Madhya Pradesh

StateCommission

A/11/1172

AMOL INDANE GAS AGENCY - Complainant(s)

Versus

ASHISH RAGHUWANSHI - Opp.Party(s)

20 Mar 2019

ORDER

M. P. STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,

PLOT NO.76, ARERA HILLS, BHOPAL

 

                                      FIRST APPEAL NO. 1590 OF 2010

(Arising out of order dated 03.06.2010 passed in C. C. No.159/2009 by District Forum, Vidisha)

 

SMT. RACHNA DUBEY,

W/O LATE SHRI SANJEEV DUBEY,

R/O IN FRONT OF MARKETING SOCIETY,

ABOVE BHARAT BEEJ BHANDAR,

MAIN ROAD, VIDISHA (M.P.)                                                                                                       ….       APPELLANT.

 

Versus

 

1.  BAJAJ ALLIANZ LIFE INSURANCE CO.LTD.

     THROUGH BRANCH MANAGER,

     NEAR OVER BRIDGE, SAGAR ROAD,

     VIDISHA (M.P.)

 

2.  BAJAJ ALLIANZ LIFE INSURANCE CO.LTD.

     REGISTERED OFFICE- G.E.PLAZA, AIRPORT ROAD,

     YERWADA, PUNE-411 006.

 

3. BAJAJ ALLIIANZ LIFE INSURANCE CO.LTD.

    MANSAROVAR COMPLEX,

    THIRD FLOOR, NEAR 7 NO. BUS STOP,

    HOSHANGABAD ROAD, BHOPAL (M.P.)                                                                            ….       RESPONDENTS.   

                     

BEFORE :

            HON’BLE SHRI JUSTICE SHANTANU S. KEMKAR   :    PRESIDENT

            HON’BLE DR. (MRS) MONIKA MALIK                         :    MEMBER

        

COUNSEL FOR PARTIES :

Shri Deepesh Joshi, learned counsel for appellant.

Ms. Sangeeta Moharir, learned counsel for respondents.

 

                                                     O R D E R

                                       (Passed On 20.03. 2019)

                   The following order of the Commission was delivered by Dr. (Mrs) Monika Malik, Member:

           

                   This appeal by the complainant/appellant is against the order dated 03.06.2010 passed by the District Consumer Disputes Redressal Forum, Vidisha (for short the ‘Forum’) in C.C.No. 159/2009, whereby her complaint has been dismissed.

2.                     The complainant had approached the Forum stating that her late husband Shri Sanjeev Dubey (hereinafter referred as ‘insured’) during his life time had obtained a Life Insurance Policy  bearing policy no. 55886060 on 20.06.2007, from the opposite parties.  The sum assured under the aforesaid policy was Rs.1 lac. The insured died on 23.09.2007.  The complainant, being his nominee filed a claim with the opposite party.  The opposite party repudiated the claim stating that the insured had suppressed material facts, while filling up the proposal form for obtaining the aforesaid insurance policy.  The complainant alleged that the opposite party did not sent the policy to the insured, despite repeated requests and

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the insured/deceased could not enjoy the privilege of free look period.  The free look period of 15 days had got lapsed, by the time the policy was delivered to the insured and this curtailed the rights of the deceased/insured to return the policy.  Further, the insured expired due to heart attack and there was no nexus of the cause of death with the alleged suppression that he had suffered Deep Vein Thrombosis in the year 2005.

3.                     The opposite party resisted the complaint stating that they had timely provided the insurance policy to the complainant and on subsequent request, the policy was yet again dispatched to the complainant.  It is further stated that the claim of the complainant was repudiated on the basis of concealment of material fact that the deceased/insured was suffering from Deep Vein Thrombosis (DVT) in right leg since 2005 and was treated for the same. Due to non-disclosure of the aforesaid facts in the proposal form, the death claim of the insured was repudiated.

4.                     Heard. Perused the record.

5.                     Learned counsel for complainant/appellant argued that the insured died on 23.09.2007 due to Heart Attack.  The opposite parties repudiated the death claim on the ground of ‘Deep Vein Thrombosis’ of Right Leg and accordingly it was contended that the insured had suppressed material fact while filling up the proposal form.  He further argued that the Forum completely failed to appreciate that the deceased/insured had expired due to Cardio Respiratory Arrest, secondary to Myocardial Infarction and therefore there is no nexus with the cause of death and the alleged ailment, suppressed. The insured had taken medical leave only for a short duration for a period from 17.05.2005 to 31.05.2005 and medical treatment was properly taken by him and he was fully cured. It is argued that the documents submitted by the opposite party/respondent were not proved by any cogent legal evidence.  Document of medical leave submitted on record also did not disclose any ailment prior to taking of the policy.  The certificate obtained from the Doctor, by the respondents also did not disclose any pre-existing disease, proving the suppression of disease on the part of the insured and therefore, the repudiation done by the respondents is not sustainable. He further argued that there has been no material suppression on part of the insured when he had filled the proposal form in order to obtain the policy. He argued that burden of proof lies on the respondents, to prove that the insured had suppressed material facts and had obtained policy fraudulently.  Learned counsel for appellant also referred to

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Section 45 of the Insurance Act, 1938 stating that no policy can be called in question on the ground of mis-statement, after two years.  With the aforesaid submission, he prayed that the impugned order be set-aside and appeal be allowed. Learned counsel for appellant referred to judgments of the Hon’ble National Commission in Praveen Damani Vs Oriental Insurance Company Limited IV (2006) CPJ 189 (NC), Aviva Life Insurance Co.India Pvt.Ltd. Vs T. Umavathi III (2007) CPJ 336 (NC), LIC of India & Anr. Vs Kamla Devi III (2009) CPJ 186 (NC) & Life Insurance Corporation of India & Anr Vs Anil Kumar Rastogi IV (2009) CPJ 300 (NC).   Learned counsel argued that the case of the insured nowhere falls in the reasons for repudiation, cited by the respondents in their repudiation letter.

6.                     Learned counsel for the opposite parties/respondents argued that the deceased/insured had obtained the insurance policy on 20.06.2007 and he died on 23.09.2007.  It was an early death claim and the respondent insurance company was not liable to establish the nexus between death and the material fact concealed.  It was sufficient on part of the insurance company to prove concealment of material fact in case of early death claim.  Referring to Section 45 of the Insurance Act, 1938 she submitted that once it is demonstrated that the deceased/insured had obtained policy by non-disclosure, it gives a cause of action to the insurer to avoid the policy commitment.  She argued that nexus between the disease concealed and the cause of death can be observed and acknowledged only when the policy had run for a period of two years but in the present case, the insured died within two months of taking the insurance policy.  There is no need at all to establish nexus between the concealed disease and the cause of death, but Deep Vein Thrombosis (DVT) is one of the factors which can lead to Heart Attack/Cardiac Arrest. Learned counsel placed reliance on the decisions of the Hon’ble Supreme Court in P.C.Chacko Vs Chairman and Life Insurance Corporation of India III (2008) CPJ 78 (SC), Mithoolal Nayak Vs LIC of India AIR 1962 SC 814, decisions of the Hon’ble National Commission in Sr.Divisional Manager LIC of India Vs Gangama & Anr. 2002 STPL (CL) 73 (NC), Revision Petition No.234 of 1992 LIC of India and another Vs Kusum Lata decided on 11.03.1992, United India Insurance Company Limited Vs Biman Krishna Bose II (1995) CPJ 62 (NC), LIC of India Vs Smt. Lily Rani Roy I (1997) CPJ 46 (NC), Ajay Prakash Mittal Vs LIC of India 1997 (2) CPR 233 (NC), Revision Petition No. 2050 & 2051 of 2000

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Smt. Vidya Devi etc. Vs LIC of India decided on 27.04.2001, The Sr.Divisional Manager & Ors Vs Smt. Raksha Goyal II (2002) CPJ 92 (NC), LIC of India & Ors Vs Smt. C. P. Kacheebi II (2003) CPJ 108 (NC), LIC of India & another Vs Parveen Dhingra II (2003) CPJ 70 (NC), LIC of India Vs Smt. Minu Kalita III (2002) CPJ 10 (NC), Sr.Divisional Manager, LIC of India Vs Smt. Gangamma & another III (2002) CPJ 56 (NC) and LIC of India Vs Mansa Devi II (2003) CPJ 135 (NC) and the decision passed by this Commission in Vinita Agarwal Vs Life Insurance Corporation of India III (2005) CPJ 446.  

7.                     As we carefully peruse the record, we observe that the opposite parties/respondents repudiated the death claim of the insured Late Mr. Sanjeev Dubey making the observations as under:

                      The company had covered the risk for the above said policy on the basis of facts mentioned in the proposal form.  However, on receiving the death claim intimation for the above said policy, various investigations & medical certificates confirm that the deceased Life Assured was suffering from deep vein thrombosis right limb for more than 2 years.  These facts known to the deceased Life assured were not disclosed at the time of proposal dated 20.06.2007 under question no.14 (d), 14(i) and 14(m).  Had these facts been disclosed, we would not have accepted the risk on the same terms and conditions.   

 

8.                     We further observe that in the proposal form, filled by the deceased/insured Mr. Sanjeev Dubey, the insured had replied in negative to the queries asked in Column 14, wherein it was asked “Have you ever been treated or currently under treatment for any of the following conditions”:

14(d)	Any diseases and disorders of the Cardiovascular system such as but not limited to chest pain, heart disease, high/low blood pressure, artery or blood disease ?	No
14(i)	Any diseases and disorders of the musculo-skeletal system such as but not limited to chronic fever, rheumatic fever, rheumatism, gout, spinal curvature or related to spines, joints or musculo-skeleton?	No
14(m)	Injured, sick, operated, given a medical consultation, given a medical advice on health, care in any hospital?	No

 

9.                     Upon careful observation and having considered the reasons, on the basis of which the opposite parties/respondents have repudiated the death claim of the insured, we are of an opinion that certainly, the repudiation done by the opposite parties/respondents on the basis of Column 14(d) is without any substance.  As referred in the repudiation letter,

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the insured had suppressed the material information regarding ailment of ‘Deep Vein Thrombosis’ (DVT).  This ailment is associated with peripheral vascular system and is not related to cardio vascular system whereas the query specifically pertains to cardio vascular system.  It is still debatable that Deep Vein Thrombosis (DVT) can increase heart attack risk.  A clot, from Deep Vein usually does not move to heart to cause Heart Attack. A blood clot collected in artery called Arterial Thrombosis can cause Heart Attack. Therefore, arguments of counsel for opposite party/respondent on this very aspect of medical facts are not sustainable.

10.                   Deep Vein Thrombosis (DVT) is not an ailment/disorder associated with musculo-skeletal system and therefore, this ground of repudiation taken by the opposite parties/respondents, based on reply in negative to Clause 14(i) is also not sustainable.

11.                   Lastly, but importantly, as per complainant’s own submission, her late husband had taken medical consultation/advice for treatment of Deep Vein Thrombosis (DVT)-Right leg, and had taken medical leave regarding the same from 17.05.2005 to 31.05.2005.  This fact is also confirmed from the certificate issued by the Assistant Professor, CTVS Bhopal Memorial Hospital & Research Centre (Exhibit R-2/1), as also through History and Progress Record annexed as Exhibit R-2/2.  Clearly, the insured had suppressed material information in this regard and replied in negative to Column 14 (m). The insured had undoubtedly taken medical consultation/advice in the above regard in the hospital and non-disclosure in this regard, amounts to suppression of material information on his part. The repudiation by the opposite parties/respondents, on the basis of the above referred clause is justified.  The opposite parties/respondents in their repudiation letter had clearly mentioned that had the aforesaid facts been disclosed by the complainant, they would not have accepted the risk on the same terms and conditions.

12.                   Section 45 of the Insurance Act, 1938, would have no application in this matter as Section 45 speaks-Policy cannot be called in question on ground of misstatement after two years.  According to Section 45 of the Insurance Act, 1938:

 “No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and policy of life insurance effected after the coming into force of this Act, shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal

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for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew       

at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.”  

 

                        Clearly, this section has no applicability in this matter, since Section 45 of the Insurance Act, 1938 is applicable after the policy runs for more than two years.  In the case in hand, the policy was obtained by the insured on 20.06.2007 and he had died on 23.09.2007 (i.e. within three months of obtaining the policy cover).  It is not a case, where the policy is run for more than two years.

13.                   Also, the averment of the complainant/appellant that the policy could not be delivered to her in the free look period is not sustainable.  The opposite parties/respondents have categorically stated that they had issued the policy to the insured.  We concur with the findings of the District Forum, that the complainant/appellant has referred to the policy number while carrying out correspondence with the opposite parties/respondents and while filling up the claim form for death claim of the insured and that it was not her case that she was not provided with the policy document and terms and conditions stated therein.  Moreover, as stated in the Policy Document, the Free Look Period is a period of 15 days of the receipt of the policy.  The complainant could have utilized her right to challenge the policy.  

14.                   The Hon’ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company Limited 2009 CTJ 956 (Supreme Court) (CP) has observed in Paragraph 12:

              “Thus it needs little emphasis is that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge.  It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not.  Of course, obligation to disclose extends only to facts which are known to the applicant and not what he ought to have known.  The obligation to disclose necessarily depends upon the knowledge one possesses.  His opinion of the materiality of that knowledge is of no moment.”

 

 

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15.                   The Hon’ble Supreme Court further in para 19 has observed:

                        In this regard it would be apposite to make reference to Regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002, which explains the meaning of term “material”.  The Regulation reads thus:

                        “2 Definitions—In these regulations, unless the context otherwise requires—

1.       xxx                                xxx                              xxx
2.       xxx                                xxx                              xxx
3.       xxx                                xxx                              xxx
4.       “Proposal Form” means a form to be filled in by the proposer for insurance for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted.

Explanation:- “Material” for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer.”

Thus the regulation also defines the word “material” to mean and include all “important”, “essential” and “relevant” information in the context of guiding the insurer to decide whether to undertake the risk or not.

 

Therefore, the upshot of entire discussion is that in a contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a ‘material fact’. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering to the questions in the proposal form.

16.                   It is settled position that the insured was under obligation to fill up the details correctly in the proposal form.  Either proposal for insurance would have been rejected or insured would have been subjected to further investigations before providing the policy cover.  Law is well settled on this matter.

17.                   Therefore, in wake of the above discussion, we are of a considered view that the complainant/appellant does not deserve the sum assured stipulated under the aforesaid insurance policy issued in the name of her late husband/insured Finding no illegality or infirmity in the impugned order, same is affirmed. Consequently, this appeal is dismissed.  No order as to costs.

 

           (JUSTICE SHANTANU S. KEMKAR)                  (DR. MONIKA MALIK)

                           PRESIDENT                                                    MEMBER                                                        

 

 

Dubey