BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

AT HYDERABAD.

F.A. 1015/2007 against C.C.  88/2006, Dist. Forum, Kakinada.       

Between:

1.  The   Branch Manager,
LIC of India,  Pithapuram Branch

Near Rama Talkies, Pithapuram

2.  The  Divisional Manager,
LIC of India, Tadithota,

Rajahmundry, East Godavari Dist.              ***                        Appellants/

Ops 1 & 2.

And

1. Gutti Ganga Bhavani

W/o. Late Veerabhadra Rao

Age: 36 years,

D.No. 17-4-16, Mattam Centre,

Samalkot.

2. Gutti Sundaralakshmi

D/o. Veerabhadra Rao

Age: 16 years  (minor)

3.  Gutti Anjalidevi

D/o. Veerabhadra Rao

Age: 15 years  (minor)

(R2 & R3 represented by their

Mother R1)                                                  ***                        Respondents/

Complainants

4.  V. Gopala Rao

LIC Agent, Satyanarayanapuram

Samalkot, East Godavri Dist.                      ***                         Respondent/

                                                                                                O.P. No. 3.

Counsel for the Appellants:                         Mr.  B. Rajendra

Counsel for the Respondent:                       Mr.  Dinesh Kumar.                                                      

CORAM:

                         HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT     

                                                                   &

                                            SMT. M. SHREESHA, MEMBER.  

MONDAY, THIS THE THIRTYFIRST DAY OF MAY TWO THOUSAND TEN

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          *****

1)                 This   is an appeal preferred by the insurance company  opposite parties 1 & 2,  against the order of the Dist. Forum directing it to pay  Rs. 5 lakhs covered under the policy with interest  @ 12% p.a., from July, 2005  till the date of realization together with  Rs. 80,000/- towards bonus, Rs. 25,000/- towards mental agony  and Rs. 3,000/- towards costs.

2)                The case of the complainant in brief is that complainant No. 1 is the wife, complainant Nos. 2 & 3 are children of  late  Gutti Veerabhadra Rao.  He had taken a policy  commencing  from  28.10.1999 to  for an amount of Rs. 25,000/-.  He had taken another policy   Jeevan Anand  (Profits)  for Rs. 5 lakhs commencing from  28.10.2003  wherein his wife  complainant  No. 1 is the nominee.  While so the assured died on 1.3.2005  due to chest pain.  When she claimed the  amount  the policy taken for  Rs. 25,000/- was settled  for Rs.  41,508/- on  4.6.2005.   In regard to second policy   ‘Jeevan Anand’   they alleged that in the third week of March, 2006 first appellant along with  the  officer of second appellant  came to her house obtained her signatures  on some papers, demanded her  25%  commission for which she refused.    Later she received a letter Dt.  6.5.2006  repudiating the claim.   On that she gave legal notice and filed the complaint claiming  the  sum assured of Rs. 5 lakhs  with penal interest @ 24% p.a.,  Rs. 80,000/- towards bonus,  compensation and costs.

3)                The appellant insurance company  resisted the case.   However, it admitted that  late Gutti Veerabadra Rao  had taken two policies  one on  28.10.1999  and another on  28.10.2003 wherein the first complainant is the nominee.    The first policy was settled.   However,  the amount claimed under the second policy was repudiated  on the ground that the assured  suppressed the ailment.    He was alcoholic for  nine long years.    Therefore it prayed for dismissal of the complaint with costs.

4)                The complainants in proof of their case filed the affidavit evidence of  first complainant and got Exs. A1 to A11 marked, while the  appellants filed Exs. B1 to B7.

5)                The Dist. Forum after considering the evidence placed on record opined that the complainant was entitled to the benefits  covered under the policy,   and not settling the claim amounts to deficiency in service, directed the  LIC to pay  Rs. 5 lakhs covered under the policy with interest  @ 12% p.a., from July, 2005  till the date of realization together with  Rs. 80,000/- towards bonus, Rs. 25,000/- towards mental agony  and Rs. 3,000/- towards costs.

6)                Aggrieved by the said order, the  insurance company preferred the appeal contending that the Dist. Forum did not appreciate either  facts or law in correct perspective.  It ought to have seen that he was an alcoholic.  He suffered from several  ailments and the same was suppressed.  Therefore  the complainants were not entitled to the amount covered under the policy.   Awarding  Rs. 80,000/- towards expected bonus, compensation   and interest @ 12% is  unjust.    Therefore they prayed that the appeal be allowed.

7)                The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?

8)                It is an undisputed fact that the deceased Gutti Veerabhadra Rao, husband of the first complainant and father of complainant Nos. 2 & 3  had taken two policies  one for Rs. 25,000/-  and another for Rs. 5 lakhs evidenced under policy Ex. A1.   It is also not in dispute that  the assured Gutti Veerabhadra Rao  died on 1.3.2005.    When the said fact was informed, the insurance company  had conveniently  settled the claim under the first policy,  obviously being small amount, while repudiating the second  policy  on the ground that the death was hastened due to consumption of alcohol and therefore  they were not entitled to the amount covered under the policy. 

9)                It is not known why  the very same objection was not raised  when they had settled the claim for the policy taken for  Rs. 25,000/-.   It is not the money that matters but the principle  under which the claim for the self same  person was allowed for one policy and rejected for another.    The insurance company  ought to have applied the very same yard stick  irrespective of the amount  involved in the policies.    

10)              The question is whether  the deceased was alcoholic and whether  he suppressed the fact while  submitting his proposal form  Ex. B1  and  therefore  the complainants  were not entitled to compensation.    The deceased when submitted his proposal form Ex. B1,    he mentioned that his health was good and he was non-alcoholic vide coloumn No. 11 (h).  It  was confirmed  by their own panel doctor Dr.  T. V. Chandrasekhar.   Had he been an alcoholic and was suffering from some ailment, he would have definitely certificated to that effect.    When the complainants  had  claimed the amount by submitting  claimant  statement  under Ex. B6  the insurance company alleged that  he was alcoholic, took treatment  in Manasa Hospital  for alcoholic de-addiction evidenced under  certificate issued by  one Dr.  Karri Rama Reddy marked as Ex. B7 Dt. 22.3.2006.    It reveals that the assured  has joined in the hospital  on 28.5.2004,  for daily monitoring  and treatment for alcohol de-addiction  treatment and was discharged on 19.6.2004.    He rejoined on 20.7.2004 for the same treatment  and was discharged on 23.7.2004, and visited for the last time on  20.10.2004.    In fact in Ex. B4 at coloumn No. 9  to the question  What was his condition when he was discharged?   Dr. Karri Rami Reddy mentioned “ in good condition and free from craving for alcohol.”

We may also mention  herein that  at the time of taking policy on 30.10.2003  he stated  as  ‘non-alcoholic’ and   his condition was good, as certified by the panel doctor  of the insurance company.    The so called treatment for deaddition was  long subsequent to proposal Ex. B1.    Therefore, it cannot be said that  as on the date of  submission of proposal form  he was  ailing or an alcoholic.    The insurance company for the reasons best known  could not state as to  where from it  could gather information that he was alcoholic  and was taking treatment in Manasa  Hospital.    They did not file the affidavit evidence of  Dr. Karri  Rama Reddy who said to have issued the certificate.    From this it is beyond doubt  that  there was no suppression of any fact  which authorises the insurance company to repudiate the claim.    Since there is no evidence  much less that of the doctor that  the assured died of ailment induced by alcohol the repudiation was unjust.    We may state that having subjected the  assured to medical examination  by  the panel doctor  of LIC  they cannot turn round and claim that  he was suffering from some ailment  and that he had suppressed it.    Unfortunately, the  insurance companies as we could see bent upon  repudiating the claims on one ground or other  without any basis.     Under the policy Ex. B3 the complainant was entitled to bonus, provided the death was before the end of the stipulated premium payment term.    He had to pay the premium  in the month of  October every  year.    

11)              It is not the case of the insurance company that  he had failed to pay the premium due.   There is no reason why the complainant should be denied  the bonus.    The insurance company did not mention  as to the exact  amount  that she was entitled towards bonus.    Had the said fact been mentioned it would have been known as to the amount that could be payable towards bonus.   The Dist. Forum had awarded Rs. 80,000/- towards bonus  when the insurance company could not  state as to the exact amount  that could be paid towards bonus.  No fault could be made when the Dist. Forum had granted the said amount.    The deceased died on 1.3.2005  about five

years ago.  Up till now  no amount was received by the complainants.   The insurance company denied the  amount all through.    Undoubtedly it must have earned interest for all these years.     Awarding interest @ 12% p.a., in the circumstances  cannot be said to be high, more so  when they denied  it to a widow,  and children who are minors.     For all these years the complainant  must have undoubtedly suffered  mental agony,   she being a widow a house maker  and  has no other source of livelihood.    Therefore awarding a compensation of  Rs. 25,000/- towards mental agony  and costs of Rs. 3,000/-  cannot be said to be unjustified,    more so  when the insurance company had settled  a lesser claim without taking any of these objections.  When it comes to a bigger amount  they had all these objections without any substance.    We do  not see any merits in the appeal.

12)               In the result the appeal is dismissed with costs computed at Rs. 2,000/-.  Time for compliance four weeks. 

1)      _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER           

   Dt.   31. 05. 2010.

*pnr

“UP LOAD – O.K.”