BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD
F.A.No.257/2013 against C.C.No.1005/2011 , Dist. Forum-1,Hyderabad.
Between:
Rayani Ramanjaneyulu,
S/o.Govardhanam,
Aged 46 years, Occ:Business,
R/o.CVhandaluru Village,
J.Pangulur Mandal,
Prakasam District. …Appellant/
Complainant
And
1.The C.E.O. & Director,
Sahara India Life Insurance Company Ltd.,
Sahara India Centre,
Kapoothala Complex,
Lucknow – 226 024.
2. The Branch Manager,
Sahara India Life Insurance Company Ltd.,
Sahara Manzil, 1st Floor,
Opp. A.P.Secretariat, Saifabad,
Hyderabad- 500 063. … Respondents/
Opp.parties
1 & 2.
Counsel for the Appellant : M/s.Smt.D.S.Lakshmi
Counsel for the Respondents : M/s.M.Hari Babu
QUORUM: SMT. M.SHREESHA, HON’BLE INCHARGE PRESIDENT,
AND
SRI S.BHUJANGA RAO, HON’BLE MEMBER.
THURSDAY, THE THIRTY FIRST DAY OF OCTOBER,
TWO THOUSAND THIRTEEN .
Oral Order: (Per Sri S.Bhujanga Rao, Hon’ble Member)
***
The unsuccessful complainant filed the above appeal, against the order dt.18.09.2012 of the District Consumer Forum–I, Hyderabad made in C.C.No.1005/2011, filed by the complainant, seeking direction to the opposite parties to pay to the complainant the policy amount of Rs.10,08,000/- with interest at 24% p.a. from the date of the death till realisation and also to pay Rs.20,000/- towards compensation along with Rs.2000/- towards costs of the litigation.
The brief case of the complainant as set out in the complaint is that the complainant’s wife Mrs.R.Madhuralalasa has obtained insurance policy from the opposite parties on 15.03.2007 for Rs.5,04,000/- the sum assured, on half yearly premiums of Rs.21,000/- for the period of 12 years . She paid the premiums regularly without default till her death. The complainant is the nominee in the above said policy bearing no.00065312 . The insured died in a motor accident on 20.11.2009 at Naguluppalapadu police station limits of Prakasam Dist. On submission of death claim benefits, before the opposite party no.2, the opposite party sent only the fund value under the policy without the accidental death benefits. On persuasion for other benefits, the opposite party dragged the matter and failed to pay the benefits, even after approaching the Insurance Ombudsman. Hence the complaint.
Resisting the complaint, the opposite party filed written version contending that the claim for death benefit was denied owing to non disclosure of material facts, relating to her earlier policies with various other insurers by the life assured and also her annual income. The opposite party also submitted that the fund value of the policy was already paid to the complainant. Therefore, the complainant is not entitled to any other sum under the policy.
The opposite party admitted that the insurance policy bearing no.00065312 for Rs.5,04,000/- sum assured, under its Sahara Sanchaya Plan for a term of 12 years, which includes accidental death benefit rider for Rs.5 lakhs was issued to the deceased wife of the complainant and that the policy commenced from 15.03.2007. The opposite party further admitted that they received the complainant’s letter dt.03.03.2010 whereunder, the death of life assured on 20.11.2009, due to an accident was intimated and his claim for the three policies(including the policy of the present case in the Sahara Life ).
The opposite party contended that in the course of investigation by them, it is revealed that the deceased wife of the complainant obtained several policies from other companies which include Sriram, ING, HDFC, TALIC, Bajaj Allianz, RLIC, Max Newyork LIC, Barathi Axa, Sahara Life , SBI, AVIVA, LIC of India during the period 1992 to 2009 and that all the policies involve total coverage of Rs.3 crores, inclusive of accidental death cover with huge annual out go on instalment premiums extremely disproportionate to the proponent’s annual income. Whereas, the deceased has disclosed her annual income as just Rs.1,20,000/- only per annum. Thus, the deceased policy holder had intentionally suppressed the material facts to defraud the opposite parties and she did not disclose the material facts. Non disclosure of the material facts amounts to an act of fraud committed by the deceased on Sahara Life. The complaint is therefore liable to be dismissed with costs.
In order to prove his case, the complainant filed his evidence affidavit and got marked Exs.A1 to A9. As against the said evidence , on behalf of the opposite parties one Sri P.S.S. Prasad local corporate office head of Sahara India Life Insurance Co. Ltd. filed his affidavit and Exs.B1 to B17 were marked.
Upon hearing the counsel for both the parties and on consideration of the material on record, the District Forum came to the conclusion that the repudiation of the claim u/s.45 Insurance Act is valid under law and consequently dismissed the complaint.
Aggrieved by the said order, the complainant preferred the above appeal, contending that the District Forum wrongly, in a mechanical way came to the conclusion that the material fact was suppressed by the appellant/complainant without considering the fact that the insured has not committed any fraud and that the required information was given through the agent of the opposite party and that the previous policies taken with other insurance companies were not disclosed due to ignorance and not with an intention to defraud the insurer of future provision of their family or other. That the District Forum failed to consider that under Sec.45 of Insurance Act, 1938, the policy cannot be questioned on the ground of mis-statement after two years, as in this case the policy was taken on 15.03.2007 and the life assured died on 20.11.2009 and as such, the respondent is liable to pay her death benefits . The appellant/complainant finally prayed to allow the appeal setting aside the impugned order and allow the complaint.
We heard the counsel for both the parties and perused the entire material placed on record.
Now the point for consideration is whether the impugned order of the District Forum is vitiated for misappreciation of fact or law?
It is an admitted fact that the deceased R.Madhuralalasa has obtained insurance policy bearing no.00065312 from the opposite parties on 15.03.2007 for Rs.5,04,000/-, the sum assured, on a half yearly premium of Rs.21,000/- for a period of 12 years and that her husband, who is the complainant herein is the nominee in the above said policy. It is also not in dispute that the insured Madhuralalasa, the wife of the complainant died in a motor accident on 20.12.2009 at Nagulapadu in Prakasam District. On the death of his wife, the complainant submitted a claim to the opposite party no.2. Under the subject policy, the opposite party insurance company has paid the fund value, to the complainant and death benefit along with accidental ride benefit has been repudiated, on the ground of suppression of material fact, that the insured has obtained several policies from various companies, but the same were not mentioned in the proposal form by the insured, only to get undue advantage from the opposite parties. These facts are also proved by Exs.B15, the registered post letter dt.29.4.2010 and Ex.B16, the copy of the cheque no.586628 dt.29.4.2010 for Rs.2,32,631.01 ps.
The learned counsel for the appellant/complainant submitted that two years after the date of the policy, the insurance company has no right to question the policy in view of Sec.45 of the Insurance Act. In support of his above submission , the learned counsel relied on the decision of the Apex Court in LIFE INSURANCE CORPN. OF INDIA vs. SMT.G.M.CHANNA BASAMMA reported in (1991) I Supreme Court Cases page 357 wherein the Hon’ble Supreme Court held “…Sec.45 of the Insurance Act has made special provisions for a life insurance policy; it cannot be called in question by the insurer after the expiry of two years, from the date on which it was affected unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. The burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the Corporation…..”
On the other hand, the learned counsel for the respondents/ opposite parties submitted that Sec.45 of the Insurance Act does not prohibit the insurance companies to question/call the policy after two years from the date of issuance, rather it specifically permits to question the policy on the ground, if the policy holder played fraud in obtaining the policy etc.
For better appreciation of the submissions made by both the counsel, it is necessary to extract Sec.45 of the Insurance Act, which reads as under:
“Policy not to be called in question on ground of mis statement after two years – No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose”.
A perusal of Sec.45 made it clear that after the expiry of two years, from the date on which, the policy was effected, such policy cannot be called in question, by an insurer on the ground that the statement in the proposal leading to the issue of the policy was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts, which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed the facts which it was material to disclose.
Ex.B2 is the copy of the proposal form submitted by the insured to the insurance company . Ex.B2 proposal is dt.08.3.2007. The opposite parties filed the copies of some of the policies, obtained by the deceased insured, prior to the date of Ex.B2 proposal and the details of those policies were not given in Ex.B2 proposal by the deceased insured.
Admittedly, the deceased assured was paying premiums regularly without committing any default till her death. Though, the opposite parties have contended that with an intention to gain unlawful advantage, the deceased insured suppressed all the insurance policies obtained by her from other companies, for obtaining the subject policy, the opposite parties have not shown or explained as to how the deceased gained unlawful advantage and the loss sustained by the opposite party insurance company, for non disclosure of the details of the existing policies, obtained by the deceased insured prior to Ex.B2. Nowhere, either in the written version or in the evidence affidavit filed by the opposite parties, it is stated that the deceased assured committed fraud by not disclosing the details of the policy particulars in Ex.B2 proposal form. Absolutely, there is no material on record, to show that the policy holder i.e. the deceased assured knew that the statement given by her was false, at the time of making it and that the statements are made with fraudulent intention to gain unlawful advantage.
Generally, it is the agents of the insurance companies who play key and active role in filling the printed proposal forms and other statements of the proposers, in an eager to secure policies from as many as number of persons, to gain more commission. It is significant to note that even according to the opposite parties, the deceased assured did not disclose the details of the policies obtained by her from the opposite party insurance company. This fact shows the ignorance of the deceased assured. Under these circumstances, basing on the printed declaration given by the deceased assured in Ex.B2 proposal, it cannot be held that the deceased assured intentionally suppressed the details of the policies obtained by her from other companies and thereby she committed fraud. It appears that due to ignorance and not with an intention to fraud the insurer of future provision of their family or other, the deceased assured did not give the details of the existing policies. That apart, in our considered view, the non-disclosure of the details of existing policies by the deceased assured in her proposal form, to obtain the policy, is not a material suppression.
In view of the above discussed facts and circumstances and having regard to the ruling of the Apex Court referred to above and provisions of Sec.45 of the Insurance Act, in our considered view, the opposite parties insurance company cannot question the subject policy after expiry of two years, from the date on which it was effected i.e.15.03.2007. Admittedly, the policy holder died on 20.11.2009 in a road accident. Further, the wife’s financial status is not only her earnings and the same is also depends on her husband’s income and income from entire family property.
For all the afore said facts and circumstances, we are of the view that there is deficiency in service on the part of the opp.parties against the appellant/complainant in repudiating the claim of the complainant, without considering the claim properly. The opp.parties are therefore liable to pay the assured sum under the policy, to the complainant. In view of the facts and circumstances of the case, there can be no doubt that the complainant was subjected to mental agony by the act of the opposite parties. Therefore, the complainant is entitled to some compensation.
In the result, the appeal is allowed. The impugned order of the District Forum is set aside. The complaint in C.C.No.1005/2011 is allowed in part directing the opposite parties to pay the amount due under the policy towards Accidental Death Benefit Rider with interest at 9% from the date of death of the deceased insured i.e. 20.11.2009 till the date of realization and to pay a sum of Rs.15,000/- towards compensation and Rs.5000/- towards the costs of the complaint and this appeal. The respondents/opp.parties are directed to comply with the above said order within four weeks, from the date of receipt of this order.
INCHARGE PRESIDENT
MEMBER
Pm* Dt. 31.10.2013
