Haryana

StateCommission

A/569/2015

ICICI PRU. LIFE INSURANCE CO.LTD. - Complainant(s)

Versus

LEKH RAJ - Opp.Party(s)

HITENDER KANSAL

11 Jul 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :      569 of 2015

Date of Institution:      07.07.2015

Date of Decision :       11.07.2016

1.     M/s ICICI Prudential Life Insurance Company Limited, Ambala Road, above Axis Bank, Kaithal, District Kaithal, through its Branch Manager.

2.     M/s ICICI Prudential Life Insurance Company Limited, ICICI Pru Life Towers, 1089, Appasahed Marthe Marg, Prabhadevi Mumbai – 400 025 through its Regional/Branch Manager, Mumbai.

                                      Appellants/Opposite Parties No.1 & 3

Versus

 

1.      Lekh Raj s/o Sh. Munshi Ram, Resident of Village Diwana, Tehsil Pehowa, District Kurukshetra now residing at Janta Market, near ICICI Bank, Kaithal Road, Cheeka, District Kaithal, Haryana.

                                      Respondent/Complainant

2.      ICICI Bank Limited, Janta Market, Cheeka, District Kaithal through its Branch Manager.

Respondent/Opposite Party No.2

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member

 

Present:               Shri Chetan Gupta, Advocate for appellants.

                             None for respondent No.1.

                             Shri Puneet Tuli, Advocate for respondent No.2.

 

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

ICICI Prudential Life Insurance Company Limited (for short ‘ICICI Prudential’)-Opposite Parties No.1 and 3, are in appeal against the order dated May 14^th, 2015 passed by District Consumer Disputes Redressal Forum, Kaithal (for short ‘the District Forum’) in Complaint No.60 of 2014.

2.      Sunehari Devi-since deceased (hereinafter referred to as ‘the Life Assured’) purchased a Life Insurance Policy No. 17982272 for Rs.2,03,700/- (Exhibit C-1) from the ICICI Prudential under Guaranteed Savings Insurance Plan vide Proposal Form (Exhibit C-3/R-1). The policy commenced from August 10^th, 2013. Lekh Raj-complainant/respondent No.1 was nominee of the life assured. The life assured died on September 2^nd, 2013, that is, after 23 days of the purchase of the policy. The complainant, being the nominee of the deceased claimed the insured amount. The ICICI Prudential repudiated claim vide Repudiation Letter dated January 20^th, 2014 (Exhibit C-7). The extract of the repudiation letter (Exhibit C-7) is reproduced as under:-

“We refer to the death claim intimation submitted to the Company on October 13, 2013 towards the above mentioned policy.

In this connection, we state that the Company received the proposal for insurance on August 08, 2013. In the aforesaid proposal, Ms. Sunhari Devi (herein after referred to as Life Assured) had stated her date of birth as August 15, 1959 and had also provided a copy of “Pan Card” as an age proof.

Among others, age of the Life to be assured is a key factor considered while assessing/accepting the risk under a proposal for life insurance. Relying on the replies/declarations provided in the proposal for insurance, the Company issued life insurance policy bearing number 17982272 on August 10, 2013.

The Company received the death claim intimation on October 13, 2013 informing that the Life Assured expired within 22 days of the policy issuance on September 02, 2013.

The Company conducted investigations to verify on the bonafides of the claim and our investigation revealed that the Life Assured has provided incorrect information about her age.

We are, therefore, satisfied that the Company has been misled to issue the above policy by making fraudulent statements in reply to specific questions in the applications for insurance.

In view of the above facts, the said policy becomes void and therefore no benefit is payable. We also stage that this is without prejudice to any other action, civil or criminal, that the Company may take against parties to the conspiracy to defraud the Company.”

 

3.      Aggrieved of the repudiation of his claim, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986.   

4.      The ICICI Prudential contested the complaint by filing reply while reiterating the fact stated in the repudiation letter and prayed that the complaint merited dismissal.

5.      The District Forum vide impugned order allowed the complaint and issued direction to the ICICI Prudential to pay the sum assured, that is, Rs.2,03,700/- to the complainant and Rs.2,000/- compensation on account of harassment, mental agony and litigation expenses.

6.      Learned counsel for the ICICI Prudential has contended that at the time of submitting the proposal form (Exhibit C3/R-1), the date of birth of Sunehari Devi was mentioned August 15^th, 1959, whereas in the Identity Card (Exhibit R-6) issued by the Military Authorities, her age was mentioned 70 years. Since, the life assured concealed the material fact with regard to her age, so the ICICI Prudential is not liable to pay the sum assured to the complainant.

7.      The contention raised is tenable. The best piece of evidence is the Proposal Form dated August 8^th, 2013 (Exhibit C-3/R-1) in which the date of birth was mentioned August 15^th, 1959, that is, she was about 54 years old at that time. But in the Identity Card (Exhibit R-6) issued by the Military Authorities, her age was mentioned 70 years because she was taking family pension on account of death of her son Jai Bhagwan, who was Army personnel.  Not only that, in the Ration Card (Exhibit R-7) issued by the Haryana Government, her age was mentioned 75 years.  In view of this overwhelming evidence, that is, the Identity Card (Exhibit R-6) and the Ration Card (Exhibit R-7), it can be said that date of birth (August 15^th,1959) mentioned in the proposal form was wrong. Thus, the life assured suppressed the material fact with regard to her age at the time of submitting the proposal form.

8.      It is well settled principle of law that any incorrect information and false statement by the life assured regarding health, age and income makes the insurance contract null and void.  Support to this view can be had from the judgment rendered by Hon’ble National Commission in Life Insurance Corporation of India versus Smt. Minu Kalita, III(2002) CPJ 10 (NC).

9.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

10.    Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

11.    In P.C. Chacko v. Chairman LIC of India, (2008) 1 Supreme Court Cases 321 Hon’ble Apex Court held as under:-

“22.   We are not unmindful of the fact that Life Insurance Corporation being a State within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reason of an act of the insured. This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the court carry the bargaining powers of the contracting parties. It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/proposal form, the respondents had acted unjustifiably or the conditions imposed are unconstitutional.”

12.    In Crown Consultants Pvt. Ltd. Versus Oriental Insurance Company Ltd., III(2011) CPJ 439 (NC), Hon’ble National Commission held as under:-

“19.     A contract of insurance is based on the doctrine of uberrima fides, i.e., “utmost good faith”, in the conduct of the insured. This doctrine was enunciated as far back as in 1766 by Lord Mansfield in the celebrated case of Carter V. Boehm, (1766) 97ER 1162, 1164, in the following words:

“Insurance is a contract of speculation….The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist….Good faith forbids either party for concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.”

 

13.    It is proved that the life assured concealed the true fact regarding her age which was material at the time of obtaining the policy. Since, the policy was obtained by the life assured on mis-statement and by concealment of true fact, so, the insurer is not liable to pay the sum assured to the complainant.  

14.    In view of the above, it is held that the ICICI Prudential rightly repudiated the claim of the complainant. District Forum fell in error in allowing the complaint and as such the impugned order cannot be allowed to sustain.

15.    Hence, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

16.    The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced 11.07.2016

Diwan Singh Chauhan Member

B.M. Bedi Judicial Member

Nawab Singh President

CL