Punjab

Rupnagar

CC/14/116

Shamsher Singh - Complainant(s)

Versus

ICICI Prudential Life Insurance & Ors. - Opp.Party(s)

sh. Harjeet Singh Saini, Adv

31 Mar 2015

ORDER

BEFORE THE DISTT. CONSUMER DISPUTES REDRESSAL FORUM, ROPAR

 

                               Consumer Complaint No. : 116 of 11.09.2014

                                 Date of decision             : 31.03.2015

 

Shamsher Singh, son of Babu Singh, resident of House No. 19-C, Sikanderpur, Tehsil & District Sirsa, Haryana.

                                                                             ......Complainant

                                             Versus

1. ICICI Prudential Life Insurance Company Limited, Vinod Silk Mills

    Compound, Chakravarthy Ashok Nagar, Ashok Road, Khandivali

    (East), Mumbai-400101, through its General Manager.

2. ICICI Prudential Life Insurance Company Limited, Ist Floor, SCF 39,

    Near ICICI Bank, Bela Chowk, Ropar, through its Manager.

3. Harinder Singh son of Jog Singh, resident of Village Bhagwantpura,

    PO Singh Bhagwantpur, Tehsil & District Ropar.

                                                                            ....Opposite Parties

 

                                       Complaint under Section 12 of the                                                           Consumer Protection Act, 1986

 

QUORUM

                             MRS. NEENA SANDHU, PRESIDENT

                             SH. V.K. KHANNA, MEMBER

SMT. SHAVINDER KAUR, MEMBER

 

ARGUED BY

Sh. Harjeet Singh Saini Advocate, counsel for the complainant

Sh. K.S. Longia Advocate, counsel for the Opposite Parties No.1 & 2

Sh. Harinder Singh, Opposite Party No. 3, in person

 

 

ORDER

                                      MRS. NEENA SANDHU, PRESIDENT

                   Sh. Shamsher Singh has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’ only) against the Opposite Parties (hereinafter referred to as ‘the O.Ps.’ only) praying for the following reliefs:-

i)       To pay Rs.15,00,000/- i.e.  the sum assured under the policy,

ii)      To pay Rs.3,00,000/- as compensation for harassment, mental agony and loss caused to him on account of deficiency in service on their part,

iii)     To pay interest @ 18% P.A. on the above said amounts w.e.f. the date of death i.e. 09.10.2012 till realization,

iv)     To pay Rs.50,000/- as litigation expenses,

                                      or

to pass any other appropriate order/directions, which this Forum may deem fit, in the facts & circumstances of the case.

 

 

2.                In brief, the case of the complainant is he was married to Jasvir Kaur and three children were born from the said wedlock. One agent of the O.Ps. No.1 & 2, namely, Harinder Singh, i.e. O.P. No.3, who lives near to the native house of the complainant at Village Bhagwantpura, approached his wife and requested her to purchase life insurance policy, as it would help him in achieving the targets, set by the said insurance company. His wife, out of love and affection to her children and in order to cover-up loss of her untimely death, had already purchased life insurance policies from various companies. On being induced by the said agent i.e. O.P. No.3, his wife agreed to purchase the policy, as suggested by him. It was assured to her that she was required to sign at one-two places and rest of the form would be filled-up by him. The said agent filled-up the proposal form, at Ropar on 24.09.2011, which was in English language. The requisite proof in support of identity and address were also provided to him. His wife was induced to sign by the agent i.e. O.P. No.3 and she being literate signed the said form in Punjabi, which was already filled-in by the said agent. His wife was unable to read the terms and condition of the policy as the same were written in English, because she only knew Punjabi language. It is further submitted that he was appointed as nominee, at the time of purchasing the said insurance policy by his wife. She was never informed that she was required to disclose the information regarding all the policies obtained by her. She had received the policy and first receipt at her permanent address in Sirsa, but it is pertinent to mention that in the documents received by her, the last two pages bearing her signatures were not received. His wife was hale & hearty and was maintaining good health and she was only 41 years of age, when she, unfortunately, died on 09.10.2012 due to natural death at home at Village Bhagwantpura. She was taken to CHC Kurali, where she was declared dead and primary cause was ascertained as Cardiac Arrest. After the death of his wife, death claim was filed by him at Ropar Branch of the O.Ps. along with requisite documents, as directed by their officials. Thereafter, he had received a letter dated 30.10.2012 from the office of the O.Ps. requiring him to provide two more documents i.e. copies of past medical record and also the Hospital Certificate, where the life assured was last admitted. On 14.12.2012, he produced the Hospital Certificate dated 7.12.2012 issued by CHC Kurali, where she was last admitted. She was not suffering from any disease, therefore, there was no question of availability of past medical record. Thereafter, he was shocked to receive a letter dated 28.02.2013 from the O.Ps., whereby it was informed to him that the claim submitted by him has been declined on the ground that the life assured had obtained life insurance policies from other companies also. It is reiterated that his wife had also obtained many other policies, which was not such a matter, which could have been disclosed easily. The agent of the O.Ps., who was his neighbor, knew about all the policies obtained by his wife, but he did not fill-up the form correctly. Even his wife could not check it as the form was in English language and his wife knew Punjabi only and did not know English Language. Even the person, who had put his signature on the declaration column is not known to him and his wife, as no person by the name of Baldev Singh his cousin and the said person is shown to be resident of Sirsa, whereas the form was signed at Ropar. It was the reason that why the last two pages of the proposal form were not sent, initially while sending the other documents by the O.Ps. His wife had five other policies and all the claims lodged thereunder  have been settled by the concerned companies and few of the policies, which were issued even after 25.11.2011 i.e. after issuance of the present policy, have also been settled, therefore, the action of the OPs. amounts to deficiency in service. Hence, this complaint. 

 

3.                On being put to notice, the O.Ps. No.1 & 2 filed a joint written statement, taking preliminary objections; that the complaint is not maintainable before this Forum, as the policy in question was issued by the answering O.Ps. on 25.11.2011 on the basis of the information provided by the Deceased Life Assured ((hereinafter referred to as ‘the DLA’ only) in the Proposal Form, but the said  information provided by him was found to be incorrect, therefore, the answering O.Ps. were well within their jurisdiction to repudiate the claim under the policy; that the O.Ps. have acted within the four corners of the statutory provisions, as such, no case of deficiency in service can be said to have arisen; that the complainant has tried to challenge the veracity of the decision of the O.Ps. to repudiate the claim, but by no stretch of imagination, the said decision can be brought under the umbrella of ‘Deficiency in Services’ as contemplated under the Act and the complainant can approach the civil courts, if he wants to challenge the same; that the repudiation of the claim under the subjected policy was on the ground of misstatement of information, suppression of material information and furnishing of false information in the proposal form by the DLA; that  the proposal form for the policy in question was submitted to the O.Ps. on 26^th September 2011 and after completing all the documentation/formalities the policy in question was issued on 25^th November 2011, but during claims investigation, it was learnt that the DLA had also availed insurance policies from the other insurance companies even before issuance of the insurance policy in question by the O.Ps., but the said fact was not disclosed by the DLA in the proposal form; that the DLA was suffering from depression and was taking treatment for the same prior to the issuance of the policy under consideration, but she had concealed the said fact in the proposal form; that in response to Question No.1 mentioned in the proposal form relating to Education, the DLA had replied stating that she was ‘Graduate’, whereas during  investigation, it has been revealed that she was not graduate; that as per the underwriting norms of the answering O.Ps. the insurance policy to a female life assured can be issued subject to the life assured being graduate; that had the DLA disclosed that she was not Graduate, then under no circumstances, the answering O.Ps. had issued the policy in question in her favour;  that there were sufficient reasons to believe that the information furnished by the DLA in the proposal form was incorrect &misleading; that the complainant himself is an advisor/agent with Birla Sun Life Insurance Company, hence, even he himself is completely aware of importance of disclosing true and correct information in the proposal form; that from the above said facts, it is evident that the policy in question was taken by the DLA purely with fraudulent intention and the answering O.Ps. were misled to issue the same by suppressing/misrepresenting the material information, which was completely within the knowledge of the complainant as well as the DLA, hence, no ignorance can be pleaded; that suppression/misrepresentation made by the DLA had a direct impact on the underwriting decision of the answering O.Ps.;  that the DLA had died within 11 months from the date of commencement of the policy, as such, the answering O.Ps. have rightly repudiated the claim lodged by the complainant; that the insurance contracts are the contracts based on utmost good faith, as per the contract, the insurer is bound to honour the claim under the policy in the event of death of the life assured, provided the life assured at the time of applying for the policy, had disclosed all relevant information with regard to his/her health, habits, education, other policies etc, which are the basis on which the insurer decides to cover the said life and at what rates; that since the DLA did not perform her duty to disclose all material information, the contract of insurance between her & the O.Ps. had become void-ab-initio and inoperative and that is why the claim was repudiated; that the life insurance claim payouts are made from the pooling of money by many consumers availing the services of the insurance company, therefore, even entertaining the claim would be against the principles of natural justice and this would not be in the interest of consumers availing services of the life insurance company; that the complainant being an insurance advisor is very well aware of the necessity and importance of disclosing correct and true information but he had conveniently remained quiet during the entire phase, when his wife was taking policies from various insurance companies and now, he is trying to act innocent and has filed a frivolous & vexatious complaint to waste the time of this Hon’ble Forum; that the complaint is devoid of substance and material particulars and has been filed with ulterior motive and malafide intention, merely to harass and gain undue advantage and unjustified monies from the O.Ps., hence, the same deserves dismissal in limine in accordance with Section 26 of the Act; that the allegation that the DLA was not informed about disclosure of other policies is baseless and frivolous because it is a settled principle of law that at the time of filling-up the proposal form, the agent acts as agent of insured and not of insurance company and no agent can be assumed to have authority from the insurer to write the answer in the proposal form. If an agent nevertheless does so, he becomes merely the amanuensis of the insured and his knowledge of the untruth or inaccuracy of any statement contained in the proposal form does not become the knowledge of the insurer; that the complainant has not acted in good faith and has not approached this Hon’ble Forum with clean hands, hence in view of doctrine – “One who seeks equity must come with clean hands”;  that the complainant has failed to set up nexus between the damages claimed in the present complaint and the damages suffered by him; that the compensation claimed by him is arbitrary, without basis and is an abuse of process of law; that the preliminary objections raised herein above with regard to the maintainability of the complaint, go to the very root of the matter and as such, these objections need to be considered at the outset and the  answering O.Ps. most humbly pray that this Hon’ble Forum may be pleased to dismiss the complaint summarily without going into the merits thereof. On merits, it is stated that on the basis of duly filled-in proposal form submitted by the DLA on 26.9.2011, policy bearing No.15987485 under plan ICICI Pru Pure Protect-Classic was issued in the name of Jasvir Kaur on 25.11.2011, for the sum assured of Rs.15,00,000/-, believing the information given by her to be true & correct in all aspects. The policy document alongwith welcome kit was dispatched on 29.11.2011, which was received by the DLA and the answering O.Ps. had not received any communication from her with regard to non-receipt of the welcome kit. In accordance with Clause 6(2) of the Insurance Regulatory and Development Authority (Protection of Policyholder’s Interests) Regulations, 2002 (hereinafter referred to as ‘the Regulations, 2002’ only), every policy document sent by it is accompanied by a forwarding letter, which clearly mentions that in case, policyholder is not satisfied with the features or the terms & conditions of the policy, he/she can withdraw/return the policy within 15 days i.e. under the “Free Look Period” provision. The DLA had retained the policy document and did not return the same to the company for its cancellation during the “Free Look Period”, thereby implying that she had agreed to all the terms & conditions mentioned therein. It is further stated that as per Regulation 4(1) of the Regulations, 2002, a copy of the proposal form duly signed by the life assured/policy holder is also sent to the life assured/policyholder alongwith the policy document, thereby giving an opportunity to the life assured/policyholder to re-examine the replies made by him/her in the proposal and get the details rectified in case of any discrepancy in the replies to the questions in the proposal form. In the instant case also, a copy of the proposal form was sent alongwith the policy document to the life assured by the answering O.Ps., but she failed to return the same. The answering O.Ps. had received death claim intimation on 22.10.2012 informing the date of life assured as 9.10.2012. On careful evaluation of the claim documents and during investigation for early claims, as the death of the life assured had occurred within 11 months of issuance of the policy, it was revealed that she was suffering from depression and was under treatment for the same. All other  assertions made in the preliminary objections were also reiterated including the one that the claim has been rightly rejected vide letter dated 28.2.2013,  purely on the basis of documentary evidence of suppression of material facts by the DLA in the proposal of insurance, consequently, no amount under the policy becomes payable and the premium received by the Company thereunder has been forfeited. Rest of the allegations made in the complaint have also been denied and a prayer has been made for dismissal thereof, with exemplary cost.

 

4.                The O.P. No.3 filed a separate reply stating therein that all the allegations made against him are wrong and hence, denied. It is further  stated that as he had newly joined as agent of O.P. No.1, the Branch Manager of O.P. No. 2 had given assured to him that since he (O.P. No. 3) was not aware of products of O.P. No.1, so he(O.P. No. 2) would personally contact the persons interested in products of O.P. No. 1 and would do policies in the Agent Code of answering O.P. No. 3. In the said circumstances, the O.Ps. No. 1 & 2 had contacted the complainant and issued the policy in the Agent Code of answering O.P. Neither any form for the alleged policy was fill-in by the answering O.P. nor any  commission was paid to him by the O.Ps. No. 1 & 2 for the same. Therefore, the complainant is not liable for any relief against the answering O.P. In case, the complainant is eligible for any relief, then only the O.P. No.1 is liable for the same. It is prayed that the complaint against the answering O.P. No. 3 be dismissed, in the interest of justice.

 

5.                On being called upon to do so, the learned counsel for the complainant tendered affidavit of the complainant, Ex. C1, photocopies of documents Ex.C2  to Ex.C10 and closed the evidence. On the other hand, the learned counsel for the O.Ps. No.1 & 2 tendered affidavit of Sh.Naresh Sharma, Manager Ex.OP-1, photocopies of documents Ex.OP-2 to Ex.OP-5 and closed the evidence, whereas the O.P. No. 3 stated that he does not want to lead any evidence and the written reply filed by him be read in evidence.

 

6.                We have heard the learned counsel for the parties and gone through the record of the file carefully.

 

7.                The learned counsel for the complainant submitted that being allured by O.P. No.3 i.e. agent of O.Ps. No. 1 & 2, wife of the complainant, since deceased, had taken one insurance policy bearing No. No.15987485 from the O.Ps. for a sum of Rs.15,00,000/-. He submitted that the O.P. No. 3 got the proposal form filled from her on 24.9.2011 and she put her signatures in ‘Punjabi’. In the said policy she appointed the complainant as nominee. He further submitted that the deceased life assured (in short the ‘DLA’) was 41 years of age and was hale & hearty, however, she died on 9.10.2012, which was a natural death. After her death, the complainant, being nominee, lodged claim alongwith requisite documents with  O.P. No. 2 and completed all the requisite formalities, but the genuine claim was declined by the insurance company vide its letter dated 28.2.2013 (Ex.C-6), illegally on the ground that the DLA had obtained other life insurance policies from other companies also. He further submitted that the DLA had 5 other policies and all the claims filed under the said policies have already been settled by the respective companies and even the policies, which were obtained by her after 25.11.2011 i.e. after issuance of the present policy, the concerned insurance companies have also settled the claims. Otherwise also, if the DLA had not disclosed about the policies already obtained, even then, the insurance company cannot repudiate the claim on the said ground, unless it proved that the life assured had concealed the factum regarding obtaining of the insurance policies from some other companies prior to the issuance of the instant policy by the O.Ps. In the case of ‘Mithoolal Nayak v. LIC’, AIR 1962 sc 814,  the Hon’ble Apex court has already held that before repudiation of an insurance claim, the insurer must satisfy itself about the following three conditions:-

1.       The statement must be on a material matter or must suppress facts which it was material to disclose.

2.       The suppression must be fraudulently made by the policy holder.

3.       The policy holder must have known at the time of making the statement that it was false or that he had suppressed the facts which it was material to disclose.

          The Hon’ble Apex Court has further held, “Mere inaccuracy of (or) falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of mis-statement of facts”. The act of the O.Ps. by not paying the genuine claim amount to him not only amounts deficiency in service on their part, but they have also indulged in unfair trade practice.

 

8.                The learned counsel for the O.Ps. No.1 & 2 submitted that the insurance company has rightly repudiated the claim under the subjected policy because the DLA while filling-in the proposal form had given wrong information and   suppressed the material information from the insurance company. Furthermore, she did not disclosed in the proposal form that she was suffering from depression and was taking treatment for the same prior to the issuance of the impugned policy, therefore, the complaint being without any merit be dismissed with costs.

 

9.                The O.P. No.3, who appeared in person argued that since the policy in question was issued by the O.Ps. No. 1 & 2 and the claim lodged by the complainant has also been repudiated by the said O.Ps. and if the complainant is aggrieved by the same, the liability, if any, under the policy is that of O.Ps. No. 1 & 2 and he being simply an agent is not liable, in any manner and the complaint filed qua him be dismissed.

 

10.              At the outset, it is pertinent to mention here that although none of the parties has placed on record the copy of the insurance policy in question, yet in the written statement filed by the O.Ps. No. 1 & 2, it has been fairly admitted that on the basis of proposal dated 26.9.2011, policy bearing No.15987485 was issued in the name of Jasvir Kaur on 25.11.2011, for the sum assured of Rs.15,00,000/-. Moreover, from the copies of proposal form produced on record by the parties as Ex. C-7 & Ex. OP-2, it is evident that the policy in question was got issued for the sum assured of Rs.15,00,000/-. Perusal of copy of letter dated 28.2.2013 (Ex. C6) reveals that the claim has been repudiated alleging that the information furnished in the proposal form by the DLA was incorrect and misleading and was furnished with intent to induce the company to issue a policy of insurance on her life. One of the ground for repudiation of the claim has been mentioned that subsequent to issuance of instant policy by them, the life assured had secured insurance coverage on her life from several other insurance companies with an aggregate coverage of around Rs.39.47 lacs. Nodout,  in para No. 5 of the written statement filed by the O.Ps. No. 1 & 2, it is mentioned that the DLA had taken one policy from Birla Sun Life Insurance Company Ltd. on 14.10.2011 and also another policy from TATA AIG Life Insurance Co. Ltd. on 24.11.2011, yet it may be stated that admittedly for the instant insurance policy issued by the O.Ps. No. 1 &2 on 25.11.2011, the proposal form was submitted by the DLA on 26.9.2011, i.e. prior to the issuance of above mentioned policies in her favour by some other insurance companies. It is fact that the complainant had averred in the complaint itself that the DLA had obtained some other insurance policies from some other companies also prior to the instant policy, but the fact that actually the DLA had obtained some other insurance policies prior to the instant policy issued by the O.Ps. No.1 & 2, has not been proved on record by any of the parties. Even in the repudiation letter, referred to above, it is categorically mentioned that  subsequent to issuance of instant policy by them, the life assured had secured insurance coverage on her life from several other insurance companies. It means that the DLA had taken some insurance policies from some other insurance companies, subsequent to the policy taken from the O.Ps. No. 1 &2, therefore, the question of suppression of factum of taking of the said policies by her did not arise at all, at the time of taking insurance policy in question from the O.Ps. Another ground taken for repudiation of the claim is that the life assured was suffering from “Depression” and was under treatment for the same, but to prove the said fact, nothing has been placed on record by the O.Ps., thus, repudiation of the claim on the said ground is baseless. Even the other ground taken for repudiation of the claim that the life assured had wrongly mentioned in the proposal form that she was “Graduate”, whereas on investigation it was found that she was not Graduate, has also been found to be baseless, because no strict proof to that effect has been placed on record by the O.Ps. Moreover, perusal of copy of ‘Section C – Personal details of life to be assured’ forming part of ‘Proposal Form for Single Life’ (Ex. OP4) reveals that in the column meant for ‘Educational qualifications’, ‘Under Matric’ is written.  Since the O.Ps. No. 1 & 2 have failed to prove that the DLA had taken the policy in question by suppressing material facts therefore, they were not justified in repudiating the claim of the complainant on the said ground, hence, deficient in rendering service and are liable to pay the claim amount to the complainant alongwith interest. They are also liable to pay compensation on account of mental agony & physical harassment suffered by him alongwith litigation expenses. In the case of ‘Life Insurance Corporation of India v. Smt. G.M. Channabasamma’ I (1991) ACC 411 (SC), the Hon’ble Apex court held that the burden of proving that the insured had made false representation and suppressed material facts is undoubtedly, on LIC of India. Furthermore, mere concealment of some facts will not amount to concealment of material facts and if there is fraudulent suppression of material facts in the proposal, the policy could be vitiated otherwise not. Further in the case of ‘National Insurance Co. Ltd. V. BIpul Kundu, II (2005) CPJ 12(NC), the Hon’ble National Commission has held that for repudiating a claim of an insured, it is for the insurer to show that a statement on a fact, which was material for the policy, had been suppressed by the insured and that statement was fraudulently made by him/her with the knowledge of the falsity of that statement.

 

                   So far as the complaint filed qua O.P. No.3 is concerned, the same is liable to be dismissed because no deficiency in service on his part has been proved.

 

11.              In view of the above discussion, we dismiss the complaint against O.P. No. 3 and allow the same against O.Ps. No. 1 & 2, directing them in the following manner:-

i)       To pay the sum assured under the policy i.e.

Rs.15,00,000/- to the complainant alongwith interest @ 9% P.A.  w.e.f. the date  of repudiation i.e. February 28, 2013 till realization;

ii)      To pay Rs.5000/- as compensation;

iii)     To pay Rs.3000/- as litigation expenses.

 

The O.Ps. No. 1 & 2 are further directed to comply with the above said directions within 45 days from the date of receipt of certified copy of this order.

12.              The certified copies of this order be supplied to the parties forthwith, free of costs, as permissible under the rules and the file be indexed and consigned to Record Room.

 

ANNOUNCED                                           (NEENA SANDHU)

Dated 31.03.2015                                       PRESIDENT

 

 

(V.K. KHANNA)                    (SHAVINDER KAUR)

                    MEMBER                                MEMBER.