Date of registration:18.02.2013

     Date of order :20.11.2014

BEFORE THE DISTRICT CONSUMERS FORUM-I,

VISAKHAPATNAM : AP

PRESENT:  Smt K.V.R.Maheswari, B.A., B.L., LL.M.,

 Lady Member & FAC President

Sri V.V.L.Narasimha Rao, B.A., LL.M., PGDHR,

Member

Thursday, the 20^th day of November, 2014

Consumer Complaint No:31/2013

Between:    

Smt.Vepada Rama Tulasi W/o late Chiranjeevi Venkata Rao, Hindu, aged 22 years, residing at Govada Village, Chodavaram(M), Visakhapatnam District.

                                                                             …   Complainant

And:

1. IDBI Federal Life Insurance Co., Ltd., rep. by its Branch Manager, Branch Office D.No.3-10-33,  Upstairs Bank of Baroda, Dabagardens, Visakhapatnam.

2. IDBI Federal Life Insurance Co., Ltd., rep. by its Senior Manager-Claims, 1^st floor, Trade views, Oasis Complex, Kamala City, PB Marg, Lower Parel(W), Mumbai-400013.                                  …            Opposite Parties

This case is coming for final hearing on 10.11.2014 in the presence of Sri D.S.R.Rajeswari Advocate for the Complainant and of Sri Sanapala Karuna & Smt. Sanapala Sailaja Advocates for Opposite Parties and having stood over till this date, the Forum delivered the following:

: O R D E R :

(As per Smt. K.V.R.Maheswari, Honourable President(FAC) on

behalf of the Bench)

1.       The brief averments in the complaint are that the husband of the complainant i.e., Chiranjeevi Venkata Rao during his life time obtained insurance policy bearing No.004276189 valid for a period of 30 years i.e., from 23.07.2010 as per the scheme, the policy holder is liable to pay yearly premium Rs.4,006/- and sum assured of Rs.3,01,000/- excluding bonus and other benefits.  While so, the life assured died in a motor accident occurred on 15/16.05.2011, when the husband of complainant i.e., DLI proceeding in a motor cycle as a pillion rider, the police authorities after receipt of the complaint, they registered the said accident as case in Crime No.80/11 on the file of Chodavaram PS of Visakhapatnam District. The Complainant stated that being a nominee of the deceased life assured she submitted the relevant papers along with claim form to the opposite parties to settle the policy amount.  After repeated demands and requests made by the complainant, finally the opposite parties addressed a Letter of Repudiation on 31.10.2011 with all false and baseless allegations only to avoid their contractual liability.  Because of the acts of opposite parties, the complainant suffered lot of pain and mental agony.  She issued a legal notice to both the opposite parties on 12.03.2012 demanding the opposite parties 1 & 2 to pay the policy amount with interest, damages etc. But even after receipt of the notices, there was no reply from the opposite parties and also failed to settle the claim amount which clearly shows deficiency of service on the part of the opposite parties.  Hence, this complaint to direct the opposite parties;

a)      to pay the policy amount of Rs.3,01,000/- with 24% interest from 16.05.2011 till the date of payment.

b)      to pay an amount of Rs.5,00,000/- towards damages besides costs. 

2.       On the other hand, the opposite parties filed their counter and denied the allegations mentioned in the complaint and pleaded that the complaint is false, malicious, incorrect and malafide and is nothing but an abuse of process of law.  As there is neither any unfair trade practice adopted by the opposite parties nor any deficiency in service on behalf of opposite parties.  The Complaint does not fall within the definition of Consumer dispute under Consumer Protection Act.  The Opposite parties pleaded that the husband of the complainant i.e., DLI after completely understanding the terms and conditions of policy, filled up the proposal form and signed it on 19.07.2010 for sum assured of Rs.3,01,000/- and the annual premium is Rs.4006/-.  Upon receipt of Rs.4,006/- towards initial premium for the issuance of the policy, the opposite parties evaluated and processed the proposal form on the basis of information provided by the DLI and issued policy bearing No.004276189 on 19.07.2010 to the DLI.  Thereafter, the policy document along with the schedule and standard terms and conditions there to and a welcome letter were sent to the DLI, which were duly delivered to him at the address of the DLI.  The Opposite parties stated that while filling up the proposal form in part-IV, Personal Health Statement of person to be insured of the proposal form, the answer to the question regarding the x ray or ECG test or ultra sound etc., was given by the DLI in negative. 

3.       On 23.06.2011 the opposite parties received a death claim and Death Certificate of the deceased policy holder whereby the opposite parties were given to understand that the deceased policy holder died due to road accident.  Then, the opposite parties conducted investigation of the said claim and it was established that the DLI met with a road accident on 10.08.2008 i.e., prior to the issuance of policy and he was treated in Sagar Durga Hospital from 10.08.2008 to 17.08.2008 and suffered from temporal acute subdural hematoma in the brain. It was also revealed that DLI sustained Haemorrhagic contusion, linear fracture in right temporal bone and linear fracture in sphlenoid bone.  The Opposite parties in its counter in page-8 para-12(iv) pleaded that the policy holder was treated in Sagar Durga Hospital from 10.08.2011 to 17.08.2011.  But the Forum observed that when the date of death of DLI was 16.05.2011 how can LA admitted in hospital from 10.08.2011 to 17.08.2011, that too the opposite parties also pleaded in that same para that he met with a road accident on 10.08.2008 i.e., prior to the issuance of the policy.  Hence, the Forum is of the view that the dates mentioned in that para which may be typographical mistake and may be those dates are 10.08.2008 to 17.08.2008. 

4.       The investigation report further revealed that DLI was alcoholic and smoker whereas the same was as negative in the proposal form at the time of filling up of proposal form.  Hence, it clearly reflects these material details effecting the decision of the insurer for the acceptance or rejection of the contract of insurance were willfully suppressed by the DLI as the same was not disclosed by him at the time of signing the said application.  Hence, the claim was rightly repudiated and the same was informed to the complainant on 31.10.2011.  The opposite parties submitted that the contract of insurance being of utmost good faith, DLI was under an obligation to disclose the said material medical details in the proposal form which was necessary to be answered for the purpose of determining the risk under the said policy were intentionally  answered in negative by DLI.  Thus the policy was obtained by suppression and misrepresentation of facts.  If the opposite parties aware of his health status at the time of signing of the application for insurance the said policy would not have been issued to the DLI at the first place. 

5.       The opposite parties submitted that in Satwant Kaur Sandhu Vs.New India Assurance Company Ltd., IV (2009) CPJ 8 (SC) has referred the term “Proposal Form” as defined under the Insurance Regulatory and Development Authority, 2002 as the “Form” to be filled in by the proposer for insurance for furnishing all material information required by the insurer to decide whether to accept or decline.  Thus the complainant has no locus standi to claim any alleged sum assured, as the insurance policy was obtained by the DLI by misrepresentation of material facts in order to defraud the opposite parties.  In United India Insurance Co. Ltd., Vs.MKJ Corporation (1996) 6 SCC 428 held that ”it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties” In Life Insurance Corporation of India Vs Smt.Surekha Shankar Jadhav NC, RP 2130 of 2007 dated 31.7.2012 Where it was held that “insurance company can repudiate a claim in case of non-disclosure of pre-existing disease or any material information and the same may or may not be the exact cause of death of the deceased life assured”.  In Divisional Manager, LIC of India & Ors. Vs.Smt.Anupama & Ors.NC, RP 3794-3796 of 2007 dated 17.04.2012 it was held that “while repudiating a death claim, doctors affidavit is not necessary/mandatory to be produced before the District Forum and non production of the same cannot become a reason to allow the complaint”. Thus the opposite parties stated that there is no deficiency in service and negligence on its part in repudiating the claim.  Hence, the complaint is to be dismissed with costs.

6.       At the time of enquiry, the complainant filed evidence affidavit along with the documents and written arguments.  Ex.A1 to Ex.A11 are marked. On the other hand, the opposite parties filed their counter, evidence affidavit and written  arguments.  No documents are marked on behalf of opposite parties, as the opposite parties filed photo copies of documents and also failed to submit the attested copies. Both the counsels were heard who reiterated their versions. 

7.       In view of the respective contentions, the point that would arise for determination is:-

Whether the repudiation of claim by the opposite parties is unjustified if so can the complainant claim the policy amount and other reliefs?

8.       Ex.A1 is the policy copy which is not disputed by the opposite parties. Ex.A2 is the FIR dated 16.05.2011.  Ex.A3 is the Inquest report dated 16.05.2011. Ex.A4 is the Charge sheet dated 22.06.2011.  These three documents clearly show that the policy holder died on 16.05.2011 in a road accident being a pillion driver.  Subsequently, being a nominee, the DLI’s wife i.e., complainant submitted relevant papers to the opposite parties but the opposite parties repudiate the claim on 09.09.2011 i.e., Ex.A5.  Then the complainant issued a legal notice on 12.03.2012 i.e., Ex.A6.  Ex.A7 is the acknowledgment. Ex.A8 and A9 are the postal receipts. Ex.A10 is the postmortem report dated 16.05.2011. Ex.A11 is the death certificate dated 19.05.2011.

9.       The version of the complainant is that after the death of her husband DLI she intimated the same and submitted all the documents to the opposite parties but the opposite parties repudiated the claim which clearly shows deficiency in service.

10.     The version of the opposite parties is that there is no deficiency in service on their part, because there is suppression of facts and misrepresentation of facts regarding the accident occurred to life insured on 10.08.2008 i.e., prior to the issuance of policy and life insured was treated in Sagar Durga Hospital from 10.08.2008 to 17.08.2008.  During the investigation it was revealed that DLI was alcoholic and smoker and in that accident on 11.08.2008 he sustained some injuries but the same were not mentioned at the time of filling up of proposal form and more over the policy was issued by the opposite parties when the DLI was expired i.e., on 16.05.2011. 

11.     It is to be noted that the opposite parties filed some photo copies of documents before the Forum, but those photo copy documents are not attested, hence those are not marked as exhibits.  But some of those are already marked as Ex.A1 and Ex.A5.  The opposite parties not even filed the investigation report in original.  What ever it may be, after careful analysation of the complaint, along with documents, counter and the versions made by both the counsels in their written arguments as well as oral arguments, the Forum is of the view that being a policy holder the DLI paid premium and obtained policy and it was clearly mentioned in Ex.A1 that the term of policy is from 23.07.2010 and the plan maturity date is 23.07.2040.

12.     The other plea of the opposite parties regarding the answers to the questions while filling up of the proposal form by the DLI is in negative regarding the questions of any X ray or ECG or Ultrasound etc., and more over he met with an accident prior to the issuance of policy i.e., on 10.08.2008 but in what way this accident caused to the death of life assured in 16.05.2011 i.e., nearly after three years of the first accident.  The main reason for the death of life assured is road accident which was occurred on 16.05.2011.  The post mortem report i.e., Ex.A10 clearly shows that the deceased died Traumatic Asphyxia which leaded to the respiratory failure followed by cardiac arrest due to internal hemorrhage and CNS dys function caused by severe trauma to the head and face.  As per his opinion in Post mortem report Forum came to know that because of head injury the life assured died and the previous accident in the year 2008 is not at all reason to the death of the life assured.  In our view if the life assured died because of illness or with a health problem then, it is necessary to look into the previous accident, but in this matter the life assured died on the same day, due to the road accident and because of head injury. 

13.     The other plea of the opposite parties is that the DLI was alcoholic and smoker but this plea is not substantiated by the opposite parties by filing any evidence.  The decisions relied by the opposite parties in their counter regarding the repudiation of claim on various grounds, those facts of the complaint are different than this present complaint.

14.     It is the bounden duty of the opposite parties to settle the claim when the claim is in genuine in nature; in this case life assured died in road accident and the opposite parties repudiated the claim on the ground of non discloser of facts concerning his previous medical history at the time of applying for insurance cover vide proposal form dated 19.07.2010.  But in our view, the reason for death is road accident and not related to the health issue; hence the opposite parties are liable to pay the claim amount to the complainant with 9% interest from the date of repudiation. 

15.     The repudiation of claim amount by the opposite parties, when the policy was in existence, definitely causes financial hardship and mental agony to the complainant and to substantiate it, the opposite parties are liable to pay compensation of Rs.4,000/- to the complainant which would be just and proper. 

          Accordingly, this point is answered.

16.     In the result, the complainant is allowed directing both the opposite parties to pay claim amount of Rs.3,01,000/- with 9% p.a. interest from 31.10.2011 to the complainant within three months, failing which to pay the same with 12% p.a. interest till the date of payment.  The opposite parties are further directed to pay Rs.4,000/- towards compensation besides costs of Rs.2,000/-.

  Dictated to the Shorthand Writer, transcribed by her, corrected and pronounced by us in the open Forum on this the 20^th day of November, 2014.

    Sd/-                                                                       Sd/-

Member                                                                 President (FAC)

                                                                   District Consumer Forum-I

                                                                             Visakhapatnam

APPENDIX OF EVIDENCE

Exhibits Marked for the Complainant:

Exhibits Marked for the Opposite Party:

                   NIL

    Sd/-                                                                       Sd/-

Member                                                                  President (FAC)

                                                                   District Consumer Forum-I

                                                                             Visakhapatnam

//VSSKL//