The complainant Bikker Singh @ Bikar Singh (here-in-after referred to as complainant) has filed complaint U/s 12 of Consumer Protection Act, 1986 against opposite parties HDFC Life Insurance Company Limited and Other (here-in-after referred to as opposite parties).
Briefly, the case of the complainant is that in year 2013, agent of opposite parties approached his father and allured to purchase the insurance policy. Being allured by agent of opposite parties, father of the complainant purchased two life insurance policies from opposite parties and paid requisite premium being first insurance premium for sum assured of Rs.7,58,427/- and Rs.7,25,642/-. Opposite parties issued policies bearing No.16206686 and 16242578 and premium was payable in one policy as semi-annually and another annually, but no terms and conditions were ever issued to the complainant or his father. The complainant was appointed as nominee by his father in both policies.
It is alleged that the father of the complainant paid regular premium against the policies. Unfortunately, his father died natural death on 1.7.2016. Intimation regarding his death was given to opposite parties. Thereafter the complainant, being nominee, lodged the claim of Rs.14,84,069/- for two policies. He submitted all the documents for settlement of his lawful claim. The officials of opposite parties assured the complainant that his lawful claim shall be settled at the earliest.
It is further alleged that opposite parties appointed investigator regarding the insurance claim of the complainant. He approached the complainant and took photocopies of some documents and got the signatures of the complainant on some blank papers and some blank printed forms. He also conveyed the complainant that his lawful insurance claim shall be paid shortly.
It is further alleged that instead of paying the claim, opposite parties conveyed the complainant that his claim has been rejected and returned him entire premium amount through NEFT in his account, but they have not sent any rejection letter or no ground ever disclosed to him.
It is further alleged that after receipt of repudiation letter, the complainant many times approached opposite parties with the request to withdraw the illegal and arbitrary repudiation letter and to make the payment of the insurance, but to no effect.
On this backdrop of facts, the complainant has alleged deficiency in services and unfair trade practice on the part of opposite parties. He has also alleged that he has suffered from mental tension, agony, harassment and botheration. For these sufferings, he has claimed damages to the tune of Rs.50,000/- in addition to insurance amount with interest @ 15% per annum. Hence, this complaint.
Upon notice, opposite parties appeared through their counsel and contested the complaint by filing written version. In their joint written version, opposite parties have raised the legal objections that the intricate questions of law and facts are involved in this complaint. They require voluminous documents and evidence for determination. It is not possible in the summary procedure under 'Act'. The appropriate remedy, if any, lies only in the civil court. The complainant has concealed the material facts and documents from this Forum and opposite parties. He has concealed the fact that life assured deceased Joginder Singh submitted electronic proposal forms dated 30.7.2013 and 19.8.2013 wherein he made material concealment of true facts as well as misrepresentation in order to get the policies. He mentioned his date of birth as 18.11.1957 and submitted PAN card as proof. As per investigation reports, the correct age of deceased Joginder Singh was 83 years as per his voter ID card. On the basis of proposal forms, the life assured was aged 58 years on the date of his death. Deceased life assured has also mentioned his occupation agriculture and gross income as Rs.5 lakhs.
It is further revealed that opposite parties got the matter thoroughly investigated. It is established that the correct age of life assured was much higher than that disclosed at the time of proposal. Had this information provided to opposite parties at the time of applying insurance policies, they would have declined the application. Since there was material concealment of vital information at the time of applying for policies, opposite parties repudiated the claim against both policies vide repudiation letters dated 5.10.2016 and released/paid Rs.1,74,600/- each by credit to the account of complainant in Punjab National Bank as refund of premium paid under the policies.
Further legal objections are that the complainant has not impleaded all the legal heirs of deceased Joginder Singh and lastly, he has no locus-standi or cause-of-action to file the complaint.
On merits, purchase of policies by Joginder Sijngh is not denied. It is denied that no terms and conditions of policies were supplied to deceased. Receipt of premium is also not disputed. In further written version, opposite parties have reiterated their stand as taken in the legal objections and detailed above, repetition of which is not considered necessary for sake of brevity.
Parties were asked to produce the evidence.
In support of his claim, the complainant has tendered into evidence his affidavit dated 1.5.2017, (Ex.C1); photocopies of policies, (Ex.C2 and Ex.C3); photocopy of death certificate, (Ex.C4); photocopy of Aadhaar card, (Ex.C5); photocopy of pan card, (Ex.C6); photocopies of receipts, (Ex.C7 to Ex.C9 and Ex.C11); photocopy of acknowledgment, (Ex.C10) and closed the evidence.
To rebut the claim of the complainant, opposite parties have tendered into evidence photocopy of policy, (Ex.OP1/1); affidavit of investigator, (Ex.OP1/2); photocopies of investigation report, (Ex.OP1/3 and Ex.OP1/12); affidavit of Arpit Higgins dated 1.2.2018, (Ex.OP1/4) photocopies of authority letters, (Ex.OP1/5 and Ex.OP1/6); photocopies of proposal forms, (Ex.OP1/7 and Ex.OP1/8); photocopies of policies and letters, (Ex.OP1/9 to Ex.OP1/11) and closed the evidence.
We have heard learned counsel for parties and gone through the file carefully.
Learned counsel for parties have reiterated their stand as taken in their respective pleadings and detailed above.
To support his submissions, learned counsel for complainant has relied upon following case law:-
i) Decision of Hon'ble National Commission rendered in RP No.3159 of 2017, Decided on 13.7.2018 in case Reliance Nippon Life Insurance Co. Ltd. & Anrs. Vs. Harjeet Singh;
ii) Decision of Hon'ble National Commission rendered in RP No.370 of 2007, Decided on 28.1.2011 in case Life Insurance Corp. of India Vs. Gopal Singh;
i) Decision of Hon'ble State Commission rendered in FA No.483 of 2018, Decided on 23.1.2019 in case Prem Singh Vs. Birla Sun Life Insurance Company Ltd.;
ii) Decision of Hon'ble State Commission rendered in FA No.695 of 2015, Decided on 27.2.2017 in case DLF Pramerica Life Insurance Co. Ltd. Vs. Buharh Singh;
To support his submissions, learned counsel for opposite parties has also relied upon following case law:-
(i) 2009 (4) CPJ 8 case titled Satwant Kaur Sandhu Vs. New India Assurance Company Ltd.;
(ii) 2008 (3) CLT 380 titled P.C. Chacko and another Vs. Chairman, Life Insurance Corporation of India and others;
(iii) 2010 (3) CPC 222 case titled M/s. Suraj Mal Ram Niwas Oil Mills (P) Ltd., Vs. United India Insurance Co. Ltd.,. and another;
(iv) 2009 (2) CPC 593 case titled Vikram Greentech (I) Ltd., and Anr., Vs. New India Assurance Co. Ltd.;
(v) Decision of Hon'ble Apex Court rendered in Civil Appeal No.3944 of 2019, Decided on 15.4.2019 in case Life Insurance Corporation of India Vs. Manish Gupta.
We have given careful consideration to these rival submissions carefully and gone through the case law cited by learned counsel for parties.
Admitted facts are that Joginder Singh, father of the complainant purchased policies from opposite parties. Copy of policies are Ex.C2 and Ex.C3. The complainant Bikkar Sijngh is nominee (beneficiary) in both policies. Therefore, he has locus-standi to file this complaint.
Joginder Singh had expired and complainant lodged the claim with opposite parties. Opposite parties repudiated the claim vide letter dated 5.10.2016, (Ex.OP1/10 and Ex.OP1/11). Both claims are repudiated on the same ground that life assured had declared his date of birth November, 17, 1957. The investigator has established that correct age of life asssured was higher than that disclosed at the time of proposal. Occupation and income details disclosed in application dated August, 19, 2013 are also found to be false. Therefore, from perusal of letters, opposite parties have repudiated the claim on following two grounds:-
i) Correct age of insured was higher than disclosed;
ii) Occupation and income details were false.
It is admitted case of the parties that deceased has declared his date of birth as 17.11.1957. Opposite parties have produced on record copies of proposal forms alongwith investigation report. Proposal form dated 30.7.2013 regarding policy No.16206686 is having declaration by financial consultant/sale representative Shifali Bansal with signatures. She has further declared that life assured/proposed policyholder has signed in her presence. It proves that financial consultant/sale representative has personally obtained the signatures of insured.
Similarly, the proposal form regarding policy No.16242578 contains declaration of financial consultatant/sale representative Manvinder Singh. He has also made similar declaration as made by Shifali Bansal and put his signatures.
These documents proves that financial consultants/sale reprentatives were having time and opportunity to seek other proof regarding age, if they were having suspicion regarding age of insured.
It is also admitted case of the parties that insured submitted PAN card at the time of availing insurance policies. PAN card of Joginder Singh is on file as Ex.C6, which shows his date of birth as 18.11.1957. Therefore, it cannot be accepted that Joginder Singh has made claim regarding age wihtout any documentary evidence.
Opposite parties have repudiated the claim on the basis of investigation report, which is Ex.OP1/3 and Ex.OP1/12. From the conclusions made by investigator, it is noticed that he has checked the voter ID card online to examine the age of deceased and from the voter ID card, he has concluded that at the time of death, age of deceased was 83 years and there is descrepency of 25 years between collected evidence and age mentioned in the proposal forms. He has also concluded that produced PAN card at the time of proposal was prepared with reduced age. The policies were purchased in the year 2013. At that time, as per PAN card, age of deceased was 56 years and as per investigator, there was distance of 25 years. Therefore, at the time of purchase of policies, deceased life assured was allegedly of the age of 81 years. If there was such a considerable difference between age reported by insured, financial consultants/sale reprentatives could have certainly raised suspicion at the time of accepting proposal forms. Moreover age mentioned in PAN card is to be preferred than the age mentioned in voter ID card.
It is matter of common knowledge that normally age in the Voter ID card is mostly not correctly recorded. Moreover no evidence has been collected to prove that that deceased himself has recorded his age in the voter ID card.
Opposite parties have also mentioned in the repudiation letter that the particulars regarding income and profession were also found to be false, but there is no evidence worth name to justify conclusion that occupation and income details were also found to be false.
There is another aspect of matter also. The polcies were issued w.e.f. 30.7.2013 and 19.8.2013. Repudiation letter is dated 5.10.2016 i.e. after more than 3 years from the date of issuance of policies. Section 145 of Insurance Act, 1938 will be helpful to solve the controversy. For sake of convenience, this Act is reproduced as under:-
“45. Policy not to be called in question on ground of misstatement after three years.-(1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy i.e. from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.
(2) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:
Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based.
Explanation 1-For the purposes of this sub-section, the expression “fraud” means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy:-
(a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;
(b) the active concealment of a fact by the insured having knowledge or belief of the fact;
(c) any other act fitted to deceive; and
(d) any such act or omission as the law specially declares to be fraudulent.
Explanation II-Mere silence as to facts likely to affect the assessment of the risk by the insurer is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the insured or his agent keeping silent, to speak, or unless his silence is, in itself, equivalent to speak.
(3) Notwithstanding anything contained in sub-section (2), no insurer shall repudiate a life insurance policy on the ground of fraud if the insured can prove that the misstatement of or suppression of a material fact was true to the best of his knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement of or suppression of a material fact are within the knowledge of the insurer;
Provided that in case of fraud, the onus of disproving lies upon the beneficiaries, in case the policyholder is not alive.
Explanation-A person who solicits and negotiates a contract of insurance shall be deemed for the purpose of the formation of the contract, to be the agent of the insurer.
(4) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground that any statement of or suppression of a fact material to the expectancy of the life of the insured was incorrectly made in the proposal or other document on the basis of which the policy was issued or revived or rider issued:- Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision to repudiate the policy of life insurance is based: Provided further that in case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy till the date of repudiation shall be paid to the insured or the legal representatives or nominees or assignees of the insured within a period of ninety days from the date of such repudiation.
Explanation-For the purposes of this sub-section, the misstatement of or suppression of fact shall not be considered material unless it has a direct bearing on the risk undertaken by the insurer, the onus is on the insurer to show that had the insurer been aware of the aid fact no life insurance policy would have been issued to the insured.
(5) Nothing in this section prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”
Aforesaid legal provision provides that no policy of life assured can be called in question by insurer after expiry of 3 years on the ground that the statement made in the proposal for insurance was incorrect or false and insurer is also to communicate in writing to insured and his legal reprentative (nominee) the ground and material upon which this decision is based.
As per Sub-section 3 also, the policy cannot be repudiated on the ground of fraud when misstatement was true to be best of knowledge and belief of insured. In this case, insured has revealed his age on the basis of entry in PAN card, which is certainly an authenticated document. Therefore, as per Section 45 of Insurance Act also, repudiation of claim after 3 years from issuance of policies is not sustainable.
For the reasons recorded above, the complaint is partly accepted with Rs.10,000/- as cost of litigation against opposite party No.1. Opposite party No.1 is directed to release an amount of Rs.5,51,042/- (Rs.7,25,642/- minus Rs.1,74,600/-=Rs.5,51,042/-) qua policy bearing No.16242578 and Rs.5,83,827/- (Rs.7,58,427/- minus Rs.1,74,600/-=Rs.5,83,827/-) qua policy bearing No.16206686 to the complainant.
Since repudiation of claim amounts to deficiency and unfair trade practice on the part of opposite party No.1, therefore, the complainant is also held entitled to compensation by way of interest @9% per annum from the date of repudiation till actual payment.
Opposite party No.2 is impleaded by name, but it will not be personally liable to comply with the order. Order is to be complied by the company.
The compliance of this order be made within 45 days from the date of receipt of copy of this order.
The complaint could not be decided within the statutory period due to heavy pendency of cases.
Copy of order be sent to the parties concerned free of cost and file be consigned to the record.
Announced:-
19-12-2019
(M.P Singh Pahwa)
President
(Manisha)
Member
