BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
FA 1218 of 2013 against CC No. 377 of 2011 , District Consumer Forum-III, Hyderabad.
Between:
- Sujatha
W/o Late A. Srinivasa Reddy
Aged about 28 years,
Occ : House wife
R/o d. No. 5/64B, B.J.R. Apats
Flat no 203, Secretariat colony
Manikonda village, Rajendranagar mandal,
R.R. Dist. .... Appellant/complainant
And
- M/s. Shriram Life Insurance Co., Ltd
Regd off. 3-6-478, III floor
Anand Estates, Liberty road
Himayathnagar, Hyderabad -29
Rep. By its Managing Director/Manager
- M/s. Shriram Life Insurance Co. Ltd
Divisional office, No.10-3-5/1,
Laxmi Plaza III rd floor
Beside Shenoy Nursing Home
East Maredpally, Secunderabad
Rep. By its Managing Director/Manager.... Respondents/opposite parties
Counsel for the Appellant : M/s. V. Hariharan
Counsel for the Respondents : M/s. K.R. R. Associates
QUORUM:
HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT
AND
SRI R. LAKSHMINARASIMHA RAO, HON’BLE MEMBER
THURSDAY, THE TENTH DAY OF JULY, TWO THOUSAND FOURTEEN
Oral Order : ( As per Sri R. Lakshminarasimha Rao , Hon’ble Member )
1. The complainant is the appellant. She filed complaint challenging repudiation of her claim for the sum assured under insurance policy bearing number NP080600112249 dated 30.11.2006 issued by the respondent-insurance company in favour of her husband during his life time for the sum assured of Rs.6,00,000/-.
2. The facts of the case leading to filing of the appeal are that the appellant’s husband was the agent of the respondent-insurance company at Gudur and he obtained Shrividya life insurance policy bearing number NP080600112249 dated 30.11.2006 from the respondent-insurance company for the period commencing from 28.11.2006 till 28.11.2022. The respondent-insurance company issued the insurance policy for the sum assured, Rs.6,00,000/- along with other benefits.
3. The appellant’s husband died on 24.02.2009 while undergoing treatment at Apollo Hospital, Hyderabad. The respondent-insurance company repudiated the claim of the appellant on the ground that her husband suppressed the fact that he was alcoholic for about ten years which resulted in the contract becoming void and unenforceable. Aggrieved by the decision of the respondent to repudiate her claim, the appellant approached the Insurance Ombudsman by filing complaint which ended in dismissal.
4. The appellant challenged the repudiation of the claim and dismissal of her petition by the Insurance Ombudsman by filing complaint before the District Forum on the premise that her husband was hale and healthy at the time of obtaining the insurance policy, he died due to haemorrhagic shock on 24.12.2009 at the hospital where he was admitted when he fell at his bathroom in his house on 22.12.2009 and the Insurance Ombudsman had not considered the medical record of the insured before passing the award.
5. The respondent-insurance company resisted the claim on the premise that the appellant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act and it issued the life insurance policy in good faith and based on the information provided by the appellant’s husband in the proposal form. The respondent-insurance company contended that the claim investigation revealed that the insured was alcoholic for ten years and he had the history of seizure disorder for four years prior to the date of his death as also he attended de-addiction programme at Asha Hospital, Hyderabad.
6. The respondent-insurance company has contended that Asha Hospital refused to furnish record on the ground that the record cannot be furnished to third party otherwise than on an order from a court of law. It could not have issued the life insurance policy had the insured disclosed his habits and the related health problems as the same would have influenced the decision of the respondent-insurance company in issuing the life insurance policy.
7. The respondent-insurance company has contended that even though no amount is payable under the policy to the appellant and even after the Internal Claims Review Committee and the Insurance Ombudsman upheld the repudiation of the claim, the respondent-insurance company on humanitarian grounds proposed to pay the fund value of Rs.3,00,000/- towards full and final settlement of the claim and to the effect it addressed letter dated 12.11.2010 which the appellant accepted by making endorsement on it and thereafter the respondent-insurance company issued cheque dated 24.11.2010 in favour of the appellant who executed an indemnity bond in favour of the respondent-insurance company and encashed the cheque.
8. The respondent filed suit, O.S.No.1484 of 2011 against the appellant on the file of Principal Senior Civil Judge, Ranga Reddy district for recovery of the amount of Rs.3,00,000/- and obtained interim order for attachment of the bank account of the appellant to an extent of Rs.3,00,000/-. The suit is still pending for disposal and the appellant without any bonafides filed the complaint. The respondent-insurance company prayed for dismissal of the complaint.
9. The appellant in proof of her case filed her affidavit and got marked Exs. A1 to A-8 .On behalf of the respondent-insurance company, it Asst. General Manager filed his affidavit and the documents, Ex.B-1 to B-21.
10. The District Forum dismissed the complaint on the premise that the insured suppressed his habit related to pre-existing health issues before taking the life insurance policy. The District Forum opined that the appellant received the amount of Rs.3,00,000/- without raising any protest and she cannot be allowed to retrace from her statement of admitting the amount towards full satisfaction of her claim.
11) Aggrieved by the decision of the District Forum, the complainant preferred the appeal contending that the District Forum had not appreciated the pleadings and evidence of the appellant and that her husband disclosed all material facts to the respondent –insurance company at the time of taking the life insurance policy. The appellant has contended that the District Forum had not considered the effect of Section 45 of the Insurance Act and that indemnity bond is not a contract between the parties.
12) The learned counsel for the appellant has filed written submissions and relied on the following decisions:
i) Life Insurance Corporation of India & Ors Vs. Kunari Devi reported in
IV (2008)CPJ 89 (NC).
ii) Kommana Veera Raju & Ors Vs LIC of India & Anr, reported in
IV (2007) CPJ 163.
13. The point that arises for consideration is whether the order of the District Forum is vitiated by mis-appreciation of fact or law?
14) It is an undisputed fact that the appellant’s husband late A. Srinivas Reddy during his life time obtained life insurance policy from the respondent-insurance company. The policy commenced on 28.11.2006. It is not in dispute that he died on 24.12.2009 within about 3 years of commencement of risk. The appellant insurance company repudiated the claim on the premise that it had arisen within one year from the date of issuing of the insurance policy and the insured suppressed the fact that he was alcoholic for about 10 years . The appellant’s husband submitted proposal that he was not suffering from any disease and he had no any habits. The contention of the appellant is that her husband was hale and healthy at the time of taking the insurance policy.
15. The insured in the proposal has stated that he was in good health condition and he had no any habit of consuming alcohol. The questions 25(c) (5) (b)(d) and (h) and the answers in proposal form which read as under:
“25(C ) Answer the following as Yes/No. Yes/No
(5) Have you ever suffered or are suffering from any of the following ?
b. Diabetes, High/Low Blood Pressure, Stroke, Epilepsy,
cancer, Leprosy, Tuberculosis. No
d. Ailments relating to Liver, Reproductive system No
h. Have you ever used/been currently using tobacco, alcohol,
tranquilizers, stimulants, sedatives, narcotics, barbiturates,
marijuana, cocaine etc ? No
16. The Medical Record of the Apollo Hospital at Hyderabad establishes the insured was diagnosed suffering from chronic liver disease with portal hypertension and he died on 24.12.2009 while undergoing treatment. The treatment summary of the insured issued on 24.12.2009 would show that the insured was alcoholic since 10 years prior to the date of his admission in the hospital. The second page of the treatment summary reads as under:
“patient presented to emergency with 1 episode of hematemesis.
.....Alcoholic Liver disease – h/o Intake of Alcohol
On regular basis since last 10 years
On UGx endoscopy – Grade 2 varices with mild portal
Gastropathy. (2008). h/0 Seizure disorder in past 4 yeas back.
1 episode of malena today. Not on any Medication”.
17. The insured was admitted Apollo Hospital, Hyderabad on 22.12.2009 and he died while undergoing treatment on 24.12.2009 and during his stay in the hospital he was transfused with blood and he was kept on ionotrop support. The treatment history is reproduced below:
“Mr.Srinivas Reddy, 41 years old male known chronic liver disease admitted with 2-3 episodes and haematemesis and malena. On evaluation he was found o be in haemorrhagic shock with severe anemia. Patient had an episode of GTCS at ER requiring Benzodiazepam fluid resuscitation was given 2 units of PRBC was given. Gastroenterologist opinion taken. SB tube place, dialaced and fixed. Patient was intubated put on ventilator support in view of low GCS and hypoxia. Surgical opinion could not considered in view of poor general condition. Patient continued to be critical, developed bradycardia. CPR started ACLS protocol started but patient could not be revived with all efforts. Declared dead at 12.30 am on 24.12.09 “
18. When there is a repudiation of the claim due to incorrect information furnished by the insured, there can be not deficiency in service and the repudiation of the claim in the circumstances is justified. However, the contention of the learned counsel for the appellant appear to have substance in the matter that in terms of Section 45 of the Insurance Act the respondent cannot take recourse to concealment of the fact as to the health condition of the insured prior to the time of submission of the proposal. In the backdrop of these circumstances, execution of indemnity bond by the appellant attains significance. The first and second paragraphs of the indemnity bond are reproduced below:
“ This deed of Declaration-cum-Indemnity Bond is made and executed on this the 24th day of November, 2010 at Hyderabd by Mrs. Arugunta Sujana, W/o Late A. Srinivas Reddy, Aged 26 years, occ : House hold, R/o H G No. 5-94/B, B J R Complex Manikonda, Rajendranagar Mandal, AP., herein after called as “ Declarant/Indemnifier” ( which expression shall mean and include her legal heirs, executors and assignees etc., ) infavour of Shriram Life Insurance Co. Ltd., having its Regd. Office at 3-6-478, 3rd Floor, Anand Estates, Liberty Road, Himayathnagar, Hyderabad – 500 029, hereinafter called as “ Company” ( which expression shall mean and includes its legal representatives, executors, assignees etc.,).
That, late A. Srinivas Reddy during his life time has taken a life insurance policy of “ Shri Vidhya” bearing No. NP080600112249. The Declarant/Indemnifier herein is the legally wedded wife of late A. Srinivas Reddy and also appointee under the above policy to receive the death benefits on behalf of minor nominee. The Declarant/Indemnifier intimated the Company that the policy holder died on 24/12/2009. After that the Company has made its regular investigator and obtained the medical records of Apollo Hospitals, Hyderabad. Upon scrutiny of which, the Company has found that late A. Srinivas Reddy has suppressed the pre-health problems and habits in the proposal form at the time of taking the above policy. As such, the Company has repudiated the entire death claim under the above policy vide their repudiation letter dt.15/03/2010. Against the same the Declarant/Indemnifier has approached the internal Claims Review Committee of the Company and the said Committee has upheld the repudiation. Further, the Declarant/Indemnifier has also approached the insurance Ombudsman, Hyderabad which has also upheld the decision of Company in repudiating eh entire death claim under the above policy vide ;its Award dt.02/11/2010”.
19. The appellant has not raised any objection as to the respondent’s statement that she executed the indemnity bond toward full satisfaction of her claim. In view of execution of indemnity bond certifying full satisfaction of the claim and pendency of the suit filed by the respondent for recovery of the amount of Rs.3,00,000/- paid to the appellant towards final satisfaction of her claim, we are not inclined to interfere with the conclusion arrived at by the District Forum.
20. In the result, the appeal is dismissed confirming the order of the District Forum. The parties shall bear their own costs.
PRESIDENT
MEMBER
DATED : 10.07.2014.
