2. Bajaj Allianz Life Insurance Co. Ltd.,

    Rep. by its Legal Manager,

    G.E. Plaza, Air-Port Road,

    Yerawada, Pune-411 006.                            … Opposite Parties

        This complaint coming up before us for final hearing on                      07-06-11 in the presence of Sri N.Srinivasa Rao, Advocate for complainant and of Sri G.Erukala Reddy, Advocate for opposite parties, upon perusing the material on record, hearing both sides and having stood over till this day for consideration, this Forum made the following: 

O R D E R

PER SMT.T.SUNEETHA, LADY MEMBER:

                This complaint is filed under section 12 of the Consumer Protection Act, 1986 by the complainant seeking directions on opposite parties to pay Rs.90,000/- towards policy amount along with interest from the date of risk i.e., 12-04-08 and to pay Rs.5000/- towards mental agony suffered by the complainant besides costs of complaint.

2.      The averments of complaint in brief are as follows:

                The husband of complainant late Malladi Venkata Krishna Murthy obtained life insurance policy bearing No.0038448770 from 1^st opposite party on 09-02-07.  The policy holder has to pay Rs.10,000/- p.a. for 3 years and the policy will be in force upto 09-02-2018.  In case of any risk to the policy holder, the opposite party company has to pay Rs.55,000/- towards risk in addition to the payment of paid amount along with accrued benefits under unit linked.  The policy holder here is the husband of complainant paid Rs.20,000/- under two yearly installments upto February, 2008.  He was admitted in Amaravathi Institute of Medical Sciences, Guntur on 12-04-08 for treatment of blood motions and on the same day he died.  At the time of obtaining policy, he was hale and healthy.  The complainant forwarded all the documents to 1^st opposite party to obtain insurance claim.   The 1^st opposite party repudiated the claim for the reason that the assured/deceased is having blood pressure since ten years and the same was not disclosed by the assured.  On receiving repudiation letter the complainant made a representation dt.14-07-08 to the Claim’s Review Committee for verification.

                 The opposite party conducted test on policy holder but they did not raise any objections and they issued policy to the policy holder.  The opposite party rejected the claim without any justifiable cause.  The opposite party committed deficiency of service.  Hence, the complaint.

3.      The 2^nd opposite party filed its version affidavit and the same is adopted by 1^st opposite party, which is in brief as follows: 

                The contract of insurance falls in the category of contract Uberrimae fidei, meaning a contract of utmost good faith on the part of the assured.

                The life assured has been suffering from diabetes mellitus and high blood pressure for the last 10 years before he made proposal for insurance. The opposite party has got ample evidence to show that the complainant’s husband has taken treatment from various hospitals.  He was treated by (1) Dr.K.Srinivasa Reddy                           (2) Y.V.S.Prabhakar and (3) Dr.D.Kavita all are specialized in the fields of Health Science based at Guntur.  The life assured has knowledge that he was suffering from those diseases even by the time of making proposal i.e., prior to 07-02-07. Had he disclosed the same to company, the company would not have insured the life assured under the said policy and would have certainly called for more documents and the medical tests. The claim is rightly repudiated for non-disclosure of material facts, and hence the present complaint is not maintainable on the ground of suggestio vari suppresio falsi.  The complaint is bad for non-joinder of proper parties.  The complainant has not come with clean hands. There is no deficiency of service on the part of opposite party.  Therefore, the complaint may be dismissed.                  

4.             Complainant filed affidavit.  Ex.A1 to A7 on behalf of complainant and Ex.B1 to B7 on behalf of opposite parties were marked.

5.      Now the points for consideration are

1. Whether there is any deficiency of service on the part of opposite parties?
2. To what relief the complainant is entitled to?

6.      POINTS 1 & 2

                The complainant is the nominee for the life insurance policy obtained by her husband for an amount of Rs.55,000/- with opposite party under policy No.0038448770 on 09-02-07.  The deceased/life assured paid two installments of Rs.10,000/- each till February, 2008 and died on 12-04-08.

7.             The opposite parties raised contention that the life assured has not disclosed the facts about his health condition such as Diabetes Mellitus (D.M.) and Hyper Tension (HTN) while filling the proposal form and thereby suppressed material facts.   

8.             The deceased/insured answered ‘NO’ to the questions asked in the proposal form (Ex.B1) with regard to his health condition as below:

14. Have you ever been treated or currently under treatment for   

       any of the following conditions:

(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?

(g)     Any diseases and disorders of the metabolic and    

          endocrine system such as but not limited to diabetes,

          hypothyroidism, hyperthyroidism, goiter or other

          endocrine diseases?  

9.                Whereas in the past history column of inpatient record bearing No.102 (Ex.B4) of AIMS Hospital, Guntur it is noted that   HTN+ DM+ /10 years.  In medical attendant/hospital treatment certificate (Ex.B5) of opposite party company, duly signed by the physician Dr.Y.V.S.Prabhakar,MD, AIMS Hospital, there is mention of diseases H.T.N. & D.M. as below:

                In part B of same document i.e., Ex.B5 at column ‘E’ cause of death is noted as below:

                   Primary cause     :        Cardio respiratory arrest

                   Secondary cause           :        GI bleeding, hypotension,

                                                          respiratory failure    

10.              The above observations revealed that the insured suffered from hypertension and diabetes mellitus since 10 years prior to his death i.e., 12-04-08 (the date of death as per Ex.A1).   The husband of complainant might be having the diseases since 1998 itself.  He took the policy on 09-02-07 as per Ex.A2.  The deceased took the policy just before 14 months prior to his death.  The deceased/insured knows very well about his illness prior to filling up the proposal form.  It goes to show that the husband of complainant took the policy by hiding the diseases      

11.              It is the fundamental principle of Insurance Law that utmost good faith must be observed by the contracting parties and if the declaration made is found to be false to the knowledge of declarant then the insurance company is entitled to repudiate the claim. 

(1)    In Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., VI (2009) SLT 338 wherein the Supreme Court observed that “the term ‘material fact’ is not defined in the Act and, therefore, it has been understood and explained by the courts in general terms to mean as any fact which would influence the judgment of a 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’.”

(2)    In a decision reported in I (2011) CPJ 83 (NC) between LIC of India Vs. Dalbir Kaur, the National Commission held that the life assured prior to taking policy had been admitted in the Sony Nursing Home w.e.f. 08-05-1999 to 16-05-1999 for treatment of gastroentitis.  He was again admitted in same Nursing Home from 01-02-2002 to 28-02-2002 for treatment of Typhoid, Jandice and Disc problem.  He remained on leave from his place of work for over two months. He continued to be under treatment as an out patient in the same Nursing Home till             22-04-2002 i.e., just before taking the policy on 31-05-2002. On 17-11-2002 he was again admitted in the hospital where he ultimately died on 29-11-2002 of septicemia. 

              The District Forum after hearing both parties allowed the complaint by concluding that the insured had not deliberately made false statements since there was no pre-existing disease which caused his death and directed the opposite parties to pay the respondent entire insured amount with 8% interest and compensation there of. 

        The State Commission also confirmed the order of District Forum.  The National Commission made the following observations:

        The insured had willfully given wrong replies to the specific questions relating to his health thus suppressing facts in his insurance declaration.  This declaration would be the basis of a contract of insurance between him and the Life Insurance Corporation of India and that if “any untrue averment be contained therein the said contracts shall be absolutely null and void and all moneys which shall have been paid in respect therefore shall stand forfeited to the corporation.”  If the declaration made is found to be false to the knowledge of the declarent.  The insurance company is entitled to repudiate the claim.     

(3)     In another decision reported in IV (2010) CPJ 86 (NC) between Kokilaben Narendrabhai Patel Vs. LIC of India, the opposite party repudiated the claim stating that the insured did not disclose that he was suffering from enteric fever 11 months prior of taking policy.  This amounts to suppression of material facts.  The insured died due to heart attack.  The National Commission held that “there was clear suppression of material facts with regard to his health and the insured was fully justified in repudiating the contract of insurance.” 

12.            In the present case, the deceased did not disclose the facts about he suffering from diabetes and hypertension at the time of taking policy, which clearly amounted to suppression of material facts.  In view of above discussion and citations, the Forum opines that repudiation of claim by opposite parties is justified.  Hence, there is no deficiency of service on the part of opposite parties.    

                In the result, the complaint is dismissed without costs.   

Typed to my dictation by the Junior Steno, corrected by us and pronounced in the open Forum, this the 17^th day of June, 2011.     

             Sd/- x x x                               Sd/- x x x                             Sd/- x x x      

          MEMBER                               MEMBER                            PRESIDENT

APPENDIX OF EVIDENCE

                                        DOCUMENTS MARKED

For Complainant:         

For opposite parties:

                                                                                 Sd/- x x x

                                                                                PRESIDENT