This C.C. came before us for hearing in the presence of Sri G. Moses Christopher and Sri B. Venkateswarlu, Advocates for complainant and of Sri.A. V. Ramanujacharyulu, Advocate for opposite parties no.1 & 2; upon perusing the material papers on record; upon hearing arguments and having stood over for consideration, this Forum passed the following:-
ORDER
(Per Smt.V.Vijaya Rekha, Member)
This complaint is filed under section 12(1) of the Consumer Protection Act, 1986. The brief facts as mentioned in the complaint are that the husband of the complainant had obtained LIC Money Plus Policy bearing No.687839917 on 31-03-2007 for a sum of Rs.1,00,000/-. The complainant is the nominee to the said policy. The policy holder died on 25-12-2009 due to chest pain, after demise, the complainant informed the same to the opposite party No.1 by submitting the claim form along with relevant documents on 26-02-2010, in spite of issuance of sum amount under the policy, the opposite party No.1 informed that the complainant is entitled the amount under the policy is Rs.24,954/- only, dissatisfied with the same, the complainant approached the opposite party No.3 and made a representation on 26-04-2010 by praying to pay the entire amount of Rs.1,00,000/-, covered under the Money Plus policy bearing No.687839917. Despite that, the opposite party No.3 had released Rs.25,046/-, in total the opposite party No.3 had released Rs.50,000/- instead of assured amount of Rs.1,00,000/-. The complainant further submitted that due to sudden death of her husband, the family of the complainant suffered a lot, due to which, they received Rs.50,000/- under force of opposite parties. After that, the complainant approached the opposite party No.1 and claimed the remaining sum assured amount of Rs.50,000/- but they reluctant to pay the remaining amount of Rs.50,000/- and postponed the matter on one pretext to other. The complainant also submitted that the irresponsible attitude of opposite parties amounts to the deficiency of services and as such knocked the doors of the consumer Forum on her grievance by praying to direct the opposite parties No.1 to 3 to pay the balance sum assured amount of Rs.50,000/- out of Rs.1,00,000/- under Money Plus Policy bearing No. 687839917 together with interest @24% p.a. from the date of claim i.e. on 26-02-2010 and to award damages of Rs.50,000/- towards mental agony and costs.
2. Along with the complaint, the complainant filed her affidavit along with photocopies of following documents, which were marked as Exhibits A1 to A6.
Ex.A1:- Photocopy of Claim form along with statements of the neighbors.
Ex.A2:- Photocopy of Policy bearing No. 687839917 for Rs.1,00,000/-
Ex.A3:- Photocopy of Death Certificate, dt.16-01-2010.
Ex.A4:- Status Report of Policy bearing No. 687839917, dt.07-04-2010, for Rs.24,954.14ps/-
Ex.A5:- Letter dt.25-11-2010, issued by the Manager of opposite parties No.1 &2, regarding the payment particulars of Rs.25,046/- under policy bearing No.687839917.
Ex.A6:- Representation dt.15-03-2009 made by the complainant to the opposite party No.1 with acknowledgements.
3. After receipt of notice, the opposite parties appeared through their counsel and filed counter by denying the averments as mentioned in the complaint.
4. In the counter, the opposite parties admitted that the issuance of policy bearing No.687839917 in the name of husband of the complainant for a sum of Rs.1,00,000/-, which is the Money Plus policy and the policy was in force from 31-03-2007, the complainant is the nominee to the above said policy. The opposite parties further submitted that the deceased/policyholder was died within three years from the date of taking of policy and after 13 days from the date of revival of said policy. Therefore, the investigation had been done by them and it came to light that the deceased/life assured having two life insurance policies on his own life, i.e. policy bearing nos.687047919 and 687839917 for the sum assured of Rs.50,000/- and Rs.1,00,000/- respectively. The opposite parties further submitted that at the time of submitting the proposal form for second policy, the opposite parties elicited the information about the previous policies/insurance, already taken by the proposed. The deceased/policy holder replied negative answer to Question No.3 of his proposal dt.31-03-2007, if the life assured had furnished the particulars of previous policy for Rs.50,000/-, the opposite parties would not have accepted the proposal for subsequent policy for Rs.1,00,000/- and further stated that the maximum insurance coverage in respect of non-standard age proof-III, with voter card is shown as Rs.1,00,000/- only, so that they repudiated the claim under policy bearing No.687839917 with regard to suppression of material fact of taking previous policy and the same was communicated to the complainant. Upon which, the complainant preferred an appeal before the Zonal Claims Review Committee, at Hyderabad, after considering the same, the Zonal Claims Review Committee, reviewed the repudiation decision and considered the claim of the complainant for Rs.50,000/- only on the ground of maximum sum assured allowed under one life under the category of non-standard age proof-III is Rs.1,00,000/-. Therefore, the opposite parties already paid Rs.50,000/- to the complainant under policy bearing No.687047919 and as such there is no deficiency on the part of them and prayed to dismiss the complaint with costs.
5. Along with the counter, the opposite parties submitted the photocopies of Proposal Form, dt.31-03-2007 and the abstract of opposite parties regarding the age proof, those were marked as Exs.B1 &B2.
6. The complainant filed written arguments, with the same averments as mentioned in her complaint. The opposite parties filed a memo by stating that to treat the contents of their counter as written arguments.
7. In view of the above submissions, now the point that arose for consideration is,
Whether the complainant is entitled to the relief
as prayed for?
Point:-
It is an admitted fact that the policy bearing No.687839917 was issued in the name of the deceased/insured on 31-03-2007 for a sum of Rs.1,00,000/-. The only dispute is with regard to the suppression of existence of prior policy and the claim in respect of policy in question bearing No. 687839917 and payment of Rs.50,000/- out of assured amount of Rs.1,00,000/-, which was paid after consideration of appeal made by the complainant before the Zonal Claims Review Committee, under category of non-standard age proof-III. Now the question for consideration is, whether the non-payment of total sum assured under subsequent policy bearing No. 687839917 was justified or not and whether the non-mentioning of prior policy in Column No.3, could be treated in the present case as suppression of material facts on the part of the deceased or not?
In cases of fraudulent suppression of material facts rests heavily on the alleging party, namely the insurer and the mere concealment of some facts will not amount to concealment of material facts. In the present case on hand, the deceased / life assured obtained the subsequent policy bearing No. 687839917 through the agent of opposite parties by submitting proposal form, on 31-03-2007, which is marked under exhibit B1 the alleged proposal form was filled by the agent of the opposite parties and the deceased/policyholder was signed on it, wherein the occupation of the decease/policyholder was mentioned as ‘Hamali’. Generally, the life assured, who had not filled the Proposal Form on his own, whether there is any lack of knowledge in fulfilling the Proposal Form or by any other reason, he had no knowledge about the contents of the Proposal Form until and unless the agent, who explains the same.
The fundamental principal of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-discloser of the facts which the parties known. In this aspect, the Apex Court clearly stated in M/s Modern Insulators Ltd. Vs Oriental Insurance Company (AIR 2000 SC 1014) – “the insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally.” in the light of the aforesaid decision of the Apex Court, the agent of the insurance company has a duty to disclose all the material facts in his knowledge while issuance of policy. In the instant case, the opposite parties issued the policy bearing No.687839917 for Rs.1,00,000/- on receipt of premium of Rs.5,000/- and the same policy was revived prior to 13 days before the death of the deceased without any verification of existence of prior policy, I seems that they could not enquired anything before issuance of policy or at any time prior to death of the insured, surprisingly, repudiated the claim of the complainant after death of the deceased only to escape from their liability and paid only Rs.50,000/- out of assured amount of Rs.1,00,000/-, by making averments against the rules of natural justice and against the purpose of establishment of insurance laws. The death of the life assured takes place after 2 years from the date of issuance of subsequent policy, if there is any misrepresentation or fraudulent concealment of prior policy, the defense could be taken by the insurance company, but there is no material filed by the opposite parties in support of their allegation regarding the misrepresentation/ fraudulent concealment and they failed to prove any deliberate or conscious omission on the part of the deceased /policy holder for wrongful gain. The deceased had died because of chest pain after 2 years from the issuance of subsequent policy and as such it seems that it was not a case of suppression of material fact on the part of the deceased regarding his health and the deceased could not aware that he would die due to chest pain in near future at the time of taking policy in question and could not intended to obtain the number of policies for wrongful gain after his death, as such it is the fact that the deceased had knowingly and fraudulently had not made false statements regarding the earlier policy. Mere incorrect or wrong answer do not have any bearing or connection with the death of the insured and even non-mentioning of earlier policy in the proposal form of subsequent policy by the deceased/policyholder, was not material from the point of view of cause of death, thus the opposite parties can not escape from their liability on the ground of suppression of material facts and the opposite parties were not justified that they paid only part payment of Rs.50,000/- out of Rs.1,00,000/- of sum assured under policy bearing No.687839917 on the ground of non-standard age proof-III, if there is any restriction or objection in payment of assured amount under category of non-standard age proof-III, the opposite parties cancelled the policy, before it came into existence or at the time of revival of lapsed policy, in fact the opposite parties did not raise any objection while issuance of subsequent policy or at the time of revival of such policy or even before death of the deceased, only they raised the objection with regard to suppression of prior policy while payment of the amount as assured, which is not tenable and the opposite parties were not justified to reduce the amounts after death of the deceased / policy holder.
The Insurance companies are “state” within the meaning of the article 12 of the Constitution of India and they are expected to act fairly and reasonably without any arbitrariness. The purpose of creating the corporation is to serve the interests of the consumers and the C.P. Act 1986 is also introduced for the purpose of protection of consumers. Taking into that consideration also the part payment of claim amount under policy bearing No.687839917 is not justified. In view of the above reasons, it is held that the present case was not a case of deliberate suppression of material facts on the part of the deceased and the claim of the complainant was wrongly reduced by the opposite parties in an arbitrary manner, which amounts to deficiency of service. In view of the aforesaid discussion, the point is answered accordingly in favour of the complainant by holding that the complainant is entitled to the remaining amount of Rs.50,000/- out of Rs.1,00,000/- (Rs.50,000/- was already paid to the complainant as per Ex. A6), sum assured under policy bearing No. 687839917.
8. In the result, the complaint is allowed in part directing the opposite parties No.1 to 3 to pay the remaining balance amount of Rs.50,000/- to the complainant under policy bearing No. 687839917 together with interest @9%p.a. from the date of complaint i.e. 08-04-2011 till the date of realization and to pay Rs.1,000/- towards costs.
Typed to my dictation, corrected by me and pronounced by us, in this Forum on this 28th day of May, 2013.
FAC President Member
District Consumer Forum, Khammam.
APPENDIX OF EVIDENCE
Witnesses examined for complainant and opposite parties: -None-
Exhibits marked for complainant:-
Ex.A1:- Photocopy of Claim form along with statements of the neighbors.
Ex.A2:- Photocopy of Policy bearing No. 687839917
Ex.A3:- Photocopy of Death Certificate, dt.16-01-2010.
Ex.A4:- Status Report of Policy bearing No. 687839917, dt.07-04-2010.
Ex.A5:- Letter dt.25-11-2010, issued by the Manager of opposite parties No.1 &2, regarding the payment particulars.
Ex.A6:- Representation dt.15-03-2009 made by the complainant to the opposite party No.1 with acknowledgements.
Exhibits marked for opposite parties:-
Ex.B1:- photocopy of Proposal Form, dt.31-03-2007
Ex.B2:- photocopy of abstract regarding the age proof.
FAC President Member
District Consumer Forum, Khammam.
