Haryana

StateCommission

CC/98/2016

SAROJ DEVI - Complainant(s)

Versus

AVIVA LIFE INSURANCE CO. - Opp.Party(s)

ASHISH YADAV

02 Feb 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

         Complaint Case No:    98 of 2016

Date of Institution:      22.04.2016

Date of Decision :       02.02.2018

 

Saroj Devi w/o Sh. Naval Singh, Resident of House No.189 B Village Manethi, Tehsil Rewathi, District Rewari, Haryana.

                                      Complainant

Versus

 

1.      Aviva Life Insurance Registered Office at IInd Floor Parkash Deep Building 7 Tolstoy Marg, New Delhi.

2.      Aviva Life Insurance, Aviva Tower, Sector Road Opposite Gold Course DLF Phase V Sector 43, Gurgaon, through its Managing Director.

                                      Opposite Parties

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Mr. Balbir Singh, Judicial Member.

                                                                                                         

Argued by:          Shri Ashish Yadav, Advocate for Complainant.

                             Shri Nitesh Singhi, Advocate for Opposite Parties.

 

                                                   O R D E R

 

BALBIR SINGH, JUDICIAL MEMBER

 

        Naveen Kumar son of Smt. Saroj Devi (complainant) during his life time was provided a medi-claim insurance policy namely ‘Aviva Life Shield Advantage Policy’ bearing No.10155158 (Exhibit C-1) under Guaranteed Benefit (Term Plan with Return of Premium) by Aviva Life Insurance Company India Limited (for short ‘the Insurance Company’) – Opposite Party, for a period of 30 years mentioning date of commencement as August 26^th, 2014 and Sum Assured as Rs.50,00,000/-. The date of birth of Naveen Kumar (hereinafter referred to as ‘the life assured’) was February 05^th, 1991. Installment of annual premium was Rs.13,402/-  and date of last premium was August 26^th, 2043 and date of maturity of the insurance policy was August 26^th, 2044. The complainant being mother was mentioned as nominee of the life assured. The life assured paid the first premium vide receipt Exhibit C-2.

2.                The life assured died on March 18^th, 2015.  The complainant submitted insurance claim alongwith Death Certificate (Exhibit C-3) and other relevant documents. The insurance claim of the complainant was repudiated by the Insurance Company stating that the life assured had violated the terms and conditions of the insurance policy as he concealed material facts at the time of submitting the proposal form (Exhibit C-4).  The life assured had given information in reply to a question in the proposal form that he was not involved in any criminal case or proceedings prior to the date of issuance of the insurance policy. No criminal case was ever registered against him. The insurance claim submitted by the complainant was repudiated by the opposite parties-Insurance Company vide letter dated October 19^th, 2015 (Exhibit C-5) mentioning that the life assured violated the terms and conditions of the insurance policy by concealing material facts as he did not disclose that he was held guilty and convicted in a criminal case registered under Sections 323,366,376,504 of the Indian Penal Code vide judgment of conviction passed by the learned Sessions Judge, Rewari.  The complainant has taken plea that the life assured used to pay premium amount of Rs.13,402/- regularly and there is no relevancy of any criminal case pending against the life assured regarding granting insurance claim. It is also pleaded that generally the proposal forms of the insurance policies are filled up by agents of the insurance companies without any involvement on the part of the life assured.

3.                The complainant has filed the present complaint with a prayer to direct the opposite parties – Insurance Company to make payment of the sum assured Rs.50,00,000/- as mentioned in the medi-claim insurance policy.

4.                The opposite parties in their written version have taken plea that the State Consumer Disputes Redressal Commission, Haryana has no jurisdiction to decide this complaint; that the complainant has no locus standi to file the present complaint and that it is not a case of deficiency in service. The opposite parties have taken decision to repudiate the insurance claim of the complainant on the basis of terms and conditions mentioned in the insurance policy. In fact, the life assured had given wrong information at the time of submitting the proposal form which amounts to misrepresentation and fraud. The insurance contract is a special contract which is based upon the utmost good faith. Any misrepresentation or concealment of material facts or wrong answers in the proposal form amounts to misrepresentation and fraud upon the Insurance Company. The information was received by the opposite parties that a criminal case was registered against the life assured and he was held guilty and convicted vide order dated November 02^nd, 2010 passed by the learned Sessions Judge, Rewari. The life assured at the time of submitting the proposal form had given information that no criminal case or proceedings were never registered or initiated against him. It is admitted fact that the life assured was provided the insurance policy Exhibit C-1, as detailed in the complaint and the life assured did not make any default regarding payment of the premium amount. As the life assured had violated the terms and conditions of the insurance policy, the complainant is not entitled to receive any amount as claimed in the complaint. It is prayed that the complaint filed by the complainant be dismissed.

5.                In her evidence, the complainant Smt. Saroj Devi has appeared as CW-1 and produced documents detailed as under:

1.	Insurance Policy	Exhibit C-1
2.	First Premium Receipt dated 27.08.2014	Exhibit C-2
3.	Death Certificate	Exhibit C-3
4.	Proposal Form	Exhibit C-4
5.	Repudiation Letter dated 19.10.2015	Exhibit C-5
6.	Letter issued by Aviva Life Insurance Company dated 16.11.2015	Exhibit C-6
7.	Letter issued by Aviva Life Insurance Company dated 15.12.2015	Exhibit C-7
8.	Letter issued by Aviva Life Insurance Company dated 24.12.2015	Exhibit C-8.

6.                The opposite parties in their evidence have examined Tarun Kumar as OPW-1 and produced following documents:

1.	Schedule of Policy Number 10155158	Exhibit OP-2
2.	Premium Quotation Illustration Benefits	Exhibit OP-3
3.	Letter dated 27.08.2014 issued by Insurance Company to the complainant	Exhibit OP-4
4.	Terms and conditions	Exhibit OP-5
5.	Death Claim Form	Exhibit OP-6
6.	Condolence Letter dated 28.04.2015	Exhibit OP-7
7.	Acknowledgment Slip	Exhibit OP-8
8.	E-mail dated 19.10.2015	Exhibit OP-9
9.	Affidavit of Dr. Anju Yadav submitted before Sessions Judge, Rewari on 18.12.2009	Exhibit OP-10
10.	Insurance Claim Investigation report dated 07.10.2015	Exhibit OP-11
11.	Copy of judgment dated 02.11.2010	Exhibit OP-12
12.	Copy of order of sentence	Exhibit OP-13
13.	Letter dated 02.12.2015 written by Saroj to the insurance company	Exhibit OP-14
14.	Copy of order dated 12.09.2011 passed by Hon’ble High Court	Exhibit OP-15
15.	Aviva Life underwriting guideline	Exhibit OP-16
16.	Death Investigation Report dated 20.05.2015	Exhibit OP-17

 

7.                We have heard learned counsel for the parties and perused the case file.

8.                It is admitted fact that life assured - Naveen Kumar son of the complainant during his life time was provided medi-claim insurance policy Exhibit C-1 for a period of 30 years mentioning the date of commencement as August 26^th, 2014 and total sum assured as Rs.50,00,000/-. The complainant was required to make payment of premium amount annually as Rs.13,402/-. The Insurance Policy Exhibit C-1 and First Premium Receipt Exhibit C-2 have been produced in evidence. It is evident from the copy of judgment dated November 02^nd, 2010 (Exhibit OP-12) and copy of order on quantum of sentence of the same date Exhibit OP-13 that the life assured Naveen Kumar was held guilty and convicted for the offences under Section 323,366,376 and 504 of the Indian Penal Code by the learned Sessions Judge, Rewari vide judgment and order dated January 02^nd, 2010.  The order on quantum of sentence was also passed on the same date. It is evident from the copy of order dated September 12^th, 2011 (Exhibit OP-15) passed by the Hon’ble Punjab and Haryana High Court in the proceedings of criminal appeal No.313 of 2010 that Naveen Kumar-convict filed the above mentioned criminal appeal against the order of conviction and order on quantum of sentence dated January 02^nd, 2010 before the Hon’ble Punjab and Haryana High Court. Shri Tarun Kumar, Assistant Manager OPW-1 also in his statement has stated like this. It is also evident from the order dated September 12^th, 2011 (Exhibit OP-15) that the substantive sentence of Naveen Kumar was suspended and he was directed to be enlarged on bail to the satisfaction of Chief Judicial Magistrate, Rewari.

9.                The insurance claim of the complainant was repudiated by the insurance company vide letter dated December 24^th, 2015 (Exhibit C-8) only on the ground that the complainant has concealed material facts and violated the terms and conditions of the insurance policy. The life assured during his life time was held guilty and convicted, as mentioned above but despite that he informed the Insurance Company at the time of submitting the proposal form that no criminal case or proceedings were ever registered or initiated him. Although the life assured-Naveen Kumar was held guilty and convicted under Sections 363, 366, 376 and 506 of the Indian Penal Code vide judgment dated November 02^nd, 2010 passed by the learned Sessions Judge, Rewari but on the basis of that order alone, findings cannot be given that the life assured Naveen Kumar is a previous convict as the judgment of conviction and order of sentence passed by the learned Sessions Judge had not attained finality because till the date of death of Naveen Kumar, the appeal filed by him remained pending before the Hon’ble Punjab and Haryana High Court, Chandigarh. Naveen Kumar-life assured had availed opportunity available with him to file appeal against the judgment of conviction and order on quantum of sentence which could not be decided during his life time. In these circumstances, findings cannot be given that the life assured – Naveen Kumar has been finally held guilty and convicted for the offences under Sections 363, 366, 376 and 506 of the Indian Penal Code. 

10.              There appears to be no controversy of any type that the criminal appeal filed by Naveen Kumar convict before the Hon’ble Punjab and Haryana High Court, as mentioned above, remained pending awaiting final decision till the date of death of Naveen Kumar-life assured. In this way, we cannot consider the life assured – Naveen Kumar as a convict as there was possibility of result and decision of the appeal in acquittal also.  It is true that in his Proposal Form (Exhibit C-4), the life assured had denied that any criminal case or proceedings ever remained pending against him prior to the date of submitting the proposal form.  We are required to give findings as to whether the repudiation of insurance claim of the complainant was valid and justified in the above mentioned circumstances or not.

11.              During the course of arguments, learned counsel for the opposite parties argued that as the life assured concealed material facts at the time of submitting the proposal form, the complainant being nominee is not entitled to receive the insurance claim. In support of his this contention, learned counsel for the opposite parties placed his reliance upon a decision of Hon’ble Supreme Court in case Satwant Kaur Sandhu versus New India Assurance Company Limited 2009(4) CLT 398.

12.              We have closely perused the above cited case law Satwant Kaur Sandhu versus New India Assurance Company Limited (Supra).  Cited case law above is of no help to the opposite parties in this case as facts and circumstances of the case in hand are quite different. As per facts of above cited case law, the insured had concealed the material facts regarding his existing disease and as per facts of the case in hand, the insured did not disclose regarding registration of a criminal case against him prior to the date of submitting the proposal form.

13.              On the other side, learned counsel for the complainant argued that mere registration of a criminal case cannot be a good ground to repudiate the claim of the complainant. Registration and proceedings of a criminal case against the life assured has no relevance of any type regarding claim of the insurance policy.  Moreover, there are number of un-necessary terms and conditions mentioned in the insurance policy which have no relevancy of any type regarding obtaining the insurance policy and claiming insurance claim. Moreover, it is a ground reality that generally the proposal forms and other documents concerned with the insurance policies are filled by agents of the insurance companies and only signatures of the insured are obtained by agents of the insurance companies. In support of his this contention, learned counsel for the complainant has placed his reliance upon a decision of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi (for short the ‘National Commission’) in case law LIC of India versus K. Purushothama, 2006(4) C.P.J. 64; a decision of the Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh in case Prithvi Raj Bhandari versus Life Insurance Corporation of India Limited and others, 1999(2) C.P.C. 160 and a decision of the Hon’ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur in case Life Insurance Corporation of India versus Rekha Pardasani, 2012(2) C.P.J. 41.

14.              We have closely perused the above cited case laws. In case law referred above LIC of India versus K. Purushothama (Supra), insurance claim of the complainant was repudiated by the Insurance Company holding that the policy in question could not be issued unless husband had matching policy.  Findings were given by the Hon’ble National Commission that it was not proved that such a clause in the insurance policy was ever disclosed to the insured by the opposite party or its agent.  The LIC agent had filled up the proposal form in a hurry and LIC authorities failed to check up the facts and figures even after seven months of issuance of the policy. In that case as per terms and conditions, insurance policy could not be issued unless husband had matching policy. In that case the repudiation of the insurance claim was held illegal.  Moreover, if a person has some knowledge regarding such type of transactions, it is a matter of common knowledge that generally the proposal forms or documents concerned with the insurance policies are not got executed and signed by officers of the Insurance Companies and the insured in the office of the Insurance Companies. It is general practice that signatures and thumb impressions of the insured are obtained on proposal forms and other documents concerned with the insurance policies by agents of the insurance companies sometimes in a drawing room, sometimes in a farmhouse, sometimes at public places and such like other places. We feel to bring improvement in the system, there is need to make changes in the existing rules and to give specific directions that such type of documents should be executed in the office of the Insurance Company and there must be some record regarding agent of the Insurance Company also so that the Insurance Companies may also be held liable regarding some acts done on their behalf by the agents.

15.              Similar, findings were given in case law referred above Life Insurance Corporation of India versus Rekha Pardasani (Supra) also by the Hon’ble Rajasthan State Consumer Disputes Redressal Commission that the Insurance Company is supposed to verify all facts mentioned in proposal form before issuance of insurance policy.  The life assured was a poor common man who is not supposed to know all niceties and technicalities of law. Having entered into an agreement, after accepting the premium and without verifying facts, the Insurance Company cannot wriggle out of its liability. 

16.              In case law referred above Prithvi Raj Bhandari versus Life Insurance Corporation of India Limited and others, (Supra), findings have been given by the Hon’ble Punjab State Consumer Disputes Redressal Commission that mere registration of a criminal case cannot be a good ground to repudiate the insurance claim. The insured’s business was well proved from various letters written by computer companies concerning his business. Nominee and legal heirs of insured, is a beneficiary and is entitled to receive the insurance claim.  Mere registration of a criminal case is not sufficient to repudiate the insurance claim. Cited case laws fully support the version of the complainant.

17.              As a result as per discussions above in detail, we have no hesitation in holding that it is a clear case of deficiency in service on the part of the opposite parties.  It stands proved that the insured died during the insurance period and that the complainant being mother and nominee of the deceased is entitled to receive the total sum assured.  Resultantly, complaint filed by the complainant is allowed. The opposite parties are directed to pay total sum assured Rs.50,00,000/- (Rupees Fifty Lacs only) to the complainant with interest at the rate of 9% per annum from the date of filing of the complaint till realisation. The complainant is also awarded an amount of Rs.25,000/- as compensation on account of un-necessary harassment, mental agony and Rs.11,000/- as costs of litigation.

 

 

Announced: 02.02.2018

(Balbir Singh) Judicial Member

(Nawab Singh) President

 

CL