This case is coming for final hearing on 18-08-2014 in the presence of Sri Adari Appa Rao, Advocate for the Complainant and Sri K.V.S.V.Prasada Rao Advocate for 1^st Opposite Party, 2^nd Opposite Party called absent and set exparte and having stood over till this date, the Forum delivered the following.                                                                                                                                             

: O R D E R :

(As per Smt. K.V.R.Maheswari, Honourable President(FAC) on behalf of the Bench)

1. The case of the Complainant is that the Complainant’s son Kandregula Satyanarayana took AEGON Religate Level Term Plan Life Insurance Policy bearing No.110413099917 from the Opposite Parties on 03.05.2011 and the Complainant was shown as a nominee. On 11.09.2011, the Complainant's son experienced Chest pain and he was immediately shifted to Health Care Hospital, New Gajuwaka for treatment and while undergoing treatment he died on the same day. The Complainant stated that she came to know about the Policy in the first week of January 2012 while she was searching for documents for applying for Legal Heir certificate and then she immediately intimated the death of her son personally on 06.01.2012 and also submitted all the required documents including claim form and those documents were received by the 2^nd Opposite Party and also gave acknowledgement to the Complainant. But there was no response from the Opposite Parties Then complainant contacted Toll free number of the Opposite Party and they informed the complainant, to contact 2^nd Opposite Party personally for further information. Then the complainant approached 2^nd Opposite Party on 4.5.2012 and came to know that the Complainant claim was in admissible as the policy void ab initio. The officials of the Opposite Party issued a cheque on 20.03.2012 bearing No.036591 for an amount of Rs.5,361/- to the Complainant together with acovering letter dt. 17.3.2012. On perusal of the letter issued by the 2^nd Opposite Party by the Complainant, it was observed that, the name of the insured mentioned as “Satyanarayana Gudimella” instead of “Satyanarayana Kandregula” and further it was also mentioned in that the insured died on 06.02.2011 instead of 11.09.2011. Then the complainant immediately brought the said discrepancies to the notice of the 2^nd Opposite party officials, but there was no response from the Opposite Party’s side.

2. The Complainant stated that repudiating the policy by the Opposite Parties without any valid reason by wrongly mentioning the name of the DLI and the date of death of the DLI and more over not pursued the matter inspite of bringing the said discrepancy to the Opposite Party’s notice and make the Complainant run from pillar and post, which amounts to deficiency in service on the part of the Opposite Parties. The Complainant without prejudice to her rights will encashed the Cheque issued by the Opposite Parties for an amount of Rs.5,361/- towards part payment of the claim amount. The complainant issued a Legal Notice to both the Opposite Parties and the same was received by them but there was no response from their side. The acts of the Opposite Parties causes financial loss and mental agony and clearly shows the deficiency of service on their part. Hence this Complaint to direct the Opposite Parties:

3. to pay an amount of Rs.15,00,000/-with 24% interest from the date of claim till date of payment

4. to pay Rs.2,00,000/- towards compensation besides costs.

5. On the other hand the 2^nd Opposite Party called absent and set exparte.

6. The 1^st Opposite party filed its counter and denied the allegations mentioned in the Complaint and pleaded that the present Complaint does not raise any consumer dispute, as defined under C.P.Act and the claim of the Complainant is based on the policy which is void ab initio, invalid and unenforceable. The Policy is a legal contract between the policy holder and the insurance company and parties have to bound by its terms and conditions. The Policy holder and the nominee is under solemn obligation and have legal duty to bound to disclose the complete true and correct facts regarding the date of death or his health, in the medical information form. The brother of the DLA fraudulently concealed the material fact of date of death in furnishing the details and furnished the false and wrong information about the date of death. The Opposite Party believed the information provided and after receipt of amount premium has issued the policy in question. The contract of insurance is based on trust that the person who obtains insurance is required to be in existence at the time of taking the policy. If the policy is obtained by a person, who is not at all in existence at the time of taking the policy and the same had been concealed by any of the family members and the same would have been obtained by mis-representation and fraud, then such a contract is null and void. Therefore, the Opposite party has rightly repudiated the claim of the complainant. The Hon’ble Supreme Court in LIC & Ors Vs Asha Goel (Smt.) & Anr (2001) 2 SCC 160 held that “the Contracts of insurance including the contract of Life assurance are contracts uberrimma fides and every material fact must be disclosed otherwise, there is good ground for rescission of the contract. If there are any misstatements or suppression of material facts, the policy can be called into question. Another decision in Satwant Kaur Sandhu vs New India Assurance Co Ltd., 2009 CTJ 956, the Hon’ble SC held that “Contract of insurance is a contract of utmost good faith. Any information which is material for entering into an insurance contract, if not disclosed, will entitle the insurer to repudiate the claim for concealment of fact. In TATA AIG Life Insurance Co. Ltd Vs Orissa State Coop. Bank & Anr (2012) CPJ 310 (NC), the Hon’ble Supreme Court interpreted the terms “material fact” is not defined in the Act and therefore it has been understood and explained by the Court in general terms to mean as any fact which would influence the judgemnet ofa prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be “material”. In another case P.C.Chako and Anr Vs Chairman, Life Insurance Corporation of India and Ors, 2008 CPJ, 78, SC held that “a deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law”. In Sita Holiday Resorts Limited Vs M/s.Mohan Lal Harbans Lal Bhayana and Co (1999-3) 123 P.L.R.D.28 explained that “Fraud or Misrepresentation not causing consent to contract – Does not render Contract voidable. In Dineshbhai Chandrana Vs LIC & Anr – FA No.242/2006 and United India Insurance Co. Ltd. Vs Harchand Rai Chand Rai Chandan Lal I (2003) CPJ 393 proved that the proposer has concealed the material facts in the Proposal Form and Insurance policy is to be construed strictly as per the terms and conditions of the Policy documents.

7. The Opposite Parties stated that by believing the version of the brother of the DLI, the information given in the Proposal form and the Proposal was accepted by the Opposite Party and issued Policy bearing No.110413099917. After the investigation made by the Opposite Parties, it came to know that DLA died on 6.2.2011 i.e. much before signing the proposal on 25.04.2011. The wife of the DLA has also given written statement that the DLA was died in the month of February 2011. The proposal form was signed by Satyanarayana Gudimella on 25.04.2011 who is fraudulently signed in the proposal form. Basing on the proposal form of insurance, the Opposite Party has issued Policy. Because of the prior death of the DLA much earlier than the proposal, the Opposite Parties repudiated the claim of the Complainant based on just and reasonable ground and the repudiation letter was issued on 17.03.2011. After getting the truth during the investigation the Opposite Party returned the 1^st premium of Rs.5,361/- to the Claimant which was given by Mr.Satyanarayana Gudimella at the time of proposal. Hence, there is no deficiency of service on its part and it is stated that if there is no discrepancy in the name of the DLA, it would be shorted out in due course but averment made in connection with date of death, the complainant wrongly informed about DLA’s death. Hence, the complaint is not maintainable and it is to be dismissed.

8. At the time of enquiry the Complainant filed Evidence Affidavit and Written arguments and Exs.A1to A10 are marked. On the other hand the 1^st Opposite Party filed its Counter, Evidence Affidavit, Written arguments and Exs.B1 to B5 are marked. The 1^st Opposite Party also field 3^rd part Affidavit of the Investigator. Heard both the counsels, who reiterated their versions.

9. In view of the respective contentions, the point that would arise for determination is:-

   Whether the repudiation of the claim amount by the Opposite Parties is come under deficiency in service on their part, if so can the complainant claim the reliefs prayed for?

10. As per Ex.A1 i.e. Policy Bond dt. 3.5.2011 in the name of Satyanarayana Kandregula for an amount of Rs.15,00,000/- is in dispute, as per Ex.A6 & Ex.B7 the Opposite Party repudiated the claim of the Complainant stating that the Life Assured expired prior to the date of signing the Form and the Contract of Insurance entered void ab initio. But the version of the Complainant is that in Ex.A1, the name of Life Assured was mentioned as Satyanarayana Kandregula, wherein in Ex.A6 & B7, the Life Assured’s name was mentioned as Satyanarayana Gudimella. Hence, we are of opinion that there is a discrepancy regarding the name of the Deceased Life Insured, may be the Policy Number is the same in those two documents. Ex.A2 is the Proposal Form dated 25.04.2011 and in that exhibit, the signature/thumb impression of the life to be assured is signed as K.Satyanarayana. But Opposite side there is another column i.e. Name of the Advisor/Relationship Manager specified person, there the Forum found that there was a name mentioned as Satyanarayana.G and at the signature column of Life Advisor there is a signature of Satya.G. Ex.A3 is the Death Certificate dt.11.09.2011 and the name was Kandregula Satyanarayana and the date of death was mentioned as 11.09.2011 issued by Registrar of Births and Deaths, GVMC. Ex.A4 is the Treatment details issued by Health Care Hospital, Gajuwaka, dt. 6.1.2012 but not on 11.09.2011 as mentioned in the Complaint, stating that “Kandregula Satyanarayana bought to their hospital on 11.09.2011 and there was no pulse he got heart attack and breathlessness and he was already died (brought dead) and immediately they declared the death of the person”. Ex.A5 is the Death Claim intimation letter dt. 6.1.2012 by the Complainant by submitting all the required documents and there was an acknowledgement given by the Opposite Party on the same day through their sign and stamp. Ex.A7 is the Legal Notice dt. 23.05.2012 issued by the Complainant to both the Opposite Parties regarding the settlement of claim amount and Ex.A9 & A10 are the Postal acknowledgements of both the Opposite Parties dt. 30.05.2012 & 25.05.2012.

11. The Opposite parties main plea is that the DLA died prior to signing in the proposal form. The Opposite parties believed the information given by the brother of the DLI and the proposals were accepted by them and issued policy, but after the investigation made by the Opposite Parties they came to know that DLA was died on 6.2.2011 i.e. much before signing the proposal on 25.04.2011. But the complainant states that the DLI was died on 11.09.2011 and claimed the claim amount. Hence the claim was repudiated as per Ex.B5. The Opposite Party further lies on the letter issued by Kandregula Suryalaxmi, wife of DLI i.e. Ex.B3 dt. 7.3.2012, wherein she mentioned that her husband Satyanarayana died on 6.2.2011 suddenly because of heart attack. Ex.B1 & A2 are the Proposal form. Ex.B2 is the investigation report and regarding this investigation report, the Investigator also filed 3^rd party affidavit and the investigator mentioned in his report that due to family disputes Insured’s wife went away and started living separately and her husband i.e. DLI died on 6.2.2011 due to heart attack but she does not know about policy.

12. The Investigator also concealed that Dr.Voleti Sri Siva Nageswara Rao, who issued certificate i.e. Ex.A4 issued by doctor only information provided by attendants, but Opposite Party not strengthen its plea by either examining the Doctor or by filing his affidavit. The investigator concluded that the age mentioned in the proposal form related to K.Satyanarayana was not correct and he is no more at the time of subject proposal and the actual death was occurred on 6.2.2011 and also mentioned that the insured by leaving behind his wife and children namely K.Suryalakshmi and others and eliminating the wife’s name, mother’s name was mentioned as nominee of the Policy.

13. Ex.B4 is the Anganwadi Survey register, where in it is mentioned that K.Satyanarayana aged 45 years and in column No.22 it was mentioned as ‘Heart attack on 6.2.2011’. In Ex.B2 i.e. the Investigator’s report Page No.2 clearly stated that due to family disputes his (DLI’s) wife K.Suryalakshmi went away and started living separately nearly 4-5 years earlier. Hence, in our view Ex.B3 i.e. letter given by K.Suryalakshmi wife of DLI regarding the date of death is 6.2.2011, but in our view DLI’s wife is living separately and she has not shown as nominee to DLI, but mother of DLI K.Venkatalakshmi shown as nominee. Because of this reason K.Suryalakshmi might have been issued that letter to Opposite Party, but it is to be noted that Ex.B4 & B3 are not a relevant documents when there is death certificate i.e. Ex.A3 given by authorized person of the GVMC. The plea regarding the death of DLA before signing the policy form must be substantiate by Opposite Party either by filing any relevant documents or by examining the wife and mother of the DLI. But they failed to do so.

14. Another plea taken by the Opposite Party is the maintainability of the complaint as “The Policy is a legal contract between the policy holder and the insurance company and parties to it bound by its terms and conditions”. But in our view the Insurance company is a service provider by taking consideration in the form of premium and they have to settle the claim amount when the claim came for settlement if everything is as per terms and conditions. Hence the complaint is maintainable and come under C.P.Act.

15. It is to be noted that absolutely no evidence was filed by the Opposite Parties regarding the date of death of the policy holder was before the proposal form and in Ex.B1 & A2 i.e. the Proposal Form issued by Opposite Party and filled up by the DLA is a relevant document to look into the facts of the case, there is a signature of K.Satyanarayana only but the repudiation letter i.e. Ex.B5 and A6 issued to one Gudimella Satyanarayana. Hence we are of view that the repudiation letter issued by the Opposite Party is not related to Kandregula Satyanarayana. Hence in the absence of any evidence as pleaded by the Opposite Party, the Forum came to conclusion as per the versions made by both parties and documents filed by the Complainant, the DLA is Kandregula Satyanarayana but not Gudimella Satyanarayana and he signed in proposal form Ex.B1 also and it is the primary duty of the Insurance company, Opposite Party to look into the genuineness of a person while taking signature in the proposal form by verifying the identity proof of the persons and more over in this case inPage No.2 of Ex.B1 there is a proof that the DLI submitted a Voter ID as address proof. Hence, in our view there is no misrepresentation or suppression of material facts by the DLA at the time of contract of insurance. Hence the Opposite Parties are liable to pay the Policy amount of Rs.15,00,000/- to the Complainant i.e. nominee of the DLI.

16. Without a reasonable ground the Opposite Parties repudiate the claim, that too by mentioning wrong name in the repudiation letter, who is not a DLI and failed to prove that DLI was died prior to the Policy which clearly shows deficiency in service in rejecting the Policy amount during the policy period. The Complainant clearly established the non-settlement of claim amount by Opposite Parties during the policy period. Hence all the Opposite Parties are liable to pay the Policy amount for Rs.15,00,000/- with 9% interest p.a. from the date of Legal Notice dt. 23.05.2012 i.e. issued by the Complainant to the Opposite Parties regarding the discrepancy of the name of the DLI in repudiation letter.

17. In view of unjust refusal without a valid reason and evidence to pay the policy amount by the Opposite Parties, there cannot be any dispute that the Complainant suffered financially and mentally and in order to compensate it, which would be just and proper that the Opposite Parties are directed to pay Rs.15,000/- towards compensationto the Complainant.

18. Accordingly this point is answered holding that both the Opposite Parties are directed to pay Rs.15,00,000/- along with 9% interest from 23.05.2012 to the Complainant and the Opposite Parties are further directed to pay Rs.15,000/- towards compensation besides costs.

19. In the result the Complaint is allowed directing both the Opposite Parties to pay Rs.15,00,000/- (Rupees Fifteen lakhs only) with 9% interest p.a. from 23.05.2012 till the date of realization to the Complainant. The Opposite Parties 1 & 2 further directed to pay Rs.15,000/- (Rupees Fifteen thousand) towards compensation besides costs of Rs.2,500/- (Rupees Two thousand five hundred). Time for compliance is 3 months.

     

    Dictated to the Shorthand Writer, transcribed by him, corrected and pronounced by us in the open Forum on this the 28^th day of August, 2014.

     

        Sd/-                                                                            Sd/-

    Member                                                                President (FAC)

                                                                        District Consumer Forum-I

                                                                                 Visakhapatnam

APPENDIX OF EVIDENCE

Exhibits Marked for the Complainant:

Exhibits Marked for the Opposite Party:   

      Sd/-                                                                              Sd/-

  Member                                                               President (FAC)

                                                                   District Consumer Forum-I

                                                                             Visakhapatnam