BEFORE THE DISTRICT FORUM: KURNOOL

Present: Sri. T.Sundara Ramaiah, B.Com B.L., President

And

Sri. M.Krishna Reddy, M.Sc., M.Phil., Male Member

And

         Smt. S.Nazeerunnisa, B.A., B.L., Lady Member

Thursday the 17^th day of November, 2011

C.C.No.13/2011

Between:

Smt.K.Saritha, W/o Late Sri C.Kesavaiah,

D.No.50/348-L-19-B2,Arora Nagar, B-Camp (PO),  Kurnool-518 002.  

                                .…Complainant

                                      -Vs-

1. Birla Sun Life Insurance Company Limited,Represented by its Chief Operating Officer,   One Indiabulls Centre,

   Tower 1, 15^th & 16^th Floor, Jupiter Mills Compound 841,  Senapati Bapat Marg, Elphinstone Road,  MUMBAI - 400 013.

2. Birla Sun Life Insurance Company Limited,Represented by its Authorized Signatory/Secretary, G-Crop, Tech Park,

   5^th & 6^th floor, Kasar Vadavali, Ghodbunder Road,THANE (West) - 400 601, Maharashtra.

3. Birla Sun Life Insurance Company Limited, Represented by its Manager,

   M.R.B. Trade Centre,        1^st floor, Railway station Road,   Bangaru peta,

   Kurnool-518002.                                                       .       

...Opposite ParTies

This complaint is coming on this day for orders in the presence of Sri M.Shyam Kumar Reddy, Advocate for complainant and Sri M.D.V.Jogaiah Sharma, Advocate for opposite party No.1 and opposite parties 2 and 3 called absent and upon perusing the material papers on record, the Forum made the following.

                                              ORDER

(As per Sri. T.Sundara Ramaiah, President)                                         C.C. No.13/2011

1.     This complaint is filed under section 12 of C. P. Act, 1986 praying:-

1. To direct the opposite party No.1 to pay the death benefits of the insured policy amount of Rs.10,06,937/- (Rupees Ten Lakhs Six Thousand Nine Hundred and Thirty Seven only) to the applicant, to pay a sum of Rs.1,00,000/- towards compensation for the inconvenience, monitory loss and mental agony suffered by the applicant and further grant interest from 22-04-2010 till the date of payment and other costs as this Honourable Forum deems fit and proper in the interest of justice.

2.    The case of the complainant in brief is as under:- The complainant’s husband late Chaduvala Kesavaiah took a dream plan policy bearing No.003753330 for Rs.10,06,937/- from opposite party No.1 through opposite party No.3 on 28-12-2009.   The annual premium payable under the policy is Rs.7,000/-.  The complainant is the nominee under the policy.  In the proposal form the insured had given each and every material information.  After considering the agent confidential report the opposite party accepted the proposal.   The complainant’s husband died on 20-03-2010.  After the death of the insured the complainant who is the nomine under the policy submitted a claim to opposite party No.1.  The opposite parties repudiated the claim of the complainant on the ground that the life assured had highly over stated his income in the proposal form.  Subsequently the complainant approached the insurance ombudsman, Hyderabad for redressal.   After hearing the both sides the insurance ombudsman decided the claim and directed opposite party No.1to pay Rs.2,00,000/- to the complainant.

In the proposal form the insured mentioned about his employment only as school bus driver as there is no column for informing the other source of income.  The agent after satisfying the income and the source of the income of the complainant, forwarded the proposal of offer to the insurer.  Opposite party No.1 after satisfying all the material information submitted by the insured accepted the offer.  The opposite party No.1 is legally bound to pay the policy amount to the complainant.  Repudiation of the policy on flimsy    grounds is not permissible under the law.  There is deficiency of service on the part of the opposite parties.  Hence the complaint.

3.     Opposite party No.1 filed written version stating that the complaint is not maintainable.  On receipt of the application a policy bearing No.00375330 was issued to the life assured on 28-12-2009.  The income of the life assured determines the capacity of the life assured to pay the policy premium.  In the present case the insured mis-stated his annual income as Rs.1,00,000/- instead of Rs.48,000/-.  The insured with malafide intention to get the policy grossly over stated his annual income.  Had the life assured disclosed his true and correct income information at the time of submitting the application the opposite parties would have not issued the policy in existing terms and conditions.  The opposite parties have rightly repudiated the claim of the complainant on the basis of the documentary evidence.  There is no deficiency of service on the part of the opposite parties.  The complaint is liable to be dismissed.

        Opposite parties 2 and 3 are called absent and set exparte.

4.     On behalf of the complainant Ex.A1 to A14 are marked and sworn affidavit of the complainant is filed. On behalf of the opposite parties Ex.B1 to B8 are marked and sworn affidavit of the opposite party No.1 is filed.

5.     Both sides filed written arguments.

6.     The points that arise for consideration are:

1. Whether there is deficiency of service on the part of Opposite Parties?

1. Whether the complainant is entitled to the reliefs as prayed for?

1. To what relief?

7.      POINTS 1 and 2:- Admittedly late Chaduvala Kesavaiah husband of the complainant took insurance policy bearing No.003753330 dated 28-12-2009 from opposite party No.1 for assured amount of Rs.10,06,937/-.  The annual premium payable under the policy is Rs.7,000/- and the maturity date of the policy is 28-12-2034.  The complainant who is the wife of the late Chaduvala Kesavaiah is the nominee under the policy.  It is the case of the complainant that her husband late Chaduvala Kesavaiah died on 20-03-2010 and thereafter she submitted claim to opposite party No.1.  The complainant in her sworn affidavit clearly stated that her husband died on 20-03-2010.  She also filed Ex.A1 death certificate of late Chaduvala Kesavaiah issued by registrar of Births and Deaths Municipal Corporation.  In Ex.A1 it is clearly mentioned that late Chaduvala Kesavaiah died on 20-03-2010. Admittedly the complainant submitted her claim to opposite party No.1.  The opposite party No.2 after receiving the claim from the complainant sent a repudiation letter Ex.A3 dated 10-06-2010.  As seen from Ex.A3 it is very clear that the claim of the complainant was repudiated on the ground that the assured had highly over stated his annual income as Rs.1,00,000/- in the proposal form.  It is not the case of the opposite parties that the insured suppressed material facts in the proposal form regarding    his health condition. 

8.     It is for the insurer to establish that the life assured mis-stated his annual income as Rs.1,00,000/- instead of Rs.48,000/- with a malafide intention to get the benefits under the policy.   Ex.A2 (Ex.B1) is the copy of the proposal form submitted by the insured.  In Ex.A2 it is mentioned that the occupation of the insured is driver and that his annual income as Rs.1,00,000/-.  The opposite parties filed Ex.B3 and Ex.B4 issued by Head Master, Ravindra Vidya Niketan High School Kurnool.  In Ex.B3 it is mentioned that the insured worked as bus driver from April 2009 to March 2010and his monthly salary was Rs.4,000/- per month.  In Ex.B4 Certificate given by the Head Master of School it is stated that the gross annual income of the insured was at Rs.48,000/-.  Admittedly the insured was working as a driver by the date of proposal and he was drawing Rs.4,000/- per month.  It is submitted by the learned counsel appearing for the complainant that the insured was doing business before he was appointed as a driver and that his hold income was at Rs.36,000/- P.A.  The opposite parties filed Ex.B6 copy of the house hold card of the insured where in it is mentioned that his house hold income was at Rs.36,000/- per annum.  The complainant filed Ex.A9 cash receipt issued by Kurnool District Co-operative Milk Producers Union Limited in favour of C.Seshpani, dated 19-06-2006.  It is mentioned Ex.A9 that an amount of Rs.5,000/- was received as security deposit from C.Seshpani.  Ex.A10 is the Partner Ship Deed in between brothers, where in it is mentioned that they are doing business in milk jointly and getting income.  From the above material available on record it is very clear that the income of the insured by the date of the proposal was more than Rs.48,000/- per year.  The complainant also filed bunch of Pro-notes Ex.A11 to show that her husband was lending money to others on interest and getting income.  The complainant did not choose to file the affidavit of the borrowers to prove the contents of the pro-notes filed.  It is submitted by the learned counsel appearing for the opposite party No.1 that all the Pro-notes are brought into existence after opposite party No.2 gave repudiation letter dated 10-06-2010.  Merely basing on the pro-notes filed by the complainant it cannot be said that the insured was doing money lending business also.   In the proposal form the insured was asked to mention his annual income.  There is no column as source of income in the proposal form Ex.A2.  The insured would have mentioned about his source of income had there is column as source of annual income in the proposal form Ex.A2.  Simply the insured was asked to mention his annual income in Ex.A2 proposal form.   Accordingly he mentioned the annual income as Rs.1,00,000/-.  The complainant filed Ex.A12 to Ex.A14 proposal forms of other life insurance companies where in there are columns regarding source of income.  The insurer having failed to put the column as source of income in the proposal form Ex.A2 now cannot contend that the insurer had no income from the other sources except through his employment as a driver. 

9.     Admittedly the insured submitted his proposal to the opposite parties through an agent mentioning that his annual income was is at Rs.1,00,000/-.  Basing on the recommendation of the agent the opposite parties issued the policy in favour of the insured.  It is not the case of the opposite parties that the agent was not satisfied about the financial capacity of the insured and also about the source of income of the insured.  The learned counsel appearing for the opposite parties relied on a decision reported in LIC U/S Samim (IV 2009 CPJ 217 (NC) where in it is held that the insured has duty to disclose accurately all facts which would influence insurer in accepting risk.  In the said case the insured submitted false documents in support of his date of birth etc.  In the present case on hand it is not established by the insurer that the insured overstated his annual income fraudulently to get money.  Mere in occurrence or falsity in respect of some recitals in the proposal is not sufficient to repudiate the claim of the nominee.  The insurance company should establish that the insured made mis statement with fraudulent intention.  Here in the present case the opposite parties accepted the proposal basing on the confidential report submitted by its agent.  When the insured stated that his annual income was Rs.1,00,000/- in the proposal form, the insurance company ought to have verified whether the said income furnished was correct or not.  There is responsibility on insurance company to verify the particulars furnished by the insured in the proposal form.  Merely because the insured stated in the proposal form that his annual income was at Rs.1,00,000/- it cannot be said that he mentioned so with a fraudulent intention.  Inspite of several requests made the complainant the opposite parties did not try to settle the claim of the complainant.  The claim of the complainant was repudiated by the opposite parties on flimsy ground.  There is deficiency of service on the part of the opposite parties.  The complainant who is the nominee is entitled to the assured amount of Rs.10,06,937/-. 

10.    In the result, the complaint is partly allowed directing the opposite party No.1 to pay an amount of Rs.10,06,937/- with interest at 9% per annum form the date of the repudiation of the claim  i.e., 17-06-2010 till the date of payment along with cost of Rs.1,000/- to the complainant.  The complaint against opposite parties 2 and 3 is dismissed.

        Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 17^th day of November, 2011.

Sd/-                                        Sd/-                                Sd/-

MALE MEMBER                      PRESIDENT                 LADY MEMBER

                                 APPENDIX OF EVIDENCE

                                    Witnesses Examined

For the complainant : Nil               For the opposite parties : Nill

List of exhibits marked for the complainant:-

Ex.A1                Death Certificate issued by Registrar of Births and Deaths

Municipal Corporation, Kurnool, dated 20-04-2010.

Ex.A2.       Photo copy of Proposal Form submitted by the insured to

the opposite party No.1.

Ex.A3                Letter by opposite party No.2 to complainant

dated 10-06-2010.

Ex.A4                Photo copy of letter by complainant to opposite party No.2

                dated 17-06-2010.

Ex.A5        Letter by opposite party No.2 to complainant

dated 02-07-2010.

Ex.A6        Photo copy of letter by complainant to Ombudsman (Insurance), Lakdikapoor, Hyderabad dated 12-07-2010.

Ex.A7                Letter by Office of the Insurance Ombudsman, Hyderabad

                to complainant dated 20-09-2010.

Ex.A8                Photo copy of Empty Proposal Form of opposite party No.1

Ex.A9        Cash Receipt for Rs.5,000/- dated 19-06-2006.

Ex.A10       Partner Ship Deed between Petitioner, Petitioner’s brother

and his father regarding milk dairy business

dated 14-05-2007.

Ex.A11       A bunch of Pro-notes (Nos.8) executed in favour

of the applicant.

Ex.A12       Empty Proposal Form of S.B.I. Life Insurance Company

 Limited, Mumbai.

Ex.A13       Empty Proposal Form of Life Insurance Corporation of India, Kadapa Division.

Ex.A14       Empty Proposal Form of Kotak Life Insurance.

List of exhibits marked for the opposite parties:-

Ex.B1                Photo copy of Proposal Form submitted by the insured to

the opposite party No.1.

Ex.B2                Photo copy of Claimants statement dated 22-04-2010

 submitted by complainant.

Ex.B3                Photo copy of Service Certificate issued by Head Master,

 Ravindra Vidya Niketan High School, Abbas Nagar,

Kurnool dated 12-05-2010.

Ex.B4                Photo copy of Employees Certificate issued by Head

Master, Ravindra Vidya Niketan High School, Abbas Nagar,

Kurnool dated 21-04-2010.

Ex.B5                Photo copy of Identity Card of Complainant husband.

Ex.B6                Photo copy of House Hold Card issued by Assistant Supply

Officer, Kurnool.

Ex.B7                Photo copy of Investigation report submitted by stellar

Investigators appointed by the petitioner company

dated 14-05-2010.

Ex.B8                Photo copy of Proceedings of the Insurance Ombudsman,

                Hyderabad dated 30-08-2010.

Sd/-                                        Sd/-                                Sd/-

MALE MEMBER                 PRESIDENT                   LADY MEMBER

    // Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987//

Copy to:-

Complainant and Opposite parties  :

Copy was made ready on             :

Copy was dispatched on               :