BEFORE THE DISTT.CONSUMER DISPUTES REDRESSAL FORUM; FATEHABAD.
C.C.No.17/2017.
Date of Instt.: 18.01.2017.
Date of Decision: 30.01.2018.
Inderjeet Singh son of Gurcharan Singh, resident of village Bhirdana, Tehsil & District Fatehabad.
..Complainant.
Versus
1.IDBI Federal Life Insurance Company Limited, Registered Office :1st Floor, Tradeview, Oasis Complex, Kamala City, P.B. Marg, Lower Parel (W), Mumbai-400 013 (India) through its Chairman-cum-Managing Director/ Managing Director/ Competent Authority.
2.IDBI Bank Limited, G.T.Road, Near Bhuna More, Fatehabad, Tehsil & District Fatehabad through its Branch Manager.
..Opposite parties.
Before: Sh.Raghbir Singh, President.
Sh.R.S.Panghal, Member.
Mrs.Ansuya Bishnoi, Member.
Present: Sh.Sukhbir Dhaka, Adv. for the complainant.
Sh.R.K.Godara, Adv. for the OP No.1.
Sh.M.K.Dharnia, Adv. for the OP No.2.
ORDER
The present complaint under Section 12 of the Consumer Protection Act, 1986 has been filed by the complainant against the Opposite Parties (hereinafter to be referred as OPs) with the averments that his father namely Gurcharan Singh got himself insured with the OPs vide Insurance Policy No.4000818047 dated 30.07.2015 for a sum of Rs.4,73,430/- and his father made the payment of insurance premium amounting to Rs.49,000/- on 30.07.2015. The said policy was valid for a period of 15 years and date of maturity of the same was 29.07.2030. The complainant is nominee in respect of the above said insurance policy and as such late Sh.Gurcharan Singh during his life-time and after his death the complainant is consumer of OPs
2. It is further submitted that father of the complainant died on 07.11.2015 and information regarding the same was given by the complainant to the OPs. The OPs assured the complainant that the insurance claim will be settled very soon and the payment will be released to the complainant. However, thereafter the complainant was informed verbally by the OPs that his claim has been repudiated. The above said action on the part of OPs in repudiating the valid claim of the complainant is against law, against facts and as such the same is liable to be set aside. From repudiation of the genuine claim of the complainant it is quite clear that there is deficiency on the part of OPs in rendering service to the complainant and as such the complainant is entitled for Rs.25,000/- as compensation on account of mental agony and harassment suffered by him. The complainant has further prayed for issuing direction to the OPs to release an amount of Rs.4,73,430/- as insurance claim with interest @ 12% and compensation of Rs.25,000/-. Hence, the present complaint.
3. On being served, the OP No.1 appeared, but did not file the written statement within the stipulated period of 45 days. Therefore the defence of the OP no.1 was struck off by this Forum vide order dated 19.04.2017. Thereafter an application was moved by Op no.1 with the prayer for placing the reply on the file in the interest of justice. However, the said application was dismissed by this Forum on 07.06.2017. Aggrieved with the order dated 19.04.2017 and 07.06.2017 passed by this Forum, the OP No.1 filed a revision petition before the Hon’ble State Commission. The Hon’ble State Commission vide its order dated 10.10.2017 allowed the revision petition of the Op No.1 on payment of conditional cost of Rs.3000/- and the OP No.1 was accorded opportunity to file written version.
4. Thereafter, Op No.1 filed a written statement wherein various preliminary objections with regard to maintainability, cause of action, locus-standi, concealment of material facts etc., have been raised.
5. On merits, it is submitted that the present complaint is false, malicious, incorrect & an abuse of process of law and as such the same is liable to be dismissed under Section 26 of the Consumer Protection Act, 1986. It is further submitted that the complaint does not fall within the definition of ‘consumer dispute’ as there is neither any unfair trade practice adopted by the OP No.1 nor any deficiency in service is established against the Op No.1. It is further submitted that the Deceased Life Assured (hereinafter to be referred as DLA) had died within a short period of three months and eight days from the date of issuance of policy and it is a settled proposition of law that a very fact of early claim is a good corroborative evidence to prove misrepresentation. It is also submitted that contract of insurance including the contract of life assurance are contracts of utmost good faith and every fact which is material must be disclosed otherwise there is good ground for rescission of the contract. It is further submitted that the DLA after completely understanding the terms and conditions of the policy signed the same on 21.07.2015 for a sum assured of Rs.3,83,870/- and a premium of Rs.49,000/- was to be paid by him yearly. Pursuant of the proposal-form the OPs accepted the same and the policy in question was issued on 30.07.2015. Thereafter on 24.08.2016 the OPs received the death claim intimation from the complainant. In the intimation it was informed that the DLA had expired on 07.11.2015 i.e. within a period of three months and eight days of issuance of policy. Being an early death claim, the matter was got investigated and on investigation it was found that the DLA i.e. Sh.Gurcharan Singh had concealed the fact that he was undergoing treatment in PGM Hospital, Bikaner for “Soft Tissue Malignant Thigh” much before availing the said insurance policy i.e. in the year 2008. The same was not disclosed by the DLA at the time of applying cover under the policy.
6. It is also further submitted that the OPs had also inquired about the other insurance policies availed by the DLA from other Life Insurance Companies. On investigation, it was found that the DLA was holding policy with PNB Met Life Insurance Company Ltd. and HDFC Life Insurance Company Ltd. for a total assured amount of Rs.6,83,479/-. On investigation it was also found that the DLA had applied for simultaneous policy on 24.07.2015 with India First Life Insurance Company for sum assured of Rs.5 lacs. It is also submitted that the policies for a total amount of Rs.31,48,794/- were obtained by DLA. It is further submitted that non disclosure of multiple insurance policies availed by the DLA is a material information for the insurance company to provide life cover to a proposer. If such material information had been disclosed at the time of applying of insurance cover the company decision would have been different.
7. It is further submitted that the OP No.1 is not liable to make any payment as demanded by the complainant. The insurance is a contract between the policy holder and the insurance company and both parties are governed by the terms and conditions as mentioned in the policy documents and all the benefits are payable strictly as per the policy terms and conditions. It is also submitted that it is a fundamental principle of insurance law that utmost good faith must be observed by the contracting parties.
8. In support of its contention the Op No.1 relied upon the judgment cited as (1996) 6, SCC Page 428 and the judgment cited as (2000), SCC Page 734. The Op No.1 has also prayed for dismissal of the complaint being devoid of any merits.
9. Op No.2 also filed a written statement wherein various preliminary objections with regard to maintainability, cause of action, locus-standi and concealment of material facts; have been raised.
10. On merits, it is submitted that the complainant is not consumer of OP No.2 as policy holder had purchased the policy from Op No.1 and not from the Op No.2. All the allegations made by the complainant against the OP No.2 have been controverted and it is stated that the Op no.2 never assured the OP No.1 regarding the settlement of claim. It is also stated that the present dispute relates to the insurer & the insured and Op No.2 i.e. IDBI Bank Ltd. has no rule to play in the present case. It is further prayed that the present complaint may be dismissed against Op no.2.
11. The complainant filed his affidavit as Annexure CW1/A in evidence along-with documents Ex.C1, Annexures C1 & C2 and closed the evidence. On the other hand Sh.Divesh Vats, Branch Head, filed an affidavit on behalf of Op No.2. Op no.1 also tendered in evidence documents Annexure A to I in support of his case.
12. We have heard the learned counsel for the parties and have also perused the case file carefully.
13. Learned counsel for the complainant has contended that the life assured expired on 07.11.2015 i.e. during the subsistence of the policy in question. The counsel further contended that the life assured was not suffering from any pre-existing disease before taking the policy in question and OPs have failed to prove by any reliable and cogent evidence that the DLA was suffering from pre-existing disease at the time of taking the insurance policy. Other terms and conditions of the policy have also not been violated by the DLA. Therefore the OPs have wrongly repudiated the insurance claim and further prayed for acceptance of the present complaint. In support of his contention the learned counsel for Op no.1 relied upon the judgment rendered by Hon’ble High Court of Punjab and Haryana at Chandigarh in CWP 24862 of 2017 decided on 02.11.2017 in case titled as Bajaj Allianz Life Insurance Co. Vs. Santosh and Anrs. The learned counsel also relied upon the judgment cited as III (2014) CPJ 552 (NC), 1 (2015) CPJ 7, III (2014) CPJ 357 (NC), judgment dated 12.04.2017 rendered by Hon’ble National Commission in revision petition No.4204 of 2011, Judgment dated 28.02.2017 rendered by Hon’ble National Commission in revision petition No.1177 of 2015, the decision dated 16.03.2017 rendered by National Commission in revision petition No.1053 of 2008 and decision dated 04.11.2016 of National Commission in revision petition No.139 of 2016, III (2011) CPJ 373 (NC).
14. Per Contra, learned counsel for OP No.1 contended that the DLA was having a pre-existing disease at the time of taking of insurance policy but with held the material information regarding the ill health in the proposal-form. During investigation it was found that the DLA was suffering from cancer. The counsel further contented that DLA had given wrong answer regarding his health in the proposal form. It is also contended by learned counsel that the DLA had obtained insurance policies from other life insurance companies but the same were not disclosed by him at the time of filing of proposal-form. It is solemn obligation and duty of the life assured to disclose the true and correct facts. In support of his contention the learned counsel for Op No.1 relied upon the judgments cited as 1(2009) page 212 (NC) and titled as LIC of India Vs. Balbir Kaur, AIR 2008 SC Page 424, in case titled as P C Chacko Vs. Chairman LIC, AIR 2001 SC Page 549.
15. We have considered the rival contentions of the parties. From perusal of the record it is revealed that the proposal-form was signed by the DLA on 21.07.2015 and the policy in question was issued on 30.07.2015. From perusal of the record it is further revealed that before signing the proposal-form the complainant had already availed two policies – one of PNB Met Life with assured sum of Rs.1,20,000/- and another of HDFC Life with assured sum of Rs.5,63,479/-. However the DLA while signing the policy in question did not disclose the above said fact and concealed the same. From perusal of record it is also revealed that during the period from 18.07.2015 to 15.09.2015 i.e. within a period of two months the DLA in addition to the policy in question had obtained the life insurance policies of huge amount of Rs.31,48,794/- whereas his annual income is Rs.5 lacs per annum only.
16. The copy of the proposal-form dated 21.07.2015 has been placed on file by the OPs as Annexure A wherein the life assured has submitted that he never suffered from any tumor, abnormal sis, any cancer. However from perusal of document Annexure E i.e. medical treatment record issued by PGM Hospital, Bikaner it is revealed that the DLA was a patient of cancer and treatment of chemo-therapy and radio-therapy was given to him.
17. The learned counsel for complainant contended that OPs have failed to prove the genuineness of the above said record of the hospital as the OPs have failed to file affidavit of treating doctor or to produce original record of the treatment, therefore he contended that concealment regarding pre-existing disease has not been proved by the OPs. However we see no substance in the contention of the learned counsel for the complainant because there is nothing on record to show that the above said treatment record of the hospital did not pertain to the life assured as the complainant has not led any contrary evidence and therefore it cannot be said that the above said treatment record is manipulated. Moreover in the Consumer Forum the documents are filed in the form of photo-copies and if the same are clear and visible and raised no doubt and suspicion, then the same can be relied upon. In this regard we are fortified with the Hon’ble National Commission in case titled as ICICI Bank Ltd. Vs. Pushpa Chandran decided on 17.11.2014. In the present case it is proved on record that DLA concealed material information regarding his health from the OPs in the proposal-form dated 21.07.2015. From perusal of record it is also evident that DLA had concealed the material information regarding the insurance policies obtained by him before signing the proposal-form.
Therefore keeping in view all the facts i.e. a very early claim as the life assured died within a period of three months and eight days, Annexure E (medical treatment for cancer taken by the LA in 2008), concealment of other multiple insurance already purchased by the life assured and huge amount of more than Rs.31 lacs insurance policies purchased by the LA within a short period of two months whereas his annual income is just Rs.5 lacs per annum, we are of the opinion that the DLA has purchased the insurance policy in question by concealing the material facts with a malafide intention.
18. It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – uberrimae fidei, applicable to both the parties. The rule of non-disclosure of material facts vitiating a policy still holds the field. The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge. The insurer may not even have the means to find out facts which would materially affect the risk. The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries. A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.”
19. In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30th, 2014, Hon’ble National Commission observed as under:-
“8. In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428]. It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.”
20. The Hon’ble Haryana State Consumer Disputes Redressal Commission, Panchkula in case titled as Life Insurance Corporation of India and others vs. Murti Devi (supra) has observed as under:-
“ Consumer Protection Act, 1986, Section 2(1) (g)- Insurance Act, 1938, Section 45- Insurance claim- Repudiation- Supression of material fact- Death within two years of the purchasing of policy- From the record it is established that in the proposal form the life assured had given wrong answers to the questions 11(1), (b), (e) and (i)- The declaration in the proposal form and the statement given by the life assured, were basis of contract of mutual trust between the insurance and the life assured- The medical record collected from AIIMS, Delhi proved it a case of concealment of true and material facts with respect to state of health of the assured and contract vitiated- District Forum committed an error in accepting the complaint- The impugned order liable to be set aside.”
Similarly, the Hon’ble State Consumer Disputes Redressal Commission, Panchkula in case titled as Rajpal Versus Birla Sun Life Insurance Co. & others, First Appeal No.94 of 2015 decided on 20th February, 2015 has held as under:-
“It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith- uberrimae fidei, applicable to both the parties. The rule of non-disclosure of material facts vitiating a policy still holds that field. The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge. The insurer may not even have the means to find out facts which would materially affect the risk. The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries. A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.”
21. In view of the factual and legal position as discussed above we are of the considered opinion that the complainant has failed to prove any deficiency on the part of OPs in rendering service to him and the insurance claim of the complainant has rightly been repudiated by the OPs. Accordingly the present complaint is dismissed. Copy of this order be supplied to both the parties free of cost. File be consigned after due compliance
Announced in open Forum. Dated:30.01.2018
(Raghbir Singh) President
(Ansuya Bisnoi) (R.S.Panghal) Distt. Consumer Dispute
Member Member Redressal Forum, Fatehabad.
