BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM ::
KADAPA Y.S.R DISTRICT
PRESENT SRI V.C. GUNNAIAH, B.Com., M.L., PRESIDENT
SMT. K. SIREESHA, B.L., LADY MEMBER
SRI M.V.R. SHARMA, MEMBER.
Tuesday, 21st October 2014
CONSUMER COMPLAINT No. 28/ 2014
Smt. M. Vasudha, W/o M. Ravisankar Reddy,
aged 34 years, D.No. 4/7/285-7, SBI Colony,
5th Line, Pulivendula post, YSR District. ….. Complainant.
Vs.
1. Reliance Life Insurance Co. Ltd., Rep. by its
General Manager, 9th & 10th Floor, Bldg. No. 2,
R-tech Partk, Nirlon Compound, Next to Hub Mall,
Belhind – Flex Bldg, Goregaon (East), Mumbai – 400 063.
2. Reliance Life Insurance Co. Ltd., Rep. by its
Branch Manager, D.No. 21/77 (2), 7 Roads,
DNR Towers, Kadapa city, YSR District. ….. Respondents.
This complaint coming on this day for final hearing on 10-10-2014 in the presence of Sri G. Trivikram Singh, Advocate for complainant and Sri C.K. Bramhaiah, Advocate for Respondents and upon perusing the material papers on record, the Forum made the following:-
O R D E R
(Per Smt. K. Sireesha, Member),
1. Complaint filed under section 12 of the C.P. Act 1986.
2. The brief facts of the complaint are as follows:- It is submitted that the mother of the complainant by name Late D. Venkata Lakshumma had taken one life insurance policy under cash flow plan bearing No. 50000703 which commences from 31-3-2012 from the respondents company by paying Rs. 89,040-97Ps towards annual premium amount. The complainant was nominated as nominee to the above policy. As per the terms and conditions of the policy, in case of death of insured before expiry of policy i.e. 31-3-2031 the respondents are liable to pay Rs. 10,00,000/- along with vested bonus to the nominee.
3. While so the insured who is no other than mother of the complainant died due to ill health on 30-8-2012. After the death of insured, being the nominee to the above policy, the complainant made a claim with the respondents for settlement of her claim under the above mentioned insurance policy by submitting relevant document along with medical records. To the utterly surprise the complainant has received a repudiation letter dt. 21-2-2013 from the respondents in which it was mentioned that the deceased has suppressed her ill health about lung disease. It is pertinent to submit here that at the time of taking above insurance policy the insured was hale and healthy. The complainant approached the appropriate insurance authorities to re-consider the decision of repudiation of her claim. The complainant contends that death of her mother was not related to lung disease as alleged by the respondents through their repudiation letter dt. 21-3-2013. In fact, the life assured died due to fever with severe hepatitis. It is necessary to mentioned here that the mother of the complainant did not suffer with any critical illness prior to date of enrolment of policy. The complainant submits that without application of mind the respondents repudiated the claim of the complainant to escape from their liability. The services of the respondents are deficient in nature and are liable to pay insurance amount to the complainant along with vested bonus together with accrued interest. The negligent acts of the respondents caused mental agony and physical strain to the complainant. The respondents are liable to pay the above said amount to the complainant as well as they are liable to pay compensation to her for causing mental agony. Hence, this complaint.
4. The cause of action arose on 31-3-2012 when the mother of complainant took insurance policy from the respondents under cash flow plan and when she died on 30-8-2012 due to ill health and when the respondents repudiated the claim of the complainant under a letter dt. 21-2-2013 and cause of action arose within the jurisdiction of Hon’ble forum as the respondents have offices within the jurisdiction of the Hon’ble forum. A fee of Rs. 500/- is paid by way of I.P.O.
5. Therefore, prayed that the Hon’ble forum may be pleased to allow the complaint and pass orders in favour of the complainant and directing the respondents (a) to pay Rs. 10,00,000/- along with vested bonus under the policy bearing No. 50000703 together with interest at the rate of 24% p.a. from the date of death of insured i.e. 30-8-2012 till the date of realization, (b) to pay compensation of Rs. 2,00,000/- for causing physical strain and mental agony and (c) to payRs. 5,000/- towards the cost of the complaint and other reliefs as the Hon’ble forum deems fit and proper in the circumstances of the case.
6. Respondents 1 & 2 filed written statement with preliminary objections. That the instant complaint is false, malicious, incorrect and malafide and is nothing but an abuse of the process of the law and it is an attempt to waste the precious time of this Hon’ble Forum as the same has been filed by the complainant just to avail undue advantage. The complaint is thus liable to be dismissed under section 26 of C.P. Act 1986.
7. That at the very outset it is submitted that after the perusal of investigation report, it was established that that DLA was suffering from Lung disease. The same was also reflected from the CECT report dt. 21-3-2012, Dinesh Medical center, wherein it was categorically mentioned that DLA has complications like large consolidated with sub segmental collapse involving most of the left upper lobe lingular segments and patchy consolidation involving predominantly apical and anterior segments of left lower lobe. Moreover it is clear from the discharge documents that the policy was taken on the date of discharge from the hospital i.e. 31-3-2012. That the above complaint is neither maintainable in law nor on facts and the same is liable to be dismissed in limine.
8. That the respondents very beginning states that there has been no negligence or deficiency in services whatsoever, on part of the respondents in dealing with the concerned policy as the claim was rightly repudiated on the ground of suppression of material facts as stated in the repudiation letter, thus the present complaint is liable to be dismissed.
9. It is most humbly submitted that the instant complaint lacks a cause of action. The complaint is based on mere surmises and conjectures and an established principle of law that the machinery of law cannot be invoked on the basis of mere conjectures. Therefore, this complaint is liable to be dismissed on want of the cause of action.
10. It is submitted that the contract of insurance are contracts “uberrima fides” and every material facts must be disclosed otherwise there is good ground for rescission of the contract. In the case of Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., IV (2009) CPJ 8 (SC) the apex court dismissed the complaint. As the insurance policy obtained by the DLI by misrepresentation of material facts in order to defraud the respondents. So the contract of insurance is void.
11. Further in LIC of India Vs. Sampat Devi, III (2006) CPJ 32 the court observed that knowingly misrepresented so done by the insurer. Similar case of V.Nalini Vs. LIC of India and another I (2008) CPJ 144 the State Commission of Tamil Nadu held that the suppression of a serious ailment. Further in Sapna Arora Vs. Life Insurance Corporation of India and others I (2009) CPJ 588 claim was repudiated on the ground of suppression of information on prior existing of diseases.
12. The DLA passed away within a short span of signing of the proposal form and issuance of the policy and issuance itself is a strong ground to raise reasonable doubt over the correctness of the material representations made in the proposal form. It has been held by Hon’ble National Consumer DisputesRedressal Commission in State of Punjab & another Vs. Smt. Asha Rani, III (2003) CPJ 172 (NC) and LIC of India and another Vs. Balbir Kaur I (2009) 212 (NC) and Life Insurance Corporation of India Vs. Smt. Piari Devi and others, II (2008) CPJ 156 and by Hon’ble Uttarkhand State Consumer Disputes RedressalCommission in LIC of India Vs. Radhika Devi III (2008) CPJ 226 that the very fact of early claim is a good corroborative evidence to prove misrepresentation, material non disclosure or contemplation of death. Thus the complaint is liable to be dismissed.
13. That without prejudice to above stated contentions, the respondents submits the correct facts and details of the case, which are as follows.
i. After understanding all the terms and contions of the policy, the D. Venkata Lakhsumma submitted the duly signed proposal forms for a Reliance Life Insurance Cash Flow Plan and voluntarily applied for an Insurance Policy vide proposal form bearing No. D 3726618, and signed on 31-3-2012 “said application / proposal form” wherein the complainant daughter of the DLI was the proposed nominee. In the proposal form, the DLI had given all relevant details and information in the prescribed from, for an assured sum amounting to Rs. 10,00,000/- which annual premium amounting of Rs. 89,040-97 was proposed to be paid on for term of 19 years. A copy of the said application / proposal form is annexed as annexure O.P.1.
ii. In the proposal form D. Venkata Lakshumma had given declaration that he had made complete true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the risk and had not withheld any information as may be relevant for the acceptability of proposal. The following questions were answered as “NO” on page 3 in section of LIFE STYLE QUESTIONS AND PERSONAL MEDICAL HISTORY OF THE LIFE TO BE ASSURED of the proposal form and same is reproduced herewith for the perusal of Hon’ble forum.
iii. It is submitted that the proposal form duly signed by the deceased policy holder clearly had a provision for the declaration by the owner of the policy i.e. deceased policy holder to the effect that he had read the application and furnished the information after fully understanding the contents thereof and also understood the terms and conditions of the plan and had applied for the same and had made complete and true disclosure of the facts in the proposal form and had not withhold any information. Further he had also agreed under the agreement therein that if any untrue statement be contained in the proposal form the policy contract shall be null and void and the money’s which have paid in respect thereof shall stands forfeited to Reliance Life Insurance. It may be noted that at page 3 of the application / proposal form under clause declaration by life to be assured / policy holder / proposer DLA and complainant put their signature in the present of witness. Please refer to the section declaration by life to be assured / policy holder proposer.
iv. Based on the information provided and declaration made in the application form and on receipt of the premium, the policy contract No. 50000703 was issued to the DLA with effect dt. 31-3-2012 and accordingly opposite party had dispatched the policy documents to the complainant. A copy of the policy contract is annexed as annexure O.P.2.
v. The Opposite party received a death claim intimation from complainant i.e. daughter of DLA who is the nominee in said policy, in form-a, wherein it was stated that the DLA had passed away on 30-8-2012 and further claim the assured amount. Copies of claim form A, B & C are annexed herewith as annexure O.P.3.
vi. As per procedure the opposite parties conducted the investigation and during the investigation it was established that the DLA was suffering from lung disease. It is submitted that the said fact was established from the CECT report dt. 21-3-2012 from Dinesh Medical Centre which clearly confirms that DLA had complications like Large consolidation with sub segmental collapse involving most of the upper lobe lingular segments of left lower lobe. It is further pertinent to mention herewith that the DLA was admitted on 21-3-2012 and he was discharge on 31-3-2012 and on a very same date the DLA applied for the policy contract, which clearly indicates and speaks the volume that DLA frequently purchased the policy contract in order to avail undue advantage. Copies of medical documents are discharge documents are annexed as annexure O.P.4.
vii. on the basis of documents collected during the investigation of the matter was convinced that there was non-disclosure of earlier disease by DLA and DLA was suffering from Lung disease and complications like large consolidation with sub segmental and upon which opposite party repudiated the claim on 21-2-2013 on grounds of suppression of material facts by the DLA while filing up the proposal form based on which the said policy was issued. It is submitted that there has been a willful concealment of vital information at the time of filing up the proposal form by the DLA i.e. non – disclosure of pre-existing disease prior to the signing of the proposal form which amounts to material non-disclosure. Had the opposite party know about the DLA’s past medical history at the proposal stage, the policy would not have been issued as proposed. A copy of repudiation letter is annexed as annexure O.P.5.
viii. The suppression of pre-existing deceases amounted to suppression of material facts and hence the contract of insurance is liable to be rescinded as per section 45 of Insurance Act 1938 and no benefit is payable.
ix. That the non-disclosure amounts to fraud and complainant cannot take the benefit of it’s owns wrongs. As per Indian Contract Act 1872 one of the essential elements for a valid contract is free consent. When consent to an agreement is caused by fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused as the same is not a free consent. As per section 17 of the Indian Contract act 1872 the term “fraud” has been defined as
“fraud” means and includes any of the following acts committed by a party to a contract or with his connivance, or by his agent, with intent to deceive another party thereto of his agent, or to induce him to enter into the contract: (1) The suggestion, as a fact, of that which is not true by one who does not believe it to be true, (2) the active concealment of a fact by one having knowledge or belief of the fact, (3) a promise made without any intention of performing it, (4) any other act fitted to deceive, (5) any such act or omission as the law specially declares to be fraudulent.
Section 18 of the Indian Contract act 1872 defines “misrepresentation” as (1) The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true (2) any breach, of duty which, without an intent to deceive, gains an advantage to be person committing it, or any one claiming under him, by misleading another to his prejudice or to the prejudice of any one claiming under him; (3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.
When consent agreement is caused by coercion, fraud or misrepresentation, may, if he things fit, insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representation made had been true.
Exception:- it such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 117, the contract, nevertheless is not voidable, if the party whose consent was so caused had the means of discovering the truth.
14. It is submitted that the Hon’ble Supreme court of India in United India Insurance Co. Ltd., Vs. MKJ Corporation (1996) 6 SCC 428 held that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. The Dist. Forum had failed to appreciate the judgment Life Insurance Corporation of India Vs. Smt. Surekha Shankar Jadhav NC, RP 2130/2007 , dt. 31-7-2012 where it was held that the insurance company can repudiate a claim in case of non-disclosure of preexisting disease or any material information and the same may or may not be the exact cause of death of the deceased life assured.
15. The Dist. Consumer forum had failed to appreciate the judgement Divisional Manager, LIC of India and others Vs. smt. Anupama and others NC, R.P. 3794, 3796/2007 dt. 17-4-2012 wherein the Hon’ble National Commission held that while repudiating a death claim, doctor’s affidavit is not necessary / mandatory to be produced before the Dist. Forum and non-production of the same cannot become a reason to allow the complaint.
16. It is most humbly submitted that non-disclosure of the material fact by DLI is a sufficient ground for repudiation of the said policy and the same has been treated in the case of LIC of India Vs. Sampat Devi III (2006) CPJ 32 wherein the court observed and in the case of V. Nalini Vs. LIC of India and another I (2008) CPJ 144 State commission of Tamil Naduhedl the suppression of a serious ailment, is the sufficient reason to repudiate the claim of the policy holder.
17. There cannot be any complaint of deficiency of service and unfair trade practice against this opposite party by the complainant and the complaint deserves to be dismissed with cost.
Para wise reply:-
18. After understanding all the terms and conditions of the policy, the DLI submitted the duly signed proposal forms for a Reliance Life Insurance Cash Flow Plan had voluntarily applied for an Insurance policy vide proposal form bearing No. D 3726618 and signed on 31-3-2012, wherein the complainant daughter of the DLI was the proposed nominee. In the proposal form the DLI had given all relevant details and information in the prescribed form, for an assured sum amounting to Rs. 10,00,000/- which an annual premium amounting of Rs. 89,040-97 was proposed to be paid on for a term of 19 years. The said proposal form D. Venkata lakhsumma had given declaration that he had made complete, true and accurate disclosure of all the fact and circumstances as may be relevant for the acceptability of the risk and had not withheld any information as may be relevant for the acceptability of proposal. The following questions were answered as “NO” on page 3 in section of LIFE STYLE QUESTIONS AND PESONAL MDECIAL HISTORY OF THE LIFE TO BE ASSURED of the proposal form and same is reproduced herewith for the perusal of Hon’ble forum. In Column No. 30, 32 the deceased Venkata lakshumma is mentioning as “NO”
19. It is humbly submitted that the proposal forms duly signed by the deceased policy holder clearly had a provision for the declaration by the owner of the policy i.e. deceased policy holder to the effect that he had read the application and furnished the information after fully understanding the contents thereof and also understood the terms and condition of the plan and had applied for the same and had made complete and true disclosure of the facts in the proposal form and had not withhold any information. Further he had also agreed under the agreement therein that if any untrue statement be contained in the proposal form, the policy contract shall be null and void and the moneys which have paid in respect thereof shall stands forfeited to Reliance Life Insurance. It may be noted that at page 3 of the application / proposal form under clause declaration by life to be assured / policy holder / proposer DLA and complainant put their signatures in the present of witness. Please refer to the section declaration by life to be assured / policy holder / proposer. Thus based on the information provided and declaration made in the application form and on receipt of the premium, the policy contract No. 5000703 was issued to the DLA with effective dt. 31-3-2012 and accordingly opposite party had dispatched the policy documents to the complainant.
20. It is submitted that as per the procedure, the opposite parties are conducted the investigation and during the investigation it was established that the DLA was suffering from Lung Disease. It is submitted that the said fact was established from the CECT report dt. 21-3-2012 from Dinesh Medical Centre which clearly confirms that DLA had complications like large consolidation with subsegmental collapse involving most of the upper lobe lingular segments of left lower lobe. It is further pertinent to mention here that the DLA was admitted on 21-3-2012 and he was discharge on 31-3-2012 and on very same date the DLA applied for the policy contract, which clearly indicates and speaks the volume that DLA frequently purchased the policy contract in order to avail undue advantage. The opposite party on the basis of documents collected during the investigation of the matter was convinced that there was non disclosure of earlier disease by DLA and DLA was suffering from Lung Disease and complications like large consolidation with sub segmental and upon which opposite party repudiated the claim on 21-3-2013 on grounds of suppression of material facts by the DLA while filling up the proposal form based on which the said policy was issued and there have been a willful concealment of vital information at the time of filling upo the proposal form by the DLA i.e. nondisclosure of pre existing disease prior to the signing of the proposal form which amounts to material non disclosure. The opposite party know about the DLA’s past medical history at the proposal stage the policy would not have been issued as proposed.
21. The contents of the complaint are wrong and denied vehemently denied that there is any deficiency in service provided by the opposite parties. Further submitted that DLA and now complainant intentionally concealed the fact of pre-existing disease at the time of signing the proposal form and DLA obtained said policy by concealing the material fact. It is further submitted that there is no cause of action involved in captioned matter and complaint is liable to be dismissed due to lack of cause of action and complaint is dismissed due to lack of cause of action.
22. Contents of para – 4 do not merit any comments.
23. It is therefore, prayed that the complaint made by the complainant being devoid of any merits, be dismissed, in the interest of equity and justice.
24. On the basis of the above pleadings the following points are settled for determination.
i. Whether the complainant is entitled to the relief as prayed by him or not?
ii. Whether there is negligence or deficiency of service on the part of the Respondents?
iii. To what relief?
25. On behalf of the complainant Exs. A1 to A3 were marked and on behalf of the respondent Exs. B1 to B6 were marked. Both complainant and respondents filed written arguments.
26. Point Nos. 1 & 2. The complainant had taken a policy under Ex. A1 from the respondents company which commences from 31-3-2012 bearing policy No. 50000703 under Reliance Cash Flow Plan. Ex. B1 is the proposal form issued by the respondents company. Ex. B2 is the risk premium receipt issued by the respondents company for an amount of Rs. 89,040-97Ps paid by the complainant. The complainant died on 30-8-2012 due to ill health, then the complainant made a claim before the respondents, Ex. B3 is the claim form. As per policy bearing No. 50000703 Reliance Cash Flow plan, the complainant has to pay Rs. 89,040-97Ps towards annual premium up to the expiry of the policy i.e. 31-3-2031. Here in the complaint, it is nowhere mentioned that the deceased life assured had any job or not and about her income earnings to pay a sum of Rs. 89,040-97 Ps towards annual premium to the above said policy. There is no documentary evidence to prove income of the deceased life assured. As per Ex. B4 the deceased life assured was admitted at Dinesh Medical Center, Pulivendula for treatment of lung disease and complications like large consolidated with sub segmental collapse involving most of the left upper lobe lingular segments and patchy consolidation involving predominantly apical and anterior segments of left lower lobe. After thorough investigation by the respondents 1 & 2, they filed Ex. B4 to prove that the deceased D. Venkata Lakshumma pre-ailment before entering into proposal of the policy. Ex. B4 clearly proves that the deceased life assured was suffering from Lung disease. The insurance policies are the contract between the parties on good faith i.e. “ubiremifides”. As per section 45 of Insurance Act 1938 the person who is marking a proposal the proposer should furnish full material facts about their health, age etc., and they should not suppress the material facts and obtain any policy. As per section 17 of Indian contract act 1872 there is misrepresentation by the deceased in making false statement, while entering into the proposal form by making false information it leads to mis-representation. Basing, on all these the respondents issued Ex. B5 to the complainant dt. 21-2-2013 that her claim was repudiated. On the basis of suppression of material facts while taking policy. Basing on the documentary evidence filed by the complainant and respondents it is found that the complainant is not eligible for any compensation as prayed by her. The complainant failed to prove her case in the above circumstances. At the same time there is no deficiency of service on the part of the respondents 1 & 2.
27. Point No. 3 In the result, the complaint is dismissed without costs.
Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open Forum, this the 21st October 2014.
MEMBER MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses examined.
For Complainant NIL For Respondents : NIL
Exhibits marked for Complainant : -
Ex. A1 P/c of policy bearing No. 50000703 issued by the respondents in favour of mother of the complainant.
Ex. A2 Death certificate of late D. Venkata Lakshumma issued by Municipal of office, Pulivendula town, YSR District.
Ex. A3 Repudication letter dt. 21-2-2013 issued by the respondents 1 & 2.
Exhibits marked on behalf of the Respondents:
Ex. B1 Proposal form issued by the respondents company.
Ex. B2 Policy copy of contract and premium receipt issued by the respondent company.
Ex. B3 Claim form: A, B & C are submitted by the complainant to the respondents company (CABG)-2 issued by Star Hospitals.
Ex. B4 Copies of Medical documents and discharge documents issued by Dinesh Nursing Home, Pulivendula.
Ex. B5 Copy of repudiation letter issued by the respondent company on 21-2-2013.
Ex. B6 Copy of investigation report issued by the investigator i.e. Zubair & Co., on 21-1-2012.
MEMBER MEMBER PRESIDENT
Copy to :-
1) Sri G. Trivikram Singh, Advocate for complainant.
2) Sri C.K. Bramhaiah, Advocate for respondents.
B.V.P.
