Complaint filed on 14.08.2013

                                                                                       Compliant disposed on 02.01.2015 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM :AT:: KARIMNAGAR, TELANGANA STATE

PRESENT: HON'BLE SRI B.SURESH, B.A., LL.M., Ist ADDL. DIST. & SESSIONS JUDGE AND PRESIDENT (FAC)
AND

SRI G.SREENIVAS RAO, M.Sc.,B.Ed.,LL.B., PGADR (NALSAR), MEMBER

FRIDAY THE 2^ND DAY OF JANUARY, TWO THOUSAND FIFTEEN

CONSUMER COMPLAINT  NO. 29 OF 2013

Between:-

Peachara Padmaja, W/o.Late Surender Rao, Age:33 years, Occ: Household, R/o.H.No.10-01-30/A, Sriharinagar, Ramnagar, Karimnagar Town & District                        

                                                                                                                                ……      Complainant                                                     

   AND

      1.Life Insurance Corporation of India, Brach, Vemulawada R/by its Branch Manager

2.Life Insurance Corporation of India, Branch, Karimnagar-I R/by it’s Branch Manager

3.Life Insurance Corporation of India Divisional Office, Karimnagar R/by it’s Branch Manager

……   Opposite parties

      This complaint is coming up before us for hearing on 31-10-2014, in the presence of Sri K.Ramchandra Reddy Advocate for counsel for complainant, and Sri J.Sriramulu Advocate for the opposite parties and on perusing the material papers on record and having stood over for consideration this day, the Forum passed the following.

:: O R D E R ::

This complaint is filed Under Section 12 of CP Act to direct the opposite parties to pay the sum assured on the policy Rs.2,00,000/- (Two lakhs) along with other benefits & interest, costs and any other relief as deemed fit in the circumstances of the case.  

Brief facts of the Case

1.       The Complainant is the wife & nominee of Peachara Surender Rao policy holder of the opposite parties, during his life time he obtained an LIC’s Jeevan Anurag (with profits) policy for Rs.2,00,000/- (Two lakhs) and the policy commenced on 19.04.2007. The said policy was revived on 29.06.2012.  The policy holder Mr.Peachara Surender Rao suddenly died on 18.07.2012 at his residence due to chest pain. As per the terms of the policy, the opposite parties are required to pay sum assured. The complainant submitted the claim forms and the opposite party no.3 issued repudiation letter dt:25.02.2013 stating that the policy holder suppressed the real facts of his health condition at the time of revival and the policy holder suffered with brain tumor and underwent radiation for the same prior to the revival of the said policy. The reason mentioned by the opposite party in his repudiation letter is imaginary one and intentionally made to repudiate the policy. Hence the opposite party is liable to pay the sum assured on the policy along with other benefits etc.  

2.       The opposite parties in their combined written version submits that the deceased had obtained a policy bearing No.684828675 which commenced on 19.04.2007 under the table & term: 168-20 for a sum assured of Rs.2,00,000/- (Two lakhs) and with first unpaid premium(FUP) date as 04/2013 and the life assured died on 18.07.2012.  Further submitted that the deceased suffered from brain tumor as per the CT-SCAN dt: 09.08.2010 of Apollo Hospital, Hyderabad who also underwent surgery in 2007 and radiation in 2009 prior to the revival of the policy. So the deceased suppressed the material facts regarding his health at the time of revival. Hence the revival is null & void. However, paid-up value is payable as per the terms & conditions of the policy.

3.       Both led the evidence and the complainant exhibits were marked as A1 to A3 and the opposite parties were marked as B1 to B4.

          Now the points for consideration are:        

1. Whether the opposite parties are responsible to pay the sum assured on LIC’s Jeevan Anurag (with profits) revival policy of the deceased?

And

1. Whether the opposite parties have intentionally repudiated the revival policy of the deceased? If so, to what relief?

POINT

4)       The complaint is specifically related to revival policy of the deceased policy holder, who obtained a policy bearing No.684828675 under table & term: 168-20 for the sum assured etc is Rs.2 lakhs + 2 Lakhs with a yearly premium of Rs.11,050/-(10,850/-+200/-) with assured benefit reads as “payable both in case of life assured surviving  to the end of the term provided the policy is kept in force by payment of premium or dying during the policy term when the policy was in force”.  The said policy was revived on 29.06.2012 and the husband of the policy holder died on 18.07.2012. On receiving the claim forms the opposite party no.3 had repudiated the death claim on the said policy.

5.       The contention of the opposite parties is that the policy was revived on 29.06.2012 basing on the declaration of good health. Whereas they submitted that they have evidence & reasons to believe that the life assured was suffering from brain tumor and underwent radiation prior to the revival of the policy. Hence, it was concluded that basing on fraudulent statement & suppression of facts of ill-health the revival was declared as null & void but the paid-up value is payable as per the terms & conditions of the policy.

6.       On examining the conditions & privileges within referred to under the subject policy, the Clause (2) is the payment of premium which is inclusive of i) installment premium for basic plan, ii) installment accident benefit of premium, iii) installment term assurance rider premium, iv) installment critical illness rider premium and v) installment PWB premium and Clause(3) is the revival of discontinued policies which mentions as, if the policy has lapsed, it may be revived during the life time of the life assured, but within a period of 5 years from the date of the first unpaid premium and before the date of maturity. The revival of a discontinued policy shall take effect only after the same is approved by the corporation and Clause(4) Non-forfeiture Regulations last rider reads as “Not withstanding what is above stated, if after at least five full years premium have been paid in respect of this policy and any subsequent premium be not duly paid, in the event of the death of the life assured within twelve months from the due date of the first unpaid premium, the policy money will be paid as if the policy has remained in full force”. Finally on the last page of the policy under the special provisions, it is mentioned as:

7.       In the event of the death of the life assured prior to the date of maturity the amount equal to the sum assured under the basic plan (specified in the schedule to the policy) shall be payable to the nominee or assignees or Legal representatives of the proposer immediately on admission of claim & further that bonus will continue to accrue for the full terms on the full sum assured and will be paid on the date of maturity along with assured benefits as stated above.

8.       On the totality the deceased during his life time had taken a specialized policy like LIC’s Jeevan Anurag (with profits) which commenced on 19.04.2007 and it was revived & approved by the corporation as per the terms & conditions of the said policy, Whereas the policy holder/life assured died on 18.07.2012 while the policy was in full force. The repudiation letter dt: 25.02.2013 on the ground of suppression of ill-health facts is contrary to the terms & conditions of the policy. The opposite parties have issued policy in utmost good faith but when the death claim was made by the nominee, they started examining the matter under the microscope. Initially the policy was routed through the LIC agent and counter signed by the doctor and even at the time of revival the LIC approved it without any objection. The opposite parties ought to have settled the death claim.

9.       In similar circumstances, in a recent judgment Abdul Latheef in LIC of India in RP No.2370/2012 decided on 04.07.2014 the Hon’ble National Commission held that:

          “It is unfortunate that on one hand the LIC raises the voice of utmost good faith”, but in contrast, the faith will be lost while not settling the premium claims for some or other reasons”.                       

10.     In view of the above we are of the considered opinion that the policy was in full force for more than 5 years at the time of making death claim by the nominee-complainant. The subject policy is a specialized policy with special provisions. So the repudiation of the claim on the specialized policy like the instant one is contrary to the teams & conditions and assurances printed on the policy. The LIC ought to have made thorough enquiry into the circumstances of the case before rejecting the claim in a routine fashion.

11.     Adding to this that the policy commenced from 19.04.2007 (Ex.A1 &B1) and the policy was revived on 29.06.2012 (Ex.B2) and the life assured died on 18.07.2012 (Ex.A3) and the repudiation was done on 25.02.2013 (Ex.A2 & B4). The basis for repudiation in the CT-SCAN brain report (Ex.B3) obtained from Apollo Hospital which was attested with date as 12.02.2013. The Ex.B3 shows Clinical History mentioning surgery in 2007 and radiation in 2009, which proves that these are not prior to obtaining the policy which initially commenced on 19.04.2007.  In the absence of specific evidence from opposite parties and there is no emphasis on the compulsory declaration of personal health at the time of revival of policy, the contention of opposite party cannot be accepted.  Usually the policy is lapsed for non-payment of premium and it will be revived on payment of dues so it is just a mechanical process. Therefore both the points are answered against the opposite parties and in favour of the complainant-nominee, thus the complainant is entitled for relief from the Forum.

12.     In the result, the complaint is allowed and the opposite parties are jointly & severally directed to pay the sum assured under basic plan etc, as appears on the face of the policy LIC’s Jeevan Anurag (with profits) under schedule Rs.2,00,000/- (Two lakhs) and to pay other entitled benefits as per the special provisions along with 9% interest from the date of complaint i.e., 14.08.2013 till realization and also to pay Rs.5000/- towards costs.

          Time for compliance is one month.            

Typed to my dictation by Stenographer and after correction, the orders pronounced by us in the open court this the 2^nd day of January, 2015.

Sd/-                                                                                                  Sd/-

MEMBER                                                                               PRESIDENT(FAC)

NO ORAL EVIDENCE HAS BEEN ADDUCED ON EITHER SIDE

FOR COMPLAINANT:                       

1. Ex.A1 is the photo copy of LIC’s Jeevan Anurag (with profits) policy Dt: 19.04.2007.
2. Ex.A2 is the photo copy of Death claim sent by Registered post with Acknowledgment due Dt: 25.02.2013.
3. Ex.A3 is the photo copy of Death Certificate of P.Surendar Rao (Death of date:18.07.2012) Dt:03.08.2012.

FOR OPPOSITE PARTY:

1. Ex.B1 & A1 are one and the same documents.
2. Ex.B2 is the original copy of personal statement regarding health Dt: 28.06.2012.

      3.  Ex.B3 is the photo copy of PET-CT SCAN BRAIN report Dt: 09.08.2010.

1.   Ex.B4 & A2 are one and the same documents.

Sd/-                                                                                                  Sd/-

MEMBER                                                                               PRESIDENT(FAC)