Order dictated by:

Sh.S.S. Panesar, President.

1.       Sh. Rajbir Singh has brought the instant complaint under section 12 & 13  of the Consumer Protection Act, 1986 on the allegations that   complainant is the husband of the deceased Mrs.Sabina, who is the beneficiary of policy having No. 133408021 for sum assured Rs. 3,00,000/-.  The wife of the complainant expired on 18.7.2013 The complainant had taken the policy on 15.4.2011 from opposite party No.1. After the death of the wife of the complainant, the complainant lodged claim with opposite party No.1  for the death benefits  on the life of deceased wife of the complainant. But opposite party No.1 repudiated the genuine claim of the complainant vide letter dated 19.12.2014 on the ground of pre-existing disease suffered by the deceased . From the said letter, it transpired that the policy was revived on 5.6.2013. The complainant never got his policy lapsed nor got the same revived. The complainant approached the office of Ombudsman. But the petition of the complainant was rejected by the Ombudsman vide order dated 13.8.2015. Copy of the order is annexed.  The complainant has sought for the following reliefs vide instant complaint:-

(a)     Opposite party be directed to pay claim of Rs. 3,00,000/- alongwith interest @ 12% p.a. thereof from the date of payment till realization ;

(b)     Compensation to the tune of Rs. 1,00,000/- may also be awarded to the complainant alongwith adequate cost of litigation.

Hence, this complaint.

2.       Upon notice, opposite parties appeared and filed separate written versions.

3.       Opposite party No.1 in its written version has taken certain preliminary objections that the present complaint is not maintainable as Smt.Sabina deceased life assured had wilfully and fraudulently withheld the correct information regarding her health at the time of revival of the policy bearing No. 133408021 on 5.6.2013. It is proved on record that the DLA was admitted to Uppal Nursing Home, G.T. Road, Amritsar on 29.5.2012 and discharged on 1.6.2012. The medical record issued by P.G.I’s out patient card also shows DLA was a diagnosed case of Cancer Breast on 22.6.2013 vide CR No. 2013 0296 9305. Thus she was suffering from these diseases well before the revival of policy on 5.6.2013. She had not disclosed these material facts at the time of revival. Hence, the repudiation of the claim by the opposite party is legal, valid and in accordance with rules ; that complainant is estopped to file the present complaint as there is no deficiency in service on the part of the opposite party ; that complainant had approached the Zonal office Claims Review Committee, New Delhi against the repudiation of claim, but his representation was declined by the competent authority , as such the present complaint is not maintainable. The complainant had also approached the Insurance Ombudsman against repudiation of claim. But his representation was also dismissed by the Insurance Ombudsman Chandigarh vide order dated 13.8.2015 and the repudiation of claim was upheld ; that as per the conditions and privileges of the policy contract printed on the back of the policy bond, in para No.5 under the heading Forefeiture in Certain Events, which reads as under:-

“In case of the premiums shall not be duly paid or in case of any condition herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal, personal statement, declaration and connected documents of any material information is withheld then and in every such case but subject to the provisions of section 45 of the Insurance Act, 1938, wherever, applicable, this policy shall be void and all claims to any benefit in virtue here of shall cease and determine and all moneys that have been paid in consequence hereof shall belong the corporation, excepting always lawfully granted by the corporation.”

That the contract of insurance is based on principles of good faith i.e. Uberima  Fides and the life assured was supposed to disclose every material information to the LIC at the time of revival of the policy. But the DLA had knowingly not given correct information about her health as such she had played fraud upon the opposite party. Hence, the claim has been rightly repudiated. On merits it is submitted that the Smt. Sabina DLA had taken the policy bearing No. 133408021 with date of commencement of policy as 15.4.2011 for a sum assured of Rs. 3,00,000/- . It was admitted that the DLA had expired on 18.7.2013 as per information received from the complainant and policy had commenced from 15.4.2011.  It was admitted that the claim was repudiated on the grounds of suppression of pre-existing disease by DLA at the time of revival of policy on 5.6.2013. As per medical attendants certificate issued by Dr. Neeraj Jain, Sri  Guru Ram Das Rotary Cancer Hospital, Mehta Road, Sri Amritsar on 19.7.2013, Smt. Sabina had consulted the doctor on 1.3.2012 and  she was suffering from Lump Brest .  As per certificate of Hospital treatment issued by Sri Guru Ram Dass Rotary Cancer Hospital and died on 18.7.2013. She was a known case of ‘Carcinoma Breast’ . The DLA had also not disclosed that she was admitted in Uppal Nursing Home , G.T. Road, Amritsar on 29.5.2012 and discharged on 1.6.2012  for ailments of ‘breast cancer’. The out patient card issued by PGI Chandigarh on 22.6.2013 also shows DLA was a diagnosed case of CA (Cancer Breast) on 22.6.2013 CR No. 2013 0296 9305. Thus the DLA was suffering from these diseases well before the revival of policy on 5.6.2013 but she had not disclosed these material facts at the time of revival of her policy. The policy stood lapsed w.e.f. 4.2012 to 4.2013 and it was revived on 5.6.2013 by depositing premiums of 5 quarters of Rs. 4106/-. The DLA had paid a sum of Rs. 20,530/- alongwith interest . A renewal premium receipt was duly issued to the DLA which speaks volumes of the fact that the policy was revived on 5.6.2013 and further belies the contention of the complainant that the policy neither lapsed nor revived. Remaining facts narrated in the complaint have been denied and a prayer for dismissal of complaint was made.

4.       On the other hand opposite party No.2 in its written version has submitted that  the complaint as framed is not maintainable against the answering opposite party and is liable to be dismissed on this score alone. At the time of revival of the policy, the answering opposite party was not even the agent of opposite party No.1 as she had already left the agentship of LIC i.e. opposite party No.1; that complainant has got no locus standi or cause of action to file the present complaint against the opposite party, hence, the complaint is liable to be dismissed; that complainant is estopped by his own act and conduct to file the present complaint ; that complainant has not come to the Forum with clean hands and has suppressed the real facts from this Forum. On merits facts narrated in the complaint have been denied and a prayer for dismissal of complaint was made.

5.       In his bid to prove the case Sh.Deepinder Singh,Adv.counsel for the complainant tendered into evidence duly sworn affidavit of the complainant Ex.C-1 alongwith documents Ex.C-2 to Ex.C-5 and closed the evidence on behalf of the complainant.

6.       To rebut the aforesaid evidence Sh.M.S. Bhatia,Adv.counsel for opposite party No.1 tendered into evidence affidavit of Sh.Yogender Singh Sisodia, Manager Ex.OP1/1 alongwith documents Ex.OP1/2 to Ex.OP1/17, affidavit of Dr.M.S.Uppal Ex.OP18 alongwith patient treatment record , affidavit of Dr. Paramjit Singh Ex.OP19 alongwith patient treatment record, affidavit of Dr. Neeraj Jain,Associate Prof.Sri Guru Ram Dass Rotary Cancer Hospital, Mehta Road, Amritsar Ex.OP20 alongwith patient treatment record  and closed the evidence on behalf of opposite party No.1.

7.       On the other hand Sh.Chandan Puri,Adv.counsel for opposite party No.2 tendered into evidence affidavit of Smt.Geeta, opposite party No.2 Ex.OP2/1, letter dated 7.12.2015 Ex.OP2/A  and letter dated 23.12.2015 Ex.OP2/B and closed the evidence on behalf of opposite party No.2.

8.       We have heard the ld.counsel for the parties and have carefully gone through the record on the file as well as written synopsis of arguments submitted on behalf of all the parties.

9.       Ld.counsel for opposite party No.1 has vehemently contended that in this case Smt.Sabina deceased life assured  had taken the LIC policy bearing No. 133408021 with date of commencement as 15.4.2011 from the opposite party for a sum assured Rs. 3,00,000/-. Copy of the proposal form and policy bond account for Ex.OP2 and Ex.OP3 respectively. The DLA had expired on 18.7.2013  and the complainant had intimated LIC vide letter Ex.OP5 that  his wife has expired due to cancer on 18.7.2013. Hence, the claim may be given in his favour. The above policy lapsed due to non payment of 5 quarterly premiums w.e.f. 4/2012 to 4/2013 and it was revived  by the policy holder by paying 5 premiums of  Rs. 4106/- each i.e. Rs. 20,530/- plus Rs. 1294/- as late fee, total Rs. 21,824/- on 5.6.2013. The renewal premium receipt  is Ex.OP4 on record . It speaks volumes of the fact that the policy was got revived on 5.6.2013 by the DLA and she got receipt for the same which has come on record from the custody of the complainant . It further belies the contention of the complainant that  the policy neither got lapsed nor revived by DLA . As per law, the renewal of policy is a new contract and the policy holder is obliged to disclose every true aspect of his/her health and status at the time of revival of the policy. However, it has been proved on record that DLA was suffering from various diseases well before the revival of policy on 5.6.2013 but she had not disclosed these material facts at the time of revival of her policy which is suppression of material facts. The DLA died  within one month and 13 days of revival of policy.  The complainant had filed death claim after the death of his wife/DLA with opposite party and the claim was repudiated vide letter dated 19.12.2014 Ex.OP11. Claim was repudiated on the ground of suppression of pre-existing diseases by DLA and prior  treatment  from various hospitals taken by the DLA before revival of the policy on 5.6.2013. The DLA had not disclosed that she was admitted in Uppal Nursing Home, G.T. Road, Amritsar on 29.5.2012 and discharged on 1.6.2012 for ailments of ‘breast cancer’. Opposite party had examined Dr. M.S.Uppal, Uppal Nursing Home, as a witness who had submitted his duly sworn affidavit Ex.OP18 in which he had proved that Smt.Sabina was admitted in their hospital and diagnosed as ‘Cancer(R) breast CC7-3 cycles’. He had also proved the discharge card issued to the patient which was signed by him and further deposed that she had taken follow up treatment from this hospital uptil 10.9.2012. Copy of the discharge card Ex.OP7 containing the detail of treatment has been adduced on record. The opposite party had also examined Dr. Neeraj Jain  in this Forum as a summoned witness, who has filed his duly sworn affidavit Ex.OP20 in which it has been stated that as per record of the hospital primary  cause of death of Smt.Sabina was cancer and she was suffering from this disease for the last 1-1/4 years. The medical certificate signed by Dr. Neeraj Jain accounts for Ex.OP9 which has been issued on 19.7.2013. The medical attendants certificate issued by Dr.Neeraj Jain Sri Guru Ram Dass Rotary Cancer Hosptial , Mehta Road, Sri Amritsar on 19.7.2013 Ex.OP1/9 states that Smt.Sabina had consulted the doctor on 1.3.2012 and she was suffering from Lump Breast and primary cause of her death was cancer. Opposite party had also examined Dr. Paramjit Singh, Assistant Professor Department of Surgery Sri Guru Ram Das Charitable Hospital,Amritsar , who has filed his duly sworn affidavit Ex.OP19 alongwith attested copy of treatment record containing 36 pages . The witness had proved that Smt.Sabina was admitted in the hospital on 17.7.2013 and she was a known case of Carcinoma breast with brain skeletal and liver metastasis and she died on 18.7.2013 in the hospital. The out patient card issued by PGI Chandigarh on 22.6.2013  also shows that DLA was diagnosed  case of CA (cancer breast) on 22.6.2013, copy whereof is Ex.OP8. These witnesses were duly cross examined by the complainant  but nothing came against their testimony as regards the medical history of DLA is concerned. The certificate of hospital treatment issued by Dr. Paramjit Singh is Ex.OP10. The complainant had approached the Zonal Office Claims Review Committee, New Delhi vide Ex.OP12 against the repudiation of claim but his representation was declined by the competent authority after examining the facts of case and the repudiation has been upheld vide Ex.OP13 and Ex.OP14. The decision was duly conveyed to the complainant vide letter dated 9.3.2015 which is Ex.OP16. The complainant had also approached Insurance Ombudsman against the repudiation of the claim but his representation was also dismissed by the Insurance Ombudsman , Chandigarh vide order  dated 13.8.2015, copy whereof is Ex.OP17. The complainant had enclosed the copy of the order dated 13.8.2015 as Ex.C-3. As per the conditions and privileges of the policy contract printed on the back of the policy bond, in para 5 under the heading “forfeiture in certain events which reads as under:-

“In case of the premiums shall not be duly paid or in case of any condition herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal, personal statement, declaration and connected documents of any material information is withheld then and in every such case but subject to the provisions of section 45 of the Insurance Act, 1938, wherever, applicable, this policy shall be void and all claims to any benefit in virtue here of shall cease and determine and all moneys that have been paid in consequence hereof shall belong the corporation, excepting always lawfully granted by the corporation.”

10.     The contract of Insurance is based on the principles of good faith i.e. Uberima Fides and the life assured was supposed to disclose each material information to the LIC at the time of revival of the policy. But the DLA had knowingly not given correct information about her health, hence the claim has rightly been repudiated.

11.     On the other hand, ld.counsel for opposite party No.2 has vehemently contended that at the time of revival of the policy in question, opposite party No.2 was not even agent of opposite party No.1 as she has already left the agentship of the LIC i.e. opposite party No.1 on 1.11.2012. The opposite party has placed on record letter dated 7.12.2015 issued by opposite party No.1 on the file as Ex.OP2/A regarding the abovesaid fact. The complainant has  got no locus standi or cause of action to file the present complaint against opposite party No.2 and as such the complaint against opposite party No.2 is liable to be dismissed.

12.     But, however, from the appreciation of the facts and circumstances of the case, it becomes amply clear that the revival of the insurance policy in dispute on 5.6.2013 is not proved from the evidence on record. It is also worth mentioning the fact that the policy was never terminated at any stage. The only moot question requiring adjudication has been whether the policy was terminated or got revived on 5.6.2013 or not ? The factum of termination and revival of the policy in dispute has been vehemently denied by the complainant . The question of revival of the policy would  arise only when the same was terminated . There is no pleadings or any document or evidence as to  when the policy was terminated . No notice of termination of policy was ever  given to the policy holder. The next most important point for consideration which goes to the root of the case has been that the opposite party has alleged that the policy was revived on 5.6.2013 with good health reality . But, however, no revival document saw the light of the day in the Forum nor any good healthy reality document was adduced by the opposite party No.1 , so as to show malafides on the part of DLA. However, there is only bald statement regarding the revival of the policy on 5.6.2013 which does not have any sanctity under law in the absence of the documentary proof. Furthermore even the complainant moved an application dated 29.3.2016 specifically calling upon the production of alleged revival documents but the same were not placed on record. Rather the statement of Sh. Munish Bhatia, official of the opposite party  was suffered that no such revival document was traceable by the opposite party , which clearly goes to show that there was no revival of the policy  as claimed by opposite party No.1 rather the policy of the DLA was continuous without any break since its inception when opposite party No.1 accepted the premium for missing period alongwith interest without executing any documents, question of termination and revival of policy does not arise. It is admitted case of the opposite party that the policy commenced on 15.4.2011 as   in para 1 of the written version but it is nowhere  stated when the policy was terminated. Moreover, record of the medical treatment of the deceased was tendered  by the opposite party in their evidence  is of the subsequent period i.e. post commencement of policy on 15.4.2011 meaning thereby that at the time of taking of the policy the deceased was not suffering from any such disease. In such a situation, the stand of opposite party No.1 that the policy in dispute was Uberima Fides or that policy holder was guilty of suppressing the material facts at the time of getting the policy issued in her favour has absolutely nothing to do in this case. If at all the policy was actually revived on 5.6.2013, there was obligation on the part of opposite party No.1 to get the proposal form refilled from DLA. But, however, no such requirements were got complied by opposite party No.1 for the reasons best known to them. The stand taken by opposite party No.1 to the effect that the revival documents were not traceable also cannot be digested. In  such a situation the contention of opposite party No.1 that DLA had given sound health certificate at the time of issuing of the revival policy , also looses any significance. Opposite party cannot draw any benefit from their own omission & commission. In order to make out a case for repudiation, the opposite party was required to produce the requisite documents, which it has failed to adduce. It is settled principle of law that the Insurance companies are always interested in getting the premium collected from the customers but when the matter comes regarding the payment of Insurance claim , they invent lame excuses to avoid their liability. Reliance in this connection can be had on New India Assurance Company Limited Vs. Smt.Usha Yadav & Others 2008(3) RCR (Civil) Page 111 wherein it has been held that :-

“It seams that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. All conditions which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy.       

The Insurance Companies in such cases rely upon clauses of the agreement, which a person is generally made to sign on dotted lines at the time of obtaining policy. Insurance Company also directed to pay costs of Rs.5000/- for luxury litigation, being rich.

13.     From the aforesaid discussion, it emerges that the complainant has been able  to prove his case for claim of life insurance of his wife Smt.Sabina. The complainant is entitled to the grant of the insurance claim on the basis of insurance policy in dispute. Opposite party No.1 is also held deficient in service because the claim has been repudiated by it without any reasonable ground. As such, the instant complaint succeeds and opposite party No.1 is directed to pay the amount of Rs. 3,00,000/- to the complainant. The complainant is also granted compensation to the tune of Rs. 5000/- and litigation expenses to the tune of Rs. 2000/-. Compliance of this order be made within a period of 30 days from the date of receipt of copy of order ; failing which, the complainant shall be entitled to get the order executed through the indulgence of this Forum. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum. Copies of the order be furnished to the parties free of costs. File is ordered to be consigned to the record room.

Announced in Open Forum

Dated: 7.09.2016.