This complaint coming up before us for final hearing on                          21-07-14 in the presence of Sri R.K.S. Murthy, advocate for complainant and of Sri G.S.K. Srinivas, advocate for opposite parties, upon perusing the material on record, after hearing both sides and having stood over till this day for consideration this Forum made the following:-

O R D E R

Smt T. Suneetha, Member:-    The complainant filed this complaint                      u/s 12 of the Consumer Protection Act seeking directions on the opposite parties to pay the policy amount of Rs.7,50,000/- along with interest from the date of death of the policy holder, compensation of Rs.1,00,000/-, for deficiency of service Rs.1,00,000/- and legal expenses Rs.5,000/-. 

2.   In brief the averments of the complaint are these:

          The complainant Mahankali Sujatha’s father Late Siriveri Venkateswarlu who died in train accident on 28-02-11, during his life time obtained life insurance policy from the opposite parties under policy     No.500-3353827 on 28-03-09 for Rs.7,50,000/- showing the complainant as nominee.  The complainant approached opposite parties with all necessary documents like death certificate of the insured, FIR, Inquest, Post Mortem Certificate and Family Member Certificate along with claim form for obtaining insurance benefits pertaining to her father.  In the 1^st week of November, 2013 when complainant approached the office of the 1^st opposite party she was informed that her claim was already repudiated by 2^nd opposite party and she was handed over a repudiation letter.  The complainant is the nominee and only legal heir of the deceased and her lawful claim  repudiated by the opposite parties which is not justifiable.  Therefore opposite parties committed deficiency of service in not settling the claim of the complainant.  Hence the complaint.   

3.      The 1^st opposite party filed memo adopting the version of the                     2^nd opposite party and its contents in brief are as follows:

          As per the provision of law the contract of insurance is the contract of good faith. Slightest variation/wrong information/suppression of material facts will frustrate the contract between the insurer and the insured.  In the present case the life insured had made wrong statements in the proposal form.   Therefore the contract is vitiated as can be deduced from events narrated below.  The Hon’ble Apex court in Vikram Greentech (I) Limited vs. New India Assurance Company Limited (2009 5 SCC 599) held that since on issuance of the insurance policy, account of the risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer……….. the insured cannot claim anything more than what is covered by the insurance policy.

          In Satwant Kaur vs. NIA in 2009 (2) SLJ 1378 and in P.C. Chacko vs. LIC in 2008 (3) CLT 380 (SC) that material fact means 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.   Further, if a person makes a wrong statement with knowledge of consequences thereof, he would be estopped from pleading that if such fact had been disclosed, it would not have made a material change.   It is important to mention here that the life insured had just died within 14 months from the date of issuance of policy.

          The life assured has suppressed material facts in insurance application form dated 30-03-09 with regard to his previous life insurance policies.   According to Indian Contract Act 1872 false statement amounts to misrepresentation.  

          The life assured had not disclosed the complete and correct facts regarding date of birth, details of income, occupation.   Life assured declared his date of birth as 12-07-1960 in the insurance proposal form.   Whereas the insured submitted his date of birth as 14-07-1960 and 06-07-1959 in other insurance companies proposals.  

          The life assured had declared that he was the owner of Surya Granites and was engaged in selling and purchasing granites.   In the proposals submitted to the other insurance companies the life assured has mentioned the occupation as agriculturist, tiles shop owner, owner of galaxy business, sales of footwear.  

          The life assured declared his annual income in the application form as Rs.3,00,000/- where as he mentioned in other insurance proposal forms as Rs.80,000/-, Rs.1,50,000/-, Rs.1,80,000/-, Rs.2,00,000/-, Rs.3,50,000/- and Rs.2,50,000/-.   All the policies were taken by the life assured during the period of two years.   The opposite parties further submit that as per the underwriting policy approved by the Board of Directors of the opposite parties a person can be issued life insurance only for a certain amount depending upon his income and occupation and had the opposite parties aware of the insurability of the life insured by other insurance companies for a substantial amount, the opposite parties would have upfront rejected the proposal of insurance.   Further, from the circumstances revealed during investigation conducted by the opposite parties, the insurance claim seems to be a false claim and wrong doings/misdemeanor of grave nature were committed by the life insured and complainant for making huge unlawful gain.

          The life assured died in train accident on 28-02-11.   The death occurred within a short span of one year and eleven months from the date of proposal.  

          Had the life insured disclosed his previous policies to the opposite parties at the time of proposal the opposite parties would not have issued the said policy.   As per section 2(1)(d) of the insurance regulatory and development.

1. As per section 2(1) (d) of the Insurance Regulatory and Development Authority (Protection of Policyholders Interests Regulations, 2002), 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.
2. Section 11 of the aforesaid Regulation, states that the policy holder shall furnish all information that is sought from him by the insurer and also any other information which the insurer considers as having a bearing on the risk to enable the latter to assess properly the risk sought to be covered by a policy.   Thus it is evident that the regulation also imposes a duty upon the policy holder to disclose all the material facts to the insurer to enable them to assess the risk to be undertaken.   The insurance is done on the basis of doctrine of Uberrimae Fidei and there was no reason for opposite parties to verify the correct facts stated in the said application.   Since the material facts were not disclosed by the life insured, the opposite parties is entitled to repudiate the claim”.

In the light of the above regulatory provisions, the opposite parties rightly repudiated the claim of the complainant.   

During the course of investigation it was found that the life assured was married to Mrs. Savithri who expired long back.   He was survived with two sons and one daughter.  The two sons were adopted by others in childhood and daughter’s name is Mrs. Mahankali Venkayamma whose where abouts were not known.  It was learnt that she is of unsound mind.   The railway accident took place on 28-02-11 and an article was published in news paper.   The dead body was ascertained by Mahankali Sujatha, complainant in the present case claimed that her father had tattoo of her deceased daughter’s name i.e., Sandhya and with the help of this tattoo she ascertained that the dead body was her father.

As per the ration card the name of the life assured daughter is Mahankali Venkayamma but not Mahankali Sujatha.  As per the information provided by villagers the life assured was around 73 years.   In the police records i.e., FIR, inquest form the age of the life assured is 30 years.   In the post mortem report the age of the life assured is 51 years.   There is discrepancy in the age of the life assured.   As per the electoral records between 2008 to 2010 the name of the S. Venkateswarlu was not found and his name was deleted from the voter list in the year 2003.   The application submitted by the life assured was full of misstatements and false statements.   The opposite parties have every right to repudiate the claim u/s 45 of Insurance Act, 1938.  

The claim to the policy holders is paid by any insurance company out of the common pool of funds which is belonging to all policy holders of the company and so it has to check the genuineness of the claim before honoring it.   The insurance company cannot do injustice to genuine policy holders by allowing ingenious and false claims.     The death of the life assured has been staged and manipulated for making huge unlawful gain from the opposite parties.   Therefore there is no deficiency on the part of opposite parties and the repudiation made by the opposite parties justified.   The Hon’ble Forum may be pleased to dismiss the complaint with costs.

4.      The complainant and opposite parties filed their respective affidavits. Exs.A-1 to A-9 were marked on behalf of the complainant and Exs.B-1 to              B-19 were marked on behalf of opposite parties.

5.    The points that arose for consideration in this complaint are these:

    1. Whether the opposite parties committed any deficiency in service?

     2.  To what relief?

6.   POINT No.1:-    The opposite parties repudiated the claim of the complainant on the ground that the insured suppressed the fact of he having insurance policies in several other insurance companies and in view of discrepancies regarding the date of birth, occupation, annual income declared by the insured in the proposal form.  

7.      The opposite parties appointed investigators from Zubair & Co., and the Stellar Insurance Management Service Private Limited to carryon the investigation of the insured’s claim. The Zubair & Co.,                                            (EX: B15 dt: 04-06-11) concluded that there is no documentary evidence available with nominee to establish the father and daughter relationship.   The body recovered by the police on the railway track is not belongs to life assured as there is lot of variation in the circumstantial evidence and age mentioned in the police records.              

8.      Ex.B-14 Stellar investigation report dated 20-10-11 came out with many issues which created several doubts in the minds of the opposite parties. The report revealed that the complainant herein Mrs. Mahankali Sujatha is not the daughter of the insured, the daughter of the insured was Mahankali Venkayamma who was of unsound mind and that the whereabouts of her were not known. 

9.  The complainant came to know about the dead body lying on the railway track on 28-02-11 through his relatives and approached the police and recognized the body as her father i.e., insured. In the Inquest Report Ex.B9 it was mentioned that the dead body recovered by the police was wearing jean pant and white shirt and a name Sandya was tatood on the right hand.    Ex.A-5 FIR dated 28-02-11 in point No.7 it was written as unknown male person aged about 30 years.   But in Ex.A-6 dated 28-02-11   post mortem report signed by Dr. M. Satish, Medical Officer, Government Hospital, Vinukonda it was mentioned as 50 years.  That itself raises a doubt regarding identity and the age of the deceased in the absence of any other particulars.

10.    The investigator enquired about the transfer certificate Ex.B-16 dated 04-11-11 with the Head Master, GP High School, China Makkena.  The Head Master confirmed that the record sheet of life assured as fake and there is no record available in that school with admission No.135 dated 12-07-69. 

11.   The investigator also verified with the voter’s list of the concerned area in the RDO office in which he found that the name of the insured was not there in the electoral list from 2008-2010.   The RDO gave an endorsement to this effect (Ex.B18 dt:02-09-11) that the name of the insured was in the deletions list of the part No.38 of 104 Sattenapalli Assembly Constituency and expressed his inability to furnish the reason for such deletion.  

12.    Ex.B-14 Stellar report concluded that the claim is a fraudulent and perfectly planned by the claimants which deserves the complaint by the insurers to the police higher authorities to reinvestigate the case.  

             The above inferences were not denied and no enquiries/ material in contra to the investigations were filed by the complainant.

13.    The opposite parties have enquired with the other insurance companies about the policies of the insured and obtained a report which is marked as Ex.B-3 which inferred the following:

14.  The insured mentioned different date of births in each of the insurance company.  The school certificate which the insured submitted to the opposite parties to determine the date of birth is also fake. 

15.  The insured gave different occupations to each of the insurance companies. In two Reliance Insurance Company proposals the occupation mentioned as sales of cheppals and shoes and tiles business.  In one of the Birla Life Insurance it was mentioned as Agriculturist and in another it was mentioned as granite business.   In Future Generali, Max New York Life Insurance and also in Aviva Life Insurance Company it was mentioned as Granite business.            

16.   The insured mentioned different annual income.  In one of the Reliance Life Insurance Company the annual income of the insured was mentioned as Rs.80,000/- and in another policy of the same it was mentioned as Rs.1,50,000/-.   In Max New York Life Insurance proposals it was mentioned as Rs.80,000/-.  In Birla Life Insurance Policies it was mentioned as Rs.1,50,000/- and Rs.1,80,000/-.   In Aviva Life Insurance policy and Future Generali it was mentioned as Rs.3,50,000/- and Rs.2,00,000/- respectively.  The complainant did not deny any of the contentions made by the opposite parties in any of documents filed by the complainant.  

17.    In the proposal form of the opposite parties the insured did not disclose the policies taken by him in various insurance companies and have declared ‘No’ to the question asked.  

18.    All these policies were taken by the insured within a period of two years.   The complainant and the insured might have obtained the policies with a view to getting huge profits over the insurance companies which is unlawful.   

19.    As per section 2(1)(d) of the insurance regulatory and development.

1. As per section 2(1) (d) of the Insurance Regulatory and Development Authority (Protection of Policyholders Interests Regulations, 2002), 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.
2. Section 11 of the aforesaid Regulation, states that the policy holder shall furnish all information that is sought from him by the insurer and also any other information which the insurer considers as having a bearing on the risk to enable the latter to assess properly the risk sought to be covered by a policy.   Thus it is evident that the regulation also imposes a duty upon the policy holder to disclose all the material facts to the insurer to enable them to assess the risk to be undertaken.   The insurance is done on the basis of doctrine of Uberrimae Fidei and there was no reason for opposite parties to verify the correct facts stated in the said application.   Since the material facts were not disclosed by the life insured, the opposite parties is entitled to repudiate the claim”.

20.        The expression “material fact” is not defined in the Insurance Act, 1938 and, therefore, as observed by the Supreme Court in Satwant Kaur Sandhu V.New India Assurance Company Ltd., VI (2009) SLT 338=IV (2009) CPJ 8 (SC) = (2009) 8 SCC 316, it has to be understood 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” and if the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance.  “thus it needs little emphasis that when an information on specific aspect is asked for in the proposal form, an assured is under 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 to what he ought to have known.  The obligation to disclose necessarily depends upon the knowledge one possesses”.    

21.    The insured did not disclose his policies to the opposite parties in the proposal form.Whether to issue policy or not as it depends upon the income of the insured.  The income of insured has baring on the insurer to issue policy in the presence of other insurance policies.   Therefore the Forum comes to the considered opinion that the insured suppressing the material fact from the opposite parties is nothing but misrepresentation of the fact.  The opposite parties did not commit any deficiency of service and their repudiation is proper.  This point is answered in favour of the opposite parties.    

22.    POINT NO.2 :-  Since the insured suppressed the material fact of having policies in other insurance companies at the time of entering into the contract of insurance with the opposite parties.  Therefore the opposite parties are not liable to compensate the complainant.   

          In the result, the complaint is dismissed without costs. 

Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum dated this the 5^th day of  August, 2014.

MEMBER                                   MEMBER                                 PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite parties:   

PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.