Orissa

Cuttak

CC/153/2016

Sandeep Kumar Prusty - Complainant(s)

Versus

Branch Manager,LIC Of India - Opp.Party(s)

A K Samal

24 Aug 2017

ORDER

IN THE COURT OF THE DIST. CONSUMER DISPUTES REDRESSAL FORUM,CUTTACK.

                                                                                    C.C. No.153/2016

Sandeep Kumar Prusty,

S/O:Sri Srimanta Prusty,

At:C/O:Dhirendra Kumar Behera,

Mansingh Patna,PO:Tulsipur,

Cuttack.                                                                                     … Complainant.

 

                Vrs.

 

1.           Branch Manager,

L.I.C of India,Jajpur Town,

Jajpur.

 

2.           Sr. Divisional Manager,

L.I.C of India, Division Office,

Nuapatna,Cuttack-1.

 

3.           Zonal Manager,

L.I.C of India,East Central Zonal Office,

Jeevan Deep Building,

Exhibition Road,6^th Floor,Patna,Bihar.                                 … Opp. Parties.

 

 

Present:               Sri Dhruba Charan Barik,LL.B. President.

Sri Bichitra Nanda Tripathy, Member.

Smt. Sarmistha Nath, Member (W).

 

Date of filing:   25.04.2016

Date of Order: 24.08.2017

 

For the complainant:           Mr. A.K.Samal,Adv. & Associates.

For Opp.Parties  :                 Mr. R.K.Pattnaik,Adv. & Associates.

 

Sri Dhruba Charan Barik,President.

                The complainant has filed this case alleging deficiency in service and unfair trade practice on the part of the O.Ps and seeking appropriate relief against them in terms of his prayer in the complaint petition.

1. The case of the complainant stated in brief is that Late Aditya Kumar Prusty, the brother of the complainant during his life time had obtained a policy from O.P No.1 bearing No.588885419 dt.04.07.2009 for a sum assured of Rs.3.00 lakhs only.  The insurance cover was for a period of 21 years and payment of premium of Rs.3934/- was made quarterly.  The last date of payment of the premium was 4.4.2030.  The complainant was the nominee under the said policy obtained by the insured who has been paying the premium regularly till 25.01.2010.
2. All of a sudden the insured fell ill in the month of March,2010 and his illness continued for about 2 months.  He was undergoing treatment at CMC,Valore and the attending physician diagnosed that he was suffering from Hodgkin’s Lymphoma(one type of blood cancer).  The insured was admitted to the said hospital and given treatment for about 6 months with assurance that he would be fully cured.  When his condition improved, he returned home in the month of December,2010.  He was then going to Ghanashyam Hemalata Hospital & Research Centre,Bhubaneswar for check up at regular intervals as per the advice of the treating physician.  During the period of his said treatment some premiums were outstanding against him and ultimately on 14.12.2010 he made full payment of the outstanding premium together with fine of Rs.12,198/-.  He also further paid one more premium of Rs.3934/- on 12.01.2011 but as ill-luck would have it, he breathed his last on 18.2.2011.
3. In the month of November, 2013 the complainant as the nominee under the above policy filed a claim application before O.P.1 for sanction of death claim of the insured.  His death claim was repudiated by the O.P.2 on the ground that the declaration made by the deceased at the time of revival of his policy has contained some miss-statement and there was suppression of material facts with regard to his ailment.  This fact was communicated to the complainant vide his letter dt.19.3.14.  Copy of the said letter has been filed and marked as Annexure-1.
4. Complainant being aggrieved by the repudiation order of the death claim of the insured, moved O.P.3, the Zonal Manager for redressal of his grievances.  His application to O.P.3 has been filed on 14.4.14.  Subsequently O.P.3 confirmed the order of O.P.2 and intimated this fact to the complainant vide his letter dt.27.3.2015.  Annexure-2 is the copy of the said letter of O.P.3 dt.27.3.15.  Thereafter, the complainant moved the insurance Ombudsman at Bhubaneswar on 29.10.15 against the order of O.P.3 and his application was also rejected for the same reason by the said authority vide his order dt.2.3.2016.  It has been specifically stated in the order of the Insurance OMBUDSMAN that as per clause-5 of the policy conditions, if any untrue or incorrect statement is furnished in the proposal form or declaration or if any material information is with held by the insured, the policy shall be void and no claim or any benefit accrued or likely to be accrued to the insured under the said policy shall cease to be effective.  It has been sated that the insured has suppressed the material facts and given incorrect statement that he was not suffering from any disease and his health condition was good at the time of revival of the said policy.  Annexure-3 is the copy of the order dt.2.3.2016 passed by the Insurance OMBUDSMAN,Bhubaneswsar.
5. The case of the complainant is further reveals that the revival of the lost policy and payment of required premium and other dues were made by the insured deceased on the advice of the local agent of O.P.1 and no document or proposal form was ever placed before him for his signature.  It is categorically denied that the insured deceased had put his signature on the revival proposal form or any other document when the policy was revived on payment of required dues.  It is also stated that the initial proposal form and the revival proposal form of the said policy may be verified to ensure genuineness of the signature of the insured deceased.  According to the complainant the ground assigned by the O.Ps in repudiating the death claim is totally opposed to public policy and violative of natural justice.  It is also against the spirit of Sec-45 of the Insurance Act.  The activities of the O.Ps as such are tantamount to deficiency in service and unfair trade practice; and as such the O.Ps are jointly and severally liable to indemnify the complainant.  Hence it is prayed that the O.Ps may be directed to pay the entire claim amount of Rs.3 lakhs together with interest @ 12% per annum as well as Rs.1 lakh towards compensation to him.  It is also further prayed that they may be directed to pay Rs.5000/- towards cost of litigation and any other relief as deemed fit and proper in the interest of justice.
6. The O.Ps. 1, 2 & 3 have entered appearance and contested the case by filing a joint written version.  At the outset it is stated that the case is not maintainable both in fact and law and also because of mis-joinder of parties.   There is also no cause of action to file such a case.  They have denied material averments made in the complaint petition.  It is categorically stated that the repudiation of death claim made by the complainant has been rightly made by the three authorities of the Department for the same reason that the insured deceased has given incorrect statement with regard to his ailment in the revival proposal form and such repudiation is perfectly legal and justified.   They have filed the copy of the declaration form and good health statement furnished by the life assured on 14.12.2010 which has been marked as Annexure-A.  Annexure-B & C are respectively the copies of the medical certificate of the deceased issued by the CMC, Valore and Ghanshyam Hemalata Hospital and Research Centre, Bhubaneswsar. Annexure-D is the copy of the repudiation letter issued by the O.P on 19.3.2014.  Annexure-E & F are respectively the copies of order of repudiation dt.27.3.15 and 2.3.2016 of the Insurance Authorities.
7. Last but not the least, it is also stated that there is absolutely no deficiency in service or unfair trade practice on the part of the O.Ps at any point of time and repudiation of the death claim of the complainant has been rightly made and as such the case of the complainant being devoid of merit, may be dismissed.
8. We have gone through the pleadings of the parties; respective annexures filed by them in support of their contentions and also heard the learned counsels for the parties.
9. The moot point that falls for consideration in this case is whether the life assured has furnished incorrect statement or made suppression of material facts with regard to his health condition on his statement of good health vide Annexure-A at the time of revival of the policy on 14.12.10 and whether repudiation of such death claim made by the O.Ps at the time of revival of the policy on 14.12.10 is legal and justified.  It is submitted by the learned counsel for the complainant that such revival of the policy was made at the instance of the local agent of O.P.1 and at that time no such good health statement  (Annexure-A) was  placed before him for his signature.  It is also submitted that the signatures of the life assured on the original policy as well as on annexure are different.  It is accordingly prayed that there is no miss-statement furnished by the life assured nor was any suppression of material facts made by him with regard to his health condition in that document.  But it is found that the complainant has failed to produce the original policy bond bearing the signature of the life assured  for the purpose of comparison of his signature in the normal course with that appearing in Annexure-A.  The original policy being the vital document has not been produced in the Court for the reason best known to the complainant.  Rather it is clearly revealed from Annexure-A which bears the signature of the life assured that he has given reply ‘yes’ to the question put to him about his sound health in point no.4 in Annexure-A.  It is also an admitted fact that the life assured had undergone medical treatment in CMC,Valore as well as in Ghanashyam Hemalata Cancer Hospital & Research Centre,Bhubaneswar vide Annexure-B & C and that treatment was provided to him as he was suffering from refractory Hodgkin’s Lymphoma( a type of blood cancer).  From the above, the conclusion is irresistible that the statement furnished by the life assured with regard to present health is incorrect and he is guilty of suppression of material facts with regard to his state of health.  The learned counsel for the O.P has placed reliance on a decision of the Hon’ble Apex Court reported in AIR 2008 (S.C) 424 (P.J.Chacko and another Vrs. Chairman,Life Insurance Corporation of India and others).  In the said judgment it has been held by his lordship that “Deliberate wrong answer which has a great bearing on contract of insurance if discovered may lead to the policy being vitiated in law.  The purpose for taking a policy of insurance is not 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 fraudulent act is discovered”.  It has been further held that the action of Life Insurance Corporation of India must be fair just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reason of an act of the insured.  Still another decision in this connection has been drawn to the attention of this Forum by the learned advocate for the O.P reported in AIR 1962(SC) 814 (Mithoolal Nayak Vrs. L.I.C of India) It has been held by the Hon’ble Apex Court while interpreting the second part of the provision of S-45 of Insurance Act,1938 that “deliberate concealment of fact that the proposer had been treated by  doctor  few months before policy was taken for serious ailment is sufficient to vitiate the policy”.  It is further held that in such a situation the party who has been guilty of fraud or a person who claims under him cannot ask for refund of money paid.

From the aforesaid discussion and keeping in view the ratio of the judgment above, it is held that there is no deficiency in service or unfair trade practice on the part of the O.Ps by repudiating the death claim made by the complainant.  Hence ordered;

ORDER

                                The case be and the same is dismissed on contest against the O.Ps.  No cost.

                Typed to dictation, corrected and pronounced by the Hon’ble President in the Open Court on this the 24^th    day of August, 2017 under the seal and signature of this Forum.

                                                                                                                                                  

    (   Sri D.C.Barik )

                                                                                                                           President.

                                                                                                               (Sri B.N.Tripathy )

                                                                                                                            Member.

                                                                                                               (Smt. Sarmistha Nath)

                           Member(W)