Order dictated by:
Mr.Anoop Sharma, Presiding Member
1. Smt.Balveer Kaur, brought the instant complaint under section 11, 12 & 13 of the Consumer Protection Act, 1986 on the allegations that the Opposite Parties is dealing in the life insurance policies and for that purposes, they had spread out number of agents in the field for covering the life risks of common man and the Opposite Parties, in order to secure the business and for having monetary gains, usually allures and gives attractive offers to common man at the time of giving policies and further assures the family members of the applicants that if any untoward incident occurred the Opposite Parties will give all the benefits and sum assured at the door step as the family will have to go nowhere and the services will be availed while sitting at home and the agents of the Opposite Parties as well as its officials as per the directions issued by the higher officials, use to give lucrative offers to common people, just in order to secure their business. The agents of the Opposite Parties approached the complainant and her son and gave the lucrative offers for having a life insurance policy. The complainant and family members agreed to insure the life of her son namely Sitara Singh son of Gulzar Singh through Opposite Parties vide present policy i.e. HDFC SL CREST vide policy number 16681529 and the said policy was issued on the basis of application dated 27.2.2014, the date of maturity of policy was fixed for 8.3.2024 and the annual premium to be paid fixed was Rs.1,59,990/- and the installments was fixed annual and sum assured was of Rs.15,999/- towards death benefits and the above said policy was issued in favour of Sitara Singh having date of birth 1.1.1975 and the complainant is the nominee of the said policy. First installment of the policy was given at the time of issuing the policy i.e. Rs.1,59,990/- was paid on 27.2.2014. Thereafter unluckily, applicant Sitara Singh died due to sudden heart attack on 21.5.2014 at Arora Hospital, Chheharta, Amritsar. The complainant gave information to Opposite Parties on 10.11.2014 regarding the death of Sitara Singh and submitted the death claim of Sitara Singh and submitted all the requisite details in original, but the Opposite Parties declined the genuine claim of the complainant and repudiated the claim on the basis of alleged income proof submitted at proposal stage has been verified and found to be fake. But the true facts are that the agent of Opposite Parties never demanded the income proof in the shape of J form at his own level. At the time of filing the proposal form of present policy, the applicant never supplied the income proof as the agent of the Opposite Parties never demanded the income proof from the applicant Sitara Singh. At the time of filing the information related to the applicant, the true and detailed facts as inquired by the Opposite Parties were provided and all the necessary information related to the income of the applicant and his family members were taken by the officials, who collected the information and relevant documents, had verified the facts from other sources. Vide instant complaint, the complainant has sought the following reliefs.
a) Opposite Parties may kindly be directed to release the sum assured amount of Rs.15,99,000/- alongwith upto date interest @ 12% per annum.
b) Compensation of Rs.50,000/- on account of mental pain, agony, inconvenience and harassment suffered by the complainant may be awarded to him against the Opposite Parties.
c) Costs of the proceedings alongwith sum of Rs.11,000/- as counsel fee.
d) Any other relief to which the complainant is found entitled to under law and equity be also granted to him.
Hence, this complaint.
2. Upon notice, opposite parties appeared and contested the complaint by filing joint written statement taking preliminary objections therein inter alia that deceased Sitara Singh wilfully and fraudulently concealed the material facts regarding his income and source of income at the time of purchase of the insurance policy with sum assured of Rs.15,99,000/-. As per investigations made by the Opposite Parties it was revealed that Sitara Sigh was not earning income of Rs.4,60,00,000/- per annum as mentioned in the proposal form. From the above facts, it is revealed that the insured had misstated his income only to get higher value of the sum assured for which he was not eligible as per terms and conditions of the policy. Ultimately, the Opposite Party rightly repudiated the claim and communicated th same to the complainant vide letter dated 20.4.2015. Moreover, the fact of his income was well within the knowledge of the deceased life assured and he was a wilful suppression to obtain insurance fraudulently. Had he disclosed that this income is far lower than the disclosed income, as stated by him while submitting the proposal form, the insurance policy would not have been issued in favour of the deceased and hence the deceased life assured did not stick to the Principle of Utmost Good Faith. Therefore, on the strength of above factors, the competent authority of the Opposite Party repudiated the liability under the said policy and conveyed to the complainant. On merits, the Opposite Parties took almost same and similar pleas as taken in the preliminary objections. Remaining facts mentioned in the complaint are also denied and a prayer for dismissal of the complaint with cost was made.
3. In her bid to prove the case, complainant tendered into evidence affidavit Ex.C-1 in support of the allegations made in the complaint and also produced copies of documents Ex.C2 to Ex.C10 and closed her evidence.
4. On the other hand, to rebut the evidence of the complainant, the Opposite Parties tendered into evidence the copies of documents Ex. R2 to Ex.R58 and closed the evidence on behalf of the Opposite Parties.
5. We have heard the ld.counsel for the parties and have carefully gone through the evidence on record.
6. Ld.counsel for the complainant has reiterated the facts as narrated in the complaint and submitted that the agents of the Opposite Parties approached the complainant and her son and gave the lucrative offers for having a life insurance policy. The complainant and family members agreed to insure the life of her son namely Sitara Singh son of Gulzar Singh through Opposite Parties vide present policy i.e. HDFC SL CREST vide policy number 16681529 and the said policy was issued on the basis of application dated 27.2.2014, the date of maturity of policy was fixed for 8.3.2024 and the annual premium to be paid fixed was Rs.1,59,990/- and the installments was fixed annual and sum assured was of Rs.15,999/- towards death benefits and the above said policy was issued in favour of Sitara Singh having date of birth 1.1.1975 and the complainant is the nominee of the said policy. First installment of the policy was given at the time of issuing the policy i.e. Rs.1,59,990/- was paid on 27.2.2014. Thereafter unluckily, applicant Sitara Singh died due to sudden heart attack on 21.5.2014 at Arora Hospital, Chheharta, Amritsar. The complainant gave information to Opposite Parties on 10.11.2014 regarding the death of Sitara Singh and submitted the death claim of Sitara Singh and submitted all the requisite details in original, but the Opposite Parties declined the genuine claim of the complainant and repudiated the claim on the basis of alleged income proof submitted at proposal stage has been verified and found to be fake. But the true facts are that the agent of Opposite Parties never demanded the income proof in the shape of J form at his own level. At the time of filing the proposal form of present policy, the applicant never supplied the income proof as the agent of the Opposite Parties never demanded the income proof from the applicant Sitara Singh. Ata the time of filing the information related to the applicant, the true and detailed facts as inquired by the Opposite Parties were provided and all the necessary information related to the income of the applicant and his family members were taken by the officials, who collected the information and relevant documents, had verified the facts from other sources.
7. On the other hand, ld.counsel for the Opposite Parties has repelled the aforesaid contention of the ld.counsel for the complainant on the ground that deceased Sitara Singh wilfully and fraudulently concealed the material facts regarding his income and source of income at the time of purchase of the insurance policy with sum assured of Rs.15,99,000/-. As per investigations made by the Opposite Parties it was revealed that Sitara Sigh was not earning income of Rs.4,60,00,000/- per annum as mentioned in the proposal form. From the above facts, it is revealed that the insured had misstated his income only to get higher value of the sum assured for which he was not eligible as per terms and conditions of the policy. Ultimately, the Opposite Party rightly repudiated the claim and communicated the same to the complainant vide letter dated 20.4.2015. Moreover, the fact of his income was well within the knowledge of the deceased life assured and he was a wilful suppression to obtain insurance fraudulently. Had he disclosed that this income is far lower than the disclosed income, as stated by him while submitting the proposal form, the insurance policy would not have been issued in favour of the deceased and hence the deceased life assured did not stick to the Principle of Utmost Good Faith. Therefore, on the strength of above factors, the competent authority of the Opposite Party repudiated the liability under the said policy and conveyed to the complainant. To support its contention the Opposite Parties has produced on record the copies of the documents Ex.R2 to Ex.R58 but has failed to corroborate these documents by filing any supporting affidavit on the record. The only reason for the repudiation of the claim of the complainant is that the insured had misstated his income only to get higher value of the sum assured for which he was not eligible as per terms and conditions of the policy. Ultimately, the Opposite Party rightly repudiated the claim and communicated the same to the complainant vide letter dated 20.4.2015. But in this regard, the Opposite Parties should have actually examined the authenticity of the income of the insured at the time when they issued the policy and accepted it as correct. It is generally the tendency of these companies to accept everything when they issue the policy and start finding faults in the same document, subsequently, when they are liable to pay compensation to the insured. However, this was not done intentionally and the Opposite Parties were waiting for the time when it is required to make the payment of compensation, to come forward and alleged that the income proof which it had earlier accepted as correct for proof of income of Sitara Singh is not a genuine document. This approach of the Opposite Parties can not be allowed. The facts of the case of the complainant are almost the same and relevant to the case decided by Hon’ble Punjab State Commission, Chandigarh in case Pawan Kumar Vs. Bajaj Allianze Life Insurance Company, First Appeal No. 1332 of 2007 decided on 28.2.2012. Moreover, the perusal of Ex.R10 produced by the Opposite Parties on record itself, the column of Discharge Voucher/ Advance Discharge Voucher shows forged and fabricated document because in this form the dates mentioned at one place as 09.10.2014 and at second place as 4 Nov. 2014 and at third place it is mentioned as 10.11.2014 whereas it was allegedly filed by the Opposite Parties on one and the same time and date, but on the basis of this document, the Opposite Parties has repudiated the claim of the complainant without application of mind and without any cogent reasons. In such a situation, the Opposite Party has wrongly repudiated the claim of the complainant. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., III (2008) CPJ 63 (SC) is fully attracted, wherein it was held that, Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation. This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. In similar set of facts, Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 has held to the following effect:-
“It seems that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.
The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.
8. During the course of arguments, ld.counsel for Opposite Parties has submitted that the Opposite Parties have already paid some amount to the complainant in regard to the presents claim.
9. Consequently, the instant complaint succeeds and the complaint is allowed against Opposite Parties with costs and the Opposite Parties are directed to pay the amount of Rs.15,99,000/- less already paid amount, if any to the complainant within 30 days from the date of receipt of copy of this order, failing which the Opposite Parties are liable to pay interest @ 6% per annum on the awarded amount from the date of order till its realization. Opposite Parties are also directed to pay the costs of litigation to the complainant to the tune of Rs.2,000/-. Copies of the order be furnished to the parties free of cost. File is ordered to be consigned to the record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum.
Announced in Open Forum
Dated: 24.05.2017.
