PER SHRI. S.S. PATIL - HON’BLE MEMBER :
1) This is the complaint regarding deficiency in service on the part of Opposite Parties as they repudiated the insurance claim submitted by the Complainant, on the ground that the insured has suppressed the material fact from disclosing to the Opposite Party that he had taken earlier insurance policy on his life before obtaining the current policy.
2) The facts of the case are that the Opposite Party No.2 issued a Life Insurance Policy in the name of the Complainant’s father Shri. Naval Kishor Ganpatrai Agarwal vide Policy No.880892643. The date of the policy was 29/04/2001. During the validity of this policy the insured Shri.Naval Kishor Agarwal died on 13/04/03. The insurance claim was lodged with Opposite Party No.2. However, Opposite Party No.2 repudiated the claim on 11/03/2004 on the ground that the deceased insured had withheld material information i.e. taking an another earlier policy on his own life prior to proposing the above said policy i.e. the insured deceased was holding a previous insurance policy no.88878617 for a sum assured Rs.1 commencing from 21/3/2000.
3) The Complainant took up the matter with different authorities but invain. It is the contention of the Complainant that while filling up the proposed form the deceased insured had replied the question in column no.9 that he has not having any previous life insurance policy. This form was filled up by the LIC Agent who had earlier secured the previous policy on the life of Shri. Naval Kashore Agarwal in 2000 only. The Complainant further stated that, the same agent has written the word ‘No’ in column 9 in the proposal form for particulars of previous policy while completing the proposal form for 2nd policy i.e. Policy No.880892643.
4) The Complainant has further concluded that the repudiating the claim of the Complainant is a clear case of deficiency in service on the part of the Opposite Party and the Complainant is entitled to the insurance amount with interest and compensation for harassment caused to the Complainant and specifically prayed for Rs.2 Lacs towards the insured sum as per the policy, Rs.1,32,000/- towards the interest Rs.50,000/- towards compensation for harassment and Rs.20,000/- towards expenses for pursuing the matter.
5) The Complainant has attached the xerox copies of the following documents -
a) Letter of the Opposite Party addressed to the Complainant.
b) Form of Insurance Ombudsman dtd.05/06/06.
c) Letter of the Complainant addressed to Insurance Ombudsman dtd.05/06/06.
d) Letter of the Insurance Ombudsman to the Complainant (dtd.14/09/06).
e) Order of the Insurance Ombudsman dtd.11/09/06.
f) Personal Statement Form singed by the Medical Examiner with no date.
g) Electro Cardiogram, dtd.03/04/2001.
6) The Complainant has also filed an application for condonation of delay. This application is allowed by the Forum vide its order no.842 on 12/04/07 and the complaint was admitted. Notices were served on the Opposite Parties. Opposite Party No.1 appeared through its Ld.Advocate and submitted its written statement wherein it denied the allegations in the complaint and specifically sated that the complaint is bad for suppresio veri and suggestio falsi.
7) The Opposite Party further stated that the deceased father of the Complainant (insured) had submitted his proposal for his life insurance policy on 27/09/2001 and he was issued Policy No.880892643 with accident benefit for Rs.2 Lac the said was dated back to 19/04/01 as per the request of the insured only. The Opposite Party has attached the copy of that proposal form and the policy to the written statement.
8) It is further submitted by the Opposite Party that, it initiated the mandatory enquiry after the receipt of the death claim after the death of the insured. During the enquiry, the Opposite Party observed that the insured Naval Kishore, had suppressed the earlier policy bearing No.880878617 held by him since March, 2000 under Table 88 for Rs.1 Lac. Therefore, the present policy would be deemed to be a High Risk Insurance. While feeling the proposal form the insured had replied in negative (No) to the question mentioned in proposal form regarding the previous policies held by him earlier to this policy i.e. the insured had not disclosed the details of the policy no.880878617 at the time of obtaining the policy no.880892643. The Opposite Party has further explained that the Insurer (Opposite Party) is required to make a reference to previous policy records to ascertain the previous set of measurements which may indicate change / deterioration of the health of the insured and /or any serious ailment which might have been disclaimed in the previous proposal which would enable the underwriter to take appropriate decision in the latest proposal. The said details are also required by the insurer to arrive at “Sum Under Consideration” as various special reports required for underwriting the proposal depends on sum under consideration. In the event of his disclosing the details of previous policy, Opposite Party would have called for the relevant special report /ECG which were their underwriting manual requirement for considering the sum under consideration. Therefore, the claim of the Complainant was repudiated on the ground of suppression of material facts.
9) The Opposite Party has further submitted that the insured was supposed to fill in the proposal form with true and correct facts and then he is to sign only after understanding its contents fully. It was also made clear to the insured that any false statement in the said proposal form shall disentitle him of any benefits under the said contract. Once the proposer gives the declaration, the statement contained therein shall be the basis of the contract of assurance and if contains any untrue statement, the contract shall be absolutely null & void. It was therefore, contended that the claim of the Complainant is based on the falsehood and therefore not sustainable. Finally the Opposite Party has prayed to dismiss the complaint with exemplary cost.
10) The Opposite Party has attached the xerox copies of the proposal form filed in by the insured on 27/09/2001 and policy no.880892643.
11) The Complainant then filed an affidavit in lieu of examination-in-chief alongwith the xerox copies of the policy no.880892643. Rejection letter dtd.11/03/2004, application dtd.15/06/06, order of the Insurance Ombudsman, copy of the ECG report dtd.03/04/01. He also submitted the written argument wherein he reiterated the facts and points raised by him in the complaint. He also filed the following citations of the following judgements –
a) 2006(3) CPR 74 N.C.D.R.C. in LIC of India V/s. K. Purushotthama.
b) II (2001) CPJ 113 – Punjab State Consumer Dispute Redressal Commission in LIC of India V/s. Nirvairsing.
c) II (2004) 146 Uttarachal State Consumer Dispute Redressal Commission in LIC of India V/s. Rukmani Dharamshakta, etc.
12) The Opposite Party also submitted its affidavit of evidence and its written argument wherein it reiterated the facts and points mentioned in the written statement.
It also submitted the xerox copy of following judgement alongwith its written argument. F.A.No.1261/06 M.A.No.1517 & 1518/06 delivered by the Hon’ble Consumer Dispute Redressal Commission, Maharashtra State in LIC of India V/s. Shri.Amarnath Kalicharan Vadav.
13) We heard the Ld.Advocates of both the parties and our findings are as follows -
The Complainant is the nominee in the Life Insurance Policy No.880892643 issued by the Opposite Parties in 2001. For obtaining this policy Shri.V.G. Deshpande the Agent of the Opposite Party approached the insured. His medical examination was done in April, 2001 and the proposal form was filled on 27/09/2001. During the validity of the said policy the insured late Shri.Naval Kishore Agarwal died on 13/04/03.
14) After the death of the insured, the nominee being minor at that time, the appointee under the policy Mr.Ram Shankar Agarwal submitted the insurance claim with the Opposite Party No.2 claiming the insured amount of Rs.2 Lac. However, the Opposite Party repudiated the said claim vide their letter 11/03/04 on the ground that, the deceased have withheld the material information regarding previous policy at that time of effecting the insurance with the insurer. The Opposite Party has further clarified in its letter that the deceased was holding policy no.880878617 for the sum of Rs.1 Lac which had commenced on 21/03/2000. Had he disclosed this policy in the proposal dtd.27/09/01, Special report – ECG would have been required for considering the proposal.
15) It is the fact that the proposal form for subsequent policy is dtd.27/09/01 and in this form column 9 states – please give details of your previous insurance and the answer given to this column is “No”. However, it is contended by the Complainant that this form had been filled in, by the Agent of the Opposite Party and this contention is not denied by the Opposite Party. At the same time, if this form is minutely checked, this form bears two signatures of the deceased insured and those signatures are put at the small x sign where the insured was supposed to put his signatures. Certainly these two x sings must have been marked by the person who had filled in the form suggesting the signatory to put his signature at that place and the person was Mr.V.G. Deshpande, the LIC Agent and no one else. It is a general practice in the day to day insurance business that the Agent fills up the lengthy form and the insured signs on the dotted lines as instructed by the Agent. Therefore, there is no doubt in our mind to suppose that the insured has signed on the form as directed by the LIC Agent without any idea that he was supposed to fill up the particulars of the previous policy.
16) Incidentally in this cas Mr.V.G. Deshpande was the only agent who had concerned in obtaining both the policy and the previous policy was obtained only in the previous year i.e. in the year March, 2000. Therefore he should have the knowledge of this policy and if it is assumed that the insured had concealed the particulars of the previous policy. The Agent of the Opposite Party should have corrected the mistake and filled in or get it filled by the insured the particulars of the previous policy.
17) Therefore, from the above facts it is clear that the proposal form was filled up by LIC Agent and obtained the signature of the insured without asking him about his particulars of the previous policy and putting a big ‘No’ in column no.9 of the proposal form and then obtaining the insurance policy no.880892643. In addition to the points discussed above, the Complainant and the Opposite Parties have submitted the citations in para 11 & 12. Later on the Opposite Parties also filed citations of the Hon’ble National Commission in the following cases –
a) II (1992) CPJ 493(NC) Jagadish Dagar V/s. Sr.Divisional Manager, LIC judgement delivered on 05/03/1992.
b)1997(1)CPR 40 Insurance Corporation of India V/s. Bily Rani Ray. decided on 24/01/97.
c)First Appeal No.163/93 LIC of India & Anr. V/s. M. Gowri & Ors. decided on 10/10/94.
18) We perused all these citations produced by both the parties and noticed that the Complainant has filed the judgement of the Hon’ble National Commission, 2006(3) CPR 74 in LIC of India V/s. K Purushottham, decided on 17/08/06. Whereas the citations produced by the Opposite Parties are decided in the year 1992, 1997 and 1994. One of the citations is of the Hon’ble State Commission, Maharashtra. Therefore, we have considered the judgement of Hon’ble National Commission, in 2006(3) CPR 74 NC in LIC of India V/s. K. Purushotthama a Revision Petition No.2656/05 decided on 17/08/09. This judgement of the Apex Commission being latest of all the above cited judgement was taken into consideration by us. In this judgement wherein it has been held by the Hon’ble National Commission that “A bare perusal with the naked eye indicates that the hand writing of a person who has filled up the form is different from the signature of the person. Even the proposal form has been filled up in a hurry (para 12). Complainant has filed an affidavit and has been examined before the Dist. Forum. A affidavit has also been filed by the Manager of the LIC Office but no affidavit has been filed by the LIC Agent nor he has been cross-examined (para 13). The proposal form also has the signature of the medical examiner. If she was suffering from Malaria at the time of taking the policy, this would have been known to the doctor (para 14). Underwriting manual which was produced by the Ld. Council for the Revision Petitioner, before us is a strictly confidential material which means that the manual is not meant for publication and it is used only for the LIC Officers and Agent. There is no evidence that relevant Clause III(6) which is quoted above was ever disclosed to the insured by the agent. LIC Authorities had seven months after the insurance of the policy to check up and cross check the facts and figures given in the policy which they had failed to do (para 15).
“Accordingly the Revision Petition fails and therefore, it is dismissed.”
“Important Point – The insured cannot be said to have provided incorrect and false information regarding the insurance policy held by her husband in the facts of the case and State Commission rightly ordered for settlement of the claim of the Complainant”
19) The facts of the case in hand are similar to that of the above case as stated earlier therefore, taking into consideration the above citation and the facts of the case in hand, it is our considered opinion that the non disclosure of the previous policy in the proposal form dtd.27/09/2001 is not a deliberate act or even, the insured might not have the knowledge of a question asked in para 9 of that form which have been filled up by the LIC Agent who is the agent of the Opposite Parties. Therefore, it will be just and proper to direct the Opposite Parties to allow the life insurance claim of the Complainant. The Complainant is also entitled for the interest on the insurance amount from the date of repudiation of the claim. Therefore, we pass the following order -
O R D E R
i. Complaint No.57/2007 is partly allowed.
ii The Opposite Parties are directed to pay jointly and/or severally Rs.2,00,000/- (Rs.Two Lacs Only) to the
Complainant with interest @ 9 % p.a. from 11/03/04 till realization of the entire amount.
iii.Opposite Parties are also directed to pay jointly and/or severally Rs.10,000/-(Rs.Ten Thousand Only) to the
Complainant towards the mental and physical agony caused to the Complainant as they repudiated the claim of
the Complainant.
iv.Opposite Parties are also directed to pay jointly and/or severally Rs.3,000/- (Rs.Three Thousand only) to the
Complainant towards the cost of this complaint.
v. Opposite Parties are directed to comply with the above said order within 30 days from the date of receipt of this
order.
vi. Certified copies of this order be furnished to the parties.
