Heard learned counsel for both the sides.
2. This appeal is filed U/S-15 of erstwhile Consumer Protection Act,1986(herein-after called the Act). Hereinafter, the parties to this appeal shall be referred to with reference to their respective status before the learned District Forum.
3. The case of the complainant, in nutshell is that his mother Late Jami Kasturi has purchased four LIC policy out of which Policy No.571171909 and 570480344 are subject matter of this case. It is alleged inter-alia that the mother of the complainant died on 07.11.2005. The aforesaid two policies have commenced on different dates. Policy bearing No. 571171909 commenced from 15.12.2003 and Policy No. 570480344 commenced on 28.11.1998.Those are for sum assured of Rs.50,000/- and Rs.1,00,000/- respectively. After her death the nominee of the complainant applied for settlement of the claim but said sum has not been paid back. Therefore, the complainant alleging deficiency in service filed the complaint case.
4. The OP filed written version stating that the complaint petition is incorrect and complainant has to prove the same. It is stated that both the policies were revived on 6.3.2004 and the early claim was made due to death of the life assured within two years of the revival. After discussing about the terms and conditions of the policy they have settled the claim by repudiating same and informed to the complainant on 30.12.2006. However, they admit that the claim of the complainant is genuine but they have repudiated the claim after due consideration of counsel causing little delay. Therefore, they have no deficiency in service on the part of the OP.
5. After hearing both the parties, learned District Forum passed the following order:-
Xxxx xxxx xxxx
“In the result we direct the opposite party to pay the sum assured of Rs.1,00,000.00 (Rupees one lakhs) vide Policy No.570480344 and Rs.50,000.00 (fifty thousand) only vide policy No.571171909 respectively with 7 % interest per annum to the complainant nominee (Jami Tirumala Rao). Besides the OP has to pay a reasonable compensation of Rs.2000/- and cost of Rs.1000/- to the complainant in this case towards harassment and mental sufferings caused to him. The entire amount has to be paid to the complainant within thirty days of receiving this order copy, failing the total amount shall attract 12 % penal interest per annum till payment is made in full.”
6. Learned counsel for the appellant submitted that learned District Forum has committed error in law by not considering the written version with proper perspectives. He submitted that there is no discussion with regard to the reasons for allowing the complaint. According to him there is no evidence discussed basing on which the learned District Forum came to conclusion, that there is deficiency in service on the part of the OP. He also submitted that learned District Forum has not assigned any reason as to how far the complainant is entitled to the sum assured. Moreover under the adversal method the evidence is discussed by any judicial or quasi judicial authority and then final order comes out. Since, neither any discussion of the material nor the evidence produced analysed, the impugned order is otherwise illegal and improper for which same should be set-aside by allowing the appeal.
7. Learned counsel for the respondent submitted that repudiation itself is illegal being barred by limitation U/S-45 of the Insurance Act. Learned counsel for the respondent submitted that no documents has been called for by the OP and simply they have repudiated the claim by observing that they have judged the case by pros and cors and then repudiated the claim. He further submitted that U/S-45 of the Insurance Act, the policy in question cannot be called two years after the commencement of the original insurance policies. He also analysised that the revival of the policy is commenced with effect from original date of commencement of policy in question. . He submitted that repudiation is itself barred for which the complainant is entitled to sum assured. He relied the decision of the Hon’ble Supreme Court in Mithoolal Nayak-Vrs-Life Insurance Corporation of India reported in 1962 AIR 814,SCR Supl.(2)571 Reliance Life Insurance Co.Ltd. & Another -Vrs- Rekhaben Nareshbhai Rathod in Civil Appeal No. 4261 of 2019 cited on 24th April,2019 in support of this claim.
8. Considered the submission of learned counsel for the respective parties, perused the DFR and impugned order.
9. It is admitted fact that the mother of the complainant has purchased two aforesaid policies for sum assured of Rs.50,000/- and Rs.1,00,000/- respectively on 15.12.2003 and 28.11.1998. It is also admitted fact that both the policies were revived on dtd.06.03.2004. Now the question arises whether the repudiation is barred by limitation or not. If the answer is yes, then the complainant will get the benefit. If the answer is no then the OP will get the benefit. It is necessary for us to examine the Section-45 of the Insurance Act before amendment and the decision of the Hon’ble Apex Court. Section-45 of the Insurance Act is as follows:-
“ No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement (was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made) by the policy-holder and that the policy-holder knew at the time of making it that the statement was false(or that it suppressed facts which it was material to disclose)”
Provided that nothing in this section shall 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.
10. In the decision of Hon’ble Apex Court while analyzing Section-45 of the Insurance Act have been pleased to observe in Moothlal Nayak(Supra) in the following manner:-
“ 45 states in effect( so far as is relevant for our purpose) that no policy of life insurance effected after the coming into force of the Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officers, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false; the second part of the section is in the nature of a proviso which creates an exception. It says in effect that if the insurer shows that such statement was on a material matter of suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose, then the insurer can call in question the policy effected as a result of such inaccurate or false statement. In the case before us the policy was issued on March13,1945, and it was to come into effect from January 15,1945. The amount insured was payable after January15,1968, or at the death of the insurer, if earlier. The respondent company repudiated the claim by its letter dated October 10,1947. Obviously, therefore two years had expired from the date on which the policy was effected. We are clearly of the opinion that Section-45 of the Insurance Act applies in the present case in view of the clear terms in which the section is worded, though learned counsel for the respondent company sought, at one stage, to argue that the revival of the policy sometime in July, 1946, constituted in law a new contract between the parties and if two years were to be counted from July,1946, then the period of two years had not expired from the date of the revival. Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is clear from the wording of the operative part of Section-45 that the period of two years for the purpose of the section has to be calculated from the date on which the policy was originally effected; in the present case this can only mean the date on which the policy(Ex.P-2) was effected. From that date a period of two years had clearly expired when the respondent company repudiated the claim. As we think that Section-45 of the Insurance Act applies in the present case, we are relieved of the task of examining the legal position that would follow as a result of inaccurate statements made by the insured in the proposal form or the personal statement etc. in a case where Section-45 does not apply and where the averments made in the proposal form and in the personal statement are made the basis of the contract.”
11. With due regard to the decision of Hon’ble Apex Court and the provision of Section-45 it is clear that the period of two years in the event of revival of the policy will be counted from the date of commencement of policy originally purchased by the policy holder and no reason whatsoever can be given calling both the policies in question after two years from the original date of commencement. This law has been changed in 2014 by incorporating amendment to the Insurance Act,1938 and as such under Section-45 of the Insurance Act (amended) the three years would be counted from the original policy commenced or in case of revival three years from the date of revival. But in the instant case the repudiation was made under un-amended Section-45 of the Insurance Act. Therefore, we are of the view that in view of decision of the Hon’ble Apex Court, the OP cannot repudiate the claim at all since two years already passed from 28.11.1998 and 15.12.2003 when original policies commenced. So, the repudiation of the claim is absolutely barred by limitation and under Section-45 of the Insurance Act, OP cannot repudiate claim or compensation.
12. In view of aforesaid analysis we are of the view that there is deficiency in service already proved by the complainant because of repudiation of claim illegally. It is true that the learned District Forum while disposing the case has not analysed the case at all. We have gone through the matter in detail for the larger interest of the consumers and we have passed the order in the aforesaid manner being the result is same as learned District Forum arrived.
In view of the aforesaid discussion, we are of the view that the impugned order does not require any interference and same is confirmed.
Appeal stands dismissed. No cost.
Free copy of the order be supplied to the respective parties or they may download same from the confonet or website of this Commission to treat same as copy of order received from this Commission.
DFR be sent back forthwith.
