BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM :: KADAPA Y.S.R DISTRICT
PRESENT SMT. K. SIREESHA, B.L., PRESIDENT FAC
SRI M.V.R. SHARMA, MEMBER.
Monday, 23rd June 2014
CONSUMER COMPLAINT No. 13/ 2014
K. Sarada, W/o Late K. Venkata Subbaiah,
Hindu, aged 48 years, Widow, Presently residing at
D.No. 3/1973, Raja Reddy Street, Kadapa City. ….. Complainant.
Vs.
1. The Branch Manager, SBI Life Insurance Co. Ltd.,
1st floor, CPVR Towers, Opp. RTC Bus Stand Out gate,
Chinnachowk, Y.S. Nagar, Kadapa City – 516 001,
Kadapa Distrit, Andhra Pradesh.
2. The Asst. Manager – Claims, Central Processing Centre,
Kapas Bhavan, Plot No. 3 A, Sector No. 10, CBD Belapur,
Navi Mumbai – 400 614, Maharastra State. ….. Respondents.
This complaint coming on this day for final hearing on 16-6-2014 in the presence of Sri G.M.B. Murali Krishna, Advocate for complainant and Sri T. Jayaram, 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, President FAC),
1. Complaint filed under section 12 of the C.P. Act 1986.
2. The brief facts of the complaint are as follows:- The complainant is wife of one K. Venkata Subbaiah. Mr. K. Venkata Subbaiah was quite hale and healthy. He had not been suffering from any disease. He used to go to his working place in a bicycle by peddling himself.
3. It is further submitted that the said K. Venkata Subbaiah was having wife, two daughters and two sons. He performed the marriage of his elder daughter and two sons in 2008 and 2010 respectively out of his hard made earnings. His younger daughter is studying 10th class now.
4. Mr. K. Venkata Subbaiah and the R1 herein have entered into the contract of life insurance on 31-3-2013 vide application form bearing No. QC636819. The policy holder had disclosed all relevant facts about his health. However, as per the requirements of the company, the life assured was physically examined by Dr. Sri S. Shyamsundar reddy, M.D Remedy Hospital, Kadapa on 01-7-2013. After satisfying about the information furnished by the life assured regarding his health and other essential facts, the R1 has accepted the proposal for life insurance. Accordingly, the life assured K. Venkata Subbaiah, got insured his life with the R1 on 24-6-2013 for a sum assured amount of Rs. 2,50,000/- by paying a premium amount of Rs. 6,250/- under SBI life – Flexi Smart insurance. The frequency of premium amount is quarterly. Subsequently, the R1 issued policy No. 56047223909 in favour of the life assured for a sum assured amount of Rs. 2,50,000/-. The complainant who is wife of the life assured was nominated as beneficiary of the policy.
5. It is further submitted that unfortunately, the life assured was dead on 26-7-2013 due to heart attack. The complainant being the nominee and wife of the deceased life assured was entitled to get the benefits covered by the aforesaid policy. Accordingly, she had intimated to the R1 orally about the demise of her husband the life assured. She has made a claim to the respondents on 23-8-2013 by furnishing all the necessary and relevant documents seeking the policy benefits. The complainant approached the R1 on several occasions for getting her claim amount.
6. It is further submitted that on 15-10-2013 the R2 addressed a letter to the complainant saying that as per the records available with them, the deceased life assured was suffering from heart disease and was taking treatment for the same prior to the date of commencement of policy and thus the material facts pertaining to the deceased life assured were not disclosed at the time of signing the contract of insurance and the claim was repudiated. The respondents company sent a cheque for an amount of Rs. 3,489/- dt. 11-10-2013 bearing No. 522521 along with the repudiation letter. The complainant did not encash the said cheque and the same is herewith filed.
7. It is further submitted that the findings of the respondents company are all totally arbitrary, perverse and unwarranted. In fact, the deceased life assured never suffered from any heart disease and he never undergone any operation as being alleged by the respondents company and he had never taken treatment for the same and so the question of not disclosing the material facts at the time of signing the contract of insurance do not arise at all. In fact the deceased life assured died of sudden heart attack but not due to any heart disease.
8. It is further submitted that the complainant had addressed a letter dt. 7-11-2013 to the R2 for reviewing the decision of repudiation. The R2 has received the said letter but it has failed to consider the claim of the complaint, hence, the complainant is obliged to file this complaint.
9. It is submitted that the deceased life assured was hale and healthy and aged 56 years only at the time of his demise. Had it is true that the deceased life assured was suffering from any disease certainly it would have been reflected in the medical tests conducted by the panel doctor of the respondents company. But there was no such finding by the said doctor. As such, the very fact that the proposal for insurance was made by the deceased life assured on 31-3-2013 and the same was duly accepted by the respondents on 24-6-2013 after a period of 2 months and 24 days after satisfying with the medical reports of the deceased life assured, itself show that there was a concluding contract of life insurance between the life assured and the respondents company.
10. It is further submitted that the acts of the respondents in repudiating the claim of the complainant clearly constitutes deficiency of service. Due to the act of the respondents in repudiating her claim, the complainant is suffering from severe several mental agony and she is also facing problems financially.
11. Cause of action for this complaint arose on 31-3-2013 when the life assured made proposal for insurance, on 01-7-2013 when the deceased life assured had undergone relevant medical tests at remedy, hospital Kadapa on 24-6-2013 when the respondents company accepted the proposal of life insurance for an amount of Rs. 2,50,000/- after receiving the quarterly premium amount of Rs. 6,250/- on 26-7-2013 when the life assured was dead on 23-8-2013 when the complainant sent claim form t the respondents company for getting her claim, on 15-10-2013 when the intimation relating to the repudiation of the claim was sent to the complainant along with a cheque for Rs. 3,489/- On 7-11-2013 when the complainant sent a letter to the respondents for reviewing the decision of repudiation which was in vain in Kadapa city, where the branch office of the R1 is located and the deceased life assured was last resided and died in Kadapa city, within the jurisdiction of the Hon’ble forum. An Indian postal order worth of Rs. 200/- is paid along with this complaint.
12. Therefore, it is most humbly prayed that the Hon’ble Consumer Redressal Forum, may be pleased to (a) direct the respondents jointly and severally to pay an amount of Rs. 2,50,000/- being the claim amount covered under the subject matter policy with interest @ 18% p.a. from the date of making claim i.e. 23-8-2013 until realization, (b) Direct the respondents to pay an amount of Rs. 50,000/- towards deficiency of service to the complainant, (c) direct the respondents to pay an amount of Rs. 50,000/- towards mental agony caused to the complainant on account of their deficiency of service, (d) direct the respondents to pay an amount of Rs. 5,000/- towards costs of this complaint incurred by the complaint and (e) Grant such other relief or reliefs as the Hon’ble forum deems fit and proper in the circumstances of the case and in the interest of justice.
13. Written statement field by the opposite parties SBI Life insurance Co. Ltd., the opposite parties humbly submit their reply in respect of the above complaint as under.
14. SBI Life Insurance Co. Ltd., is a life insurance company carrying on life insurance business as licensed by IRDA under the provision of the insurance Act 1938. In the course of the said business the company offers insurance coverage to individuals and groups of individuals in accordance with the provisions of the insurance Act.
Preliminary objections:-
At the outset, it is submitted that the address of the O.P2 is at Navi Mumbai, but the complaint is filed before the Hon’ble forum at Kadapa. Hence, the complaint is not maintainable for want of territorial jurisdiction of the Hon’ble forum. Hence, the complaint is liable to be dismissed against the O.P.2.
15. The Life insurance Contract is a contract of “utmost good faith” where in the proponent is duty bound to disclose everything concerning her health, habits and other related matters which are within her knowledge at the time or making the proposal, failing which the insurer has every right to repudiate the claim. In the instant case, the deceased life assured Sri K. Venkata Subbaiah committed a breach of the principle of utmost good faith by suppressing the material fact that he was suffering from Heart disease and was under treatment for the same prior to the date of commencement of rick. At the time of signing the proposal form on 31-3-2013, he replied negative to the questions Nos. “13 (iv) and 13 (xv). It is clear from the records that the Deceased Life Assured was suffering from coronary Artery Disease and has undergone PTCA stent on 25-4-2008. Hence, it is clear that the Deceased Life Assured was suffering from heart disease prior to the date of commencement of insurance policy. So here deliberately suppressed the material facts and obtained the insurance cover fraudulently. Hence, the complaint is not maintainable and hence, deserves to be dismissed.
16. There is no negligence, carelessness or deficiency in service on the part of the Opposite parties as defined in section 2 (1) (g) of C.P. Act as the Deceased Life Assured himself is guilty of suppressing and concealing the material and true facts regarding her preexisting illness at the time of taking the policy from the opposite parties. Hence, the complaint deserves to be dismissed in limine.
17. The said complaint has not been filed for real cause of justice but has been filed with the malafide intention to harass the opposite parties as well as to pressurize the opposite parties to sanction the claim filed by the complainants knowing fully well that the deceased life assured has concealed and suppressed the material facts at the time of procuring insurance policy from the opposite parties. Fraud is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a cheating to get an advantage. Thus in terms of section 17 of Indian Contract Act 1872 the contract is void. Hence, there cannot be any enforcement of any right under a contract which is void ab-initio. Thus the complaint is totally ill conceived and frivolous and hence should be dismissed in limine. It is clear from the above that an insurer can repudiate a claim if there is a suppression of material fact.
Brief facts of the case:-
The Deceased Life Assured Sri Kola Venkata Subbaiah had applied for SBI Life Flexi Smart Policy vide proposal No. 56QC636819 dt. 31-3-2013. On the basis of the proposal form submitted by the DLA and believing the information furnished therein, to be true and accurate, the opposite parties have accepted the risk cover under the doctrine of utmost good faith and issued the policy No. 56047223909 for a sum assured of Rs. 2,50,000/- with date of commencement of the policy as 11-7-2013. As the risk needs to be assessed while accepting the proposal form for insurance cover, it is essential that the proposer or person whose life has to be insured gives true and correct answers to the questions in the proposal form. In the instant case the proposer has answered negatively to all the questions in the medical questionnaire. In the proposal form he had replied in negative to the question Nos. “13 (iv), 13 (v). but the available records prove that the Deceased Life Assured was suffering from Coronary Artery Disease, Posterior wall myocardial Infraction and has undergone Coronary Angiogram and PTCA stent on 2008 i.e. much prior to the date of signing the proposal from. This fact was deliberately suppressed by the Deceased Life Assured in the proposal form. If the deceased life assured disclosed in the proposal form about his preexisting disease, the proposal would not have been accepted.
18. Further in the medical examination dt. 2-7-2013 the deceased life assured has replied to the following questions. Question No. 3, (c), question 5. The proposal form and medical examination form are primary documents for assessment of risk and answer to each and every question therein is vital for underwriter to decide whether the proposed life is to be insured or not. Thus any correct information stated in the proposal form certainly vitiates the interests of the insurer and hence, the insurer is well within their rights to repudiate the claim wherever materials facts are suppressed by the life assured.
19. The deceased life assured reported to have died on 26-7-2013. The policy resulted in a claim in just 15 days. So SBI Life Insurance Co. Ltd., enquired into the matter and found that the Deceased Life Assured was suffering from coronary artery disease and posterior wall myocardial infraction and was treated in M/s Bollineni Super Specialty Hospital, Nellore during April 2008. The investigation report is also filed.
20. The hospital records of Bollineni Super Speciality Hospital, Nellore clearly reveals that the deceased life assured was admitted on 19-4-2008 under I.P. No. 15241 and was discharged on 27-4-2008. In the case notes dt. 19-4-2008, it is noted that the deceased life assured was a known case of coronary artery disease true posterior wall MI (Myocardial infraction) and Mod LV Dysfunction. In the doctor orders and progress notes dt. 19-4-2008 it is noted PTCA + stent to mid LCX – good result. In the discharge summary dt. 27-4-2008, it is noted that the deceased life assured was a known case of Cad True Posterior MI, AOE class II mod LV Dysfunction. CAG done on 19-4-2008 CAD two vessel disease. PTCA+stent to LCX done on 25-4-2008. A copy of hospital records of Bollineni Super Speciality Hospital, Nellore is also filed.
21. The above referred documents clearly establish the preexisting illness of the Deceased Life Assured. The proposal form was singed on 31-3-2013. The date of commencement of risk on the life of Sri Kola Venkata Subbaiah under the policy was 11-7-2013 and from the documents produced it is clear that the deceased life assured was suffering from Coronary Artery Disease and has undergone PTCA with stent prior to the date of commencement of the policy.
22. It is submitted that the opposite parties have received a representation from the complainant and the same was referred to the claims Review committee. But as there was no indisputable proof that the deceased life assured Sri Kola Venkata Subbaiah has suppressed the material fact that the was suffering from Coronary Artery Disease and has undergone PTCA stent in 2008 i.e. prior to the date of signing the proposal form, the claim repudiation decision was upheld by the claims Review Committee, headed by a retired High Committee. The same repudiation letter was also filed. In the above facts and circumstances, SBI Life Insurance Co. Ltd., is fully justified in repudiating the claim on the basis of insurance policy which has been obtained by the deceased life assured by non – disclosure of the material fact that he was suffering from coronary artery disease and has undergone PTCA stent prior to the date of signing the proposal form and thereby obtained the said insurance cover under the said policy fraudulently. The O.P. is repudiated the claim because of the suppression of material fact by the deceased life assured and hence the repudiation of claim is lawful and just. The complaint deserves to be dismissed and it should be dismissed in limine.
23. On the basis of the above pleadings the following points are settled for determination.
- Whether the complainant is entitled to the relief as prayed by him or not?
- Whether there is negligence or deficiency of service on the part of the Respondents?
- To what relief?
24. On behalf of the complainant Ex. A1 to A11 were marked and on behalf of the respondent Ex. B1 to B8 were marked.
25. Point Nos. 1 & 2. It is true that the deceased life assured Kola Venkata Subbaiah, had SBI Flexi Smart Insurance policy vide bearing No. QC636819, dt. 31-3-2013. Ex. A1 is the proposal form of the policy. Ex. B1 and Ex. A2 are the same. The policy document of the deceased life assured Kola Venkata Subbaiah, dt. 24-6-2013 for a sum assured amount of Rs. 2,50,000/- by paying premium amount of Rs. 6,250/-. Ex. A3 is the receipt, dt. 24-6-2013. Ex. A4 shows that the deceased Kola Venkata Subbaiah died on 17-8-2013. Ex. A5 is the claim form submitted by the complainant dt. 22-8-2013 for seeking the benefits of the policy of the deceased life assured as she is the nominee of the policy. As per Ex. B4 the deceased life assured was suffering from coronary Artery Disease and he was treated in M/s Bollineni Super Specialty Hospital, Nellore during April 2008. Ex. B5 supports the investigation report i.e Ex. B4 of the respondent.
26. The Life insurance Contract is a contract of “utmost good faith”. It is bounded duty of the proposer to discuss the health condition prior to the making of proposal. The insurer is having every right to repudiate the claim. In this case the deceased life assured was suffering from heart disease under Ex. B5 it is very clear that he was treated at Bollineni Super Speciality Hospital, Nellore. Ex. B5 is very clear that the deceased life assured was admitted in hospital on 19-4-2008 in I.P. No. 125241 and he was discharged on 27-4-2008. It was noted from Ex. B5 that the deceased life assured was known case of coronary artery disease true posterior wall MI (Myocardial infraction) and Mod LV Dysfunction. In the doctor orders and progress notes dt. 19-4-2008 it is noted PTCA + stent to mid LCX. The deceased life assured was suffering from coronary artery disease undergone with PTCA stent on 25-4-2008 i.e. prior to the date of commencement of the policy. So it is very clear that the deceased life assured was suffering from heart disease and so underwent treatment for the same prior to the date of commencement of the risk. At the time of entering into the proposal form dt. 31-3-2013 i.e. Ex. B1, the deceased life assured had replied in negative to the questionnaire in No. 13 (iv), 13 (v). So it is very clear the deceased life assured had suppressed the material facts about his health conditions. The suppression of material information is Contract is a contract of “utmost good faith”. Thus in contract of insurance is by breach of the principle of utmost good faith by suppressing the material facts. The address mentioned in Ex. B5 and Ex. A11 are the same. So Ex. B5 belongs to the deceased Life assured Kola Venkata Subbaiah. There is no dispute that the contract of insurance which is based on the principle of utmost good faith and the case of death becomes irrelevant. As the deceased life assured did not discuss and deliberately suppressed the material facts and obtained the insurance cover fraudulently. The opposite parties in their investigation and in Ex. B4 they filed Ex. B5 and on the ground of fraudulent suppression of material facts they repudiated the claim for the complainant as unjust and illegal under Ex. B6. Ex. A7 is the letter sent by the complainant to R2. Ex. A8 is the acknowledgement dt. 7-11-2013. Ex. A9 to A11 are the proofs of deceased K. Venkata Subbaiah. So under the above all circumstances it is very clear that the deceased life assured had suppressed material facts and obtained the life insurance policy with malafide intention. So there is no negligence or deficiency of service found on the part of the respondents 1 & 2. The citations filed by the respondents supporting their version in repudiating the claim of the deceased life assured. So the complainant is not eligible for any compensation as prayed by her.
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 23rd June 2014
MEMBER PRESIDENT FAC
APPENDIX OF EVIDENCE
Witnesses examined.
For Complainant NIL For Respondents : NIL
Exhibits marked for Complainant : -
Ex: A1 Policy document issued by the respondent company in the name of the deceased life assured K. Venkata Subbaiah showing the name of the complainant as nominee of the policy.
Ex: A2 Proposal form of the policy.
Ex: A3 Proposal deposit receipt dt.24-6-2013 issued by the 1st respondent.
Ex: A4 Death certificate of the deceased life assured dt.17-8-2013 issued by the Kadapa Municipal Corporation.
Ex: A5 Claim form dt.22-8-2013 submitted by the complainant seeking the benefits of the policy.
Ex: A6 Repudiation letter dt. 15-10-2013 issued by the respondent no.2 to the complainant along with unencashed cheque bearing No.522551 dt.11-20-2013 for Rs.3,489/-.
Ex: A7 Letter dt.7-11-2013 sent by the complainant to the R2
Ex: A8 Postal acknowledgement dt.7-11-2013 signed by the R2.
Ex: A9 P/c of Aadhar card of the deceased K. Venkata Subbaiah.
Ex: A10 P/c of Aadhar card of the complainant.
Ex: A11 P/c of Family Ration Card of the Deceased.
Exhibits marked for Respondents: -
Ex. B1 Copy of Proposal form issued by the respondent company.
Ex. B2 Copy of the policy document issued by the respondent company.
Ex. B3 Copy of the Medical Examination Form.
Ex. B4 Copy of the Investigation Report.
Ex. B5 Copy of the Hospital Records of Bollineni Super Speciality Hospital,
Nellore.
Ex. B6 Copy of Claim Repudiation letter dt. 15-10-2013.
Ex. B7 Copy of the claimant’s statement.
Ex. B8 Copy of the letter conveying the decision of the CRC.
MEMBER PRESIDENT FAC
Copy to :-
- Sri G.M.B. Murali Krishna, Advocate for complainant.
2) Sri T. Jayaram, Advocate for respondents.
B.V.P.
