DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANSA. Complaint No.62/13.05.2008 Decided on : 19.09.2008 1.Chitwant Singh S/o Sh.Sikander Singh S/o Sh.Kalyan Singh, Resident of village Ramdittewala, Tehsil and District Mansa. 2. Ravneet Kaur D/o Sh.Sikander Singh S/o Sh.Kalyan Singh, Resident of village Ramdittewala, Tehsil and District Mansa. ..... Complainants. VERSUS 1.Life Insurance Corporation of India through its Branch Manager, Fatehabad (Haryana). 2.Life Insurance Corporation of India, Divisional Office, Jeevan Jyoti, Opposite Akashwani, Rohtak, (Haryana)through its Divisional Manager. 3.Life Insurance Corporation of India, Divisional Office, Karnal (Haryana) through its Divisional Manager. 4.Life Insurance Corporation of India, Jeevan Bharti, Connaught Circus, New Delhi through its Zonal Manager. ..... Opposite Parties. Complaint under Section 12 of the Consumer Protection Act, 1986. ..... Present: Sh.Rovin Kumar Goyal, counsel for the complainant. Sh.Sushil Kumar Bansal, counsel for the opposite parties. Before: Sh.Sarat Chander, Member. Smt.Neena Rani Gupta, Member. ORDER: Chitwant Singh and Ravneet Kaur (hereinafter called as the complainants) have filed the present complaint against the Life Insurance Corporation of India through its Branch Manager at Fatehabad, Divisional Managers at Rohtak and Karnal and Zonal Manager at New Delhi Contd........2 : 2 : (hereinafter called as Ops No.1,2,3 & 4, respectively) for issuance of a direction to the OPs to pay the insurance claim of Rs.50,000/- to them with interest @ 18% and Rs.10,000/- as compensation and Rs.5,000/- as litigation costs. Brief facts of the case are that Sikander Singh, father of the complainants had obtained a Policy bearing No.173633082 dated 2.8.2003 bearing proposal No.5045 dated 26.10.2003 from OP No.1 in the sum of Rs.50,000/-. The annual premium was Rs.6881/- and maturity date was 2.8.2018. Smt.Amarjit Kaur w/o Sikander Singh and mother of the complainants was the nominee of this policy and during his life time he had been paying the insurance premiums regularly. Unfortunately Amarjit Kaur (nominee) died on 3.11.2003 and Sikander Singh died on 2.8.2004. As such, the complainants are the legal heirs of Sikander Singh. Being the legal heirs the complainants approached the Ops for claiming the insurance claim but instead of making good the payment of insurance claim the OPs had repudiated the claim of the complainant vide their letter dated 8.2.2008 which is alleged as illegal and wrong. Due to the repudiation of the claim of the complainant, the complainants alleges to have suffered mental, as well as physical harassment. Hence this complaint. In the written version filed by the Ops certain legal objections have been taken. It was admitted that the claim of the complainants was rightly repudiated on the basis of non-compliance of principles of uberrimae fibes (utmost good faith) . It rather reiterated its stand and contended that after going through the facts on claim file it was revealed that Sikander Singh was under treatment of PGI, Chandigarh and he was admitted on 29.6.2004 vide CR No.348946 and diagnosed as a case of chronic liver disease i.e. Cirrhoses c PHIN (alcohol/HW related decompensate c Jaundice c Ascites). As such he was a chronic alcohol consumer for the last 30 years. The history of illness shows that the Contd........3 : 3 : disease was prior to the date of proposal papers i.e. 26.10.2003 and first premium receipt was of dated 31.10.2003. It is yet to be ascertained whether there are other legal heirs of Sikander Singh. Obtaining of succession certificate is also important which has not been done by the complainants. All other allegations were denied and a prayer for dismissal of the complaint was accordingly made. Both the parties have led their respective evidence in the shape of affidavits and documents. We have considered the arguments advanced by the learned counsel for the parties and carefully scrutinized the entire evidence placed on record by them. The counsel for the OPs has placed on record the repudiation letter dated 8.2.2008 copy of which is Ex.C-3 and had vehemently argued that the insured had failed to disclose about the fact that he was a chronic alcohol consumer for the last 30 years in the Proposal Form /Personal Statement. Due to his deliberate incorrect statement and withholding of correct information from the Ops regarding his health, the repudiation has been rightly done by them. In support of this, the Ops have placed reliance upon various case laws cited in 2004(3) CLT 640; 2004(3) CLT 588, 2007(3) CLT 535, 1994(1) CLT 445, 2004(2) CLT 264, 2004(1) 669, 2005(1)CLT 116, 2005(1)CLT 123, 2003(1) CLT 75 and 2003(2) CLT 199. To further support his stand, Ops have placed reliance on Ex.OP-3 leave application of Sikander Singh w.e.f. 22.6.04 to 31.7.04 and report of PGI Ex.OP-4. A careful perusal of these two documents shows that the insurance policy has been issued to Sikander Singh on 14.10.2003 (Ex.OP-2) and the leave application is w.e.f. 22.6.2004. Sikander Singh was admitted in PGI on 25.7.2004. It was only after eight months after the obtaining of the policy by Sikander Singh that he fell ill and admitted to the PGI. The Ops have produced only a single leave application of Sikander Singh (Ex.OP-3). The case of the Ops cannot be decided on a Contd........3 : 4 : single leave application alone. It is a case where the illness was not within the knowledge of the insured. The answers to the questions put to the insured at the time of proposal of insurance (according to the OPs 26.10.2003) were in negative. But in our view the Ops itself were bound to get Sikander Singh medically examined throughly from their own doctors before selling the insurance policy. The medical report, if any, has not even shown the light of the day by the Ops. In the absence of any previous leave record, medical report of the doctors on the panel of OPs or prescription slips by any other doctors prior to the proposal of insurance of the insured, it cannot be held that Sikander Singh had suppressed the material facts while taking insurance policy from the Ops. The above referred citations, as such, does not help the Ops in any manner. Other argument pressed into service by the OPs was that Sikander Singh was a chronic alcohol consumer for the last 30 years. No sufficient evidence to this effect has been placed on record by the Ops. In New India Assurance Co.Ltd vs Smt.Usha Yadav 2008(3)RCR Civil 111 (P&H), it has been held that no claim would lie in case of death by use of intoxication drugs/alcohol. Repudiation of claim by insurance company is illegal as use of alcohol was not the only cause which led to the disease. Otherwise also alcohol is beneficial for health if taken in limited quantity. On the other hand to rebut the contentions of the Ops, the complainant has placed reliance on Ex. C-2 copy of the insurance policy obtained by Sikander Singh father of the complainants from the Ops and Amarjeet Kaur(his wife) is shown as nominee in this policy. Letter of repudiation in regard to this policy is dated 8.2.2008. The complainant has further placed reliance upon Ex.C-8 , the status report of another policy No.162184324 in respect of Sikander Singh, the insurance claim amounting Rs.113100/- of which had been duly paid on 28.12.2007. The date of commencement of this policy was 28.01.2002. It can be well judged from this document that the insurance claim has been paid after the Contd........5 : 5 : death of Sikander Singh (i.e on 2.8.04) and his nominee Amarjeet Kaur (i.e on 3.11.03) to his legal heirs. The complainant has further invited our attention towards the Medical Examiner's confidential report in respect of Sikander Singh conducted by Dr.Rakesh Kr.Raina on 26.10.2003 (though not exhibited) and no adverse remarks about his health finds mention by the said doctor in this report. No question was ever put to the insured at the time of selling policy in regard to chronic liver disease i.e. Cirrhoses c PHIN (alcohol/HW related decompensate c Jaundice c Ascites), as alleged by the Ops in its reply. Accordingly, even if the insured was suffering from disease as referred above, he cannot be accused of suppressing any material facts in any deceitful way. In this regard we get support from Birla Sun life Insurance C. vs Keshav lal & others, 2008(3)RCR Civil 637. In the present case the Ops have retained the insurance amount for a sufficient period of four years. A person obtained insurance policy by misrepresenting material facts-Insurance Company could repudiate the policy within 2 years and not after that. In this view of the matter we are fortified by the observations of the Hon'ble Supreme Court of India in case of P.C.Chaeko and another vs LIC, 2008(1) RCR Civil 127. It is the Ops own case that the claim had been repudiated by them on 8.2.2008 vide letter ex.C-3. The Ops are also contesting their stand on the point whether there are other legal heirs of Sikander Singh and for succession certificate from the complainants. It is well settled law that nominee alone is not entitled to claim the amount payable under the LIC. Nomination only indicates the hand which is authorized to receive the amount. Amount can be claimed by heirs of policy holder. We get support in this regard from Punjab & Haryana High Court in case Tej Kaur vs Smt.Sarbjit Kaur, 2007(3) RCR Civil 333. Similarly it has been held in the Hand book of Insurance Laws Section 39, page 218 sub section (5) as under: Contd........6 : 6 : Nomination by policy holder: Where the policy matures for payment during the lifetime of a person whose life is insured or where the nominee or if there are more nominees than one, all the nominees dies before the policy matures for payment, the amount secured by the policy shall be payable to the policy holder or his heirs or legal representatives or the holder of a succession certificate as the case may be. Complainants case is fully covered under this Section. The Ops have further failed to act according to the Insurance Act, 1938. Special Provisions of Law Section 45 under the title Policy not to be called in question on ground of misstatement after two years envisages that No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which the policy was effected be called by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, was inaccurate or false.... The Ops are bound to act in accordance to this Section also. It being so, OPs cannot escape their liability to pay the insurance amount concerning the death claim of Sikander Singh to the complainants on this count. Claim amount has to be paid by Ops which has not been paid. Hence deficiency in service on their part is proved. The inaction of the OP Company had thus compelled the complainants to knock at the doors of this Forum for the redressal of their grievance. In view of the above authoritative pronouncements and facts and circumstances of the case, the complaint is allowed with a direction to the opposite parties to pay the insurance claim amount of Rs.50,000/- to the complainants. The OPs are also burdened with Rs.25,000/- as Contd........7 : 7 : compensation on account of suffering harassment, mental agony at the hands of the opposite parties and keeping the amount for unfounded reasons for a sufficient period of four years by the Ops and depriving the complainants from their hard earned money along with Rs.2,000/- as litigation costs. Compliance of the order be made within two months from the date of receipt of the copy of the order. Copy of the order be supplied to the parties free of charges under the rules and file be arranged, indexed and consigned to record. Pronounced: 19.09.2008 Neena Rani Gupta, Sarat Chander, Member. Member.
