Date of filing: 29.12.2011.
Date of disposal: 26.06.2012.
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - II:
VIJAYAWADA, KRISHNA DISTRICT
Present: Sri A. M. L. Narasimha Rao, B.Sc., B. L., President
Smt N. Tripura Sundari, B. Com., B. L., Member
Tuesday the 26th day of June, 2012
C.C.No.15 of 2012
Between:
1. Vyakaranam Sri Nagavani, W/o late Chalamaiah Sastry, R/o. Kakaravari Village,
Vastavai Mandal, Krishna District.
2. Vyakaranam Murali Krishna, S/o late Chalamaiah Sastry, R/o. Kakaravari Village,
Vastavai Mandal, Krishna District.
3. Vyakaranam Sri Krishna, S/o late Chalamaiah Sastry, Being Minor, Rep: by his
mother and natural guardian Vyakaranam Sri Nagavani, R/o. Kakaravari Village,
Vastava Mandal, Krishna District.
. … Complainants.
AND
1. Dr. Rakesh Moyal, Asst. Vice President Claims India First Life Insurance Co.,
Ltd., 301, ‘B’ Wing, The Qube Infinity Park, Dindoshi, Filcity Road, Maldad (E),
Mumbai – 400 097.
2. The Branch Manager, Andhra Bank, Konakachi, Penuganchiprolu Mandal,
Krishna District.
. … Opposite Parties.
This complaint coming on before the Forum for final hearing on 08.06.2012, in the presence of Sri K. Kishore Kumar, advocate for complainant, Sri T.S.R.K. Prasad, advocate for opposite party No.1, Sri K. Pandu Ranga Rao, advocate for the opposite party No.2 and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble President Sri A. M. L. Narasimha Rao)
1. This complaint is filed under Section 12 of the Consumer Protection Act, 1986 for a direction to the opposite parties 1 and 2 to pay insurance amount of Rs.1,00,000/- with interest, compensation of Rs.1,00,000/- and to pay costs.
2. The averments of the complaint in brief are as follows:
Vyakaranam Chalamaiah Sastry the husband of the 1st complainant and father of complainants 2 and 3 had opened savings bank account namely Abhaya Jeevan General with the 2nd opposite party with account No.029710100005899. The account has insurance coverage with assured sum of Rs.1,00,000/- from the 1st opposite party insurance company. The said Chalamaiah Sastry died on 21.8.2011 leaving behind the complainants 1 to 3. Later the complainants made a representation and intimated the death of the account holder to the opposite parties. The 2nd opposite party issued a claim application and the claimants had submitted the same to the 1st opposite party through the 2nd opposite party. The 1st opposite party sent a letter dated 4.11.2011 that the claim was being repudiated in view of treatment taken by the deceased in Durgabai Deshmukh Hospital earlier. Chalamaiah Sastry did not take treatment for heart failure as alleged by the 1st opposite party in the repudiation letter but he got above knee amputation done in Durgabai Deshmukh Hospital. The opposite parties had wrongly repudiated the claim. There is deficiency in service on the part of the opposite parties. Therefore the present complaint is filed.
3. The 1st opposite party filed its version in the form of counter denying the allegations made in the complaint and further stating as follows:
Chalamaiah Sastry had opened savings account AB Jeevan Abhaya Savings Bank account with the 2nd opposite party. He also applied for life insurance provided under that account. It has group insurance coverage scheme and the assured sum is Rs.1,00,000/-. As per the scheme no formal medical check up and medical examination was required. The proposer has to submit health declaration form. The 2nd opposite party is the master policy holder. Individual policies were not issued. The period of insurance coverage was from 1st December to 30th November of succeeding year. Death intimation has to be given within 90 days and documentation can be completed within 180 days. The 1st complainant is named as nominee for the account by Chalamaiah Sastry. At the time of opening account the account holder had made a declaration inter alia stating that he was in sound health and not suffering from any critical illness or condition requiring medical treatment as on that date. The claim was repudiated on the ground that the account holder had deliberately concealed material facts with regard to his state of health and the membership of the deceased life assured was cancelled. There was no deficiency in service on the part of the 1st opposite party.
4. The 2nd opposite party also filed its version separately admitting the fact of deceased opening account and account being covered by insurance policy and further stating as follows:
The claim was repudiated by the 1st opposite party as the account holder did not disclose the medical condition namely heart failure with LV Systolic Dys-function with diabetes, in health declaration signed by him; that it was communicated to the complainants through letters dated 24.10.2011 and 4.11.2011; that there was no deficiency in service on the part of the opposite parties and the complainants are not entitled to reliefs.
5. The 1st complainant filed her affidavit and it is received as evidence of PW-1. The Authorized Representative of the Insurance Company, 1st opposite party filed affidavit and it is received as evidence of DW-1.
Ex.A1 statement of account of the deceased maintained by the 2nd opposite party bank, Ex.A2 photocopy of voters identity card, Ex.A3 photocopy of house hold card, Ex.A4 photocopy of death certificate of the deceased, Ex.A5 letter dated 4.11.20111 sent by the 1st opposite party to the 2nd opposite party, Ex.A6 office copy of legal notice, Ex.A7 postal receipts, Ex.A8 reply letter dated 19.12.2011 to the counsel of the complainant and Ex.A9 copy of discharge summary issued under Rajiv Aarogya Sree scheme are marked for the complainant.
Ex.B1 application mad by the 1st complainant with the bank, Ex.B2 letter dated 27.9.2011 addressed by the bank to the 1st opposite party, Ex.B3 letter dated 17.10.2011 addressed by the 1st opposite party to the bank, Ex.B4 copy of another letter dated 24.10.2011 addressed by the bank to the 1st complainant, Ex.B5 copy of letter dated 4.11.2011 addressed by the 1st opposite party to the bank, Ex.B6 copy of letter dated 19.12.2011 addressed by the 1st opposite party to the complainant’s advocate marking copy to the bank, Ex.B7 statement of account of the complainant along with annexure namely application form for opening account and its annexures are marked on behalf of the 2nd opposite party.
6. Heard the arguments advanced by the learned counsel for both the parties.
7. The points that fall for determination are:
- Whether there is deficiency in service on the part of the opposite parties 1 and 2 in repudiating the claim for insurance amount?
- Whether the complainants are entitled to reliefs as prayed for?
Point No.1:
8. Chalamaiah Sastry opened an account with the 2nd opposite party and admittedly the account has insurance coverage. As per the statement of account Chalamaiah Sastry opened account on 29.8.2010. Initial deposit was made into account on 30.8.2010. Insurance premium and insurance charges were deducted once on 30.8.2010 and nextly on 30.11.2010. Chalamaiah Sastry died on 21.8.2011. The claim was made to the insurance company. The claim was repudiated on the ground that the Chalamaiah Sastry suppressed material facts relating to his health condition.
9. The opposite parties contend that contract of insurance is contract based on good faith and the parties are bound to disclose all material facts which have bearing on issue of policy or acceptance of policy. There is no dispute on this legal point. The opposite parties contend that the deceased Chalamaiah Sastry had undergone treatment in Durgabai Deshmukh Hospital for heart failure with LV Systolic disfunction with diabetes and it was suppressed at the time of taking the policy. The complainants admit that the Chalamaiah Sastry had taken treatment in Durgabai Deshmukh Hospital but they state that the treatment taken was above Knee Amputation of left leg. The opposite parties sent a copy of case sheet along with reply notice under Ex.A8. According to said case sheet and summary sheet, the diagnosis including RHF that means Refractory Heart Failure, severe LV Systolic disfunction, dialated left atrium etc. Procedure may involve amputation as stated by the complainants but the reason for this amputation seem to have direct nexus to LV dysfunction. In the last sheet of Ex.A8 it is noted that the patient was complaining of SOB (shortness of breath) for three days and mild chest pain for one day, pain and swelling of left lower leg etc. Therefore it is clear from these details given in Ex.A8 that the deceased Chalamaiah Sastry was suffering from heart problem by 4.8.2010 the date of admission in Durgabai Deshmuch Hospital. According to this summary sheet he was discharged on 9.8.2010. The proposal for policy was signed as per Ex.B7 on 30.8.2010. So by that date the deceased had taken treatment and also got amputation done to the left leg. This ailment patently not disclosed in the declaration form. The account holder declared that he was not suffering from any critical illness or condition requiring medical treatment as on that date. When there was LV dysfunction it cannot be said that he was not having any condition requiring medical treatment. Therefore this declaration is not correct. When such false declaration is given the insurance company is entitled to repudiate the claim because the contact for insurance is a contract based on good faith.
10. The deceased by the time of opening the account got his left leg amputated above knee. The amputation was fresh. As he was a diabetic he may even have bandage by the time of opening account. At the time of opening account some responsible person of the bank had interviewed the complainant and signed as interviewing officer in two sheets of Ex.B7. No doubt interview is not with regard to ailment. But the purpose of the account is specifically mentioned in the last sheet of printed proforma as insurance + savings. When the applicant had amputated left leg would not the concerned officer verify what had happened to him why the leg was amputated and if there is any ailment because of which the leg was amputated. The interviewing officer seems to have collected information about properties, vehicles and gadgets owned by the applicant. Would not he ask about health condition in view of visible disability? A bear look at the applicant would create suspicion if he was completely hale and healthy. The concerned officer deliberately kept quiet and allowed the applicant to open the account and also allowed him forego the insurance amount by remitting the premium to the insurance company debiting the account of the deceased with such amounts insurance premium. We cannot readily say that there is fairness on the part of the bank in receiving the application and accepting it and also taking declaration knowing fully well that the proposer had amputated leg. Then the bank shall be made liable to pay damages for the deficiency in quality of service to be rendered. When the applicant had opened the account and the bank did not disclose the impact of declaration given by applicant, it could be said that there is deficiency in service on the part of the bank the 2nd opposite party.
Point No.2:
11. The complainants are not entitled to insurance amount in view of the findings on point no.1. They are certainly entitled to compensation from the 1st opposite party who had accepted the deceased applicant as a person entitled to open account which has insurance coverage. If the bank did not accept the application the deceased would have taken some other policy suitable to him and would have chosen to pay premium even at higher rate. Therefore we feel that the 2nd opposite party can be directed to pay compensation and we reasonable assess the compensation at Rs.50,000/-. Since the 1st opposite party is not shown to have knowledge of the health condition of the applicant i.e., deceased account holder, the 1st opposite party cannot be burdened with compensation. The complainants shall also be entitled to interest from the date of order since the amount is awarded as compensation. The complainant is also entitled to costs assessed at Rs.1,000/-
12 In the result the complaint is allowed in part and the 2nd opposite party, the bank is directed to pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards compensation with interest thereon @ 9% p.a., from the date of this order till payment and also to pay costs assessed at Rs.1,000/- (Rupees one thousand only) to the complainant. The amounts awarded shall be paid within one month from the date of receiving copy of the order. The complaint against 1st opposite party is dismissed. The complaint for rest of the reliefs is dismissed.
Dictated to Steno N. Hazarathaiah, transcribed by him corrected by me and pronounced by us in the open Forum, this the 26th day of June, 2012.
PRESIDENT MEMBER
Appendix of evidence
Witnesses examined
For the complainant: For the opposite parties:
Pw – 1, Vyakaranam Sri Nagavani DW – 1, Authorized Representative (by affidavit) of the Insurance Company, 1st opposite party (by affidavit).
Documents marked
On behalf of the complainant:
Ex.A1 Statement of account of the deceased maintained by the 2nd opposite party bank.
Ex.A2 Photocopy of voters identity card.
Ex.A3 Photocopy of house hold card.
Ex.A4 Photocopy of death certificate of the deceased.
Ex.A5 04.11.2011 Letter sent by the 1st opposite party to the 2nd opposite party.
Ex.A6 Office copy of legal notice.
Ex.A7 Postal receipts.
Ex.A8 19.12.2011 Reply letter to the counsel of the complainant.
Ex.A9 Copy of discharge summary issued under Rajiv Aarogya Sree scheme
On behalf of the 2nd opposite party:
Ex.B1 Application mad by the 1st complainant with the bank. Ex.B2 27.09.2011 Letter addressed by the bank to the 1st opposite party. Ex.B3 17.10.2011 Letter addressed by the 1st opposite party to the bank. Ex.B4 24.10.2011 Copy of another letter addressed by the bank to the 1st complainant.
Ex.B5 04.11.2011 Copy of letter addressed by the 1st opposite party to the bank
Ex.B6 19.12.2011 Copy of letter addressed by the 1st opposite party to the complainant’s advocate marking copy to the bank.
Ex.B7 Statement of account of the complainant along with annexure namely application form for opening account and its annexures.
PRESIDENT
