JUSTICE V.K.JAIN, PRESIDING MEMBER (ORAL)

          One Abdulla obtained an insurance policy on his life from the appellant on 20.06.2013. His brother Abdul Kayyum, respondent/complainant in this matter was the nominee in respect of the said insurance policy.  The insured Abdulla having died on 13.10.2014, within about one year and 4-5 months of the issuance of the policy, a claim was lodged by the complainant with the appellant.  The claim was repudiated vide letter dated 29.04.2015 which to the extent it is relevant, reads as under:

          The policy was issued on the basis of an application of (Late) Mr. Abdulla Mohammad dated June 17, 2013 to HDFC Standard Life Insurance Co. Ltd. (herein after referred to as “The Company”) for purchase of HDFC Life Click 2 Protect, Policy No.16122885 for a sum assured of Rs.40,00,000/- towards death benefits. 

This case was accepted at standard rates based on the information provided in the Proposal Form and the Policy was issued on June 19, 2013. 

In this connection we refer to Part II in the said Application, which deals with ‘PERSONAL DETAILS OF LIFE TO BE ASSURED’.  Under this section the following relevant questions had been answered as incorrectly.

PERSONAL DETAIL OF LIFE TO BE ASSURED PART II

2.      Being aggrieved from the rejection of the claim, the complainant/respondent approached the concerned State Commission by way of a complaint.  The complaint was resisted by the appellant on the ground on which the claim was repudiated. 

3.      The State Commission, vide impugned order dated 27.11.2018, directed the appellant to pay a sum of Rs.40 lacs with 9% interest to the legal heirs of the deceased insured alongwith compensation quantified at Rs.1 lac and cost of litigation quantified at Rs.50,000/-.  Being aggrieved from the order passed by the State Commission, the complainant is before this Commission. 

4.      It would be evident from a perusal of the repudiation letter that the claim was rejected solely on the ground that the information furnished in the proposal with respect to the occupation and income of the insured was incorrect. 

5.      The case of the appellant is that the deceased insured as well as his brother complainant Abdul Kayyum together were earning only Rs.2 lac per year, and were employed as labourers.  The said plea is based upon a statement of Abdul Kayyum alleged to have been recorded by the investigator appointed by the appellant.  The complainant/respondent, on the other hand, produced before the State Commission, two rent receipts purporting to be issued by Amin s/o Abdul Razzaq wherein the insured Abdulla was shown as the proprietor of Bhati Cloth, Mahi Gate, Nagaur.  The rent of the said shop was shown to be Rs.8,500/- per month for the period from 01.04.2013 to 31.03.2014 in one receipt and in another receipt, the rent was shown to be Rs.9,200/- per month for the period from 01.04.2014 to 31.03.2015.  Though in the first receipt, the period was written as 01.04.2013 to 31.03.2015 on the top, this obviously was a mistake as is evident from the body of the receipt where the rent was recorded as 8,500/- per month and the receipt pertained to rent for twelve months beginning April 2013 and ending March 2014, for a total sum of Rs.1,02,000/-.  The complainant also produced a number of invoices, showing purchase of cloth by Bhati Cloth Store, Nagaur from different vendors on different dates.  The aforesaid documents would show that the insured was the owner of Bhati Cloth Store which was engaged in the business of selling clothes in Nagaur.  No attempt before the State Commission was made by the appellant to disprove the genuineness of the aforesaid documents.  Once the said documents had been filed, nothing prevented the appellant from verifying the genuineness or otherwise of the said documents.  On such verification, had the appellant come to know that the rent receipts purported to be issued by Mohd. Amin were not genuine documents, it could have sought permission of the State Commission to summon and examine Mohd. Amin to prove that the rent receipts filed by the complainant and purporting to be issued by him, were forged documents.  No such attempt however, was made.  Similarly, nothing prevented the appellant from verifying the large number of invoices in the name of Bhati Cloth Store, produced by the complainant in support of his case that the insured Abdulla was the owner of Bhati Cloth Store and was engaged in the business of selling clothes.  Had the appellant, on such verification, come to know that the aforesaid documents were forged documents or that though the documents were genuine, the owner of Bhati Cloth Store, according to the vendors who issued the said invoices, was someone other than Abdulla, it could have requested the State Commission to summon the said vendors as witnesses to prove that either the invoices filed by the complainant were forged documents or that the owner of Bhati Cloth Store was someone other than deceased Abdulla.  It has to be kept in mind that the onus was upon the insurer to prove that there was concealment of material facts by the proposer while obtaining the insurance cover and the said concealment had influenced the decision of the insurer on the question as to whether to accept the proposal for insurance or not.  Since the appellant did not disprove the genuineness of the documents of the complainant by carrying out verification and leading evidence in the aforesaid manner, it would be difficult to say that this onus placed upon the appellant stood discharged from the statements alleged to have been recorded by the investigator.

6.      I have perused the reply filed by the appellant before the State Commission.  Though it is stated in the reply that had the correct occupation and income of the insured been declared, the policy would not have been issued to him, the reply does not specify as to what the requisite guidelines adopted by the appellant in this regard were, at the relevant time.  The reply did not disclose as to how much would have been the sum assured, had the appellant disclosed his correct occupation and income at the time the proposal was submitted.  This was not the case of the appellant in the reply that as per the guidelines adopted by it, no insurance cover would have been granted to a person who was a labourer or whose income did not exceed Rs.2 lacs.  No attempt was made by the appellant to obtain the proof of occupation and income from the proposer before accepting the proposal submitted by him.  The guidelines of the appellant with respect to the occupation and/or income of the proposer and the quantum of insurance which it could grant to a person having a particular income, were not filed before the State Commission.  In the absence of such guidelines, it would be difficult to accept the bald plea of the appellant that had the deceased disclosed his correct income and occupation, the proposal for grant of insurance cover to the extent of Rs.40 lacs would not have been accepted.  It has to be kept in mind that the annual premium payable on the policy taken by the insured was only about Rs.8,000/- per year which comes to only about Rs.700/- per month.  It would be difficult to accept that no person earning about Rs.2 lacs per year could have afforded to pay an annual premium of Rs.8,000/-. 

7.      For the reasons stated hereinabove, the appeal is hereby dismissed.  However, liberty is granted to the appellant to investigate and verify the documents which the complainant had submitted before the State Commission from the respective authors, within four months from today, to verify the income and occupation of the insured and if on such verification, the said documents are found to be forged or it is found that the insured Abdulla was not a partner/proprietor of Bhati Cloth Store, the appellant shall be at liberty to apply for a review and recall of this order, on the strength of such verification.  The payment in terms of the order of the State Commission shall not be released to the legal heirs of the deceased for a period of six months from today, in order to give an opportunity to the appellant to carry out verification in terms of this liberty granted to it.