BEFORE THE  DISTRICT CONSUMER DISPTUES REDRESSAL FORUM, FATEHABAD.

Complaint no.189/2018.

Date of instt.13.07.2018. 

                                                                                                Date of Decision: 24.12.2019

Ram Kishan son of Sh. Pokar Ram, resident of H. No. 1184, Agroha, District Hisar.

                                                                                                                                ..Complainant.

                                                                Versus

1. ICICI Prudential Life Insurance Company Ltd., ICICI Prulife Towers, 1089, Appasaheb Marathe Marg, Prabhadevi Mumbai.
2. ICICI Prudential Life Insurance Company Ltd., Ground & First Floor, Street Mail Building, Nh 10, Near Old Bus Stand, Fatehabad.

..Respondents/OPs. 

      Complaint under Section 12 of Consumer Protection Act, 1986.                                                                   

Before:       Sh.Raghbir Singh, President.

                                     Sh. Jasvinder Singh, Member.

Argued by:                  Sh. Vinod Godara, Advocate for the complainant.

 Sh. Yogesh Gupta, Advocate for the OPs.

ORDER

                                The present complaint under Section 12 of Consumer Protection Act, 1986  has been filed by the complainant against the Ops with the averments that late Sh. Vinod Kumar son of the complainant during his lifetime obtained life insurance policy bearing no.20940049 dated 12.4.2017 from OP no. 2 for an amount of Rs. 10 lac.  The complainant being father of the life assured was nominated as nominee in the abovesaid policy.  The life assured Vinod Kumar made a payment of Rs.5,228/- as premium on 12.4.2017. Sh. Vinod Kumar took another policy bearing no.209398333 from OP no. 2 on 12.4.2017 for an amount of Rs. 6 lac.  The complainant being father of the life assured was appointed as nominee in the abovesaid policies also and a premium of Rs. 6,000/- was paid by the life assured to the OPs on 12.4.2017 in the abovesaid policy.

2.                             It is further submitted that before issuance of the abovesaid policies the health of the life assured was examined by the doctors on the penal of the OPs and after satisfaction of the same the abovesaid policies were issued.  It is also submitted that the representative of the OPs had suo moto filed the proposal form without taking the signature of the life assured and without disclosing the details mentioned in the proposal form.  That unfortunately on 21.11.2017 life assured Sh. Vinod Kumar died at his home due to failure of heart.  However, before his death the life assured was very fit.  Thereafter the complainant intimated the OP no. 1 and 2 regarding death of DLA and requested for settlement of the insurance claim.  Thereafter, as per demand of the OPs the requisite documents were also submitted by the complainant within stipulated period but the OPs prolonged the matter on one pretext or the other and ultimately vide letter dated 28.3.2018 repudiated the insurance claim of the complainant on the ground that the life assured had taken insurance policies from different insurance companies including the company of the OPs.  It is further submitted that the aforesaid reason for repudiating the insurance claim by the OPs is totally wrong and illegal.  The OPs are under legal obligation to release the insured sum of Rs.16 lac alongwith interest at the rate of 18% and other benefits.  The complainant has further prayed that the present complaint may be allowed and the OPs may be directed for making a payment of Rs.16 lac alongwith interest and other benefits.  Hence, the present complaint.

3.                             On being served, the OPs appeared through their counsel and resisted the complaint by filing a joint written statement wherein various preliminary objections with regard to maintainability, jurisdiction, concealment of true and correct facts, locus standi, estoppel and cause of action etc., have been raised.

4.                             In reply on merits, it is submitted that the answering OPs had received two duly filed online proposal forms for the said policies bearing no. 20940049 and 20939833.  Based on the information provided in the application forms both the policies were issued on 24.5.2017 to the DLA.  Thereafter, the OPs received claim intimation from the complainant informing that DLA had died on 21.11.2017.  Since death of the DLA was within six months from the issuance of the policies as such the company had conducted due investigation wherein it was highlighted that the life assured had multiple insurance policies from other insurance companies to the tune of Rs.1.03 Crore.  Out of this the policies to the tune of Rs.69.02 lakhs were opted by the DLA before availing the insurance policies in question from the OPs.  Since the said material information regarding the prior policies of the DLA were not informed to the OPs company in the proposal forms as such the OPs had duly repudiated the claims of the complainant vide letters dated 28.3.2018.  It is further submitted that since the OPs have established that the information provided by the DLA in the proposal forms was untrue and false and as such the Ops were well within their right to repudiate the said claim of the complainant.  The OPs have acted perfectly in accordance with the terms and conditions of the insurance policies and no case of deficiency on the part of OPs have arisen in rendering service to the complainant.  It is further submitted that the repudiation of the insurance claim under the said policies was on the ground of mis-statement of information, suppression of material information and deliberately furnishing of false information in the proposal form.  Had the company been made aware of the fact that the DLA was already insured upto 69.02 lakhs, then the company would have rejected the proposal and would not have issued the policies in question to the DLA as the DLA was over insured and not eligible for any further insurance as per Financial Underwriting Guidelines.

5.                             It is further submitted that the contract of insurance is based on the Doctrine of Uberrimae Fide and even if any due diligence is done by the insurance company, it does not change the basic element of an insurance contract.  Since the DLA had not performed his duty to disclose all material information the contract of insurance between the OP company and the DLA is a void contract.  It is further submitted that the present complaint is without any merits and as such the same is liable to be dismissed.

6.                             The learned counsel for the complainant tendered in evidence affidavit of complainant as Exhibit CW-1/A alongwith documents as Annexure C1 to Annexure C-9. On the other hand, the learned counsel for OPs tendered in evidence affidavit of Gopi Retnakar as Annexure RW1/A alongwith documents as Annexure OP1/1 to OP1/9.

7.                             The learned counsel for the complainant in his arguments contended that nothing material was concealed by the life assured in the proposal form submitted by him for obtaining the insurance policies in question.  It is further contended that the officials of the OP company had filed the proposal form and the facts and details in the proposal form were filed by the officials of the OP company were not disclosed to the life assured.  It is further contended that a non-disclosure of previous insurance policies cannot be a valid ground for repudiation of the insurance claim.  There is no provision in law for a person for holding any number of life insurance policies from different insurers.  The non-disclosure of a previous insurance cover is not of any material consequence under Section 45 of the Insurance Act, 1938.  The alleged omission or commission is not of any material consequence and would not have influenced the mind of appellant while issuing the policies.  Therefore, the repudiation of insurance claim of the complainant in the present case is not in accordance with the terms and conditions of the policies in question, unsustainable in the eyes of law and as such the same is liable to be set aside.  In support of his case, the learned counsel for the complainant placed reliance on the judgment rendered by Hon’ble National Commission in case titled as Sahara India Life Insurance Company Vs. Rayani Ramanjaneyulu decided on 1.8.2014 and cited as 2014 (3) CPJ Page 582.

8.                             It is also further contended that the abovesaid judgment of the Hon’ble National Commission has been further upheld by the Hon’ble Apex Court.

9.                             On the other hand, the learned counsel for the OPs vehemently rebutted the arguments advanced by learned counsel for the complainant and further contended that the life assured had availed multiple life insurance policies from other insurance companies before obtaining the policies in question and the said fact was not disclosed to the OPs in the proposal forms.  The life assured had already availed insurance policies from other insurance companies for an amount of Rs.69.02 lacs.  It is further contended that before issuance of the insurance policies in question the life assured was over insured and not eligible for any further insurance as per the financial underwriting guidelines. In total the life assured had purchased insurance policies to the tune of Rs. 1.03 crores in a short span between March 2017 to August 2018.  The abovesaid fact was not disclosed by the life assured at the time of filing the proposal form for obtaining the insurance policies in question.  It is further contended that since the life assured had not performed his duty to disclose all material information the contract of insurance between the OP company and the DLA is a void contract and as such the repudiation of the insurance claim of the complainant by the OPs is perfectly in accordance with the terms and conditions of the insurance policies and the present complaint is liable to be dismissed.

10.                          In support of his case, the learned counsel for the OPs placed reliance on the judgment rendered by Hon’ble Supreme Court of India in case titled as Reliance Life Insurance Company Vs. Rekhaben Nareshbhai Rathod decided on 24.4.2019 wherein the judgment rendered by National Commission in Sahara India case has also been discussed.

11.                          We have duly considered the arguments advanced by learned counsel for the parties and have also perused the documents placed on record.  The core issue involved in the present case is as to whether the repudiation of the insurance claim of the complainant by the OPs on the ground of non-disclosure of previous insurance policies held by the life assured at the time of obtaining the present insurance policies, is in accordance with the terms and conditions of the insurance policies and sustainable in the eyes of law.

12.                          A perusal of the proposal forms submitted by the life assured (Annexure C-1 and Annexure C-2) would show that he was asked inter alia to disclose all the insurance policies held by him.  The abovesaid question was answered by the life assured in negative thereby representing that he was not holding any insurance cover issued by any other insurance company.  However, from perusal of the documents placed on record as Annexure OP1/7, it is revealed that the life assured had already availed insurance policies from other insurance companies for an amount of more than Rs.60 lac before applying for the insurance policies in question.  The OPs in their written statement has given the list of the insurance policies purchased by the life assured from various insurance companies before obtaining the present insurance policies as under:-

13.                          However, the complainant in his affidavit tendered in evidence has not denied the purchase of the abovesaid policies by the life assured before obtaining of the insurance policies in question.  Therefore, the said information given by the life assured in the proposal form was false.  Vide declaration and authorization on the proposal form and signed by the insured he agreed that in case of any mis-statement or suppression of material information the company had the right to repudiate the claim under the policies.  Therefore, if the information withheld by the insured is found to be material no amount is payable by the insurance company to the complainant. 

14.                          Disclosure of pre-existing life insurance cover of the proposer is necessary to unable the insurer to assess the human life value of the proposer before issuance of a policies.  The consequences of non-disclosure of a pre-existing cover is that the insurer is unable to assess the real risk.  In the present case, the life assured was having insurance cover of more than 60 lac from other insurance companies before obtaining the insurance policies in question.  The OP company may not have given insurance cover to the life assured had he disclosed the insurance policies taken from other life insurance companies.  Moreover, in the present case the life assured was over insured and not eligible for any further insurance as per the Financial Underwriting Guidelines. 

15.                          We are of the view that the information with regard to policies of more than Rs.60 lacs taken from other insurance companies by the life assured was a material information, since the decision of the OP company whether to accept the proposal or not was dependent inter alia on the amount of insurance cover already taken by the life assured.  On account of the concealment of the aforesaid material information by the life assured the OP company was deprived of an opportunity to consider the proposal in the light of all the relevant facts including the extent to which the insured had already been covered by way of other policies.  It was clearly and specifically agreed by the life assured himself by way of declaration contained in the proposal form that in case of any mis-statement or suppression of material information the company had the right to repudiate the claim.  In the present case, the information with respect to other life insurance policies held by the life assured cannot be said to be inconsequential or trivial information since the said information had a material bearing on the decision of the petitioner company.

16.                          The learned counsel for the complainant in support of the case of the complainant has relied upon the judgment rendered by Hon’ble National Commission in case titled as “Sahara India Life Insurance Company Vs. Rayani Ramanjaneyulu.” The findings of the Hon’ble National Commission in the above said judgment have been discussed by the Hon’ble Apex Court in case titled as “Reliance Life Insurance Company Limited Vs. Rekhaben Nareshbhai Rathod” and the findings of Hon’ble National Commission have been overruled. The Hon’ble Supreme Court vide order dated 24.04.2019 in the above said case has held that concealment of previous policies by the proposer at the time of obtaining life insurance policy is a material fact and failure to disclose the previous life insurance policies by the insured entitles the insurer to repudiate the insurance claim.

17.                          For the reasons stated hereinabove, we hold that since the deceased insured had withheld material information from the OP company and had mis-represented with regard to other insurance policies taken by him, the OP company was entitled to repudiate the claim.  Consequently, no amount is payable to the complainant on the strength of aforesaid insurance policies.

18.                          In view of the aforesaid discussion, we are of the considered opinion that the complainant has not been able to prove any deficiency on the part of OPs in rendering service to him.  The present complaint is accordingly dismissed with no order as to costs. Copy of this order be supplied to both the parties free of cost.  File be consigned to the record after due compliance.

Announced in open Forum:            

Dt.24.12.2019.                                                    

                                               (Jasvinder Singh)                                     (Raghbir Singh)

                                                    Member                                                  President                                                                                                                                                                                                    DCDRF, Fatehabad.