Haryana

StateCommission

A/460/2015

BAJAJ ALLIANZ LIFE INSURANCE CO.LTD. - Complainant(s)

Versus

BIR MATI - Opp.Party(s)

VARUN CHAWLA

09 Oct 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :      460 of 2015

Date of Institution:      21.05.2015

Date of Decision :       09.10.2015

 

Branch Manager, Bajaj Allianz Life Insurance Company Limited, SCO No.226, Sector-12, Urban Estate, Karnal.

                                      Appellant-Opposite Party

Versus

 

Bir Mati wife of late Shri Harpal Singh s/o Sh. Rajbir Singh, Resident of Village Goghripur, Tehsil and District Karnal.

                                      Respondent-Complainant

 

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

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                      

 

Present:               Shri Varun Chawla, Advocate for appellant.

                             Shri R.K. Hooda, Advocate for respondent.

 

                                                   O R D E R

NAWAB SINGH J.(ORAL)

 

This Opposite Party’s appeal is directed against the order dated April 1^st, 2015, passed by District Consumer Disputes Redressal Forum, Karnal (for short ‘District Forum’), in Complaint No.331 of 2012.

2.      Harpal Singh – since deceased (hereinafter referred to as ‘Insured’)-husband of Bir Mati-complainant-respondent, purchased a Life Insurance Policy bearing No.0111113982 from Bajaj Allianz Life Insurance Company Limited (for short ‘Bajaj Allianz’) on September 29^th, 2008 commencing from October 15^th, 2008 for the sum assured Rs.1.00 lac. The installment of premium payable was yearly. The insured did not pay the installments of premium due in October, 2009. So, the policy lapsed. He paid the premium in the month of January 13^th, 2011 to get the policy revived by filing revival form Exhibit O-25.  The Bajaj Allianz revived the policy. The Insured died on November 1^st, 2011.  The complainant filed claim with the Bajaj Allianz but the same was repudiated vide letter Exhibit O-3.  The relevant portion of which reads as under:-

“We would like to inform you that the company had covered the risk for the above said policy on the basis of the facts mentioned in the proposal form. However, on receiving the death claim intimation for the above said policy, the various investigations done, the various medical records received reveal certain facts, which were known to the deceased life assured and were not disclosed to us. Hence the death claim under above mentioned policy has been declined for the following reason/s:

Consultation/Treatment for Acute Gastroenteritis with Abdominal Koch’s since 10/7/2009, 2/12/2009 to 15/1/2010 and 5/2/2010 to 20/3/2010 and on regular intervals thereafter. These facts were not disclosed in DGH dated 13.1.2011.

Had these facts been disclosed the company would not have covered the risk for the above said policy under the same terms and conditions.

As a result we are refunding the account value of Rs.17107/- under the captioned policy which is credited to your saving account No.32065227204 of State Bank of India, vide Neft reference No.SIN001011Q2254186.

Hence, the claim has been repudiated due to non-disclosure of material facts.”

4.      Aggrieved of the repudiation of her claim, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986. 

5.      The Bajaj Allianz contested the complaint by filing reply reiterating the fact stated in the repudiation letter.

6.      After hearing learned counsel for the parties and perusing the record over the file, question arises is as to whether Bajaj Allianz was justified in repudiating complainant’s claim?

7.      Indisputably, the policy had lapsed and it was revived on January 13^th, 2011.  At the time of revival of the policy, Harpal Singh-deceased submitted form (Exhibit O-25), wherein he answered questions No.1 and 4 as under:-

Q.No.	Question	Answer
1     a)	Have you suffered from any illness/disease requiring treatment for a week or more?	No
b)	Did you ever have any operation accident or injury?	No
c)	Have you had an electrocardiogram, X-ray or screening blood urine or stool examination?	No
4	Are you at present in good health?	Yes.

 

8.      Bajaj Allianz has produced medical record of Harpal Singh-deceased Exhibit O-7 to O-20.  Exhibit O-8 is a certificate issued by Dr. Ravindera Maternity & General Hospital, Panipat which showed that Harpal Singh was suffering from Abdominal Kochs disease, that is, Abdominal Tuberculosis and leave from July 10^th, to July 20^th, 2009 was recommended because Harpal Singh was a driver in Haryana Roadways.  To the same effect is the certificate Exhibit O-12 whereby he was diagnosed as a patient of Acute Gastroenteritis with Abdominal Kochs and leave was recommended from February 05^th to February 20^th, 2010. Certificate Exhibit O-19 was issued by Dr. Gian Chand Gupta, Karnal certifying that Harpal Singh was suffering from Infection Hepatitis.  In Outdoor Ticket of Government Hospital, it was mentioned that Harpal Singh was suffering from HIV +ve.  From the medical record, it is evident that Harpal Singh was suffering from Abdominal Tuberculosis much prior to the revival of the insurance policy.  He remained on leave for a long period as is mentioned in the certificate (Exhibit O-6) issued by General Manager, Haryana Roadways, Karnal.     

 9.     It is well settled principle of law that revival of the policy is a new contract and the insurer can repudiate the insurance claim if it finds that the policy was got revived by the insured on mis-statement and by concealment of true fact regarding his health.

10.    In LIFE INSURANCE CORP. OF INDIA & ANR. versus KEMPAMMA & ANR. I(2013) CPJ 653 (NC), Hon’ble National Commission held as under:-

“11.   Learned Counsel for the respondent further argued that statement regarding his health at the time of revival of lapsed policy is not to be seen. This argument is devoid of force in the light of judgment rendered by this Commission in R.P. No.85 of 2007, Pritam Kaur v. LIC of India, in which it was held that “At the time of revival fresh declaration is taken on the basis of which new contract is entered into”. Thus, it becomes clear that at the time of revival of policy new contract comes into existence and if assured suppresses material fact or gives false declaration regarding his health, Insurance Company is entitled to repudiate claim.”

11.    In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

12.    Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

13.    In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  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, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that 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.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

14.          From the medical record, it is established that insured was suffering from Abdominal Tuberculosis prior to the revival of the insurance policy and he suppressed this fact in his statement (Exhibit O-25) made at the time of revival of the insurance policy.     In this view of the matter and the law enunciated above, this Commission is of firm opinion that Bajaj Allianz was justified in repudiating the claim of the complainant.  Hence, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

15.          The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellant against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced 09.10.2015

Diwan Singh Chauhan Member

B.M. Bedi Judicial Member

Nawab Singh President

CL