Andhra Pradesh

East Godwari-II at Rajahmundry

CC/17/2015

Kaluva Lakshmi Narayana - Complainant(s)

Versus

LIC of India, - Opp.Party(s)

G. Murali Vamsi

22 Jun 2016

ORDER

                                                                                                Date of filing:   20.03.2015

                                                                                                Date of Order: 22.06.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

                Wednesday, the 22^nd day of June, 2016

 

 

C.C.No.17 /2015

Between:-

 

1)  Kaluva Lakshmi Narayana, S/o.late Kaluva Siva Ramayya,

      Aged 67 years, Business, D.No.2-278, Market Road,

      Addateegala.

 

2)  Kaluva Pushpavathi, W/o. Kaluva Lakshmi Narayana,

      Aged 57 years, Housewife, D.No.2-278, Market Road,

      Addateegala.                                                                                        …        Complainants

 

                                                And

 

L.I.C. of India, Rep. by its Sr. Divisional Manager,

Divisional Office, # 85-6-18/1, V.L. Puram,

Morampudi Road, Rajahmundry – 533107.                                               …        Opposite party

 

 

            This case coming on 25.05.2016 for final hearing before this Forum in the presence of Sri G. Mohan Vamsi, Advocate for the complainant and Sri D.V. Krishna Rao, Advocate for the opposite party, and having stood over till this date for consideration, this Forum has pronounced the following:  

O R D E R

[Per Smt.H.V. Ramana, President(FAC)] 

This is a complaint filed by the complainants U/Sec.12 of Consumer Protection Act 1986 to direct the opposite party to pay Rs.10,00,000/- with interest @ 12% p.a. from 06.04.2013 till the date of payment; to pay Rs.1,00,000/- towards compensation for mental agony and pay Rs.10,000/- towards costs of the complaint.

2.         The case of the complainants is that their son by name Kaluva Harinarayana took policy for Rs.10,00,000/- bearing Policy No.805214891 by nominating his father 1^st complainant as nominee. Previously, the life assured K. Hari Narayana also took policy No.801940075 for Rs.2,00,000/- in the year 2005. The life assured was hale and healthy by the date of taking the policy. The policyholder Harinarayana died on 6.4.2013 while he was sleeping. Thus, there is no chance to take him to any hospital also. The complainants lodged claim in respect of Policy No.801940075 in respect of Rs.2,00,000/- and another claim covered by the Policy No.805214891 for Rs.10,00,000/-. But, the insurance company paid the claim covered by the earlier policy for Rs.2,00,000/-. The complainants sent claim forms under the Policy No.805214891 for Rs.10 lakhs to the opposite party, but the opposite party insurance company did not pay the same. On 29.3.2014, the opposite party repudiated the claim on the ground that the life assured was suffering from Epilepsy and further informed that the said disease was not informed by the policyholder in the proposal form dt.31.1.2011 at the time of taking the policy. In fact, at the time of taking policy, the life assured was examined by the qualified doctor of the L.I.C.  The complainants got issued notice on 5.2.2015 to the opposite party. But, there is no reply from them. Hence, the complaint.

3.         The opposite party filed its written version and denied all the allegations made by the complainants and the complaint is not maintainable either under law or on facts. This opposite party submits that the deceased Kaluva Hari Narayana during his life time, obtained a Policy bearing No.801940075 for an assured sum of Rs.2,00,000/- in the year 2005 on his own life with the date of commencement as 28.12.2005.  He also obtained the policy bearing No.805214891 dt.28.1.2011 (subject matter policy) for an assured sum of Rs.10,00,000/- on his own life, with the date of commencement as 28.1.2011 the nominee being his father who is complainant No.1. The policy was issued under Plan & Term : 48-25 with the premium paying term of 10 years quarterly mode. The said Kaluva Hari Narayana also obtained another policy bearing No.804190129 under plan and term 175-09 Bima Bachath for an assured sum of Rs.30,000/- under single premium mode with date of commencement as 20.12.2012 the nominee being K.S. Vara Prasadam, who is his brother. While so, the opposite party received death claims in respect of the above policies from the respective nominess on the death of the life assured who reported to have died on 6.4.2013. So far as Policy No.801940075 for Rs.2,00,000/- of the year 2005 is concerned, as more than 7 years premium was paid and as there was no evidence of preproposal illness, death claim was paid. So far as the other two policies are concerned, i.e. policy bearing No.805214891 dt.28.1.2011 and policy bearing No.804190129 dt.20.12.2012 are concerned, as it is a very early death claim, occurring within three years from the date of the commencement of the policies, soon after receiving the claim forms, an enquiry was conducted as per the rules laid down in early claims. Sri K. Satya Vara Prasad who is another son of the claimants and brother of the deceased gave a letter dt.20.3.2014 stating that the deceased suffered from disease for five  years prior to the death; seriously affected by fits and taking treatment at Addategala Mandal. Thus, on thorough enquiry, it came to light that the deceased suffered from Epilepsy for the past five years prior to his death, but obtained the policies dt.28.1.2011 and 20.12.2012 suppressing the ailment and by not disclosing the material facts which invalidate the policies abinitio. The Life Insurance Policy is a contract governed by the Indian Contract Act. The requirements of contract are necessary to be a valid contract. Though the deceased life assured was suffering from ailment, he did not disclose the material facts at the time of submitting the proposal. In the declaration given in the proposal, the deceased gave an undertaking that for any false statement in the proposal, the contract of life assurance becomes void abinitio. Thus, as per the evidence with the opposite party, the policyholder was suffering from Epilepsy for the past five years prior to death and the cause of death as stated by the claimants is “heart attack with epilepsy”.  The fact of suffering with epilepsy was not disclosed by the policyholder at the time of taking the policies referred to and as the cause of death is related to undisclosed facts, the claims were rightly repudiated and the decision of repudiation was communicated to the claimants by registered post. So far as policy bearing No.804190129 for Rs.30,000/- is concerned which is a single premium policy, though it was repudiated, as per policy conditions 90% of single premium paid by the policy holder was refunded to the nominee. As such, the opposite party submits that the repudiation of the death claims was strictly in accordance with the rules and regulations and that the claimants are not entitled to question the same and they are not entitled to any reliefs against the opposite party. A letter dt.29.3.2014 was sent to the claimants furnishing the reasons for repudiation. This opposite party submits that the complainants are not entitled to any relief, muchless to any claim under the policy and the complaint is liable to be dismissed with costs.    

4.         The opposite party also filed additional written version is that mere medical examination by the doctor cannot absolve the proposer/life assured of his duty to disclose the complete details of his health problems (Supreme Court in LIC of India Vs. Mithoolal Nayak AIR (1962) S.C. 841). It is abundantly clear from the proposal submitted by the proposer/life assured that the doctor recorded what the insured tells to him. It is not the result of any test/ examination. This opposite party submits that if a person withholds any information, the doctor would not know it, unless it is visible. [NCDRC in Panna Devi Vs. LIC of India, III (2003) CPJ 15 (NC)].  The proposer/life assured to give the correct information in his health [NCDRC in LIC of India Vs. Minu Kalitha III (2002) CPJ 109 NC].  In the instant case, the proposer/life assured suppressed the ailment of Epilepsy from which he is suffering. As such the repudiation of the claim by the opposite party is perfectly legal and the claimants are not entitled to any relief. This opposite party therefore submits that the claimants are not entitled to any relief and the complaint is liable to be dismissed with costs.

5.         The proof affidavit filed by the 1^st complainant and Exs.A1 to A9 have been marked for the complainants. The proof affidavit filed by the opposite party and Exs.B1 to B6 have been marked for the opposite party.

6.  Both parties filed written arguments. Heard both sides.

7.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite party?

            2. Whether the complainants are entitled for the reliefs asked for?

            3. To what relief?

 

8.  POINT Nos.1 & 2:  The complainants submitted that their son took two life insurance policies from the opposite party bearing Nos.801940075 for Rs.2,00,000/- in the year 2005 and also took another policy bearing No.805214891 for Rs.10,00,000/- in the year 2011 vide Exs.A1 & A7. The life assured was hale and healthy at the time of taking the policy, but he died all of a sudden in the sleep on 6.4.2013.  To that extent, they filed the death certificate vide Ex.A2. The complainants also submitted that the Gokavaram Branch of the opposite party asked the complainant to prepare a cheque for Rs.10,01,909/- in ordered to get the amount back from the L.I.C. of India. The complainants also submitted that they could not understand for what purpose they asked the cheque. Even then, they issued a cheque dt.30.12.2013 in favour of the opposite party vide Ex.A3. The complainants submitted the claim form to the opposite party vide Ex.A5. Later, the L.I.C. of India, Yeleswaram Branch addressed a letter dt.22.2.2014 by returning the cheque to the complainants. The complainants approached the opposite party several times, but finally on 29.3.2014, the opposite party repudiated the claim on the ground that the life assured was suffering from Epilepsy and the same was not informed by the policyholder in the proposal form vide Ex.A4. Therefore, the complainants got issued legal notice dt.5.2.2015 to the opposite party for payment of the claim amount vide Ex.A6. The complainants further submitted that the opposite party paid the claim amount of the first policy bearing No.801940075 vide Ex.A8. The complainants also filed the Household card vide Ex.A9.

            The opposite party admitted that the deceased obtained two policies from them and nominated his father Kaluva Lakshminarayana in Ex.B1, in which they also filed a statement given by their agent. The Chief Manager of Kakinada wrote a letter to the Divisional Manager of the opposite party vide Ex.B2 and stated that he met the brother of deceased who is an agent of Kakinada branch by name Sri K. Satya Vara Prasad, who informed that the life assured had fits disease five year ago and died of massive heart attack without any medical assistance at Addateegala and he also filed the letter given by K. Satya Vara Prasad vide Ex.B3 and repudiation letter vide Ex.B4 = A4. They also filed Ex.B5 payment of ex-gratia amount and stated that the amount is paid under the claim of Bhima Bachat Plan 175-09 Policy No.804190129 dated 20.12.2012 and the sum assured is Rs.30,000/-. The opposite party gave a reply notice to the complainants’ advocate vide Ex.B6.  

            After perusing the material on record, we observed that the main contention of the complainants is that their son died of heart attack while he was sleeping and the opposite party repudiated the claim of the life assured. But, the insurance company paid the claim covered under the Policy bearing No.801940075 to the complainants. They also contended that the opposite party asked for a cheque and the same was returned by the Yeleswaram Branch. Later, they repudiated the claim on the basis that the life assured was suffering from Epilepsy and the same was not mentioned in the proposal form. They also contended that their son was hale and healthy at the time of taking the policy and they got issued a legal notice through their advocate for settlement of the claim. They also contended that the life assured paid huge amount of premiums by believing the agent and the development officer. The complainants contended that their second son is not having in talking terms with them and he is acting adverse in the interest of the complainants and they also contended that their son addressed a letter to them admitting that the life assured is having a disease is not correct. They also contended that the citations relied by the opposite party are not relevant to the facts and circumstances of the case.

            The opposite party contended that the life assured obtained another policy i.e. Bhima Bachat and the sum assured was Rs.30,000/- under single payment mode with the date of commencement 20.12.2012 and the nominee being K.S. Vara Prasad, who is his brother and addressed a letter to him for payment of ex-gratia amount vide Ex.B5. The opposite party contended that when they made an enquiry from the brother of the life assured by name K. Satya Vara Prasad, who gave a letter vide Ex.B3 and stated that his deceased brother suffered from Epilepsy prior to his death. They also contended that the deceased life assured did not disclose the material facts at the time of submitting the proposal form and they repudiated the claim on the basis of suppression of material facts in the proposal form and the same was informed to the Zonal office. They also contended that their branch people asked the complainants to prepare a cheque for Rs.10,01,909/- in ordered to redeposit the said amount in our corporation. It is a false statement created for the purpose of allegation only.

            The opposite party also contended that mere medical examination by the doctor cannot absolve the proposer/life assured of his duty to disclose the complete details of his health problems (Supreme Court in LIC of India Vs. Mithoolal Nayak AIR (1962) S.C. 841). It is abundantly clear from the proposal submitted by the proposer/life assured that the doctor recorded what the insured tells to him. It is not the result of any test/ examination. This opposite party submits that if a person withholds any information, the doctor would not know it, unless it is visible. [NCDRC in Panna Devi Vs. LIC of India, III (2003) CPJ 15 (NC)].  The proposer/life assured to give the correct information in his health [NCDRC in LIC of India Vs. Minu Kalitha III (2002) CPJ 109 NC].

            Basing on the above discussion, it is observed that the life assured obtained three policies from the opposite party, out of which one claim is settled. For payment of the second claim i.e. the sum assured is Rs.10,00,000/-, the opposite party contended that the life assured concealed the fact that he was having the disease of Epilepsy, but as per the proposal form, the said life assured has to be examined by their own panel doctor and he will certify the health condition of the life assured. The opposite party contended that mere examination by doctors certain diseases cannot be identified and the life assured has to inform his health condition at the time of taking the policy itself, but in this case, as per their own contention,  the brother of the life assured informed that his deceased brother was suffering from Epilepsy. As per their own agent’s information that he knows the life assured since 8 years prior to taking the policy and the said information is herewith filed by the opposite party. As seen from Ex.B3 letter, the opposite party contended that the said letter was issued by the brother of the life assured and stated that his brother was suffering from Epilepsy prior to taking the policy. But, the opposite party has not examined the brother of the life assured by name K. Satya Vara Prasad, who is also the agent of their own company. He also mentioned in Ex.B3 that his brother was taking treatment in Addateegala Mandal, but the opposite party has not investigated the same and not filed any medical record of the life assured, who was suffering from Epilepsy for several years prior to taking of the policy. As per the material on record, one Ch.G. Siva Prasad, who is the agent of the disputed claim policy to the life assured. Mere filing a letter i.e. Ex.B3, this Forum cannot come to a conclusion that the life assured was having Epilepsy prior to taking the policy and the said fact was concealed by him. Therefore, in our opinion, the opposite party could not establish the fact that the life assured was having Epilepsy prior to taking of the policy and they have not filed any authenticated documents to prove their case. Hence, the complainants are entitled for the claim amount.              

 

9.   POINT No.3:  In the result, the complaint is allowed in part, directing the opposite party to pay the claim amount of Rs.10,00,000/- with interest at 9% p.a. from the date of repudiation i.e. 29.03.2014 till realization to the complainants. We further direct the opposite party to pay Rs.5,000/- towards costs of the complaint to the complainants. Time for compliance is two months from the date of this order.   

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the 22^nd day of June, 2016.

    

                Sd/-                                                                                             Sd/-

              MEMBER                                                                              PRESIDENT(FAC)

         

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANTS: None.                                      FOR OPPOSITE PARTY: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANTS :

 

 

Ex.A1    Policy copy for Rs.10,00,000/- dt.28.1.2011.

Ex.A2    copy of Death certificate dt.10.4.2013.

Ex.A3    Letter dt.22.2.2014 along with cheque dt.30.12.2013 addressed by the LIC branch,

      Yeleswaram.

Ex.A4    Letter dt.29.3.2014 repudiating the claim by the opposite party.

Ex.A5    O/copy of the application for policy by the deceased K. Hari Narayana which was

             sent by the opposite party along with repudiation letter.

Ex.A6    O/copy of the notice dt.5.2.2015 along with acknowledgement.

Ex.A7    Policy copy for Rs.2,00,000/- in the name of the deceased.

Ex.A8    Letter dt.7.6.2013 regarding payment of Rs.2,00,000/- to the complainant.

Ex.A9    copy of Ration card issued by M.R.O.

 

 

FOR OPPOSITE PARTY:-          

 

Ex.B1    Proposal submitted by Kaluva Hari Narayana at the time of obtaining policy for

             Rs.10,00,000/-.

Ex.B2    Letter dt.20.3.2014 addressed by the Chief Manager, LIC, Kakinada to the opposite

             Party.

Ex.B3    Letter dt.20.3.2014 Letter addressed to the opposite party by K. Satya Vara Prasad.

Ex.B4    Letter dt.29.3.2014 addressed by the opposite party to the 1^st complainant in respect

             of Policy for Rs.10,00,000/-.

Ex.B5    Letter dt.29.3.2014 addressed by the opposite party to the 1^st complainant in respect

             of Policy for Rs.30,000/-.

Ex.B6    Reply dt.23.3.2015 issued by the opposite party to the lawyer’s notice dt.5.2.2015 of

             complainants.

 

                 Sd/-                                                                                             Sd/-

              MEMBER                                                                              PRESIDENT(FAC)