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 to 3; 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 Bheema Gold Policy bearing No.687439753  from the opposite parties on 28-03-2006, for a sum of Rs.3,00,000/-.  The complainant is the nominee to the said policy.  The Bheema Gold policy is a money back policy. The policy holder died on    24-11-2010 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, in spite of issuance of sum amount under the policy, the opposite party No.2 addressed a letter dt.07-03-2011 with an advise to approach opposite party No.3 for reconsideration, accordingly, the complainant approached the opposite party No.3 and made an application on 13-04-2011 for reconsideration of her claim.  Despite acknowledging the same, the opposite parties postponed the matter on one pretext to other.  The complainant further submitted that the family of the complainant suffered a lot due to the deficiency of services of the opposite parties 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 sum assured amount of Rs.3,00,000/- under Bheema Gold Policy bearing No.687439753 together with interest @24% p.a. from the date of claim and to award damages of Rs.1,00,000/- 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 A4.

3.      On being noticed, 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.687439753 in the name of husband of the complainant for a sum of Rs.1,00,000/-, which was valid from 28-03-2006 and the complainant is the nominee to the above said policy and also submitted that the deceased Sk.Meera Saheb was having another policy bearing No.687049688, which was taken prior to the policy bearing No. 687439753.  The opposite parties further submitted that the sum under consideration would have become Rs.4,00,000/-, the special medical reports would have been called by the opposite parties i.e. blood sugar test, lipidogram, elisa for HIV, heamogram, protein, urine analysis and chest x-ray.  The risk under the policy would have been accepted on receipt of special medical reports as required.  The deceased/life assured had fraudulently suppressed material fact of previous insurance policy under Q. No.9 of Proposal Form and the insured had replied negative answers regarding the existence of previous policies with an intent to avoid special medical reports by suppressing the existence of previous policy, which is untenable, and there is no deficiency on the part of them and they ready to refund the premiums after deducting the survival benefit amount already paid as exgratia, which was communicated to the complainant through letter dt.07-03-2011 and also stated that the claim under the previous policy, bearing No.687049688 was settled by the opposite parties and as such prayed to dismiss the complaint with costs.

5.      Along with the counter, the opposite parties submitted the photocopies of Proposal Forms, dt.13-01-2005 and dt.27-03-2006 those were marked as Exs.B1 & B2.

6.      In addition to the averments of their counter, the opposite parties filed additional counter by submitting that in the counter filed by them earlier, they have observed some typographical errors in the policy particulars i.e. the sum assured under policy bearing No.687439753 was wrongly submitted as for Rs.1,00,000/- instead of Rs.3,00,000/- and the sum assured under policy bearing No.687049688 was submitted as Rs.3,00,000/- instead of Rs.1,00,000/- i.e. the policy bearing no.687049688 for Rs.1,00,000/- had taken earlier to the alleged policy and the  subsequent policy bearing No.687439753 had taken by suppressing the prior policy bearing No.687049688 and also submitted that the complainant obtained the subsequent policy fraudulently by suppressing the material facts and as such prayed to dismiss the complaint with costs.

7.      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.

8.      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:-       As seen from the above averments, there is no dispute regarding the issuance of policy bearing No. 687439753 on28-03-2006 and the other policy bearing No.687049688 for Rs.1,00,000/-, which was taken by the deceased/policy holder, prior to the alleged policy for Rs.3,00,000/- and there is no dispute on the point that payment in respect of prior policy bearing No. 687049688.  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. 687439753, which was repudiated by the opposite parties and the information made by them through a letter dt.07-03-2011 with regard to refund of premiums as exgretia under the disputed policy, after deducting survival benefit, which was marked under Ex.A2.  Now the question for consideration is, whether the non-payment of assured amount under subsequent policy bearing No. 687439753 was justified or not and whether the non-mentioning of prior policy in Column No.9, could be treated in the present case as suppression of material facts on the part of the deceased or not?

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 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 death takes place after 4 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 4 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 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 in repudiating the claim of the complainant on mere suppression of taking of earlier policy.

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 repudiation of the claim of the complainant 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 repudiated 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 sum assured as nominee under policy bearing No.687439753.

9.      In the result, the complaint is allowed in part directing the opposite parties 1 to 3 to pay the assured sum of Rs.3,00,000/- under policy bearing No. 687439753 to the complainant together with interest @9%p.a. from the date of complaint i.e. 15-06-2011 till the date of realization and to pay Rs.1000/- towards costs.

          Typed to my dictation, corrected by me and pronounced by us, in this Forum on this 28^th 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 Policy bearing No.687439753.

Ex.A2:- Photocopy of Letter dt.07-03-2011 addressed by the opposite party No.2 to the complainant.

Ex.A3:- Photocopy of Death Certificate, dt.15-12-2010.

Ex.A4:- Photocopy of Letter dt.13-04-2011, addressed by the complainant to the opposite parties No.2 & 3.

Exhibits marked for opposite parties:-

Ex.B1:- Photocopy of Proposal Form, dt.13-01-2005.

Ex.B2:- Photocopy of Proposal Form, dt.27-03-2006.

FAC President           Member

 District Consumer Forum, Khammam.