Present:
- Sri N.K.Sarker, President.
- Smt. A. Bandyopadhyay, Member.
For the Complainant : Sri P. Roy, Advocate.
For the O.Ps. : Sri Sandeep Roy, Advocate.
Jiblal Rajak, the father of the complainant was holder of Birla Sunlife Insurance Policy bearing Certificate No. 006216031 dated 29/8/13 who died on 7/9/2013 due to Cardio Respiratory Failure ( vide Annexure 1) when the policy was in force. The complainant being the nominee of the policy applied to the O.P. for payment due from the policy but the claim was repudiated vide letter dated 30/6/14 and his prayer for reconsideration of repudiation was also turned down. The O.Ps did not take any further step towards payment despite lawyer’s letter sent under Regd. Post with A/D vide Annexure 5 Series. Hence the case.
Having denied all the material allegations contained in the petition of complaint the O.Ps have contested the case contending inter alia that the law of insurance is governed by the legal doctrine “Uberrima fides” but the proposal form was subsequently found to contain wrong information and particulars, in respect of the life assured, which came to light during investigation in case of an early claim. There was no scope to entertain the claim in view of the existing law for the time being in force coupled with decision of certain upper Forum in certain cases having similar ratio of fact and law. Hence the prayer for dismissal of the case.
Only point for consideration is whether the complainant is entitled to any relief? If so, what is the relief/reliefs he is entitled to?
Decision with Reason:-
Admittedly, the father of the complainant was holder of a Policy Certificate bearing no. 006216031 dated 29/8/13 of Birla Sunlife Cum Pay Term –15 (Vide Annex 2). During the continuance of the policy the life assured died on 07/09/13 due to Cardio Respiratory Failure (vide Annex 1). The complainant being the nominee preferred claim but the same was repudiated on certain grounds (vide Annex 3) and prayer for reconsideration (vide Annex 5) of such repudiation was also turned down (vide R10).
Admittedly, the grounds for repudiating the claim are as follows:-
- Suppression of material facts.
- Age proof certificate as furnished is fake one.
Let us now take into consideration the materials on records furnished by the rival parties including the argument in writing submitted on behalf of each of the parties.
Let us take the point no. 2 first. It is with regard to age of the life assured. As per the proposal form his date of birth 01/01/1961 vide the photo copy of the policy attached with annexure 2 by the complainant while the same is R2 attached with written version submitted by the complainant. The same person obtained another policy (which is also subject matter of another case) where his date of birth has been mentioned as 01/01/1961 (vide R3) attached to written version of the O.P. On the other hand, the O.P., after the death claim was preferred, caused an investigation in view of the fact that it was an early claim and the O.P. during such investigation obtained school leaving certificate of the LA (Life Assured) wherefrom his date of birth appears to be 06/01/1961 (vide R5) annexed to WV. A certificate from the Pradhan of local gram Panchayet was obtained by O.P. (vide R6) wherefrom the age of LA at the time of his death was about 71 years which is based on the age of the LA recorded on the voter list of the local area. It is also found from the death certificate dated 13/9/13 that the LA died on 7/9/13 and his age was recorded 52 years (vide Annex1). It is also found from an affidavit dated 23/5/14(vide R7) sworn by the complainant himself where he stated his age as 43 years. The date of birth furnished as 6/1/61 is backed by the school leaving certificate but on investigation it revealed, as per endorsement made by the Head Teacher, that said certificate had no resonance with the register maintained at that end and accordingly it was said to be a false certificate and was rejected (vide R7).
From the above materials it is clear that the LA and subsequently his descendant/ descendants used to use/furnish different dates as the date of birth of the LA.
True it is that recording of age of the LA in the voter list, in the death certificate etc are un-backed by any document or basis but those documents were prepaired by some one else to whom the age of the LA was not known and same must have been noted as per statement either of the LA or some one related or known to him having knowledge of his age. Therefore, those documents cannot be thrown away outright. On the other hand, if we consider the school leaving certificate as the document regarding date of birth of the LA then the document being doubted and cancelled by a proper person in chair, being the successor of the person who actually issued it, the document looses its force. Ld advocate for the complainant has argued that no attempt was taken either to collect the certified copy of the counter part of TC No. 267 and admission register or to examine the Head Teacher who cancelled the school leaving certificate and accordingly no reliance should be placed upon such cancellation of certificate alleging the same to be false.
Such argument is no doubt appreciable but is of little impact because it has already been found that in different documents different date of birth of the LA has been mentioned. If we assume that the present Head Teacher has wrongly stated the school leaving certificate of the LA as false which is relied by the O.P. then the onus was obviously upon the complainant to call for the admission register or the counter part of school leaving certificate bearing no. TC267. It can hardly be concluded that the complainant himself in his affidavit sworn in 2014 stated his age as 43 which is not correct. If we assume that the date of birth of his father is 6/1/61 then as on the date of death he was about 52 years in the year 2013. So, if the age of the father in the year 2013 is about 52 years and age of his son in the year 2014 is 43 then their difference in age comes to about 9-10 years which is nothing but absurd and unimaginable. The age of a proposer for an insurance policy is very important specially because on attaining certain prescribed age limit a person is not entitled to such policy or the quantum of premium may vary according to age of the proposer as the case may be. Therefore, inspite of strenuous argument advanced by Ld advocate for the complainant, we are left with no other alternative but to conclude that no where the date of birth or the age of the LA was mentioned correctly. So, there is suppression of actual age of the LA which is against the principal of “Uberrima fides” and is highly essential element for a valid contract applicable in case of acceptance of proposal and issuance of Insurance Policy. Therefore, the point no. 2 must be answered against the complainant and it is so done.
Let us now proceed to deal with the Point No. 1 which relates to allegation of suppression of material facts in obtaining the policy and this is another important ground for repudiation of the claim. To the queries relating to information as to whether the LA, prior to taking of the policy, had been suffering from certain specific diseases or was under treatment of a doctor for certain ailments or was hospitalized for his treatment with regard to some ailments/disease etc the LA answered all such queries in the negative as it appears from the proposal form. Because it was an early claim it was imperative upon the O.P. to cause an investigation and during such investigation it revealed that LA was hospitalized at Rajendra Institute of Medical Sciences, Ranchi in the department of medicine where the clinical history and findings at the time of admission was that the patient had swelling of face and neck since 15 days which was ultimately diagnosed as Super Vena Cava Syndrome. Fact that a person named Jeevlal Rajak aged about 65 years, male, was admitted in aforesaid hospital with aforesaid ailment on 5/7/13 and was discharged on 10/7/13. Ld advocate for the complainant with his usual vigour coupled with submissiveness has submitted that the person who was admitted in aforesaid hospital is not the present LA. To fortify his submission first of all he has pointed out that the LA is Jiblal Rajak and not Jeevlal Rajak, secondly, there is no address of the patient in the discharge sheet issued by the hospital. Thirdly, date of birth of the LA was 6/1/61 and as per the medical documents (vide R4) he was aged about 65 years which does not tally with the age of the LA.
The first point raised by Ld advocate for the complainant is settled by the affidavit (Vide R7) sworn by the complainant himself where he stated on oath that he is the son of Jiblal Rajak and said Jiblal Rajak and Jeevlal Rajak is the same and single person. Though the complainant in his evidence in chief stated that the official of O.P.- insurance company fraudulently obtained said affidavit for the purpose of repudiating his claim and that the medical paper marked R4 is not related to his deceased father yet we do not find that after swearing that affidavit and handing it over to the official of O.P. the complainant took any initiative to inform any appropriate authority that such an affidavit was obtained forcibly or by any allurement. Therefore, we have no hasitation to hold that the affidavit was a voluntary act.
So far the above point no. 2 is concerned we find that the medical documents were prepaired by the staff of the hospital concerned and it is their negligence in omitting to note down the detail address of the patient. Be that as it may, it goes unchallenged that aforesaid medical documents were obtained by the O.P. not by hand to hand but were directly sent to them through post. Now the question is how could O.P. nock at that hospital to come with certainty that this very LA was admitted in that hospital. It is not that they found it in dream. But the investigation report speaks that the investigator (who stated all these by swearing an affidavit vide R8) examined some neighbour of the LA viz. Mr. Mouchiram Mahato, Ph: 9547233505, Mr. Swarup Rajak, Ph: 9932905792, Mr. Manoranjan Mahato, Ph: 9547649646, Mr. Sonatan Rajak, Mr. Murlidhar Rajak who revealed that the LA had been suffering from DM and other associated problems alongwith old age problems and was admitted in RIMS, Ranchi in the month of July’13 and he died on 7/9/2013. Therefore, we get source which led the O.P. to knock at the door of said hospital and obtain the medical documents relating to the LA. Ld advocate further submitted that none of aforesaid person has been examined by the O.P. and so the stand taken by the O.P. should be ignored. We are unable to agree with such submission simply because O.P. has clearly stated the name of the person as the source of their information. Had any of them not stated anything to the investigator of the O.P. then it was the complainant to call and examine all those persons to prove that none of them has made any such statements to the investigator. In such circumstances we have no hasitation to hold that the LA was admitted in the aforesaid hospital for treatment of his aforesaid ailment no matter his name was written there as Jeevlal without any detail address.
So far the above third point is concerned our decision have already been depicted while dealing with point no. 2. So, this point does not require any further deliberation.
Ld advocate for the complainant has submitted that may be, the proposer of a policy may omit to mention or inadvertently may mention something contrary to the reality so far the points with regard to medical ailments if any, from which the proposd LA had been suffering from. But it is the duty of the policy issuing authority to satisfy itself that the proposed LA is medically fit to have a particular policy. If that is not done and if the premium for the policy is accepted and if the LA dies during continuance of the policy, the insurance company has no escape but to make the payment as per terms of the policy. In support of his submission he placed reliance upon a decision reported in (2014)4 WBLR (CPSC) 728 where it has been held “ the insurance company was no doubt free to verify the information provided by the proposer before accepting the proposal as well as premium. ‘Good faith’ prompted them to accept information furnished by the proposer. They did not exercise their right to cancel or make void the insurance contract which implies that the insurance contract was in force till the date of filing of the insurance claim. Since the insurance claim was in force till the report of death of the insured, it becomes obligatory on the part of the insurer to fulfill their commitment of releasing ‘ Death Benefit’ as provided in para 11 of the policy. In reply Ld advocate for the O.P. placed reliance upon the provision u/S 45 of the Insurance Act 1938 which runs as follows:
Policy not to be called in question on ground of mis-statement after two years.
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 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 insured, or in any other documents leading to the issue of policy, was inaccurate or false, unless the insurer shows that such statements was on a material matter of suppressed fact which it was material to disclose and that it was fraudulently made by the policy holder and 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.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.
In addition to this Ld advocate for the O.P. has placed his reliance upon a decision in the matter of Mohit Kohli –vs- Branch Manager, Aviva Life Insurance Co Ltd (Judgment & order dated 1/4/14 passed by State Consumer Commission, Delhi, first appeal 170/11) where it has been held that suppression of material fact regarding previous ailments would amount to repudiation of claim. He has also placed his reliance upon a decision reported in AIR 1959 PA(413) [Ratan Lal & anr –vs- Metropolitan Insurance Co. Ltd] where it has been held that ‘ The well settled law in the field of insurance that contract of insurance including the contracts of life insurance are contract Uberrima fides and every fact of materiality must be disclosed otherwise there is good ground for rescission and this duty to disclose continues upto the conclusion of contract and covers any material alteration in the character of the risk which may take place between proposal and acceptance.
He has also referred the observation of Hon’ble Apex Court’ relied upon in a decision by NCDRC in the matter of Life Insurance Corporation of India –vs- Smt. Kusum Patra, (Revision Petition No. 1585/11) which are as follows:
There are three conditions of application of second part of Section 45 of Insurance Act such as
- the statement must be on a material matter or must suppressed facts which it was material to disclose;
- the suppression is fraudulently made by the policy holder; and
- the policy holder knew at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
Now, the term material fact does not found to have been defined in the insurance act and so it has to be understood and explained by the court in general terms as held by Hon’ble National Commission to mean as to ‘ 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 in fixing the rate of the premium is a material fact…………… In this regard, it would be apposite to make a reference to Regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of policy holders’ interests) Regulation 2002 which explain the meaning of the term “material” to mean and include important, essential and relevant information in the context of guiding the insurer to decide whether to undertake the risk or not. Another reference has been cited in a case between LIC of India and Kusum Patra decided by Hon’ble NCDRC where it has been observed that “ in the contract of insurance any fact which would influence the mind a prudent insurer in deciding whether to accept or not the risk is a ‘material fact’. If the proposer has knowledge of such fact he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasis that any inaccurate answer will entitle the insurer to repudiate his 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.
Therefore, summing up the argument advanced by Ld advocates of the respective parties and keeping in mind the decisions relied upon by them we are of the clear opinion that contract of insurance is based upon the principle Uberrima fides i.e. a contract based on the principle of utmost good faith. In such view of the matter we accept the argument advanced by Ld advocate for the O.P. which is found to be fortified by the observation and decision made by Hon’ble Superior Forum and Court in catena of judgments.
The next question to be dealt with is whether omission to mention the disease, the LA had been suffering from, in the proposal form is material or not and whether it amounts to suppression of material facts. We have already found that the LA was sufficiently aged at the time of taking the policy. It has been proved satisfactorily that immediate few days before his death he was admitted in the hospital for treatment of his ailment Super Vena Cava Syndrome. As per the positive assertion and defence taken by the O.P. the anxious consideration could be given whether to issue the desired policy to the LA had all such material fact been disclosed in the proposal form.
In this context Ld advocate for the complainant has submitted that the LA was not conversant with English language as it reveals from the fact that he put his signature in the proposal form in Bengali manuscript. He also submitted that the entire form was filled up by the agent and therefore allegation of suppression of material fact cannot be attributed to the LA. As against such submission Ld advocate for the O.P. placed his reliance upon a decision of Hon’ble Supreme Court in a case between Grasim Industries Ltd and Agarwal Steel (2101) 1 SCC 83 where it has been held “in our opinion when a person signs a document there is a presumption, unless there is proof of force or fraud, that he has read the document properly and understood it and only then he has affixed his signature thereon, otherwise no signature on a document can ever be accepted”. In addition to this the proposal form contains a vernacular declaration stating that if in a case LA does not understand English the terms and conditions of the policy has been read over and explained to the LA, who after understanding all the contents thereof has put his signature on the proposal form. In this case, if we accept the submission that the proposal form was filled up by the agent then also we must presume that said agent had a fiduciary relation with the LA and therefore, the LA without any hesitation in mind and having a belief that the form has been correctly filled up has put his signature thereon. So, the LA/proposer cannot absolve himself of the liability if the proposal form contains false statement or suffers from suppression of material facts.
Having regard to entire facts and circumstances of the case we are fully convinced to hold that the date of birth furnished in the proposal form was not only doubtful but also not correct at all in view of the fact that different date of birth and different ages of the LA have been brought to our notice and also in view of the reasons stated ante. We are also convinced to hold that the proposer/LA has suppressed material facts which hit to the very root of the contract of insurance so far it relates to the decease Super Vena Cava Syndrome the LA was suffering from who died due to Cardio Respiratory failure which has a co relation with the aforesaid decease the LA had been suffering from.
It is the positive assertion of the O.P. that “had the LA disclosed the above fact at the time of issuance of policy, the policy would not have been issued at all”. By this the O.P. tried to impress this Forum that had the LA disclosed his correct age it could be found to have exceeded probably the insurable age and had he disclosed the ailments he had been suffering from since before taking the policy, the policy would not have been issued.
The above submission seems to be the gist of defence case and stand of the O.P. If we keep it in mind then we reach at that very stage where the proposal is being made for its acceptance/non acceptance subject to satisfaction of disclosure or non disclosure of material facts.
Now truth has been unveiled meaning thereby that the LA suppressed material fact and so the proposal turns non acceptable. If that be so the question of acceptance of premium does not arise. Since a single premium has been accepted, in our considered view, in the proper evaluation of the factual aspect of the case, that premium should be returned back specially because such acceptance of premium was made due to ignorance of the fact of suppression of material fact and had it been known the premium would not have been accepted. So, we propose to ask the O.P. to refund the amount of premium accepted by them from the LA. But since there has been suppression of material facts we hold the complainant not entitled to litigation cost or any compensation because we find no deficiency in rendering service by the O.P. The point under consideration is accordingly disposed off. Hence,
ORDERED
That the petition of complaint be and the same is allowed in part on contest but without any cost.
The O.Ps are jointly and severely directed to refund the premium amount to the complainant received by them from the LA within 2 (two) months from the date of this order failing which the order shall become executable.
Let a copy of this judgement be supplied to the parties free of charge.
