| Final Order / Judgement | DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, BATHINDA C.C. No. 126 of 01-05-2018 Decided on : 25-08-2022 Sunita Rani aged about 40 years, widow of Suresh Kumar, R/o Street No.1, 6th Chowk New Suraj Nagri, Abohar, Tehsil Abohar, District Fazilka. ..........Complainant Versus Aditya Birla Sun Life Company Ltd. (Fromly known as Birla Sun Life Insurance Company Ltd.), having Registered Office at: One Indiabulls Centre, Tower 1, 16th Floor, Jpiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai-400013, through its CEO/Managing Director/Directors. Aditya Birla Sun Life Company Ltd. (Fromly known as Birla Sun Life Insurance Company Ltd.),having branch office at First Floor, Mall Road, Bathinda, through its Branch Manager. .........Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986 QUORUM Kanwar Sandeep Singh, President Smt. Paramjeet Kaur, Member Present For the complainant : Sh. Shaminder Singh Sandhu, Advocate. For opposite parties : Sh. Ashok Bharti, Advocate. ORDER Kanwar Sandeep Singh, President The complainant Sunita Rani (here-in-after referred to as complainant) has filed this complaint U/s 12 of Consumer Protection Act, 1986 (Now C.P. Act, 2019, here-in after referred to as 'Act') before this Forum (Now Commission) against Aditya Birla Sun Life Insurance Co. Ltd., and another (here-in-after referred to as opposite parties). Briefly stated, the case of the complainant is that husband of the complainant, namely Suresh Kumar purchased two life insurance from the opposite parties i.e.:- Policy No. Date of commencement Sum Assured (1) 006927889 13.1.2016 Rs.5,72,830/- (2) 006939117 29.1.2016 Rs.6,02,990/- The complainant alleged that her husband Suresh Kumar died on 6/3/2017. After his death, complainant submitted claim for payment of the sum assured under said policies with the opposite parties alongwith all required documents and information. as required. The opposite parties vide letter dated 26.10.2017 repudiated the 1nsurance claim under abovesaid both the policies on the ground that their investigations established that: (1) "Life assured was a drug addict, due to which he was menally disburbed. Also Life Assured had attempted suicide in August,2015, and was on antidepressant medication. Further Life Assured had undergone debridement of wound on legs on 7"' July, 2014." (2) "Life Assured had not disclosed policy details from other Insurance Companies in applications for insurance." It is alleged that the allegations/grounds for repudiation of insurance claims as made in repudiation letter dated 26.10.2017, are wrong and baseless. It has been pleaded that the Life assured was not a drug addict nor he withheld any correct information at the time of proposal. Correct information was supplied to agent/ advisor of opposite parties, who got signature of life assured on blank proposal form and filled the same later-on. Further upon proposal, opposite parties got him medically examined through their own Doctor, who submitted his confidential report to oppoiste parties and it was only thereafter the proposal forms were accepted. No material information was suppressed, as alleged by the opposite parties. Further more the opposite parties have sufficient time to investigate before issuance of the policies, therefore after issuance of the policies, the opposite parties are duty bound to pay the claim, if occured and are estopped to repudiate the claim under said policies on the grounds mentioned in repudation letter. Therefore the repudiation of claim under said policies by the opposite parties, is wrong, illegal, null and void and against the principle of natural justice. Therefore the act and conduct of the opposite parties amounts to deficiency in service and unfair trade practice. On this backdrop of facts, the complainant has prayed for directions to the opposite parties to pay her claim amount of Rs. 5,72,830/- and Rs.6,02,990/- with interest @ 18% p.a. from the date of repudiation of claim till realization. The opposite party be also directed to pay Rs.1,00,000/- as compenation besides Rs.20,000/- as litigation expences. Upon notice, the opposite parties put an appearance through counsel and contested the complaint by filing joint written reply. In written reply, the opposite parties raised preliminary objections that the complaint is not maintainable, The complainant has suppressed material facts from this Commission. The policies were issued on the basis of the information provided by the Life Assured in the proposal forms. Since the information provided by the Life Assured in the proposal form was established to be incorrect, the company was well within its rights to repudiate the claim. It has been pleaded that the Assured was known case of drug addiction and this fact can be corroborated with the statements of the Brother in Law and the wife of the Life Assured before the police. During investigation it also came to the knowledge of the company that the Life Assured was mentally unbalanced and it was confirmed from the fact that the Life Assured attempted suicide by consuming substance on 14.08.2015. Furthermore as per the Medical Reports of MAX hospital Bathinda LA was admitted there on 07.07.2014 where he was Diagnosed for Alleged RTA with lacerated wounds on leg with severe pain and tenderness, Chronic wound LT Leg. He underwent Procedure for Debridement & Skin Grafting. He was also being treated at Cosmo Hospital from time to time. The Life Assured, at the time of filling up proposal forms, did not disclose the correct information with regard to his other life insurance policies with other insurers. It has been further pleaded that the Life Assured passed away within 13 months from the date of commencement of the policy and as such, the company has rightly repudiated the claim preferred by the Complainant. Insurance contracts are contracts based on "Utmost Good Faith". As per such contract, the insurer is bound to honour the claim under the policy, provided that the Life Assured at the time of applying for the policy, had disclosed all relevant information with regard to his/her health, habits, employment, other policies etc. which are the basis on which the insurer decides to cover the said life and at what rates. Since the Life Assured did not perform his duty to disclose all material information, the contract of insurance between the Company and the Life Assured is a void contact. Further preliminary objections are that the matter in question involves complicated questions of facts and law as well as voluminous evidence, which can only be dealt with by a civil court. Therefore, the present complaint is devoid of substance and deserves dismissal. That the complaint is devoid of any material particulars, and has been filed merely to harass and gain undue advantage and unjustified monies from the opposite parties and hence the complaint deserves to be dismissed in limine. That the proposal form is not merely a document to be signed and submitted for formality rather it is the basis for the contract of insurance. It is the mode of providing information to the insurer so as to enable them to exercise a lawful right to evaluate the life to be assured before providing its services by covering the life. That the contract of insurance is based on the Doctrine of Uberrimae Fides, and the insured is obliged to give full and correct information on all matters which would influence the judgment of a prudent insurer in determining whether he will accept the risk, and if he would, at what rate of premium and subject to what conditions.The insurer, therefore, has to rely entirely on the information, which the Proposer / Life Assured gives at the time of proposal. If a material fact is suppressed, the insurer will be misled about the risk covered, and hence the same will vitiate the contract. The insurer will then be well within its right to treat the contract as void as per the terms and conditions of the policy document. That in the present dispute, the proposal forms submitted by the Life Assured contained a declaration stating that in case of any misstatement or suppression of material information, the Company has the right to repudiate the claim under the policies. Thus, the complaint is liable to be dismissed. That the complainant has failed to set up a nexus between the damages claimed in the present complaint and the damages actually suffered by her. That the complaint is frivolous and vexatious. That the complainant has concealed and suppressed the material and relevant facts of the case like non disclosure of past treatment and also under medical treatment of depression. On merits, it has been pleaded that the Life Assured was known case of drug addiction and was admitted in the hospital and operated twice. The statements given by Brother in Law of LA and wife of LA clearly revealed that the Assured was a drug addict. During investigation it also came to the knowledge of the company that the Life Assured was mentally unstable as confirmed from the fact that the Life Assured attempted suicide by consuming substance on 14.08.2015. Furthermore, as per Medical Reports of Max hospital Bathinda LA was admitted there on 07.07.2014 where he was Diagnosed for Alleged RTA with lacerated wounds on leg with severe pain and tenderness, Chronic wound LT leg. He underwent Procedure for Debridement & Skin Grafting. This fact was not informed to the company at the time of taking the policy. He was also being treated at Cosmo Hospital from time to time. The Life Assured, at the time filling up the proposal forms, did not disclose the correct information with regard to other life insurance policies with other insurers. The Life Assured in the proposal form had deliberately given wrong answers to all the relevant questions pertaining to Health, Habit and prior insurance policies. It has been further pleaded that the said matter is still under investigation by the police authorities, hence actual cause of death is still to be determined. In the present case, the company sent the policy documents along with copies of the proposal forms to the Life Assured and he retained the policy documents and did not raise any objection towards the policy, or with respect to the material facts disclosed in the proposal form. That considering the age of the Life Assured no medical was required. Furthermore it is submitted that even if the medicals had been triggered than nothing would have stopped the Life Assured from disclosing his medical adversities. It is denied that the repudiation of death claim by the Company is false, baseless and concocted. After controverting all other averments of the complainant, the opposite parties prayed for dismissal of complaint.
In support of her complaint, the complainant has tendered into evidence her two Affidavits (Ex.C-1 & Ex. C-9) and the documents (Ex. C-2 to Ex. C-8). In order to rebut the evidence of complainant, the opposite parties have tendered into evidence affidavit of Kshma Priyadarshani dated 28-11-2018 (Ex. OP-1/11) and the documents (Ex. OP-1/1 to Ex. OP-1/10). The learned counsel for the parties reiterated their version as pleaded in their respective pleadings. We have heard learned counsel for the parties and gone through the record. In nutshell, the case of the complainant is that her husband namely Suresh Kumar purchased aforesaid two Insurance Policies for the Sum Assured of Rs. 5,72,830/- and Rs. 6,02,990/-. Complainant is the nominee in the said insurance policies. Suresh Kumar died on 6-3-2017. The complainant filed claim for payment under the said insurance policies, but the opposite parties repudiated her claim. Ex. C-6 is the repudiation letter. The relevant portion of this letter reads as under :- “...Our Investigations have established that the life assured was a drug addict due to which he was mentally disturbed. Also life assured had attempted suicide in the year August, 2015 and was on antidepressant medication. Further Life Assured had undergone debridement of wound on legs on 7th July, 2014. It was also established that the Life Assured had not disclosed policy details from other Insurance Companies in applications for Insurance.” In the case in hand, death of Life Assured took place due to drowning in water as is evident from Form No. 25,35(1) – Report of Casual Natural Death – Death Rapat dated 6-3-2017, issued by Police Department, District Fazlika. The opposite parties have repudiated the claim of the complainant by taking plea that Suresh Kumar was a drug addict due to which he was mentally disturbed. In Investigation Report of FRM Services Pvt. Ltd., (Ex. OP-1/6) produced by the opposite parties themselves, it has been mentioned :- “As per post mortem reports DLA has head injuries on back side of his head and his hands and legs were found to have marks of lashes. As per the Form No. 24,35 (1) DLA died due to drowning in the water. “After going through all these story and discreet investigation, there is suspicion of murder also, as DLA was found drowned but as per police death report, has head injuries on back side of his head and his hands and legs were found to have marks of lashes.” Perusal of this investigation report (Ex.OP-1/6) reveals that name of investigator is written as Firoz but this report has not been signed by the investigator. Moreover, opposite parties has not examine said investigator. In affidavit Ex.OP-1/7 of Sh. R K Garg, who also carried out the investigation has deposed in para No.8 that :- “As per statements given by LA's brother in law and LA's wife before police, LA was drug addict and he used to go away from his hone for 2-3 days and return back of his own. There is suspicion of murder also as LA was found drowned but as per police death report LA has head injuries on back side of his head and his hands and legs were found to have marks of lashes. Post mortem was also done but final opinion will be given only after viscera report is received which is pending. Final police report will be filed only after viscera report.” Perusal of the file reveals that opposite parties has not brought on file investigation report of said surveyor R.K. Garg. Therefore, in such circumstances plea of the opposite parties that life assured was drug addict due to which he was mentally disturbed and attempted suicide in the year August, 2015 and was on antidepressant medication, is not tenable. The opposite parties have not placed on file any document to prove that life assured committed suicide. Rather Investigators deputed by the opposite parties have specifically opined that there is suspicion of murder. No Viscera report has been placed on file. Neither in any of the document issued by police authorities nor in any document issued by Investigator of the opposite parties, it is mentioned that there is any doubt of suicide of life assured. Opposite parties has not examined treating doctor or brought on file affidavit of treating doctor. Ex. OP-1/3 and Ex. OP-1/4 are the Proposal Form of life assured Suresh Kumar, which has also been signed by Insurance Advisor alongwith life assured. The said Advisor (Mangal Singh) has given declaration that he met the applicant and stated that he/she appears to be in good health. Further an objection has been taken by opposite parties in repudiation letter regarding debridement of wound on legs on 7th July, 2014, but this has no nexus with the death of life assured. Moreover, opposite parties themselves has mentioned in repudiation letter that life assured declared while answering the questions that life assured has disclosed surgery in left leg due to dog biting. So far as the objection of the opposite parties that life assured has not disclosed while purchasing the insurance policies in question that he purchased other insurance policies also, is concerned, if life assured purchased insurance policy, from any other insurance company, that has no concern with the case in hand as against each policy separate premium has been paid. Insurance Regulatory and Development Authority (IRDA) vide circular “ Ref No. IRDA/HLTH/MISC/CIR/216/09/2011 Dated 20-09-2011 directed All life insurers and non-life insurers : “The Insurers' decision to reject a claim shall be based on sound logic and valid grounds. It may be noted that such limitation clause does not work in isolation and is not absolute. One needs to see the merits and good spirit of the clause, without compromising on bad claims. Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation.” Keeping in view the facts, circumstances and the evidence placed on file by the parties, this Commission is of the considered opinion that there is deficiency in service on the part of the opposite parties in repudiating the claim of the complainant on flimsy grounds without any solid reason and proof. In view of what has been discussed above, this complaint is partly allowed with Rs.10,000/- as cost and compensation against the opposite parties. The opposite parties are directed to pay insurance claim/sum assured under Insurance Policies No. 006927889 and 006939117 to the tune of Rs.5,72,880/- and Rs. 6,02,990/- respectively, with interest @ 8% p.a. to the complainant from the date of repudation i.e. 26-10-2017. The compliance of this order be made by the opposite parties jointly and severally within 45 days from the date of receipt of the copy of the order. The complaint could not be decided within statutory period due to Covid pandemic and heavy pendency of cases. Copy of order be supplied to parties free of cost as per law. File be consigned to record room.
Announced : 25-08-2022 (Kanwar Sandeep Singh) President
(Paramjeet Kaur) Member
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