BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMRITSAR.

Consumer Complaint No. 720 of 2015

Date of Institution: 18.12.2015

Date of Decision: 16.06.2016  

Shakuntla Devi wife of late Kishori Lal aged 62 years, resident of House No. 337, Gali No.5, Krishan Nagar, Joura Phatak, Amritsar (Nominee of the deceased Naresh Kumar son of late Kishori Lal).

Complainant

Versus

1.       Sr.Divisional Manager, through LIC of India, Amritsar Division, Jewan Parkash Building, Near Shopping Complex, Ranjit Avenue, Amritsar.

2.       Zonal Manager, through LIC of India, Northern Zonal Manager, Jeewan Bharti Building, Connaught Circus, New Delhi

Opposite Parties

Complaint under section 11, 12 & 13 of the Consumer Protection Act.

Present: For the Complainant: Sh.N.S.Cheedha, Advocate

              For the Opposite Parties: Sh. Subodh Salwan, Advocate

Coram

Sh.S.S.Panesar, President

Ms.Kulwant Kaur Bajwa, Member

Mr.Anoop Sharma, Member  

Order dictated by:

Sh.S.S. Panesar, President.

Smt.Shakuntla Devi has brought the instant complaint under section 11,  12 & 13 of the Consumer Protection Act, 1986 on the allegations that earlier the same complaint having the same subject matter between the same parties was dismissed in default on 10.4.2013 by this Forum due to note down the wrong date by the complainant. The complainant is the law abiding citizen of country and is the mother of deceased Naresh Kumar so of late Sh.Kishori Lal, aged 28 years, resident of House No. 337, Gali No.5, Krishan Nagar, Joura Phatak, Amritsar who has died on 10.2.2011 and who purchased the LIC policy bearing No.471578419 assured on his life from Opposite Parties  and also declared the complainant i.e. his mother as his nominee in this policy. The son of the complainant i.e. Naresh Kumar had purchased the policy bearing No. 471578419 from the Opposite Parties  in the year 2005 and was continuously paying the premium of this policy till 2007, but due to some reasons, he could not be able to continue his policy till 2009, but in the year 2009 deceased Naresh Kumar has revived this policy again on 9.6.2009 and until 8.2.2011 he has regularly paid the premium of this policy. The photo copy of the receipts of the premium installments are attached. The deceased Naresh Kumar was working as a government employee i.e. Peon (Sewadar) in Government High School, Pakharpura Jaintipur, Amritsar. On 19.5.2009 Naresh Kumar, now deceased, suffered with normal fever and he was treated at his home and the doctor advised Naresh Kumar to take rest for some days. The son of the complainant i.e. Naresh Kumar died on 10.2.2011 due to falling  down from the stairs of his house. Death certificate regarding the death of Naresh Kumar alongwith a Majornama having signatures of the respectables and the councilor  of concerned Illaqa are also attached. After the death of son of the complainant, the complainant being the nominee claimed the insured sum under the policy from the Opposite Parties, but the Opposite Party No.1 declined the insurance claim filed by the complainant declaring the policy null and void on the basis that deceased Naresh Kumar had misrepresented the Opposite Parties  on the revival of his policy regarding his sound health. In fact on 19.5.2009 deceased Naresh Kumar was suffering with a normal fever, for which he was treated at home and he recovered from this fever after some days and he revived this policy again on 9.6.2009 after paying all the dues, due towards  him and was regularly paying the premium of this policy since 9.6.2009 till 8.2.2010 after the revival of the policy. Unfortunately, Naresh Kumar met with an accident due to which he died by falling down from the stairs of his house. The complainant visited the office of Opposite Parties  many a times, but every time, the Opposite Parties  declined her request to give the sum assured to her. Vide the instant complaint, the complainant has sought for the following reliefs:-

a)       To direct the Opposite Parties  to  give the sum assured on the policy alongwith interest till the realization.

b)      To pay the cost for mental harassment, agony and litigation expenses to the tune of Rs.10,000/-.

c)       Any other relief as this Forum think appropriate may kindly be allowed in favour of the complainant.                

Hence, this complaint.

2.       Originally the complaint was filed on 29.4.2013 which was dismissed in default by this Forum vide order dated 17.6.2014. The complainant filed an appeal against the order of dismissal before Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh and vide order dated 8.12.2015, Hon’ble State Consumer Disputes Redressal Commission, Punjab, Chandigarh remanded back the complaint for deciding the same on merits.

3.       Upon notice, Opposite Parties appeared and contested the complaint by filing  joint written statement taking certain preliminary objections therein inter alia that the complainant has filed a baseless, frivolous and imaginary claim with an ulterior motive. The complaint is bad in law and the same can not be entertained. The complainant has fabricated a false story with ulterior objective to extract unlawful gains to which he is otherwise not entitled; that the complainant is estopped by her own act and conduct to file the present complaint and the present complaint is not maintainable under law, hence liable to be dismissed; that the complainant does not fall within the ambit of consumer under section 2 of the Consumer Protection Act; that no cause of action has arisen to the complainant to file the present complaint as the averments of the present complaint do not depict any consumer dispute between the parties; that  the complainant has not come to this Forum with clean hands and has rather suppressed the material facts from this Forum; that the present complaint is not maintainable under the law as Opposite Party No.1 has already repudiated the claim of the complainant vide its letter dated 28.1.2012 stating the reason therein for the said repudiation. On merits, it is stated that the earlier complaint filed by the complainant which was dismissed in default on 10.4.2013 by this Forum is a matter of record. However, it is specifically denied that the complainant had noted down wrong date of the earlier complaint due to which the said earlier complaint was dismissed in default. It is an admitted fact that deceased Naresh Kumar had taken the insurance policy in question in which deceased had nominated his mother i.e. complainant as his nominee for the said policy. It is further an admitted fact that the policy holder  namely Naresh Kumar had died as stated in para No.2 of the complainant. It is further stated that deceased had revived policy in question for two times i.e. firstly on 9.6.2009 for the period commenced from 8.4.2008 to 8.4.2009 and thereafter, on 7.4.2010 which again lapsed on 8.7.2009. It is admitted that deceased Naresh Kumar was working as a government employee i..e Peon in Government High School, Pakharpura Jaintipur, Amritsar. The claim of the deceased policy holder has been repudiated on 28.1.2012 since the life assured was not keeping good health prior to the date of both revivals dated 9.6.2009 and 7.4.2010 and the complainant herself has admitted that the policy holder was not in good health prior to the first revival of policy i.e. before 9.6.2009 and revived the policy after  recovery from his illness, but the said fact had not been disclosed by the life assured at the time of submitting personal statement regarding his health while reviving the policy.  It is worthy to mention over here that the policy in question was lying lapsed since 8.4.2008 and had been revived on 9.6.2009. The life assured while submitting his personal statement regarding his health on form No. 680 dated 6.9.2009 specifically stated that he was in good health. However, the factual evidence shows that the life assured was not having a good health  on the date of revival of the policy i.e. on 9.6.2009 and has intentionally suppressed this material fact while reviving his policy. Remaining facts mentioned in the complaint are also denied and a prayer for dismissal of the complaint with cost was made.

4.       In her bid  to prove the case, complainant tendered into evidence her  duly sworn affidavit Ex.C-1 in support of the allegations made in the complaint and also produced documents Ex.C2 to Ex.C22 and closed the evidence.

5.       To rebut the evidence of the complainant, the Opposite Parties  tendered into evidence the affidavit of Sh.Makhan Lal, Manager Ex.OP1 alongwith documents Ex.OP2 to Ex.OP17 and closed the evidence.   

6.       We have heard the ld.counsel for the parties and besides going through the written synopsis of  arguments submitted on behalf of the complainant and Opposite Parties. We have also carefully gone through the evidence on record.

7.       Ld.counsel for the Opposite Parties  has vehemently contended that the claim filed by the complainant has been repudiated vide repudiation letter dated 28.1.2012, copy whereof is Ex.OP2 on the record, on the ground of misstatement of the facts in declaration Ex.OP14 before revival of the policy. The policy in question was revived twicely i.e. firstly on 9.6.2009 which got lapsed on 8.4.2008 and for the second time, the policy in question was revived on 7.4.2010 which again lapsed on 8.7.2009.Prior to the first revival of the policy in question, policy holder namely Naresh Kumar had  signed a declaration of good health which is Ex.OP14 on record. Two questions have been asked from the policy holder in the said declaration, which are reproduced in the repudiation letter dated 28.1.2012 and read as under:-

Question (2)(a)-    Have you ever suffered from any illness/ disease requiring treatment for a week or more?

Ans.                     No.

Question (4)                   Are you at present in sound health?

Ans.                     Yes

The aforesaid declaration Ex.OP14 was duly signed by the policy holder Naresh Kumar. However, the documentary evidence on record clearly shows that he was ill prior to the first revival and the sad fact was not intentionally disclosed by the policy holder at the time of the revival of the policy.  Ex.OP4 and Ex.OP5 are the letters of Principal of Government High School, Pakharpura Jaintipur, Amritsar in which the Principal has clearly mentioned that the policy holder Naresh Kumar who was working as Peon in the said government school remained on leave from 19.5.2009 to 3.6.2009 for a period of 16 days for taking treatment of typhoid. Thereafter, again Naresh Kumar remained on leave from 15.11.2009 to 30.11.2009 for a period of 15 days due to a head injury sustained by him in an  accident and during the said period he remained admitted in Khushbir Kalra Hospital, Sultanwind Road, Amritsar. The medical record of policy holder Naresh Kumar with respect to his admission at Khushbir Kalra Hospital, Sultanwind Road, Amritsar is Ex.OP7 on record.  The aforesaid documentary evidence clearly shows that the deceased Naresh Kumar policy holder intentionally did not disclose with respect to his health and has given wrong answers in the declaration signed by him of good health prior to revival of the policy. The contract of insurance being based on utmost good faith has been broken down by the policy holder and the contract of insurance is void abnitio as the policy holder made the misstatement intentionally with ulterior motive, therefore, the claim of the  complainant has rightly been repudiated on the basis of condition No.5 of the policy. Condition No.5 of the policy reads as under:-

“in case the premium shall not be duly paid or in case any condition herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statements is contained in personal, personal statement, declaration  and connected documents or any material information is withheld then and in every such case, but to the provisions of section 45 of  Insurance Act, 1938 wherever applicable, the policy shall be void.”

As the law on the subject is concerned, Hon’ble Apex Court in case: Suraj Mal Ram Niwas Oil Mills (P) Limited Vs. United India Insurance Company & Anr. 2010 Vol. IV CPJ page 38 has held that in interpreting documents relating  to contract of insurance, the duty of the court is to interpret the words in which the contract is expressed by the parties, because is not for the court to make a new contract. The terms of the policy have to be construed as it is and we cannot add or subtract something. How so ever liberally we may construe the policy, but we cannot take liberalism  to the extent of substituting the words which are not intended.  In another case reported as Bawa Singh Vs. MD India Health Care Services & Others  2015 (2) CLT, page 418 Hon’ble Punjab State Commission, it has been held that in case the complainant is basing his claim on the basis of policy taken by him, there is presumption that he must have gone through the terms and conditions of the policy.  Keeping in view the aforesaid submissions, ld.counsel for the Opposite Parties  has vehemently contended that the complaint may be dismissed as the Opposite Parties have rightly repudiated the claim of the complainant vide repudiation letter dated 28.1.2012 Ex.OP2.                  

8.       However, from the appreciation of the facts and circumstances of the case, it becomes evident that it is not disputed that Naresh Kumar had obtained LIC policy, copy whereof is Ex.OP16, which was valid uptil 6.4.2011 vide which he appointed  his mother Smt.Shakuntla Devi complainant as his nominee. It is also admitted fact that Naresh Kumar, life insured has since died. The complainant has filed the claim for the recovery of the insurance amount, but the Opposite Parties have repudiated her claim vide repudiation  letter, copy whereof is Ex.OP2, on the ground that insured has given false statement regarding his health on the revival of the insurance policy in question on 9.6.2009. Further on the second time revival of the policy again on 7.4.2010 the life assured Naresh Kumar gave false statement regarding his health as life assured,  deceased Naresh Kumar had met with an accident and had taken the treatments from Khushbir Kalra Hospital, Sultanwind Road, Amritsar. During both the times, the life assured was on medical leave from his job. In support of his contentions, the Opposite Parties  adduced on record the certificate of the Principal of the school which is Ex.OP4 to Ex.OP6 while record of the medical treatment of the life assured  is Ex.OP7 and certificate of the insured showing head injury is Ex.OP9. In order to prove his case, the Opposite Parties  have examined  only one witness namely Makhan Lal, Manager Legal of Insurance Company who tendered his affidavit Ex.OP1 in which he reiterated the pleadings in his affidavit and on the same day counsel for the Opposite Parties  has closed his evidence.

9.       Now in this case the Opposite Parties have examined only one witness i.e. the Manager of Insurance Company and the Opposite Parties did not examine any other witness who prepared the document Ex.OP4 to Ex.OP6 and Ex.OP7. Without examining any witness, these documents can not be said to have been proved as per law. In this case, the Opposite Parties  have failed to prove the medical history of the life assured  and he only alleged that the insured was suffering with typhoid and he has taken the treatment of the typhoid, but Opposite Parties  did not prove by producing any document regarding  the history of the insured’s ailment and the treatment thereof. They have produced the document issued by the Principal of the school where the insured was working in which it was alleged  that the insured was on leave for 15 days due to typhoid. Even the documents Ex.OP4 to Ex.OP6 are not proved as per law. Second document which is  Ex.OP7, the same was also not proved by any witness who prepared the same. Hon’ble State Commission, Punjab, Chandigarh in appeal No.317/2014 titled as Max Bupa Health Insurance Limited and others Vs. Anjana Goyal, decided on 19.1.2015 has held that production of the prescription slip was not sufficient for proving the pre-existing disease of the complainant. Opposite Parties  were required to examine the doctor who prepared that prescription slip for proving the medical history of the insured. In this case also, on the basis of these contents, the claim was allowed in favour of the complainant. Further in case LIC of India & Ors. Vs. Surekha Rameshrao Mankar 2012(2) CLT page 224 (NC) it has been held that while filing up an insurance proposal, it is not expected that the insured has also to state all incidents or viral infection from which he may have suffered since these are frequent, common place and curable. In another case decided by Hon’ble State Commission of Himachal Pradesh in First Appeal No.11/2010 titled as LIC of India Vs. Bheema Devi decided on 18.8.2011 (2012 (1) CLT 169, it has been held that taking leave for medical ground for the head injury and fracture of skull deceased died in vehicular accident. Even  the wrong answer given in the proposal form relating to the state of health of the deceased are not of material significance since the fracture of the skull which was not disclosed by the policy holder at the time of answering the questions, can not be termed as a disease, claim of the complainant allowed.  

10.     Not only that,  the Opposite Parties  have failed to produce any document regarding the second revival of the policy. The Opposite Parties  have vehemently alleged that the policy was revived on two occasions by the insured. The first revival of the said policy is stated to have been done vide document Ex.OP14 on 9.6.2009, but the Opposite Parties  have failed to produce any document relating to the second time revival of the insurance policy. NONE of the documents produced by the Opposite Parties show the second time revival of the policy and the statement of the insured deceased Naresh Kumar. Thus, the Opposite Parties  have failed to prove the fact relating to the second revival of the policy. As per the provisions of section 45 of the Insurance Act, the one ingredient of this section is that the fact which has to be stated by the insured at the time of taking the policy must be material one which is required to be disclosed at the time of taking the policy or before entering into the contract of the insurance. Hon’ble Punjab & Haryana High Court in is judgment: Life Insurance Corporation of India Vs. Permanent Lok Adalat, Punjab Law Reporter, Vol.CL-II 2008, has held that material fact which is sufficient for the repudiation of the contract insurer may only avoid the policy, if the insured knowingly misrepresent his state of health. If in his honest judgement, there was no illness or any change of health but only an ordinary disorder, the mere non communications of that event to the company can not be ground of the insurer to avoid the policy. Further in this case, the court held that material fact is not an ordinary disorder of health and does not include the disease which a doctor might have diagnosed. Further in case LIC and others Vs. Surekha, Remesh Rao Manker 2012(2) CLT (NC) 224 decided on 3.11.2011, it has been held that viral infections which have common, frequent and curable, the non disclosure of such disease did not amount to suppression of material acts, repudiation of the policy was not justified. In another case The Senior Divisional Manager, Life Insurance Corporation of India & Anr—Appellants Vs. Krishna Devi-Respondent in appeal No.A431 of 2001 decided on 28.2.200 of, Hon’ble State Commission of New Delhi, it has been held that  there are certain diseases such as hypertension, diabetes disease relating to kidney, heart which effected the life span of person and if any misstatement is made by the persons in respect of such type of disease seeking insurance, then it can not be believed that knowingly the persons taking out the insurance had made misstatements, but if anyone suffer from temporary illness such as fever, cough, cold etc. and the same is not mentioned at the time of taking insurance it can not be stated in true sense that misstatement in respect of the state of health has been made by the persons seeking insurance. 

11.     Even the disease i.e. typhoid alleged by the Opposite Party was  not chronic one and it was held by various judgements that such disease was of temporary nature and non- disclosure of the same to the insurance company at the time of taking policy does not amount to suppression of material facts and misstatement regarding the state of health of the insured, the claim can not be repudiated on the basis of such statement. As such, it becomes quite evident that the Opposite Parties  have repudiated the claim of the complainant without any reasonable cause which amount to deficiency in service on the part of the Opposite Parties.

12.     Consequently, the claim of the complainant for recovery of assured amount i.e. Rs.1,00,000/- on the basis of insurance policy in dispute succeeds and the same is allowed in favour of the complainant as nominee of Naresh Kumar now deceased. However, the complainant shall be under legal obligation to account for the awarded claim  to other first class legal heirs of Naresh Kumar, now deceased. The complainant is also entitled  to compensation to the tune of Rs.5,000/- while costs of litigation are assessed at Rs.2,000/-. Opposite Parties  are given one month’s time for complying with the order, failing which, awarded amount shall carry interest @ 6% p.a from the date of passing of order until full and final recovery. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum.

Announced in Open Forum

Dated: 16.06.2016.                                                                       (S.S.Panesar)                                                                                                                                                                                                            President

                                                (Anoop Sharma)     (Kulwant Kaur Bajwa)   

Member                         Member

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