This case coming on 10.02.2015 for final hearing before this Forum after remanded from the Hon’ble State Commission for fresh disposal, in the presence of Sri Appanna Venkateswara Rao, Advocate for the complainants and the opposite parties failed to appear before this forum and having stood over to this date for consideration, this Forum has pronounced the following:
O R D E R
(Per Smt. H.V. Ramana Lady Member)
This is a complaint filed by the complainants U/Sec.12 of Consumer Protection Act 1986 to direct the opposite parties jointly and severally to refund an amount of Rs.10,00,000/- with interest at 18% p.a. from 12.12.2010 till payment, pay damages of Rs.6,00,000/- (Rs.1,50,000/- for each complainant) for mental agony suffered by them, pay Rs.1,000/- towards legal notices charges and pay Rs.50,000/- towards legal expenses and costs.
2. The case of the complainants is as follows:- The complainants stated that the 1st complainant is the wife, 2 and 3 complainants are the sons of deceased Tirumalasetti Sivaji and 4th complainant is the daughter. The deceased took a policy issued by the 1st and 2nd opposite parties with premium of Rs.5,004/- and sum assured is Rs.10,00,000/. He died on 12.12.2010 due to heart attack. The complainant submit that the 1st opposite party took signatures and thumb impressions of the 1st complainant on the blank papers and white papers stating that they will be using for getting the insurance amount from the insurance company. Hence, the 1st complainant subscribed the necessary signatures as per the dictation and took papers stated above from her. On 30.8.2011, the 1st complainant sent a letter of requisition under R.I. Act to the opposite parties for which they gave reply stating that they would not come under R.I. Act. Then the complainants got issued a legal notice on 19.9.2011 calling for particulars and for insurance amount. The 1st opposite party received the same and kept quiet and sent a stereo typed letter of repudiation of the claim dt.28.2.2011 and they did not pay any claim amount. Hence, this complaint.
3. The opposite party No.2 filed written version and denied all the allegations made by the complainants. The 2nd opposite party submitted that the 1st opposite party is the branch of the 2nd opposite party. The complainant filed this complaint for an undue advantage and the same may be liable to be dismissed. The opposite party submits that this Hon’ble Forum has no jurisdiction and therefore, same is liable to be dismissed. The contract of insurance is based on the principles of utmost good faith i.e. principle of uberrimafides. The life assured is under solemn obligation to make full, complete, true and correct disclosure of the material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted. The life assured failed to disclose the correct facts to the insurer and obtained the policy and same is vitiated, the life assured is not entitled for any benefit under the said policy and the life assured was suffering from interstitial lung disease with heart problems since November, 2009. The same was not disclosed by the life assured. Under Section 45 of Insurance Act, 1938, the insurance company can challenge the policy on the ground of concealment of material facts by the insured within two years from the date of issuance of the policy. In the present case, the policy was issued on 28.12.2009 and the life assured was reported to have been died on 12.12.2010 within 11 months of the issuance of the policy. Basing on this, the opposite party repudiated the claim and there is no deficiency in service on their part. The opposite party further submitted that the life assured was having lung problem and other complications and was admitted in Sreelatha Nursing Home, where he was treated for 15 days and they also submitted that the deceased developed diabetes and kidney related problems, which were confirmed by the statement of mother. As per the application form, the date of birth of DLI was 35 years as on the date of signing the form, whereas as per the Household card, which was issued in the year 2005, the DLI’s age was 27 years i.e. the DLI was 31 years of age as on the date of signing the application form. The date of birth in voter card is mentioned 1975 i.e. his age on the date of signing the application form was 34 years. Diabetes Mellitus with ECG changes from last four years. The DLI’s wife stated that he used to sell watches, fancy goods in his shop and he is monthly income was around Rs.3,000/- to Rs.4,000/-, but in the application form, the annual income is mentioned as Rs.2,50,000/-. The copy of the investigation report along with the statements of DLI’s mother and wife are filed. This opposite party repudiated the claim on the grounds of material, medical, non-disclosure, which was communicated to the complainant vide letter dt.28.2.2011. Therefore, this opposite party prays the present complaint may be dismissed with costs.
4. Proof affidavit filed by the 1st complainant and also filed Exs.A1 to A10 has been marked on behalf of the complainants and the 2nd opposite party filed proof affidavit and Exs.B1 to B8 has been marked.
5. Points raised for consideration are:
1. Whether there is any deficiency in service on the part of the opposite parties?
2. Whether the complainant is entitled for the reliefs asked for?
3. To what relief?
6. After considering the documentary evidence and arguments on behalf of the both parties, this Forum came to the conclusion that there was deficiency in service on the part of the opposite parties and the complaint is partly allowed grating the relief. Against the said order, the opposite parties preferred appeal in FA No.478/2013 before the State commission. At the time of disposing the appeal, the matter was remanded back for fresh consideration by this Forum after giving opportunity to both parties to adduce further evidence, if any.
7. The complainant counsel was present and has not filed any additional evidence before this Forum. The opposite parties failed to appear before this forum for adducing their additional evidence, even after giving several adjournments. Finally, the matter was posted on condition for their additional evidence, even then, they have not appeared before this forum and the matter is posted for hearing on 5th January 2015, on that day also the opposite parties did not turned up. There after two more adjournments were given for hearing the matter, but the opposite parties did not appear before this forum. We heard the complainant on 22nd January 2015 and the matter was posted to 6th February 2015 and a last chance was given for hearing of the opposite parties. On that day also, the opposite parties failed to appear before this forum and therefore the matter was posted for orders on 10th February 2015.
8. The admitted facts are that the 1st complainant’s husband obtained a policy from the 1st opposite party vide Ex.B1 and paid an amount of Rs.5,004/- towards quarterly premium. The said receipt has been marked vide Ex.A1. The life assured died on 12.12.2010 vide Ex.A2. The complainant also filed a Medical certificate for cause of death vide Ex.A3. The complainant received a letter from the 1st opposite party vide Ex.A4 = B6. The complainant got issued a notice to the 1st opposite party vide Ex.A8. The complainant made an application to the 1st opposite party under R.I. Act for authenticated policy copy with all necessary papers vide Ex.A6 = B7. But they gave a reply vide Ex.A7 stating that their company does not come within the purview of R.I. Act.
9. Point No.1:- The main contention of the complainants is that the opposite parties repudiated the claim and failed to pay the sum assured. The complainants contended that the 1st opposite party obtained signatures and thumb impressions on some blank papers and white papers stating that they are necessary for giving the insurance amount. Believing the same, the complainant submitted all the papers required by the 1st opposite party, but they did not pay the claim amount.
The 2nd opposite party contended that the contract of insurance is based on the principles of utmost good faith, but in this case, the life assured was suffering from Interstitial Lung disease with Heart problems since November, 2009. The said fact was not disclosed by the life assured and obtained the policy with ulterior motive. He further submitted that under Section 45 of Insurance Act, 1938, the company can challenge the policy on the concealment of the material facts by the insured within two years from the date of issuance of the policy. In this case, the life assured was died within eleven months from the date of obtaining the policy.
10. The counsel for complainants relied on the following citations:-
- 2012(2) ALT 438: High Court of Judicature, Andhra Pradesh in Krapa Vidyavathi and others Vs. Life Insurance Corporation of India, Machilipatnam and others, in which it was observed that mere non-disclosure of hospitalization in proposal form does not tantamount to suppression of fact regarding his health. No material suppression of fact by the diseased insured relating to his health at the time of obtaining the policy. The policy obtained by him is enforceable and the insurance company is liable to pay the insurance claim amount as prayed by the plaintiff.
- 2012(1) CPR 391 (NC): in Life Insurance Corporation of India through their Regional Manager Vs. Smt. Sudesh, in which it was observed that the policy was obtained on the ground of concealment/suppression of information would have arisen in this case only if there is evidence to show that the insured had undergone hospitalization/treatment for any disease in near proximate of the time when the insurance policy was obtained and had chosen not to disclose it. The facts also remains that voluntary disclosure of information relating to drinking as made in the proposal form by the deceased, was not investigated further before the appellant chose to issue insurance policy in favour of the deceased.
- 2012(1) CPR 364 (NC) in Birla Sun Life Insurance Company Limited Vs. Charakapu Chinna Rao, in which it was observed that the documents produced before the Forum do not constitute any documentary evidence in support of the ground used for repudiation of the claim.
- 2012(1) CPR 232 (NC) in S.B.I. Life Insurance Company Limited Vs. Smt. D. Leelavathi and another, in which it was observed that the alleged preexisting disease photocopies purporting to be outpatient tickets/cards of the diseased government general hospital do not bear the signature of any attending physician at OPD nor was any doctor produced before the Forum to prove these documents – it was also necessary for the petitioner to examine the investigator who has signed the investigators report and asking to produce statement attributed to the complainant that her husband used to go to general hospital for check up of BP.
- 2012(3) CPR 302 (NC) in S.B.I. Life Insurance Company Limited Vs. Kambala Sandhya, in which it was observed that the Insurance Act, 1938 u/s 45 repudiation of death claim for suppression of preexisting medical condition - insured died over two years later after having taken insurance policy – evidence on record does not support the claim of the petitioner that deceased suffer from preexisting condition of diabetes, mellitus and haemoptysis.
The above citations are applicable to the facts of the present case on hand.
11. After perusing the material on record, it is true that the complainant’s husband obtained a policy vide Application No.33105250 and paid premium of Rs.5,004/- Quarterly. The opposite party submitted that they appointed an investigation officer and he filed the report vide Ex.B4. The said report is stating that the life assured obtained a policy in Rajahmundry bearing No.003730207 and the sum assured is Rs.8,38,420/-. In this report, he enquired that the life assured had heart problem, lung problem and other complications prior to inception of the policy. The said information was enquired from Dr. Padmalatha. He also mentioned that he enquired Smt. Lakshmi, mother of deceased about the health condition of her son and she stated that her son was suffering from Diabetes and Kidney problem from the last three years and also taking treatment from one Dr. Guduri Srinivasa Rao as inpatient. He also mentioned that he enquired the wife of deceased about their income, and she informed that her husband used to earn Rs.3,000/- to Rs.4,000/- per month, but the deceased mentioned in the application form that he was earning Rs.2,50,000/- p.a. The investigator also mentioned that he was suspecting the advisor Mr. Ravi, who is known to the family of the life assured. The opposite parties contended that the age of the insured defers from household card, voter ID, and proposal form.
12. The Investigator of the opposite parties alleging that the life assured was having preexisting disease and also he was hospitalized for a period of 15 days in Srilatha Nursing home, but has not filed any Medical record with regard to the above said treatment and there was no attempt on the part of the opposite parties to examine the doctor(s)of the above said hospital. He has not filed any authenticated record with regard to enquiry of the mother of the deceased and his wife and they do not bear their signatures. While issuing the policy itself, the opposite parties have not taken necessary verification of facts and other medical tests to the life assured before giving such huge value of the policies. The family doctor of the life assured was mentioned in the family physician certificate that the life assured died due to sudden heart attack and the same was filed along with claimants statement vide Ex.B3. The opposite parties alleging that the complainant suppressed material facts and died due to pre-existing disease, but the insurer failed to discharge the burden of proof that the insured was suffering from ill health at the time of taking the policy. The family doctor of the insured gave a medical certificate for cause of death vide Ex.A3. The opposite parties did not file any material before this Forum to establish that the complainant’s husband is earning only Rs.3,000/- to Rs.4,000/- per month, but not Rs.2,50,000/- per annum. The Investigator alleging that the advisor Mr. Ravi is known to the family of the life assured, but this advisor is appointed by the opposite parties and they have not examined by them for getting the correct information before this Forum.
13. As per the orders of the Hon’ble State Commission, the opposite parties filed medical record consisting of 14 documents, in support of their contention and this matter was remanded for fresh disposal. We heard the complainant side and the opposite parties never appeared before this forum or filed any additional documentary evidence on their behalf. Though, this forum has given several adjournments and opportunities to the opposite parties.
As per the above discussion, we opined that there is a deficiency in service on the part of the opposite parties in repudiating the claim of the complainants.
14. Point No.2:- In view of discussion under Point No.1, the complainants are entitled for the sum assured with interest @ 9% p.a. and costs.
15. Point No.3:- In the result, the complaint is partly allowed and the opposite parties are directed to pay the sum assured of Rs.8,38,420/- (Rupees eight lakhs thirty eight thousand four hundred and twenty only) with interest @ 9% p.a. from the date of filing the complaint till the date of realization and also directed to pay Rs.1,000/- towards costs to the complainants. The above directions shall be complied within a period of two months from the date of this order.
Dictated to the Stenographer, typed to my dictation, corrected and pronounced by us in open Forum, on this the 12th day of March, 2015.
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MEMBER MEMBER PRESIDENT
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
FOR COMPLAINANT: None. FOR OPPOSITE PARTIES: None.
DOCUMENTS MARKED
FOR COMPLAINANTS:
Ex.A1 003730207 Policy renewal premium receipt dt.12.3.2010 for Rs.5,004/- issued
by the opposite parties.
Ex.A2 Death certificate dt.22.1.2011 reporting the date of death of the insured is as
12.12.2010.
Ex.A3 Medical certificate d.30.12.2010
Ex.A4 Repudiation letter dt.28.2.2011 by the opposite parties to the 1st complainant
Ex.A5 House hold card dt.16.12.2005.
Ex.A6 Letter of requisition by the complainant dt.30.8.2011 under Right to Information Act to the 1st opposite party.
Ex.A7 Reply by the opposite party dt.9.9.2011
Ex.A8 Legal notice dt.19.9.2011 got issued by the complainant to the 1st opposite party with postal receipt.
Ex.A9 Acknowledgement from the 1st opposite party.
ExA10 dt.17.10.2011 e-mail reply by the opposite parties to the complainants.
FOR 2nd OPPOSTIE PARTY:-
Ex.B1 Copy of the Application form No.33105250.
Ex.B2 Receipt.
Ex.B3 Copy of the claimants form along with the family physicians certificate of DLI
Ex.B4 Copy of Investigation report.
Ex.B5 Voter I.D. copy, Household card.
Ex.B6 Copy of letter of Repudiation.
Ex.B7 Copy of the Requisition letter dt.30.8.2011.
Ex.B8 Copy of the Reply letter dt.9.9.2011.
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MEMBER MEMBER PRESIDENT
