause of death, the data when syno’oms where first observed actual caust of the illness and the doctors who attended with respective dates. If death was due to accident, state the nature of the accident give full particulars, of the accident and subsequent statement, in case of road accident No. of vehicle involved and name of the police station, where the incident is reported, is there a suspicious one of suicide? In case of murder give briefly the circumstances under which he/she was murdered and one has been arrested? And the information obtained by the said investigator for the above was that “ (1) Dr.P.Sivarajappa, M.D,Kurnool, from 5-9-2002 to 9-9-2002 (2) Dr.K.Sunkanna, MBBS, Rtd. Dy.Civil Surgeon, Kurnool, on 6-10-2002 (3) Indian Red Cross Society Urban Health Centre, Kurnool, on 21-10-2002 (4) Dr.M.A.Ahmad Ali, M.D, Kurnool, from 5-11-2002 to 18-1-2003 and (5) Form No.5152 submitted by the Dr.M.Ahmed Ali,M.D., Kurnool.” At column No.12 of the said report it was mentioned that the prescriptions cited vide above column No.10 file in original are enclosed. This fact revealed at column No.19. But no cogent material in support of the information given at column No.s 1, 10, 12, and 19 are filed by the said investigator for its appreciation. In the absence of the said cogent material which is very important and crucial in adjudication of the present case of the complainant, and further the information at column No.5 and column No.18 reveals that the said investigator attributed that the dead body brought to the Govt. General Hospital, Kurnool only to take the death certificate and LIC forms purpose as suggested by the Agent of this policy who is a relative of the DCA. The Agent also not disclosed his relationship in ACR. If at all any suppression of facts about the health of the deceased at the time of taking policy and for the deliberate acts and mischief if any of the said Agent, who was appointed and who was under the control of the opposite parties. How the complainant is responsible and it is upto the opposite parties to deal with that Agent according to their rules and regulation under LIC Act. The Ex.B4 is the form No.5152 submitted by the Dr.M.Ahmed Ali, M.D, Kurnool on 14-10-2003 wherein the said doctor has been consulted by the deceased on 5-11-2002 which is mentioned at column No.1 for the Gastritis (Peptic Ulcer) disease (mentioned at column No.2) and said deceased has been suffering from that disease since 1 year (mentioned at column No.3) and reported by himself (deceased) about the symptoms i.e. burning sensation in stomach, vomiting and pain in abdomen (mentioned at column No.4). At column No.6 of the said Ex.B4 in connection with column No.2 it is mentioned that there was general weakness, pain in abdomen, chest pain due to gastritis referred pain. Further, it is mentioned at column No.8 that on and off treatment from 5-11-2002 to 18-1-2003 taken irregular treatment. To establish this the opposite parties utterly failed to obtain in respect of the above facts any piece of evidence what so ever and failed to obtain sworn affidavit of the said doctors and further not even taken any pains whatsoever to summon the said doctors for their evidence in support of the above said facts mentioned in Ex.B3 and Ex.B4. The Ex.B5 is an order passed on 11-10-2004 by the INSURANCE OMBUDSMAN, HYDERABAD, wherein he ordered that in the circumstances mentioned in it, the complaint fails and is, therefore dismissed as devoid of any merit. The Ex.B6 is the DELIGATION OF POWERS AND REGULATION No.41 OF LIFE INSURANCE CORPORATION REGULATIONS, 1959 (AMMENDED UP TO 31-12-2003) FRAMED UNDER SECTION 49 OF LIC ACT XXXI OF 1956.
9. The complainant counsel in support of its case referred a judgment which was reported as in (2005) CPJ 107 (NC) of NCDRC , in Ramleswari Prasad Sing V/s National Insurance Company Ltd. in revision petition wherein it was observed that OMBUDSMAN not discharging judicial or quasi-judicial functions, the Award (Ex.B5) in this case of said OMBUDSMAN not binding on complainant and the repudiation of the claim by it subject to adjudication by Fora, here the said revision allowed and the order of Forum restored. Thus it is very clear that the decision of OMBUDSMAN is not binding on the complainant and the decision of Insurance Company to repudiate the claim is subject to adjudication by the Fora constituted under the C.P. Act. The complainant’s counsel in support of its case relied on another judgment of NCDRC which was reported in 2005, CTJ 152 (CP) (NCDRC) wherein it was observed that the insured died of Myocardial Infraction (Heart-attack) in December,1999 wherein insurance claim repudiated on the ground that deceased at the time of taking policies suffered from cough, expectoration and breathlessness (hoarseness of voice) for the last 2-3 years but she did not get these diseases recorded in the proposal form. District Forum dismissed the complaint hence appeal preferred in the State Commission where it is observed that the onus on the insurance company to prove that the insured conceal the disease from which she suffered with an intention to defraud it – insurance company fail to bring forward any proof – nature of the ailment not known to the deceased not even to the insurance company despite a detailed examination of the deceased by its doctor- deceased not treated at any point of time for any heart ailment. No nexus could be established between bronchitis and the deceased’s heart failure – Appeal allowed by the State Commission – revision petition – nothing to show that the State Commission exercise its jurisdiction not vested in it by law or fail to exercise the jurisdiction so vested or acted in the exercise of its jurisdiction with material irregularity. Hence, the revision petition dismissed. Further in support of the above judgment, it was referred the findings of Supreme Court in LIC and other V/s Asha Goal 2001 (2) SCC 160, the judgment of Mithoolal Nayak was considered wherein the onus to prove that there was material concealment of any disease, which directly proved fatal, was on the petitioner, insurance company. In addition to above the petitioner was supposed to prove that at the time of taking policy the person who gave the information, knew about such a disease and he withheld it with an intention to defraud the insurance company. Further the complainant’s counsel in support of his case relied on another judgment of NCDRC which was reported in I (2005) CPJ 41 (NC) LIC of India and others (petitioners) V/s Dr.P.S.Aggarwal (respondent) in this judgment also, the same findings of judgment in LIC and others V/s Asha Goal I (2001) SLT 89=2001 (2) SCC 160, the judgment of Mithoolal Nayak was considered.
10. The citation mentioned above establishes that the burden is very heavy on the insurance corporation to establish that the insured has suppressed the fact that he was suffering from ailments. No material has been placed for the purpose of establishing that the Myocardial Infraction (heart-attack) is the direct result of Peptic Ulcer. Even in fact as seen from the above material placed by the opposite parties, the alleged disease of PEPTIC ULCER with which the deceased was suffering prior to take the policy was not at all proved/established in any manner whatsoever by the opposite parties. In the judgment reported in 1999 (2) ALD (Cons.) 93 the A.P State Commission has clearly held that repudiation of the claim based on the doctors certificate is unsustainable. The corporation should be able to establish that the assured has really suppressed the material facts and such suppression resulted in the death of the assured. No such material has been placed in this case in this Forum.
11. In the light of the above decisions and cogent material placed on record by the complainant and in the result of the above discussion the complainant is entitled to the policy amount of deceased M.Madhusudhan on the contingency of his death and opposite parties No.1 and No.2 by their repudiating the claim of the complainant the said conduct of the said opposite parties lead to the mental agony and also driven her to seek the redressal in this Forum, the complainant is not only remaining entitled to receive the said endowment assurance policy of Rs.1,00,000/- with profits + acc. benefit with interest at 9% per annum from the date of demise of the policy holder but also to pay Rs.10,000/- towards mental agony and Rs.1,000/- as costs.
12. Therefore, the opposite parties No. 1 and No.2 jointly and severally are directed to pay the award amount of Rs.1,00,000/- with benefits with 9% interest per annum from the date of demise of the policy holder i.e. 29-4-2003, Rs.10,000/- as compensation, and Rs.1,000/- as costs to the complainant. In default the opposite parties No.1 and No.2 jointly and severally are liable to pay the above said award amount with 12% interest per annum from the date of said default till the date of the realization.
Dictated to stenographer, transcriber by him, corrected and pronounced by us in the Open Forum this the 2nd day of June, 2006.
PRESIDENT MEMBER
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant: Nil For the opposite parties: Nil
Exhibits Marked for the complainant:
Ex.A1 Attested copy of the policy of deceased, P.No.653094861.
Ex.A2 Repudiation letter, Dt.12-11-2003.
Ex.A3 Death Certificate.
Ex.A4 Certificate of Hospital Treatment, Claim Form-B1.
Ex.A5 Claim Form ‘B’ (Medical Attendant’s Certificate).
Exhibits Marked for the opposite parties:
Ex.B1 Proposal form of the policy.
Ex.B2 Original policy bond.
Ex.B3 Claim Enquiry Report.
Ex.B4 Form No.5152.
Ex.B5 Order passed by Insurance, Ombudsman, Hyderabad, Dt.11-10-2004.
(Complaint No.L.21.001.0054.2004-05)
Ex.B6 LIC Regulation 1959 (amended upto 31-12-2003)
PRESIDENT MEMBER
Copy to:-
- Sri. P.Siva Sudarshan, Advocate, Kurnool
- Sri. S.Viswanatha Reddy, Advocate, Kurnool
Copy was made ready on:
Copy was dispatched on:
Copy was delivered to parties on:
