Haryana

Yamunanagar

CC/1269/2012

Paramjit Singh S/o Alam Singh - Complainant(s)

Versus

Birla SUn Life Insurance Co.Ltd. - Opp.Party(s)

Brijesh Partap

13 Sep 2017

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, YAMUNA   NAGAR

 

Complaint No.1269 of 2012.

Date of institution: 10.12.2012

Date of decision: 13.09.2017.

 

 

Paramjit Singh aged about 41 years son of Shri Alam Singh, resident of House No.351, Old Hamida, Anand Colony, Garhi Road, Yamuna Nagar, District Yamunanagar.

                                                                                                   …Complainant.

                             Versus

Birla Sun Life Insurance Co. Ltd. Branch Office: Yamuna Nagar, through its Branch Manager.

 

….Respondent.

 

 

BEFORE    SH. SATPAL, PRESIDENT

                   SH. S.C.SHARMA, MEMBER.

                   SMT. VEENA RANI SHEOKAND, MEMBER.          

 

 

Present:       Sh. Brijesh Partap, Advocate, for complainant.   

                    Shri Nitin Arora, Advocate for OP.

 

 

ORDER (SATPAL, PRESIDENT)

 

 

1.                The complainant Paramjit Singh has filed this complaint under section 12 of the Consumer Protection Act 1986 as amended up to date (hereinafter respondent will be referred as OP). 

2.                Brief facts of the complaint, as alleged by the complainants, are that complainant has taken three Life Insurance Policies i.e. for himself and in the name of his mother and his father Shri Alam Singh and the Life Insurance Policy bearing No.004717260 was obtained by the complainant in the name of his father Shri Alam Singh from the OP for a sum assured of Rs.5 lac on 07.03.2011 and installment/ premium was paid by Shri Alam Singh to the OP. The insurance installments were to be paid monthly. The complainant has been made nominee in the said policy of his father. Hence, the complainant has a right to file the present complaint being nominee of the deceased Alam Singh. It is pertinent to mention here that prior to obtaining the said policies , the complainant, his mother and his father were medico legally examined and there was no disease to all of them and all the expenditure of medical were borne by the complainant himself. After obtaining the policy the first installment of premium was paid by the complainant on behalf of his father in cash and for remaining installments/premium and the complainant has given cross cheques in favour of the OP, so that in further there will be no delay in premium installment. The OP has been withdrawing the insurance premium from the saving account of the complainant i.e. Paramjit Singh. Unfortunately, Shri Alam Singh suffered some deceased and was admitted in PGI Chandigarh on 30.07.2011 and during treatment he died on 03.08.2011. Thereafter, the complainant informed the Agent of the OP regarding the death of the deceased Alam Singh and supplied all the documents, and filled up insurance claim form with the OP who assured that the insurance claim will be released very soon. Thereafter, the complainant has been regularly visiting the OP for insurance claim in respect of the death of Alam Singh, but the OP every time postponed the matter on one or the other false pretexts. Now, more than one year has been elapsed from lodging the insurance claim with the OP but the OP has not released the insurance claim to the complainant, who is the son and nominee. Lastly prayed for directing the OP to pay assured amount along with interest compensation as well as litigation expenses. Hence, this complaint.

3.                Upon notice, OP appeared and filed its written statement taking some preliminary objections such as complaint is not maintainable and is liable to be dismissed as no cause of action ever arose in favour of the complainant and against the OP to file the present complaint; OP submits that the complainant has created a false story in his complaint to mislead this Hon’ble Forum by concocting and distorting the facts and circumstances of the present case. The deceased “life Assured” (herein after referred to as DLA) i.e. Shri Alam Singh had submitted to the OP party a proposal/application dated 17.02.2011 for the purchase of BSLI Vision Plan. The proposal was accepted on the standard rates based on the information provided by the LA and consequently a policy was issued bearing policy No.004717260 dated 07.03.2011. The present complaint is an afterthought and has only been filed with the ulterior motive to harass and humiliate opposite party.  Before acceptance of the proposal/application by the OP, the contents of the proposal/application illustrations and the addendum form were read and understood by the DLA. On the basis of the information furnished in the application/proposal form, the proposal was processed by the OP and thereafter the said policy was issued to the LA. However, it is also submitted that before acceptance of the proposal by the OP party adequate information with regard to the product, nature and its significance was given to the DLA as per the IRDA guidelines. As per proposal annual premium was Rs.98,721/- and rider premium was Rs.450/- sum assured was Rs.3,15,000/- and rider sum assured on account of accidental death and disability was Rs.3 lac, guaranteed survival benefit was Rs.3,28,230/- premium paying term was 5 years, last premium was due on 07.02.2016. However, the DLA proposed to pay premium per month i.e. Rs.8349.35/- and had paid two months premium at the time of filing the proposal as per terms and conditions of the policy i.e. Rs.16,700/-. He had further undertaken to pay next premiums through ECS mandate by way of auto debit from the account of Shri Paramjit Singh bearing No. 12840100009228 in Bank of Boroda and therefore, the third premium was paid through ECS. However, it is again submitted that the DLA only paid three premiums i.e. two at the time of filing the proposal form and third in the month of May, 2011 but did not pay the fourth premium which was due on 07.06.2011. The auto debit form filled up by the DLA along with the proposal form failed to honour the fourth premium due in the month of June, 2011 hence, the policy got lapsed on 07.06.2011 due to non payment of premium for the month of June, 2011. Unfortunately the deceased life assured died on 03.08.2011 in P.G.I. Chandigarh and the complainant being nominee lodged the death claim with the OP but the death claim was repudiated by the OP vide letter dated 10.10.2011 on the ground that the policy stood lapsed on account of non payment of premium due since 07.06.2011. However, the complainant lodged a reconsideration request to the OP and the matter was reconsidered and investigated through an independent agency namely Probe India. However, as per investigation report the DLA was treated in Waryam Singh, Hospital Jagadhri Road, Yamuna Nagar vide OPD No.02162 Registration No.00576 dated 28.01.2011 i.e. much prior to the issuance of the Insurance policy. Further, the deceased Alam Singh was also admitted in PGI, Chandigarh vide CR No. 3157777 dated 30.07.2011. He was also a known case of hypertension for the last 5 years and was on medication. He was also a habitual drinker and was taking alcohol for last 30-35 years, had history of taking opium for last 20-25 years and later on he developed cancer and died on 03.08.2011 at PGI, Chandigarh. He was earlier also admitted in PGI on 18.04.2011 and was discharged on 29.04.2011 vide CR No.A1396650 in GS –II 4067 clinic and was treated by Dr. Vikas Gupta. This fact of pre existing disease was not disclosed in the proposal for insurance. Had he not concealed the above facts regarding his pre existing disease in the proposal form, the OP would not have issued the policy on existing terms and conditions. 

          Medical History

1. Within past 5 years have you:

Consulted any doctor or health practitioner except for common cold, influenza lasting less than 4 days?	“ No”
c) Admitted /been advised to      be admitted any hospital      or medical facility for      medical management or      surgical procedure ?

`

(ii)     Have you ever sought advice or suffered from any of the following?

(f) Cancer, tumour,abnormal           growth,thyroid disorder,           enlarged glands or           enlarged lymph nodes?	“ No”
(n)     Any other illness, surgery           or injury?

 

On merit rest contents of the complaint were controverted and reiterated the stands taken into preliminary objection.

4.                In support of his, learned counsel for the complainant tendered into evidence affidavit of complainant as Annexure CW/A and documents as Annexure C1 to C11 and closed the evidence on behalf of complainant.

5.                On the other hand, learned counsel for the OP tendered into evidence documents such as Annexure R1 to R9 and written statement by way of affidavit and closed the evidence on behalf of OP.  

6.                We have heard learned counsel for the parties and have also perused the record available on the file.

7.                 Arguments heard. Learned counsel for the complainant has argued that the complainant had taken insurance policy in the name of his father Shri Alam Singh from OP on 07.03.2011 and paid the installment. It is further argued that before obtaining the said policy father of the complainant was hale and healthy and was medico legally examined by the penal of doctors of OP and they found no disease. However, the proposal form was filled up by the agent and the same was signed by father of the complainant who was not aware of concealment of any facts regarding health mentioned therein. The installment premium was to be paid monthly and the complainant had given cross cheque in favour of the OP for withdrawing the insurance premium from the saving account of complainant through auto-debit. As such, it was the duty of OP to collect the premium from the account of the complainant and he was not at fault in case there was any default in the payment of the premium. Unfortunately, life insured Shri Alam Singh suffered some disease and was admitted in PGI, Chandigarh and expired on 03.08.2011 at PGI Chandigarh. Claim was lodged with the OP but the OP did not settle the claim of the complainant and prayed for acceptance of the complaint.

8.                On the other hand, learned counsel for the OP argued that on the basis of proposal form duly filed by the life insured and on the basis of information furnished in the proposal form the case was processed by the OP and the said policy was issued to the life insured. The complainant paid only three monthly installments upto May, 2011. But, the Life Insured did not pay the fourth premium which was due on 07.06.2011 and the auto debit form filled up by the life insured along with the proposal form failed to honour the fourth premium that was due in June, 2011 for which OP is not at fault hence, the policy got lapsed on 07.06.2011 due to non payment of the premium. The claim case of the life insured was investigated through independent Agency and as per investigation the life insured was treated in Waryam Singh Hospital Jagadhri on 28.01.2011 much prior to the issuance of the insurance policy. Moreover, the life insured was also admitted in the PGI, Chandigarh on 30.07.2011 wherein as per record the life insured was a known case of Hypertension for the last five years and was on medication and he was also a habitual drinker from last 30/35 years and also having history of taking opium for last 22-25 years and lateron he developed Cancer and died on 03.08.2011 at PGI, Chandigarh. He was earlier also admitted in PGI on 18.04.2011 and was discharged on 29.04.2011. The claim of the complainant was rightly repudiated as the life insured suppressed the true facts from the OP company at the time of taking the policy. Beside this, the policy in question was also in lapsed mode. Learned counsel for OP referred the case laws titled as “Pallavi Dhawan Vs. Ms Birla Sunlife Insurance Co. ltd. and others, 2015(4), CLT 1 wherein the Hon’ble National Commission held that “deceased suppressed information regarding chronic disease from the insurance company at the time of submitting proposal form for obtaining the insurance policy – Section 45 of Insurance Act, is not held to be applicable since the insured died within less than 2 years of taking all three insurance policy in question – Even if a period of two  years and elapsed the suppression was clearly within the knowledge of deceased  and it was on material fact regarding health condition – Consumer complaint dismissed.”

          The counsel for the OP also referred the case law titled as “ICICI Prudential Life Insurance company limited Vs. Yashika @ Meera & 2 others, 2015(4) CLT 518, wherein the hon’ble National Commission held that insured was alcoholic and chain smoker – Said fact suppressed – It is not necessary that there should be any nexus between the reasons for the death of the insured and particulars he has suppressed from the insurance policy – Complaint dismissed.

          Learned counsel for the OP further referred the case law titled as “Birla Sun Life Insurance Company Limited Vs. Ronnanki Rangarao, 2016(4) CPJ 640 wherein the Hon’ble National Commission held that deceased was under treatment for carcinoma stomach and was operated prior to apply for policy- fact of pre existing produced no evidence in support of averment that medical record is fabricated and deceased was hale and hearty at the time of filing of proposal- State Commission erred in holding petitioner guilty of deficiency in service- impugned order set aside – Revision Petition allowed.

          Learned counsel for the OP also referred the case law titled as “Life Insurance Corporation of India and another Vs. Manikappa N. Bhandari, 2015(4) CPJ 386, wherein the Hon’ble National Commission held that “As per terms and conditions of the policy grace, period of one month was allowed for payment of defaulted premium and if premium is not paid before expiry of the dates of grace, policy lapses- No payment of premium was made which was due in February, 2005 and policy stood lapsed before his death presumed to be on 22.10.2005- Specifically been mentioned in the policy that basic /extended claim concession are not applicable to this policy and after expiry of dates of grace, policy will be treated as lapsed and full death sum assured is not payable- Repudiation of claim justified.      

 

There is no deficiency on the part of the OP and prayed for dismissal of the complaint. 

9.                After hearing the learned counsel for the parties and the evidence on record whether the complainant suppressed the true facts regarding his heath, at the time of taking the policy. It has been repeatedly held that the contract of the insurance falls in the category  of contract of UBERRIMAE FIDEI meaning thereby a  contract of utmost good faith, between the parties. When information, on a specific aspect, is asked for, in the proposal form, the insured is under a solemn obligation, to make a true and full disclosure of the same (information), on the subject, which is within his knowledge. Of course, obligation to disclose, extends only to the facts, which are known to the assured, and not to what he ought to have known. The Hon’ble Supreme court of India in United Insurance Co. ltd. Vs. MKJ Corporation III (1996) CPJ 8 (SC)= (1996) 6 SCC 428, laid down the principle of law, that it is a fundamental principle of insurance law, that utmost good faith must be observed, by the contracting parties. Good faith forbids either party from non disclosure of the facts, which they party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing to the contrary. To the similar effect, the principle of law, was laid down in Modern insulators  Ltd. Vs. Oriental Insurance Co. Ltd. (II) (2000) SLT 323=1 (2000) CPJ 1 (SC). In PC Chacko and Anr. Vs. Chairman Life Insurance Corporation of India and Ors. III (2008) CPJ 78 (SC) it was observed as under:

          11” Section 45 of the Insurance Act reads as under;

45.  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 the expiry of two years from the date on which it was effected, be called in question by any 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.

          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 form.

          Section 45 postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia on the ground that the certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy holder or that the policy holder knew at the time of making it that the statement was false. Statute, therefore, it self provides for the limitation for valid repudiation of an insurance policy. It takes into account the social security aspect of the matter.

          13. there are three conditions for application of Second part of Section 45 of the insurance Act which are: -

“ (a) the statement must be on a material matter or must suppress fact which it was material to disclose.

2.  The suppression must be fraudulently made by the policy holder; and
3. The policy holder must have known at the time of making the statement that it was false or that it suppressed fact which it was material to disclose”.

10.              The purpose of taking a policy of insurance is not, in our opinion, very material. It may serve the purpose of social security , but then the same should not be obtained with a fraudulent act, by the insured. Proposal can be repudiated, if a fraudulent act is discovered. The proper must show that his intention was bonafide. It must appear, from the fact of record. In a case of this nature, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policyholder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answering which has a great bearing on the contract of insurance, if discovered, may lead to the policy being vitiated in law.

11.               In Rampreeti Yadav Vs. UP Board of High School & Intermediate Education & Ors. V (2003) SCT 394= JT 2003(Supplt.I) SC 25, the principle of law, laid down was to the effect that it is well settled law that mis-representation itself, amounts to fraud, in some cases.

12.              Keeping in view,  the principle of law laid down in the aforesaid cases and the case law referred by the counsel for the OP, the main question which arises for consideration is whether in the instant case the life insured (now deceased) at the time of taking the insurance policy suppressed the material facts  or had made a wrong declaration or not?  Admittedly Shri Alam Singh life insured had purchased an insurance policy from OP. He was issued the insurance policy. Copy of Proposal Form (Annexure R-2) duly signed by the life assured reveals that he made the declaration and authorization in the proposal form. Some part of the proposal form is reproduced as under, wherein the life insured answer the question regarding his health that he was not suffering from any ailment.

1. Within past 5 years have you:

Consulted any doctor or health practitioner except for common cold, influenza lasting less than 4 days?	“ No”
c) Admitted /been advised to      be admitted any hospital      or medical facility for      medical management or      surgical procedure ?

`

(ii)     Have you ever sought advice or suffered from any of the following?

(f) Cancer, tumour,abnormal           growth,thyroid disorder,           enlarged glands or           enlarged lymph nodes?	“ No”
(n)     Any other illness, surgery           or injury?

           

According to the opposite party, the life insured did not give true answers to the above questions at the time of taking the policy. The opposite party got conducted the investigation of the case and has annexed with investigation report (Annexure R-7), copies of record of treatment taken by deceased Alam Singh from Waryam Singh Hospital, Yamuna Nagar and PGI Chandigarh which clearly shows that the life assured was diagnosed as a case of Metastatic Liver Disease on 01.02.2011 and he was a known case of hypertension from the last five years and as per report of spiral CT & MRI Centre , Chandigarh dated 01.02.2011, the life insured was diagnosed as a Metastatic Liver Disease (Cancer). Later, he developed cancer and expired at PGI Chandigarh on 03.08.2011. Beside this as per medical report of PGI, Chandigarh, the life insured Shri Alam Singh was suffering from Metastatic Liver Disease and expired on 03.08.2011 due to CA Gall Bladder.

13.              From the details of diagnosis, explained above, it is evident that the life insured, before commencement of insurance policy in question, had been taking treatment for serious ailments and was also recommended Chemo Therapy  as is clear from OPD slip dated 28.01.2011 of Waryam Singh Hospital Yamuna Nagar, but the deceased had concealed these facts in the proposal form and if there is any mis statement or suppression of material information, the company has the right to repudiate the claim under the policy. It was not the case of the complainant that the life assured was not aware of symptoms of any disease or the treatment however, he was taking the treatment from Waryam Singh Hospital Yamuna Nagar as reflected in investigation report got conducted by OP (Annexure R-7).

14.              We are of the considered view that the life assured in the proposal form was certainly a material fact and had the true state of affairs been disclosed to the insurer, it was quite  probable either the proposal would have been rejected or a higher premium would have been charged. Since, the life insured in the instant case made mis presentation/suppressed  the fact personally related to him, the policy became void ab initio and as such the OP company has rightly repudiated the claim of the complainant. There is no force in the contention raised by the counsel for the complainant that the proposal form (Annexure R2) was filled up by the agent and the deceased Alam Singh such had only signed the same. From the perusal of the proposal form, it is clear that deceased Alam Singh was not an illiterate person as he had signed the proposal form in English.

15.              Beside this, the other point for consideration is whether at the time of death of the life assured, the policy in question was lying in lapsed mode or not as per terms and conditions of the policy?

16.              In the present case, the life assured had admittedly deposited only three monthly premiums upto May 2011 and thereafter the Life Assured failed to deposit the premium of June 2011, July 2011 and thereafter, at the time of death of the life assured, the policy was lying in lapsed mode. As per case law titled as “Life Insurance Corporation of India Vs. Mani Ram, reported in CPJ 2005 (3), P-31 SC it has been held that: -

Insurance (Life) : Lapse of Policy: Non Payment of premium: insurance company not liable- Terms and conditions of policy- Payment of premium to be made within grace period of one month-  Policy would lapse in case of non compliance- Premium not paid within grace period- Insurnace Cmpany wholly justified in rejecting claim of the complainant – No exception can be taken against such decision- Fora below committed error of law in allowing claim of respondent- Order liable to be set aside- Appeal allowed. 

 

In view of the aforesaid law as well as terms and conditions of the policy the life assured failed to deposit the premium and as such the policy become lapsed. The complainant has failed to place on record any document to prove that it was the duty of the OP to collect premium from his account as there were instructions for payment of installment through Auto Debit. The fault if any, was of the concerned Bank and not of the OP, So the complainant is not entitled for any claim and the OP company has rightly repudiated the claim of the complainant.

17.              In view of the above discussion as well case law referred above, we are of the considered view that the policy in question had lapsed before the death of insured, as such no claim was payable under the policy and the OP company has rightly repudiated the claim of the complainant. Beside this, at the time of taking the policy,  the life assured has suppressed the true and material facts regarding his health and by way of mis representation took  the policy which is illegal and the OP company has rightly repudiated the claim of the complainant. Hence, there is no deficiency on the part of the OP. So, we have no option except to dismiss the present complaint and the same is hereby ordered to be dismissed with no order as to cost. Copy of this order be sent to the parties free of cost. File be consigned to the record room after due compliance.

Announced in open court.

Dated: 13.09.2017                                          (SATPAL)

                                                                       PRESIDENT

                                                                 D.C.D.R.F.YAMUNA NAGAR

                                                                       AT JAGADHRI            

 

 

(VEENA RANI SHEOKAND)                   (S.C.SHARMA)

MEMBER                                                    MEMBER