Ex-P A R T E O R D E R
PER SHRI. S.M. RATNAKAR – HON’BLE PRESIDENT
1) This is the complaint under Section 12(1) of the Consumer Protection Act, 1986. The Complainant has alleged that he is consumer within the meaning and definition of Consumer under Sec.2(1)(d) of the Consumer Protection Act, 1986 (referred to as the Act). The Opposite Party is guilty of deficiency in services and unfair trade practices under Sec.2(1)(g)(r) of the Act.
2) According to the Complainant his father Late Balakrishan Manilal Makwana was in need of finance. He approached to Centurian Bank of Punjab Ltd. (Now known as HDFC Bank Ltd.). In the month of January, 2007, the said bank after scrutinizing the loan documents was ready to disburse the loan under the condition that his father should buy insurance policy from the Opposite Party. The father of the Complainant was badly in need of finance; obtained the insurance policy from the Opposite Party. The said bank on 31/01/2007 issued two Demand Drafts of Rs.31,81,403/- and Rs.3 Lacs as loan and first premium to the Complainant’s father which are marked as Annexure ‘C-1’ (Copies of Demand Drafts).
3) It is alleged that the father of the Complainant met Mr. Nitesh Gupta, Agent of the Opposite Party at the Branch Office of the aforesaid bank who discussed various life insurance plan offered by the Opposite Party. The father of the Complainant selected plan called as “Save Guard” with the option of annual premium of Rs.3 Lacs having some assured Rs.15 Lacs. The agent of the Opposite Party requested the Complainant’s father to put his signature on blank proposal form by saying that it is just formality. The father of the complainant being educated upto 4th Standard and had no knowledge of English he put his signature on the proposal form and entire proposal form was filed in by the agent of the Opposite Party. The copy of the said proposal form is Annexure ‘C-2’. The father of the Complainant deposited Demand Draft No.325386 of Rs.3 Lacs, dtd.31/01/2007 in his personal account and on 02/02/07 issued cheque of Rs.3 Lacs of ICICI Bank to the Opposite Party towards first premium of the Policy No.RSG1448367 as annual premium. The copy of the receipt of first premium and policy schedule issued by the Opposite Party to the father of Complainant alongwith terms and conditions is Annexure ‘C-3’colly.
4) According to the Complainant, his father paid second premium of Rs.3 Lacs to the Opposite Party by cheque of ICICI Bank which was accepted by the Opposite Party by issuing receipt of the same. The copies of it are Annexure ‘C-4’ colly.
5) The father of the Complainant in January, 2009, requested the Opposite Party for conversion of annual premium into monthly premium as he was unable to pay Rs.3 Lacs as annual premium and requested to make it of Rs.25,000/- per month. The Opposite Party accepted the said request. The copy of endorsement request form is Annexure ‘C-5’. The father of Complainant accordingly, on 27/02/2009, paid Rs.57,000/- to the Opposite Party towards the monthly installment for the month of March & April, 2009. The copies of the said receipts issued by the Opposite Party are Annexure ‘C-6’.
6) According to the Complainant, on 28/04/2009, his father after dinner around 9.50 p.m. was feeling uneasiness while climbing stairs and all of a sudden he fell down. Immediately he was admitted in Ashirwad Heart Hospital, at Ghatkopar (E) and he was declared dead by the Doctors in the Hospital due to Acute Myocardial. The copy of Death Certificate issued by Municipal Corporation of Mumbai, dtd.07/05/2009 and Medical Certificate of cause of death are Annexure ‘C-7’ colly.
7) It is alleged that on 05/05/2009, the Complainant informed officer of the Opposite Party Mr. Ashish of Ghatkopar West Branch about the death of his father. On 11/05/09, the Complainant received sympathy letter and death claim form from Opposite Party. After completion of last rites and religious requirement, the Complainant on 15/05/09 filed death claim alongwith required documents to Mr. Ashish, officer of the Opposite Party. The copy of death claim filed by the Complainant is Annexure ‘C-8’. On 02/06/2009, the Complainant received letter questionnaire regarding hypertension and diabetes about his father from the Opposite Party. The Complainant on 04/06/09 submitted the details in the questionnaire and gave to Mr. Ashish. The copies which are Annexure ‘C-9’.
8) It is submitted by the Complainant on 30/06/09 he received repudiation letter from the Opposite Party stating that in the proposal form the deceased under the “Declaration of Good Health” had answered “No” to the specific question in respect to medical condition. The copy of the repudiation letter received from the Opposite Party to the Complainant dtd.30/06/09 is Annexure ‘C-10’. Upon receipt of the aforesaid letter the Complainant was in continuous touch with the Opposite Party and requested to consider his claim as his father had borrowed money from Centurian Bank Punjab Ltd. He wrote many letters to the Opposite Party to consider the claim. The copy of the letter dtd.09/01/2010 is Annexure ‘C-11’. According to the Complainant he lodged the complaint against the Opposite Party with the office of Insurance Ombudsman, Mumbai on 06/02/2010. The said office had directed the Opposite Party to produce relevant documents vide its letter dtd.18/05/2010. The copy of the said letter and the decision of the Insurance Ombudsman is Annexure ‘C-12’ colly. The Insurance Ombudsman passed an award in which the Opposite Party was directed to pay the policy fund value under the policy to the Complainant.
9) It is submitted that the father of the Complainant was 50 years old at the time of death. As per existing law it was the duty of the Opposite Party to perform medical test of Insurer as he was above 45 age before ensuring policy. The Opposite Party failed and neglected to carryout medical tests which were mandatory. It is submitted that as per Sec.45 of the Insurance Act, 1938, “no policy shall after expiry of two years from the commandment date called in question by the Company on the ground that the statement made in the proposal or any report of the medical officer or reference of the friend of the policy holder or in any of the documents leading to the issue of the policy document was in accurate or false unless the Company shows that such statement was on material matter or suppressed facts which it was material to disclose and it was fraudulently made by the policy holder and the policy holder new at the time of making if that statement was false or that suppression facts which it was material to disclose.” The Complainant therefore, alleged that the Opposite Party illegally repudiated the claim on 30/096/09.
10) The Complainant prayed that it be declared that the Opposite Party is guilty of deficiency of service and unfair trade practices as per the act. The Opposite Party be directed to pay Rs.15 Lacs being the sum insured as per the Insurance Policy alongwith interest @ 18% p.a. from 28/04/2010 till its realization. The Opposite Party be directed to pay Rs.2 Lacs as compensation for mental agony and physical hardship caused to the Complainant. It is prayed that the Opposite Party be directed to pay Rs.50,000/- as legal and incidental expenses towards this complaint.
11) The record the case shows that on 18/02/2010 this Forum had passed ex-parte order against the Opposite Party. Complainant then filed affidavit and written arguments. Matter was listed for hearing on 07/02/2011. After hearing Advocate for the Complainant matter was closed for order on 10/02/2011. On 10/02/2011, the advocate for the Complainant was present, matter was already adjourned for judgement but since steno on leave judgement was not ready. At that stage Advocate Ashok Wasvani, Advocate Tiwari appeared filed memo and applied to set aside ex-parte order that application was ultimately allowed by order dtd.22/02/2011. Thereafter, the Complainant filed revision petition before the Hon’ble State Commission bearing No.R.P./11/48. The said Revision Petition was allowed and the order dtd.22/02/2011 passed by this Forum was quashed and set aside with a direction to decide the complaint ex-parte only by delivering judgment. The Opposite Party challenged the said order of the Hon’ble State Commission before the Hon’ble National Commission in Revision Petition No.2318/2012. The Hon’ble National Commission dismissed the Revision Petition filed by the Opposite Party with cost of Rs.5,000/- and upheld the order of Hon’ble State Commission observing that it is well settled that the District Forum and State Commission have no jurisdiction and power to set aside ex-parte order or review their own order.
12) The Complainant has filed his affidavit, written arguments and pursis on 22/05/2013 stating that the Opposite Party offered Rs.4,32,622/- in view of the award of Insurance Ombudsman vide letter dtd.25/08/2010 which the Complainant had accepted under protest as part payment. The said amount be deducted from the amount of Rs.15 Lac and the claim would be for Rs.10,67,378/-. The Opposite Party though filed written arguments on 10/02/2011 the same cannot be considered in view of the decision of the State and National Commission in the present case as it is directed to decide the complaint ex-parte by delivering the judgment.
13) We heard the Ld.Advocate for the Complainant Smt. Rashmi Manne. She relied the following case laws –
1) Life Insurance Corporation of India V/s. Smt. Sajida Begum, 2007 CTJ 1062 (CP) (NCDRC).
2) New India Assurance Co. Ltd. V/s. Rajkumar Chuchra, 2007 CTJ 1061 (CP) (NCDRC).
3) Life Insurance Corporation of India V/s. Badri Nageshwaramma, II (2005) CPJ 9 (NC).
4) United India Insurance Co. Ltd. V/s. Anil Mulakchand Shah, I (2007) CPJ 69 (Maharashtra).
5) National Insurance Co. Ltd. V/s. Bipul Kundu II (2005) CPJ 12 (NC)
6) Life Insurance Corporation of India V/s. Dr. P.S. Aggrawal, 2004 3(CPR) 152 (NC).
7) Parveen Damani V/s. Oriental Insurance Co. Ltd., R.P.No1696/2005, decided on 30/10/2006 by National Commission.
8) Oriental Insurance Co. Ltd. V/s. Government Tool Room & Training Centre, F.A.No.383/2005, decided on 17/05/2007 by National Commission
She submitted that the onus is upon Company to prove that the decease insured was suffering from pre-existing ailment referable to pre-existing heart ailment when he obtained the original policy from the Opposite Party. She made submission that as per the provisions of Sec.45 of the Insurance Act, 1938, the claim made by the Complainant can be granted. She therefore, submitted that the part payment amount received by the Complainant as prayed in the pursis dtd.22/05/2013 may be deducted from the claim made in the complaint and an amount Rs.10,67,378/- and other consequential reliefs such as, interest, compensation, cost of this proceedings may be awarded in favour of the Complainant.
14) In view of the observations of the Hon’ble State Commission in Revision Petition No.48/2011 decided on 02/05/2012 and confirmed by the Hon’ble National Commission in Revision Petition No.2318/2012, decided on 19/02/2013, this Forum is required to take into consideration the documents and submissions relied by the Complainant only for delivering the judgement ex-parte against the Opposite Party.
15) It is undisputed that the deceased Balakrishan Makwana had obtained Policy Product “Save Guard” from the Opposite Party by submitting the proposal as per Annexure ‘C-2’ on 27/01/2007. Policy document is Annexure ‘C-3’ under which the sum assured by the Opposite Party was of Rs.15 Lacs. The date of maturity of the said policy as shown in Annexure ‘C-3’ is 03/02/2017. The deceased Balakrishan Makwana died on 28/04/2009. In the policy schedule issued by the Opposite Party in Article 8, the Opposite Party has referred Sec.45 of the Insurance Act, 1938. In accordance with Sec.45 of the Insurance Act, 1938, “No policy shall after the expiry of 2 years from the commencement date be called in question by the Company on the ground that a statement made in the proposal or in any report of a medical officer or referee, or friend of policy holder, or in any other document leading to the issue of the policy document was inaccurate or false unless the Company shows that such statements was on 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 new at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.”
In view of the aforesaid provision it is necessary to be taken into consideration whether the decision communicated by the Opposite Party vide letter Annexure ‘C-10’ repudiating the claim of the Complainant is justifiable as communicated for the following reasons –
“As per the discharge summary from Kamdar Nursing Home and Polyclinic Pvt. Ltd. dtd.22/12/2007, the deceased life insured was suffering from diabetic mellitus and hypertension since 14 years. These facts in respect to pre-existing medical were not disclosed in the proposal form.
In the proposal form dtd.29/01/2007, the deceased life assured under the ‘Declaration of Good Health’ had answered ‘No’ to specific question related in respect to medical condition.
Have you ever had a heart condition, a stroke hypertension, paralysis, cancer, diabetic, kidney failure, lever failure, mental illness, HIV infection or AIDS – No
These amounts to serious non discloser of material facts, which is violation of terms and conditions of Insurance Policy. Insurance being a contract “Uberrimae Fidae (utmost good faith), the policy holder is duty bound to reveal all relevant facts to the insurer in order for the insurer to determine the policy holders illegibility for availing the insurance.”
The Opposite Party therefore, informed that the Complainant is not entitled for any claim.
16) In this case the said contention raised by the Opposite Party in its repudiation letter is not proved by adducing the evidence to that effect. The Opposite Party in the present case is marked as ex-parte. The onus to prove that there was material concealment of any disease which directly proved fatal is on the Opposite Party. The Hon’ble National Commission in the case of Life Insurance Corporation of India V/s. Badri Nageshwaramma, II (2005) CPJ 9 (NC), held that burden to prove false representations and suppression of facts; on Insurer and doctor’s certificate without affidavit, no basis for repudiating the claim. It is further held that no conclusive evidence produced to suggest suppression on part of deceased and Company is liable under policy. Considering the above view of the National Commission and in the present case as the Opposite Party has not discharged the onus cast upon it against the Complainant and kept quite till the death of the deceased Balakrishan Makwana, we hold that the reasons mentioned in the repudiation letter by the Opposite Party and without having supporting evidence as provided under Sec.45 of the Insurance Act, 1938, the Opposite Party has wrongly rejected the claim lodged by the Complainant who was declared dead by the Doctor of Ashirwad Heart Hospital, Ghatkopar on 28/04/2009 due to Acute Myocardial. Furthermore, when deceased Balakrishan obtained the policy from the Opposite Party he was more than 45 years age. In such circumstances the Opposite Party was required to carryout medical test of him. The Opposite Party neglected in carrying out the medical test of the father of Complainant and later on come out with the case that there was non disclosure of pre-existing disease on the part of the deceased insured Balakrishan. The Hon’ble National Commission in reported case 2007 CTJ 1061 (CP) (NCDRC) (Cited Supra) also held that it is not in dispute that no evidence is adduced by the Insurance Company that the Respondent was shown to be the known case of diabetes mellitus having received treatment from diabetes or he being aware of suffering from that disease before purchase of mediclaim policy and as such, the Fora below had rightly passed the award rejecting the aforesaid defence taken by the Insurance Company. In the decision of the Ombudsman dtd.18/06/2010 it is though held that the Insurer is entitled to recover all the charges and cost incurred while procuring the policy, managing the fund and mortality charges but it will be unfair not to refund the fund value as the policy has a component of investment in addition to risk cover. In the facts and circumstances, it will be proper to refund the policy fund value to the claimant as at the time of intimation of death. In our view, the Ombudsman has not considered the above factors which we have discussed in view of the observations of the Hon’ble National Commission in the above authorities. Furthermore, the Hon’ble National Commission in the case of Kamleshwari Prasad Singh V/s. National Insurance Co. Ltd., I (2005) CPJ 107 (NC), held that “In view of the above discussion, it is held that the decision of the Ombudsman is not binding on the Complainant and the decision of the Insurance Company to repudiate the claim is subject to adjudication by the Fora Constituted under the Consumer Protection Act.” In view of the above facts and the contentions raised in the letter of repudiation by the Opposite Party are not proved by documentary evidence as well evidence on affidavit by the Opposite Party, we hold that the Complainant is entitled for Rs.10,67,378/- i.e. remaining amount yet to be received from the Opposite Party on account of sudden death of his father from the sum insured under the policy at Annexure ‘C-3’ @ 6% p.a. from the date of repudiation i.e. 30/06/2009. The Complainant in the complaint though claimed compensation of Rs.2 Lacs from the Opposite Party for mental agony and hardship caused to him by the act and omission by the Opposite Party, however, in our view the said compensation claimed by the Complainant is excessive and exorbitant. In our view an amount of Rs.10,000/- would be just and proper on that count. The complainant has claimed cost of Rs.50,000/- towards this proceeding. We are of the view that an amount of Rs.5,000/- would be justifiable for the said purpose. In the result the following order is passed –
O R D E R
i. Complaint No.252/2010 is partly allowed against Opposite Party.
ii. Opposite Party is directed to policy Rs.10,67,378/-(Rs. Ten Lacs Sixty Seven Thousand Three Hundred Seventy Eight Only) to the Complainant alongwith interest @ 6% p.a. from 30/06/2009 till actual payment.
iii. The Opposite Party is directed to pay Rs.10,000/- (Rs. Ten Thousand Only) as compensation towards mental agony and hardship caused to the Complainant.
iv. The Opposite Party is directed to pay cost of Rs.5,000/- (Rs. Five Thousand Only) to the Complainant.
v. The Opposite Party is directed to comply with the above order within one month from the date of service of this order.
vi. Certified copies of this order be furnished to the parties.
