BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION AT BANGALORE (URBAN)

DATED 21^ST DAY OF OCTOBER 2022

ORDER

SMT.M.SHOBHA, PRESIDENT

This complaint has been filed under section 35 of C.P.Act, 2019 (herein after referred as “ACT”) for the following reliefs.

1. Direct the Ops to pay the amount of Rs.17,99,000/- covered under the policy bearing No.09207251 Policy type – LIFE Commencement of policy dated 26.03.2019 under the policy Kotak Premier Endowment Plan for a period of 20 years with accidental benefits along with interest at the rate of 18% per annum to the complainant.
2. Direct the Ops to pay a sum of R.1,00,000/- as compensation towards deficiency in service, mental agony, harassment, etc., given by the Ops to the complainant.
3. Direct the OP to pay the cost of the proceedings to the complainant.
4. Grant such other reliefs.

2.The case of the complainant in brief is as under:

The complainant’s father namely Chennappa, during his life time availed a life insurance policy bearing No.09207251 and the date of commencement of the policy was 26.03.2019 and the policy is for a sum of Rs.17,99,000/- including accidental benefit under the policy Kotak Premium Endowment plan for a period of 20 years with the OP2.  As per the policy, the installment premium was Rs.15,649/-  the father of the complainant obtained the policy through one of the agent by name Smt.Shobha P., wherein she had guided and informed about the benefits of the policy to the complainant’s father.  The said policy also covers the accidental benefits.  As per the said policy the basic sum assured is Rs.9,00,000/- and the rider sum assured is Rs.8,99,000/- and in total Rs.17,99,000/-.  The complainant’s father after satisfying with the benefits of the policy he had agreed to avail the policy.  The entire application form of the policy was filled by the agent herself. The agent has also submitted the said policy application forms which was duly signed by the complainant’s father with the relevant document to OP2 branch office.

3.       It is the specific case of the complainant that his father has mentioned the name of the complainant as his nominee.  The policy availed by the father of the complainant also covers the accidental benefits to the amount covered under the policy.  The OP2 branch after verifying the documents submitted by the complainant’s father had issued the policy bond in favour of the complainant’s father.  After that the complainant father had paid the monthly premium to OP2 branch for one month after availed the policy. 

4.       It is further case of the complainant that his father met with an accident on 14.06.2019 near Nelamangala Sondekoppa road, near Ganesh Gudi, Mallasandra cross, Bangalore, and thereafter he was admitted to hospital as an inpatient.

5.       The complainant also lodged a complaint against the rider of the vehicle and the same was registered in C.R.No.254/2019 for the offences punishable u/s 279 and 337 IPC.  Due to the accidental injuries the father of the complainant has succumbed to the death on 26.06.2019 and thereafter the complainant has performed all the funeral ceremonies of his late father. 

6.       It is further case of the complainant that when he was cleaning the house he had traced above said policy.  After that he had approached the OP2 branch for enquiry.  The OP2 branch had informed the complainant to furnish all the relevant documents along with the above said policy.  Inspite of furnishing all the documents the OP2 branch has not responded properly and they have given evasive reply.  When the OP2 has not shown any interest to settle the claim got issued a letter dated 19.05.2020 requesting the OP2 to settle the claim amount.  But the OP2 has rejected the claim of the complainant and made the complainant to run from pillar to post and evaded to settle the claim amount of the policy.

7.       It is further case of the complainant that he has lodged an online complaint to the Ombudsmen and the said complaint was registered.  The OPs have appeared before the Ombudsmen ad later the Ombudsmen hearing both the sides dismissed the complaint of the complainant. 

8.       It is further case of the complainant that the OP have not settled the claim even though his father has taken the policy and their action leads to financial loss to the complainant.  They have grossly neglected and committed deficiency in service and thereby they have caused mental shock harassment agony.  Hence, this complaint.

9.       In response to the notice, OPs have appeared through their counsel and filed their version.  The OP1 and 2 have raised the preliminary objection stating that the complaint is liable to be dismissed on the ground that the insurance ombudsmen Bangalore already adjudicated the issue in question and dismissed the complaint on merits. The complaint is false, frivolous and vexatious and abuse of the process of this commission and liable to be dismissed.

10.     It is the specific contention taken by the OPs that the complaint has not disclosed any cause of action to proceed against this OPs. The OPs have acted as per the terms and conditions of the policy and they have rightly repudiated the claim of the complainant on the basis of non disclosure of material facts with regard to existing insurance policies applied with other insurance company and this was not disclosed at proposal stage.  Hence the complaint is liable to be dismissed.  The OPs have also taken the contention that the contract of insurance is based on the foundation of at most good faith and both the parties are bound by its terms and conditions. They have also cited the decisions of the Hon’ble apex court in support of their contention.  

11.     It is the specific contention taken by the OP that the father of the complainant had applied for policies from HDFC life insurance company, PNB MetLife and Bajaj Allianz Life Insurance which were rejected at the proposal stage and the policy from PNB MetLife was in non forfeiture stage.  Hence the DLA had applied policies worth more than Rs.2.22 crore prior to issuance of the subject policy in question.  Post which he had applied for policy with Kotak life worth sum assured Rs.9,00,000/-.

12.     It is further contention taken by the OP that after applying for Kotak life policy the DLA had applied for policy with Exide life bearing policy No.3999501 with risk commencement date as 11.04.2019 and sum assured Rs.6,26,991/-.  This implies that he had applied for insurance worth approximately Rs.2.24 crores including kotak life policy.  It is clear from the above said facts that the deceased had malafide intention and he has made misrepresentation to the insurance companies.  The father of the complainant had applied for policies worth more than 2.24 crore with annual income of Rs.4.39 lakhs as disclosed in the proposal form, which was concealed from the OPs and shows the malafide intention on the part of the DLA.  As per the declaration signed by the deceased life assured he ought to have disclosed the details of his health condition, existing policies and any changes till the time of the policy issuance despite signing the declaration the deceased life assured choose not to disclose the correct details to the OP.  

13.     It is very clear from the above said fact that these policies were issued in the name of the deceased before the issuance and after the issuance of the said policy from the OP, which clearly discloses the fact that the DLA with a malafide intention concealed the material information regarding his insurance policies.  The DLA had taken different policies from life insurance companies are duly confirmed by the authorized personal of the company through email conversations.  The OP on the basis of the investigation have rightly declined the claim on the ground of other insurance policies u/s 45(3) of the insurance act.   The company has refunded the premium amount of Rs.15,649/- to the complainant’s bank account and the fact of repudiation of the claim was also intimated to the complainant vide letter dated 31.12.2019.  

14.     The OPs have also given parawise reply to the allegations made by the complainant in the complaint and prays for dismissal of the complaint with cost.

15.     The complainant has filed his affidavit evidence and relies on 8 documents. Affidavit evidence of the authorized signatory of OP has been filed and has relied on Exhibits R1 to R9.

16.     Both parties have filed written arguments. perused records.

17.     The following points arise for our consideration are as under:-

1. Whether the complainant proves deficiency in service on the part of the OPs?
2. Whether the complainant is entitled for the reliefs as mentioned in the complaint?
3. What order?

18. Our answer to the above points are as under:

       Point No.1 :-Negative

      Point No.2 :-Negative

      Point no.3:-As per the final order.

REASONS

19.   Point No.1&2: Perused the complaint and the version and the documents placed by both the parties.

20.   It is undisputed fact that the father of the complainant has availed the policy for an amount of Rs.17,99,000/- from the OP on 26.03.2019 under the policy Kotak Premium Endowment plan for a period of 20 years with accidental benefits. It is also undisputed fact that the father of the complainant met with accident and he died on 22.06.2019.  a criminal case was also registered against the rider of the vehicle in C.R.No.254/2019.  After the death of the father of the complainant the complainant traced about the said policy and approached the OP2 and claimed the policy amount.  The OPs have repudiated the claim on the basis of suppression of the earlier policy taken by the father of the complainant.

21.   In support of his contention the complainant has filed his affidavit evidence and relied on 9 documents Ex.P1 to P9. On the other hand, the OP has taken the contention that the father of the complainant has suppressed the fact that he has taken the policies from other companies prior to the date of filing of the proposal form and signing the customer declaration form.  The OP has also relied on the decision of the Hon’ble apex court and also Hon’ble NCDRC and they have taken the contention that the complainant is not at all entitle to any benefits under the policy.  The complaint itself is not maintainable.  The father of the complainant has obtained the policy by concealment of material facts since the issuance of the subject policy is an outcome of material non disclosure and false.  Therefore the complainant is not entitling for any benefits.  

22.   In support of their contention the manager of OP has examined as RW1 and they have relied on Ex.R1 to R9.  

23.   The OP has rejected the claim of the complainant only on the ground that the father of the complainant had applied for policies from HDFC Life insurance company, PNB MetLife and Bajaj Allianz Life insurance, which were rejected at the proposal stage and the policy from PNB met life was in non forfeiture stage.  The DLA had applied policies worth more than Rs.2.22 crore prior to the issuance of the policy in question.  He has applied for the subject policy with the OP worth sum assured Rs.9,00,000/-.

24.   It is further contention taken by the OP that after applying for the Kotak life policy, he had applied for policy with Exide life with risk commencement date as 11.04.2019 and the sum assured Rs.6,26,991/- and this implies that he had applied for insurance cover worth approximately Rs.2,24 crore including the policy in question.  The annual income of the father of the complainant was Rs.4.39 lakhs as mentioned in the proposal form.  As per the declaration signed by the DLA he ought to have disclosed the details of his health condition, the existing policies and any changes till the time of the policy issuance, despite signing the declaration the deceased choose not to disclose the correct details to the OP.  

25.   It is further contention taken by the OP that on the basis of the investigation they have received confirmation from HDFC life, PNB MetLife and Bajaj Allianz life insurance.  In addition to this the complainant has also approached the office of the insurance Ombudsmen claiming the death benefit under the subject policy and the same was rejected by the Insurance Ombudsmen, holding that the insurance contract being the contract of at most good faith and it is bounden duty of the DLA to disclose all the material fact to the OPs, so that, the OPs could assess the risk correctly.  Non disclosure/suppression of material facts renders the contract void.  

26.   On this back ground we have also rely on the decision of the Hon’ble Supreme Court in Civil Appeal No.4261/2019 between Reliance life insurance co. Ltd., and others -vs- Rekha ben Naresh Bai Rathod.

27.   It is clear from the above decision the finding of a misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute.  The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact.  There is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into contract of insurance, each representation or statement may be material to the risk.  The insurance company may still offer insurance protection on altered terms.  

28.   It is also clearly observed by the Hon’ble Apex Court that the duty of full disclosure record that no information of substance or of interest to the insurer be omitted or concealed. The disclosure of earlier cover was material to an assessment of the risk which was being undertaken by the insurer.  The failure of the insure to disclose the policy of insurance obtained earlier in the proposal form is entitled the insurer to repudiate the claim under the policy.  

29.   In view of the above observation made by the Hon’ble apex court, it is clear that the OP have rightly repudiated the claim of the complainant on the ground the father of the complainant has suppressed the material information about the existing policies at the time of the filing the proposal form to the OP.  Therefore, the complainant is not entitled for the relief claimed in his complaint. Hence, we answer point no.1 & 2 in Negative.

30.   Point no.3: In view of the discussions referred above, the complaint requires to be dismissed. Accordingly, we proceed to pass the following

O R D E R

1. The complaint is Dismissed. No cost.
2. Furnish the copy of this order to both the parties and return extra pleadings with documents to the parties.  

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open Commission on this 21^ST  day of OCTOBER, 2022)

Documents produced by the Complainant-P.W.1 are as follows:

Documents produced by the representative of opposite parties: