1.      These two revision petitions no. 1686 of 2019 and no. 1862 of 2019 have been filed under Section 21(b) of the Act 1986 in challenge to the common Order dated 29.04.2019 of the State Commission in appeals no. 1251 of 2017 and no. 1356 of 2017 arising out of the Order dated 31.08.2017 of the District Commission in complaint no. 247 of 2015.

2.      The dispute relates to repudiation of the insurance claim by the insurance co. on the death of the insured (the husband of the complainant  nominee).

3.      Briefly, the husband of the complainant took an insurance policy on 26.09.2014 for sum assured of Rs. 10 lakh. Its maturity date was 26.09.2072. The premium was paid. The policy was valid. During the subsistence of the policy the insured died on 10.10.2014 due to heart-attack. The complainant i.e. the wife of the insured was the nominee. Her claim was repudiated by the insurance co. vide its letter dated 22.12.2015 on ground that the life assured did not disclose his ‘income’ and ‘occupation’ in the application truthfully and correctly and had he done so the insurance co. would not have issued the policy at all.

The complainant approached the District Commission on 23.10.2015. The District Commission, for its reasons given, allowed the complaint, on contest, and directed the insurance co. to pay the sum assured i.e. Rs. 10 lakh to the complainant along with Rs. 3300/- for mental harassment and litigation expenses.

Both sides, i.e. the insurance co. and the complainant, appealed before the State Commission, the insurance co. for setting aside the Order of the District Commission and the complainant for enhancement in compensation. The State Commission vide its common Order dated 29.04.2019 dismissed both appeals, and affirmed the Order of the District Commission.

Both sides then preferred their respective revisions before this Commission.

4.      We have heard the learned counsel for the complainant as well as the learned proxy counsel for the insurance co. who makes her submissions on instructions. We have also perused the record including inter alia the Order dated 31.08.2017 of the District Commission, the impugned Order dated 29.04.2019 of the State Commission and the two petitions.

5.      Learned counsel for the insurance co. submits that there were alterations, over-writings and cuttings in the application form, the same needs to be read against the insured.

In rebuttal learned counsel for the complainant submits that the insured had made his application without any malafide or material alterations, over-writings or cuttings.

We note that this ground had not been taken by the insurance co. in its repudiation letter wherein the sole disapproving ground was in respect of the ‘income’ and ‘occupation’ of the insured.

We also note that the State Commission has dealt with this issue in para 12 of its impugned Order wherein it has inter alia observed that “The alternations, over-writings and cuttings in the proposal form or whatever it is not possible to be done at the level of the insured and in all probabilities have been committed at the level of the insurer only”.

To our mind, in case there were alterations, over-writings or cuttings in the application form or for that matter in any other document(s) submitted by the insured at the time of making the application, the same should have been aptly seen and considered / objected to before allowing the application and before accepting the premium, the insurance co. could (and should) have rejected the application if it was in any manner suffering from some infirmity or was not to its entire satisfaction. After having accepted the application and also the premium, and after the record was thereafter admittedly in its own custody, it does not lie in the mouth of the insurance co. to then take a plea of alterations, over-writings and cuttings at the time of settling the claim after death. There is nothing on record to show that any inquiry was conducted by the insurance co. to ascertain whether the averred alterations, over-writings or cuttings had been done prior to the acceptance of the application and prior to the taking of the premium and if so who were those functionaries responsible for accepting such flawed application and taking such questionable premium or whether the averred alterations, over-writings or cuttings had been done when the record was in its own custody and if so who were its functionaries responsible therefor.

No benefit can therefore go to the insurance company on the basis of this contention.

8.      Learned counsel for the insurance co. also submits that in the application form the ‘occupation’ had been written as ‘contractor’ and the annual ‘income’ had been written as ‘Rs. 10 lakh’. However the insured was only a ‘labourer’ with annual income of ‘Rs. 30,000/-‘ and as such there was material misinformation and concealment in the application.

In rebuttal learned counsel for the complainants argues that the insured had started life as a labourer and with the passage of time by his dexterousness and assiduous efforts he started taking contracts, progressively larger ones, he had also built a pakka house with his earnings through contracts, he was actually in fact a ‘contractor’ with annual income of about ‘Rs. 10 lakh’ when he made the application and there was no material misinformation or concealment in the application. 

We may note that ‘income’ and ‘occupation’ are purely a question of fact. And both the fora below have arrived at concurrent findings on this question.

We also see that the District Commission has dealt with this issue in para 9 of its Order wherein it has inter alia observed that “As per their repudiation letter, OPs have investigated matter of DLA and on the basis of investigation they have rejected the claim of the complainant, but they (OPs) have failed to bring on record any such evidence or document pertaining to the said investigation report, which could have provide whether the investigation in the present case of  the DLA has been actually conducted or not.”.

To our mind, such question of fact, re ‘income’ and ‘occupation’, necessitates conducting some sort of an inquiry / investigation. But there is nothing on record to show that any inquiry / investigation report had been filed in evidence by the insurance co. before the District Commission. In the normal wont of functioning, the insurance co.’s repudiation letter itself, in which the averment was made that the ‘income’ and ‘occupation’ was not disclosed truthfully and correctly by the insured, should have been based on a bonafide inquiry / investigation report. And the said report should have been filed in evidence before the District Commission in the normal course. (We also do not find any such report with the insurance co.’s petition too.) In the absence of any plausible reason or explanation for the lack of any inquiry / investigation report in the matter, we are at a loss to comprehend the basis on which the repudiation letter was issued in the first instance itself. Finding this gap to be critical and material, when no reason or explanation to explain the absence of any such inquiry / investigation report is forthcoming and no systemic way & manner and basis on which the repudiation letter was issued is forthcoming, we find it difficult to interfere in the arena of concurrent findings of fact by the two fora below. Decidedly, it is unclear in which factual context and circumstances the insurance co. made ‘occupation’ and ‘income’ the (sole) ground of repudiation and an argument is being made on its behalf that in fact the insured was only a ‘labourer’ with annual income of only ‘Rs. 30,000/-‘ when there is no semblance of an inquiry / investigation etc ever having been undertaken. There appears to be an air of subjective arbitrariness as well as opacity behind the repudiation, which the insurance co. has not been able to dispel either through its petition or through its arguments.

No benefit therefore can go to the insurance company on the basis of this contention.

9.      It is also not of little significance that there is no allegation of malafide or suspicion in respect of the death per se. That is to say, neither is there any allegation of foul play, or suicide, or crime, or some concealed pre-existing medical condition being the cause of death, etc. The facts and circumstances regarding the death per se are not questioned. The only question is on the truthfulness and correctness of the ‘occupation’ and ‘income’ written in the application. There is also no dispute apropos the premium having been duly received.

10.    Concurrent findings have been returned by the District Commission and the State Commission. The Orders of the two fora are a matter of record. No useful purpose will be served by reproducing them here all over again. Suffice is to say that we find the Orders to be well-appraised and well-reasoned. We do not notice any jurisdictional error or material irregularity as may go to vitiate the findings. We also do not find any reason to make fresh de novo re-appreciation of the evidence in revision. We find no good ground for interference in the exercise of the revisional jurisdiction of this Commission.

11.    Learned counsel for the complainant submits that the death of the insured occurred on 10.10.2014, the insurance co. repudiated the claim on 22.12.2015, the District Commission passed its Order on 31.08.2017. Though it directed that the sum assured be paid to the complainant nominee, but no interest to offset the delay in making the said payment has been factored in by the District Commission. In the appeal before the State Commission also this aspect had not been considered. The submission is that interest at a reasonable rate ought to be awarded on the sum assured to offset the efflux of time.

Learned counsel for the insurance co. submits that if at all interest has to be awarded on the sum assured, a rate of interest of 6-8% per annum would be fair and reasonable.

Learned counsel for the complainant on the other hand submits that rate of interest of 8-10% per annum would be fair and reasonable.

12.    Considering the facts & circumstances and specificities of the case, we find it just and appropriate that the assured sum of Rs. 10 lakh shall be paid by the insurance co. together with interest at the rate of 8% per annum from the date of repudiation i.e. 25.12.2015 till the date of actual payment, along with the lumpsum compensation of Rs. 33,00/- (without interest) towards harassment and cost awarded by the District Commission, to the complainant nominee (Kusum Devi).

The amount if any deposited with the District Commission in compliance of this Commission’s Order dated 31.07.2019 along with interest if any accrued thereon shall be forthwith released by the District Commission to the complainant  nominee (Kusum Devi) by way of ‘payee’s account only’ demand draft as per the due procedure. The balance amount shall be made good by the insurance co. by way of ‘payee’s account only’ demand draft in favour of the complainant nominee (Kusum Devi) within six weeks from today, failing which the District Commission shall undertake execution, for ‘enforcement’ and for ‘penalty’, as per the law. 

13.    The revision petition no. 1862 of 2019 filed by the complainant stands partly allowed as above and the revision petition no. 1686 of 2019 filed by the insurance company stands dismissed.

14.    The Registry is requested to send a copy each of this Order to the parties in the two revision petitions and to their learned counsel as well as to the District Commission immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.