Andhra Pradesh

Nellore

CC/45/2015

Ayyalla Bhaskar Rao, son of Late Narayanaswami, aged 64 years - Complainant(s)

Versus

1.The Manager, Shriram Life Insurance Company Ltd., - Opp.Party(s)

D.Bala Gopal Reddy

22 Sep 2017

ORDER

Date of Filing     :17-01-2015

                                                                             Date of Disposal:22-09-2017

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM:NELLORE

Friday, this the  22^nd  day of   SEPTEMBER, 2017

 

          Present: Sri Sk.Mohd.Ismail, M.A., LL.B., President

                         Sri K. Umamaheswara Rao, M.A., B.L., Member

 

C.C.No.45/2015

Ayyalla Bhaskar Rao,

S/o.Late Narayanaswami,

Hindu, Aged about 64 years,

Resident of 14/96,

I.C.S.Road, Gudur Town.                                                           ..… Complainant      

                                                             Vs.

 

1.	The Manager, Shriram Life Insurance Company Limited, 16/1433, 2nd floor, Sunshine Plaza, Ramalingapuram Main Road, Nellore-524 003.
2.	The Manager, Claims Department, Shriram Life Insurance Company Limited, 3-6-478, Anand Estates, 3rd floor,    Liberty Road, Himath Nagar, Hyderabad-500029.                                                             .…Opposite parties

                                                             .

          This complaint coming on 14-09-2017  before us for hearing in the presence of  Sri D. Bala Gopal Reddy, advocate for the complainant and                                    Steps of opposite party No.1 not taken  and Sri  V. Jayarama Rao,     advocate for the opposite party  No.2  and having stood over for consideration till this day and this Forum made the following:

 

ORDER

                       (ORDER BY  Sri.Sk.MOHD.ISMAIL, PRESIDENT)

 

The complainant filed this complaint under Section-12 of  Consumer Protection Act, 1986  directing the opposite parties to  pay the amount of Rs.20,00,000/- being the restricted claim amount under the policy along with  interest at 12%  from the date of complaint till it’s payment  and  submits to allow the complaint with costs.

 

2.   The brief averments of the complaint  are as follows that:-  the complainant  is the husband  of late Chandramma, the said Chandramma  obtained policy from the opposite parties.  The said  Chandramma, wife of Bhaskar Rao insured his life with the opposite parties under policy No.LN 081200053359  on 24-03-2012 and the said policy plan name is Srirama Ujjwal Life SP  and  for a period of 10 years.    The single  premium amount of Rs.1,60,000/- p.a.  and the said Chandramma paid the said premium amount.  The complainant submits that  the insured nominated  the name of her husband , who is the complainant  is the nominee under the said policy.

The complainant submits that his wife unfortunately died on                         04-09-2012  due to ill health.  The complainant submitted the claim form on 19-03-2013  along with  necessary documents to the opposite parties  requesting him to pay the amount due under the policy.  The opposite parties under their letters dated 25-01-2013 repudiated the claim of the complainant stating that insured  has submitted to  the medical reimbursement papers from the  R& B Department stating  that the insured husband of DLA  had submitted  the medical bills for the medical expenses insured for the  treatment for his life for the mentioned decease CABG Surgery with Grafts Coronary Artery  Disease, Class iii Aegina on Exertion  Severe Triple Vassal decease  Systemic Hypertension type 2 Diabetes Mellitus Dyslipidemia, Obesity at Vijaya Heart Foundation, Vijaya Hospital, Chennai during the period from  23-01-2009 and from 28-01-2009  to 14-02-2009, the treatment   taken for the same diseases in the year 2009 in the proposal  form which are ought to have been disclosed  the material facts of his earlier disease and their investigation is established that the life insured was diagnosed prior to the application for insurance, the deceased life insured filed the proposal forms  for insurance policy on the date of proposal  mentioned above and had answered the following questions.  Yes or No have you ever been hospitalized for general checkup or observation treatment or surgery.  It is stated in the repudiation letter, the  deceased  had not disclosed the pre-health ailments and the treatment taken for the same diseases in 2009 in the proposal forms which are ought to have been disclosed, they might have not issued the policy in view of the above findings, they repudiated the claim of the complainant.  It is further stated that the life  insurance policy are contract governed by the  principle of Uberrima Fide  and the proposer applying for insurance is expected to correctly furnish all material information regarding health, habits, correct age family history, personal medical history income etc., of the life proposed  for insurance by giving correct answers to the questions in the proposal forms. It is stated in the repudiation letter. In this case, the insured correctly informed about the pre-health problems of the life proposed for insurance it would have  influenced our decision in issuing the policy as such   the contract is void unforceful and not legally binding on the opposite party and they are repudiating the claim for payment of death benefits under the policy  of the complainant.

 

The opposite parties further stated that no claim is payable under the policy and treated the matter as closed however the policy was taken under unit linked plan where the investigation risk relating  to the funds available for investments after appropriation charges  from the premium paid is fully borne by the policy holder investment  of the fund made by them as per the investment choice   exercised by the policy holders life assured by the time of taking of policy and subsequent  switching exercised if any as such though the claim for insurance  benefit  is not maintainable as stated above  the  balance   in the fund account of the policy holder as at the date of registration of claim in their books  is available for payment   to claimant and a sum of Rs.1,66,850.67Ps.

The complainant submits that mere allegations  made by the opposite parties for repudiation of the claim are not sustainable  in law  and the reasons for repudiation are only to avoid the payment of the policy  amount. If really the insured  suffered   such ailment  as alleged by the opposite parties, they ought  to have cancelled  the policy prior to her death.  It is clearly shows that their defense is only invented  for the purpose of avoiding the payment of insurance amount.  It is submitted  though the insured  took treatment  Vijaya Hospital, Chennai, during the year  2009, there is no need for her  to mention the same   in the proposal form submitted after two years.  Further the above  said  decease will not cause death. The insured has not died due to the above said deceases  which are not continues deceases.

The complainant submits that  the particulars mentioned in the proposal forms was  enquired in to by the agent of the company and he himself  recommended for issue  of the policy.  The opposite parties cannot repudiate the claim only on the ground  suppression  of unnecessary particulars in the proposal forms, he cannot raise such  dispute after the  death of the insured and amount is payable to the nominee with a malafide intention  without proper application of mind which  is not reasonable, justifiable both in principle and doctrine and natural  justice.

There is clear negligence  and deficiency  of service on the part of the opposite parties in not paying the policy amount.  Hence,  the opposite parties are liable to pay damages for causing  mental agony to the complainant.  The opposite parties  are also liable to pay interest  at 12% p.a. from the date of submission of claim forms on the policy amount and submits to allow the complaint with cost. 

3.     The brief averments of the written version of  the opposite party No.2 are as follows that:-   the opposite party No.2 submits   that Late V. Chandramma, the wife of the complainant had taken Shriram Ujjwal Life Policy No.LN081200053359,  date of commencement  11-05-2012, sum  assured is Rs.1,76,000/- with other benefits, policy term 10 years, premium payment mode:single premium.  It is submitted that  Late V. Chandramma  nominated her husband  i.e., the complainant  to receive  the death  benefits under the policy.

At the time of taking the above policy  the deceased life assured was supplied  with the proposal form   and  requested   to fill the same  with regard to her health condition, pre-health problems if any, habits, age, occupation, family history etc.,  as per the questionnaire  of the proposal form.  Basing  on the information  provided by the deceased in the proposal form,  this opposite party   after under writing  has accepted the  risk  on her life and thereby issued  the subject policy  in good  faith.

The complainant intimated that the deceased policy holder died on                 04-09-2012.  It is submitted that  after receipt  of the death intimation as the policy is a unit linked plan where in the funds related to  investment belongs to the policy holder after appropriation of charges has paid the balance fund of Rs.1,66,850.67 ps. available in the account  was sent to the complainant through a cheque  bearing No.005919 of H.D.F.C.  bank  dated 29-11-2012  and it is also informed  to the  complainant that the   claim will be processed on receipt of investigation  report, claim forms duly signed by the   complainant.  It is submitted that  as the claim of the complainant is  an early one within two years from the date of commencement   of the policy   in the routine course, the opposite party company   entrusted the matter for investigation to Mr.G. Ramamurthy, Private  Investigator and the investigation  report   along with  medical reimbursement papers from the R & B Department, Government of A.P.  submitted by the complainant were received on  22-01-2013.  It is submitted that on going through the investigation report   and the  medical reimbursement papers  it is came to known that the life assured took treatment for the diseases off-pump CABG Surgery   with  Grafts, Coronary Artery Disease, Class-III  Angina  on Exertion,  Severe Triple Vessel Disease, Systemic Hypertension, Type-2 Diabetes Mellitus,  Dyslipidemia and Obesity  at Vijaya Heart Foundation, Vijaya  Hospital, Chennai during  the   period from 23-01-2009 to 25-01-2009 and from 28-01-2009 to 14-02-2009.

The opposite party No.2 submitted that  before  issuing the policy, the opposite party  had provided  a proposal form wherein the deceased life assured has asked specific question  vide questionnaire  No.22 i.e.,

Personal Medical History of the life to be assured clause (b) are you  at  present in good health?

(2)   Have  you ever  been hospitalized  for general check up or observation,

       treatment or surgery?

(3)    Did you have any ailment / injury requiring treatment for more  than one

        week?

(5)    Have you ever suffered or are suffering   from  any of the following?

(a)    Ailments relating  to the heart, digestive system, stomach, lungs, kidney,

         brain or nervous systems.

(b)      Diabetes, High / Low  Blood Pressure, Stroke, Epilepsy, Cancer, Leprosy,

          Tuberculosis.

          The opposite party  No.2 submits that  the policy holder has given   her answer in negative as “NO”  for all questions.

      The opposite parties  submitted that  the life assured is a retired   teacher and the  complainant is a retired Assistant  Engineer in R &  B Department.  They know  very well about the  questions  asked  in the proposal form.  Even then with a   wrong motive the life assured had not disclosed her pre-health  ailments  and the treatment taken  for the is diseases in the year,2009.  The opposite party No.2  life insurance  policies are contracts governed  by the principle of “UBERRIMA FIDE”   and the proposer  applying for insurance  is expected to  correctly furnish all material information regarding  health, habits, correct age, family history, personal medical history, income etc., of the  life proposed for insurance by giving  correct answers  to the questions in the proposal form.  In the present case, it is very clear that the life assured  intentionally suppressed  her pre-existing ailments and the treatment taken by  here.  Hence, the  subject policy  was obtained by the deceased life assured in a deceitful manner by suppressing the actual pre-existing health condition  and with a fraudulent  intention to have undue  advantage of the policy benefits.

         The opposite party No.2 submits that the deceased life assured provided  the correct  details  about  her pre-health problems  it would have influenced the decision of the underwriters of the opposite  party company in issuing the policy.  As the deceased had deliberately  suppressed the material facts which were  supposed  to be disclosed  at the time ;of taking the policy  and violated  the  terms and conditions of the policy, the contract of insurance  has now become void, unenforceable and not   legally binding on the opposite party company.  Therefore,   this opposite party  is not liable to pay any amount  towards  death  benefits under the policy claim. Hence, the claim of the  complaint was repudiated and submits for dismissal of the complaint with costs.

          4.    On behalf of   complainant  P.W.1 was examined and Exs.A1 to A3  were marked.

         5.    On behalf of the opposite parties 1 and 2, R.W.1  was examined and Exs.B1 to B3  were marked.

         6.    On behalf of the complainant   and opposite party No.2  written arguments filed.

         7.      Heard the learned counsels for both parties.

          8.     Perused the  written arguments filed on behalf of the  both parties.

          9.     Now the points  for consideration  are:

1. Whether the complaint filed by the complainant against  the opposite parties 1 and 2 under Section-12 of Consumer Protection Act, 1986?
2. To what relief, the complainant is entitled?

 

           10.   POINT No.1: The learned  counsel for the complainant submits by relying upon Ex.A1 policy that during the life time of Chandramma who is the wife of the complainant obtained a policy under the policy No.LN 081200053359 on 24-03-2012 by paying  premium  of Rs.1,60,000/- and after  the death of  Chandramma  when the complainant approached opposite parties, they refused  to pay the claim amount and  repudiated  the policy  under Ex.A3 on 25-01-2013  and as the   opposite parties 1 and 2  failed to  explanation  the policy  and about the health condition of late Chandramma.  The proceedings issued  by the opposite parties  repudiating the policy is not valid  and as there is no  suppression of  facts  before taking policy, he submits by relying upon evidence of P.W.1 and Exs.A1 to A3  that the complainant is  entitled for recovery of the  amount of Rs.20,00,000/-   with interest and submits  to allow the complaint with costs.

              On the other hand, the learned counsel for the opposite party No.2 submits by  relying upon R.W.1  and Exs.B1 to B3, that under  Ex.B1 proceedings, dated 08-06-2009, the wife of the  complainant has taken  treatment  for her ill-health and by suppressing  the said  fact, the wife of  complainant namely Chandramma obtained Ex.A1 policy  by suppressing  material facts and as the wife of the complainant suppressed material facts.  The proceedings issued  under Ex.B1  repudiating the policy is valid and hence he submits that as the wife of the complainant suppressed  material facts before obtaining Ex.A1 policy, the complaint filed by the complainant for the recovery amount  is not maintainable   and submits for dismissal of the complaint against  the opposite parties. 

             In view of arguments submitted by the learned counsels for the both parties  and  as seen from the Ex.B1 proceedings No.14145/O.P.II (2) /08,                                   dated 08-06-2009 it  reads as follows:

 

        “Sub:- R & B  Department – Sanction of Medical re-imbursement to Sri

                  A.Bhaskar Rao, Assistant Engineer, (R & B) Retired (R & B)

                    Division, Gudur towards medical  expenses  incurred by him for his

                    Wife’s treatment of Off-Pump CABG  Surgery with Grafts, Coronary

                  Artery Disease, Class-III Angina on Exertion, Severe Triple Vessel

                  Disease, Systemic Hypertension,  Type-2 Diabetes Mellitus,

                   Dyslipidemia, Obesity   at  Vijaya Heart Foundation – Vijaya Hospital,

                    Chennai, during the period  from 23-01-2009  to 25-01-2009 and from

                  28-01-2009 to 14-02-2009 –Regarding:

 

           Ref:  1) G.O.Ms.No.175 HM & FW  Department, dated 29-05-1997.

                    2) G.O.Ms.No.74 HM & FW (K1) Department, dated  15-03-2005.

                   3)  From S.E. (R & B) Circle, Nellore Lr.No.M.R./A2/2007,              

                        Dated 25-03-2009.

                   4)   DME Lr.L. Dis.No.15322(1)/ MA-B/2009, Dated 01-06-2009.

 

The Roads and Buildings Department, Hyderabad has issued proceedings  sanctioning medical bills to an extent of Rs.2,00,466/-  towards the  medical expenses incurred by the  complainant for his wife treatment.

 

“Sri  A. Bhaskar Rao,  Assistant Engineer (R & B) Retired (R  & B) Division, Gudur has submitted  the medical bills  to an extent of Rs.2,00,466/- towards the medical expenses incurred by him for his Wife’s treatment   of Off-Pump CABG Surgery with Grafts, Coronary Artery Disease, Class-III Angina on Exertion, Severe Triple Vessel Disease, Systemic Hypertension, Type-2 Diabetes Mellitus, Dyslipidemia, Obesity at Vijaya Heart Foundation-Vijaya Hospital, Chennai, during the period from 23-01-2009  to 25-01-2009 and from 28-01-2009 to 14-02-2009 and requested for reimbursement of medical expenditure incurred byhim.”
 

Ex.B2  policy was issued in favour of   late Chandramma, who is the wife of the complainant  on 24-03-2012.  In Ex.B2 policy, the wife of the complainant  did not mention about the  medical treatment taken by her as noted under Ex.B1 proceedings.  Hence, we are of the opinion that by  suppressing  health condition of Chandramma, the complainant has obtained policy in favour of his wife late  Chandramma from the opposite party No.2.  As the  deceased suppressed the material facts about the treatment taken by the late Chandramma in Ex.B2 proposal form, dated 24-03-2012 , we are of the opinion that  the complainant, who is the husband of late Chandramma is not entitled   to claim compensation.

In,  LIC of India Vs. Yogender Mittal reported in II (2012) CPJ 556 (NC)

          Wherein the Hon’ble National commission held that  Insuree was detected with cancer prior  to approval of the policy, claim was repudiated.

 

	In, Nokul (Minor) and another Vs. LIC of India and another  reported in II (2012) CPJ 68 (N.C.),
	In, P.C. Chacko and another Vs. Chairman, LIC of India reported in AIR 2008  S.C.  424, and
	In, Satwant Kaur Sandhu Vs. New India Assurance Company reported in  IV (2009) CPJ 8 (SC)

          Wherein the  Hon’ble Apex Court and Hon’ble National Commission held that  in a case where there was proof  that the insured person was suffering from certain diseases and had a received  treatment before making the proposal for insurance, but suppressed the said fact in the declaration given by him in the proposal  form, the repudiation of the claim was justified.

           Following the above decisions as the  deceased suppressed the material facts at the time of taking policy, we are of the opinion that  the complaint filed by the complainant against the opposite parties  for the recovery of the amount is not maintainable and the same has to be dismissed.

         By relying upon the above decisions and discussion above, we answer this point against the complainant and in favour of opposite parties 1 and 2.

           11. POINT No.2: In view of our answering  on point No.1 against  the complainant and in favour of the opposite parties 1 and 2, the complaint  filed by the complainant against the opposite parties 1 and 2 for the recovery of the amount  is not to be maintainable  and the same has to be dismissed.

        In the result, the complaint is dismissed but in the circumstances, no costs.

          Dictated to Stenographer, transcribed by her corrected  and pronounced by us in the open  Forum, this the  22^nd day of  SEPTEMBER, 2017.

 

            Sd/-                                                                                 Sd/-

      MEMBER                                                                         PRESIDENT

 

                                      APPENDIX OF EVIDENCE

 

Witnesses Examined for the complainant

 

P.W.1  -

11-08-2016

Sri A. Bhaskar Rao, S/o.Late Narayanaswami, SPSR Nellore District (Chief affidavit filed).

 

Witnesses Examined for the opposite parties

 

R.W.1  -

01-12-2015

Sri E. Sridhar, S/o.Late E.J. Lingam, Working as Assistant General Manger in Shriram Life Insurance Company Limited, Hyderabad (Evidence affidavit filed)

 

                           EXHIBITS MARKED FOR THE COMPLAINANT

 

Ex.A1  -	-	Photostat  copy of  proposal acceptance letter                dated 11-05-2012,  ULIP Policy Schedule,  First premium receipt and proposal form in proposal No.508012000201.
Ex.A2  -	-	Photostat copy of letter on 25-09-2012 from  complainant to the opposite party office at Gudur, letter from opposite party office at Tirupathi to the  opposite party office at Gudur and Photostat copy of claimant’s statement.
Ex.A3  -	25-01-2013	Photostat copy of Repudiation of the Claim letter from opposite party to the complainant.

 

                         EXHIBITS MARKED FOR THE OPPOSITE PARTIES

 

Ex.B1  -	08-06-2009	Photostat copy of proceedings No.14145/O.P.II(2)/08    from office of the Engineer-in Chief & B)Admn & N.H. Erra Manzil, Andhra Pradesh, Hyderabad.
Ex.B2  -	24-03-2012	Photostat copy of proposal form for ULIP in favour of Chandramma issued by the opposite party.
Ex.B3  -	25-01-2013	Photostat copy of Repudiation of the Claim letter from opposite party to the complainant.

 

 

                                                                                                          Id/-

                                                                                                      PRESIDENT

Copies to:

 

1.	Sri  D. Bala Gopal Reddy, Advocate, Nellore.
2.	The Manager, Shriram Life Insurance Company Limited, 16/1433, 2nd floor, Sunshine Plaza, Ramalingapuram Main Road, Nellore-524 003.
3.	Sri V. Jayarama Rao, Advocate, Nellore.

 

Date when free copy was issued: