STATE CONSUMER DISPUTEs REDRESSAL COMMISSION

BIHAR, PATNA

Complaint Case No.44 of 2012

Smt Rani Devi, C/O- Late Suman Kumar, R/O- Raju Shah Lane,  Bina Concert Gali, Harisabha Chowk, P.O.- Ramana, P.S.- Mithanpura, Distt- Muzaffarpur, Bihar.                                                                                       ………… Complainant

Versus

1. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. 5^th Floor Plaza, Airport Road, Kerwada, Pune- 411006
2. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD. claim Manager (claim department) 5^th Floor Plaza, Airport Road, Kerwada, Pune- 411006
3.  The Branch Manager, BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD.  In front Jubba, Shanipark, Club road, Mithanpura, Muzaffarpur-Pin Code 842002.
4.  

            Learned Counsel for the complainant-  Mr. Pritam Kumar

            Learned Counsel for the Opposite Party- Mr. Manish Kumar Singh

Before,

             Hon’ble Mr. Justice S. Kumar, President

Mr. Raj Kumar Pandey, Member

 Mr. Ram Prawesh Das, Member

ORDER

Per:Raj Kumar Pandey (Member)

Dated-03.05.2023

1. The complainant Smt. Rani Devi filed this consumer complaint seeking the reliefs against the opposite parties and prayer has been made, for directing the O.Ps. to pay the complainant:-

1. Sum assured as well as other benefits along with interest @ 10% from the date of death of life assured ( Suman Kumar@ Suman Kumar Singh - now deceased) till realization;
2. Rs. 5 lacs as the compensation.
   And
3. Rs. 10,000/- as litigation cost.

2. The facts as stated in the complaint case and emerged from the documents attached therewith are as follows:-

(a).  Life assured (hereinafter referred to as L/A)had taken a life Insurance Policy, bearing policy no.0190053182 (Bajaj Allianz Invest Gain Diamond Product Code -12) from the Opposite party no.3 for the period of 26 years, valid from 08.02.2011 to 08.02.2037 and the risk was commenced from the starting date of policy i.e. from 08.12.2011. The premium paid for the policy was on H/Y (Half yearly) basis and the first premium Rs.10,984/- was paid immediately for which receipt was issued in favour of L/A. Thereafter Policy Bond was also issued from  the office of Opposite party no.3.

(b).  The proposal form regarding the said policy was duly filled up and all required informations were given correctly, which was examined by the officials of the opposite parties and the same was accepted without raising any objection.

(C). Apart from the informations given in proposal form, there was also an “exclusion clause” of the company attached with the proposal form regarding“ non-payment of claim in certain circumstances.”

(d). Unfortunately, the L/A met with a road accident on 09.05.2011 and died, for which a formal FIR was lodged at Lalganj  Police Station, Vaishali, accordingly Lalganj P.S. Case No.97/2011 u/ss. 279/304 (A)IPC was registered. Thereafter, dead body was forwarded for postmortem on the same day.

(e). Thereafter an Insurance claim petition was filed by the nominee (Smt. Rani Devi) of  L/A within stipulated period in the Office of the Opposite parties for considering and passing the Insurance claim in favour of nominee.

(f).  After considering the matters, the opposite parties rejected the Insurance claim filed by the nominee of L/A on the ground of ‘misrepresentation of material facts vis-à-vis submission of fake documents’.

(g).  As, no opportunities were given to the complainant ( nominee) of being heard by the opposite parties, the complainant had  no option but to file this consumer complaint before this State Commission seeking reliefs aforesaid.

3. On Notice, issued by the State Commission the Opposite parties were appeared through their counsel and filed preliminary objection which was put on record, thereafter written version (W.S.) was filed on 27.08.2015, in which the material facts have not been denied and apart from formal objections, as- maintainability of complaint, limitation period, mis-joinder of parties, recognition of complainant as consumer, pecuniary jurisdiction etc. the main objection was raised that the L/A namely Suman Kumar had obtained some more policies during his life time from the other insurance companies and suppressing the previous policies details, he obtained the “Insurance Policy in question” from the Opposite parties. However, he was bond to disclose the previous policy / policies as required in relevant column of the proposal form.

But, in relevant column in which the description of previous policy / policies was required, the short form of ‘non-applicable’ as- N/A had written.Hence the O.P. Company rightly repudiated the claim as per the provision of Insurance Law as well as precedent of the Hon’ble N.C.D.R.C. (a case law has referred).It has been further stated that the instant complaint case is prematured and based on wrong interpretation of terms and conditions of the Insurance Policy, and it has been prayed that the instant case is fit to be dismissed with cost.

4.  Both the parties have filed supporting documents regarding their respective pleadings. Where the complainant has filed a numbers of documents in annexures attached with the complaint petition and supported by the affidavit, on the other hand the opposite parties have also filed some documents in annexure with the W.S. and  a separate evidence on affidavit of Bhuwan Bhaskar (Deputy Manager - legal of O.Ps.) is also filed.

The descriptions of documentary proofs filed by the complainant with complaint petition, supported by affidavit are as follows:-

 Annexure- 1:- Repudiation letter dated25.01.2012

Anneuxre-2 (Series):- Policy bond, schedule, premium

Receipt

                                    Annexure-3:-  Exclusion clause’s, terms & conditions

Annexure-4:- FIR, Final form, P.M. report, Death Certificate                          

The description of documentary proofs filed by the Opposite parties with W.S. (written statement), supported by a separate affidavit of Bhuwan Bhaskar are as follows:-

Annexure-A: - Photocopy of rulingreported in II (2015) CPJ 246 (NC)

Annexure-B/1:- Photocopy of proposal submitted to Birla Sun Life Insurance Co. Ltd.

Annexure-B/2:Photocopy of proposal submitted to Aviva Life Insurance Co. Ltd.

Annexure-B/3:Photocopy of proposal submitted to Bajaj Allianz Life Insurance Co. Ltd.

Annexure-B/4 & B/5:Photocopies of two proposal forms submitted to Reliance Life Insurance Co. Ltd.

Annexure-C:Photocopy of Certificate issued by the Circle Officer Musahari dated 30.11.2011

Annexure-D:Photocopy of Certificate issued by the Ward Counselor dated 26.11.2011

Annexure-E:Photocopy of Certificate issued by the United Bank of India dated 30.12.2011

Annexure-F:Photocopy of letter dated 23.07.2012

5. Both the parties have filed their written notes of argument. They have also filed supplementary written notes of argument and fresh written notes of argument respectively, in support of their respective case.

Learned counsel for the complainant placed reliance on the following judgments of the Hon’ble Supreme Court of India and Hon’ble N.C.D.R.C. New Delhi:-

Supreme Court of India

1. United India Insurance Co. Ltd Vs. M/S. Pushpalaya Printers

Appeal (Civil) 391 of 1999

On 25 February, 2004

Reported in CPJ (2004) V-1, S.C.-22

2. Reliance Life Insurance Co. Ltd. Vs. Rekhaben Nareshbhai Rathod

Civil Appeal No. 4261 of 2819

On 24 April, 2019

Reported in CPJ (2019) V-2, S.C.-53

3. Saurashtra Chemicals…Vs. National Insurance Co. Ltd

Civil Appeal No.2059 of 2015

On 13 December, 2019

Reported in CPJ (2020) V-1, S.C.-93

National Consumer Disputes Redredressal Commission

4. United India Insurance Co. Ltd. Vs. Ashrathlal Jethabai Patel

Revision petition No.

On 06 May, 1996

                         On the other hand, learned counsel for the Opposite parties placed reliance on the following Judgments of the Hon’ble Supreme Court of India:-

                        Supreme Court of India:-

1.  Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbahai Rathod

Appeal (Civil) 4261of 2019

On 24April, 2019

2. Mithoolal Nayak Vs. Life Insurance Corporation of India

Civil Appeal No.224 of 1959

On 15^th January, 1962

Reported in [1962] 0 Supreme (SC)5; [1962] Supp2 SCR 571; [1962] AIR (SC) 814

6. In our view each case has been decided as per its own merit and provisions of law concerned.
7.  Here the decision of the Hon’ble Apex Court is relevant in this complaint case regarding suppression of material facts:-

In Mithoolal Nayak Vs. Life Insurance Corporation of IndiaCivil Appeal No.224 of 1959On 15^th January, 1962 Reported in [1962]  Supreme (SC)5; [1962] Supp2 SCR 571; [1962] AIR (SC) 814

“7. We shall presently consider the evidence but it may be advantageous to read first S.45 of the Insurance Act, 1938, as it stood at the relevant time. The section, so far as it is relevant for our purpose, is in these terms:

 “ 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 no 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 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. ……………………………… ”

8.  The second part of the section is in the nature of a proviso which creates an exception. It says in effect that if 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, then the insurer can call in question the policy effected as a result of such inaccurate or false statement.
9. In the case before us the policy was issue on 08.02.2011 and it was come into effect from same date. The respondent-company repudiated the claim by its letter dated 25.01.2012. Obviously, therefore, two years from date on which the policy was effected. We are clearly of the opinion that section 45 of Insurance Act clearly applies in the present case in view of the provision laid- down in above section.
10. Under the provisions of Insurance Regulatory and Development Authority (Protection of Policyholders’ Interests) Regulations, 2002 the explanation to Section 2(d) defining” proposal form” throws light on what is the meaning and content of “material.” For an easy reference the definition of “proposal form” along with the explanation under the aforesaid Regulations has been extracted as under:”2.Definitions, In these Regulations, unless the context otherwise requires: (d) “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 Regulations also defines the word “Material” to mean and include all “ important”, “essential” and “relevant” information in the context of guiding the insurer in deciding whether to undertake the risk or not.
11.  In the  present case, the declaration made by the insured at the bottom of the proposal form and signed by him contains clear stipulation to the effect that he has not withheld any information and that the statements made by him in the said declaration shall be the basis of “Contract of Insurance’ between him and the Insurance Company and, if any, untrue averment be contained therein, the contract shall be absolutely null and void.
12.  After having gone through the whole material on record as well as discussion made‘above, it is necessary to preface our analysis with reference to two basic facts. The first pertains to the nature of the disclosure made by the insured in the proposal form, the second relates to the ground for repudiation of claim. The proposal form required a specific disclosure of the Life Insurance Policy held by the  proposal form. In this case the L/A  Suman Kumar did not disclose his previous policies. However, more policies were taken by him prior to the policy in question. As per the signature which was English clearly indicates that he was aware of the English Language. In case if he was not aware of the English language and unable to understand the meaning of the column given in proposal form, he can take recourse from the others to understand the same, which was not done by him. The conduct of the L/A shows that the concealment of fact regarding the previous policies was deliberate action of the L/A which shows his ulterior motive. The second aspect of the case which merits to be noticed is that the repudiation of claim regarding the policy in question was on the ground that there was non disclosure of a material fact on the part of the ensured in not disclosing that he held prior insurance Policies. The repudiation in present case was within a period of two years after the commencement of the Insurance cover. This assumes significance because of the provision of the Insurance Act 1938. The grounds as given in the complaint petition in length regarding law of contract would not applicable in this case.
13. For the reasons stated here in above, this complaint is not fit to be allowed. Hence, the same is disallowed. “However, the repudiation was on the basis of misrepresentation of material facts”, and in such cases under the provisions of section- 45 (4) second proviso  of the Insurance Act 1938, the premiums collected on the policy till the date of repudiation shall be paid to the insured or the legal representatives or nominees or assignees of the insured within a period of Ninety days from the date of such repudiation, but the opposite party failed to follow the provisions. The premiums collected ought to have refunded within Ninety days i.e. on or before 25.04.2012, but the said amount was not refunded by the Opposite parties to the nominee of the L/A. Hence, the premium amount was became due on that date i.e. on 25.04.2012. So, the opposite parties are directed to pay the premium amount @ Rs.10,984/- with interest @ 12% p.a. from  26.04.2012 till its payment within a period of 3 months from the date of receiving the certified copy of this order, failing which the complainant will be entitled to receive the said amount  with interest @16% p.a. till its payment.
14.     As such the complainant case stands disposed of.

15.     A copy of this order be supplied to both the parties free of cost as mandated by the C.P. Act 2019. Order be uploaded forthwith on the website of the State Commission.
16. Let the file be consigned in the record room along with copy of this order.   

            (Ram Prawesh Das)          (Raj Kumar Pandey)                      (S. Kumar)

                        Member                               Member                               President

Mukund