Haryana

Ambala

CC/321/2011

Smt Meena Rani - Complainant(s)

Versus

LIC - Opp.Party(s)

K.C.Jain

26 Nov 2015

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMBALA.

Complaint Case No.321 of 2011

Date of Institution:   03.10.2011

Date of Decision  :   26.11.2015

Smt. Meena Rani W/o Late Sh. Parminder Kumar S/o Sh. Shankar Ram R/o VPO Tharwa, Tehsil & District Ambala.

                                                                                                                                                                               ……Complainant.

 

                                                                                                                Versus

1.         Life Insurance Corporation of India through its Branch Manager, Branch Office near Head Post Office, Ambala City.

2.         Senior Divisional Manager, LIC  of India, Divisional Office, Model Town, Karnal.

…..Opposite Parties.

Complaint Under Section 12 of the Consumer Protection Act

CORAM:        SH. A.K. SARDANA, PRESIDENT.

                        SH. PUSHPENDER KUMAR, MEMBER.

Present:          Sh. K.C. Jain, Adv. counsel for complainant.

                        Sh. Dev Batra, Adv. counsel for Ops.

 

ORDER:

                        The present complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter in short called as the ‘Act’) has been filed by the complainant alleging therein that her husband Parminder Kumar S/o Shankar Ram got insured himself for Rs.1.00 lacs under policy No.175776662 from OP No.1 w.e.f. 28.12.2007 whose premium was Rs.10,000/- on yearly basis and thus the second yearly premium which fell due on 28.12.2008 was paid on 11.12.2008 and the complainant is nominee in the said policy.  It has been contended by the complainant that during the subsistence  of the said policy, life assured died during the night of 17^th & 18^th April 2009 due to accidently fall from the stairs of his house and before any medical aid is to be provided to him, he succumbed to the head injuries.   Being nominee of the life assured in the said policy,  complainant submitted claim under policy alongwith all requisite documents  which has been repudiated by OP No.2 vide letter dated 14.07.2010  on the ground that “Before he proposed for the above policy, he had suffered from T.B., for which he had consulted a medical man and had taken treatment from him in a hospital”, whereas   in fact the assured never suffered from T.B. and never took any treatment as alleged by OP. It has been further contended by the complainant that OP No.2 has paid the Bid Value of Rs.17,925/- of the units allotted to the assured under the policy vide cheque No.238680 and  the complainant aggrieved from the abovesaid impugned decision of the Ops, got served a legal notice dated 22.10.2010 upon the OP No.2 but the Ops had neither replied the said legal notice nor released the death claim payment under the said policy to the complainant meaning thereby that the OP has nothing to say in the matter to support its allegations and by not releasing the death claim payment under the policy to complainant, the OP had committed gross negligence in discharge of its liability which clearly amounts to unfair trade practice as well as gross deficiency in service on his part. Hence, the present complaint has been preferred by the complainant seeking relief as per prayer clause.

2.                     Upon notice, Ops appeared through counsel and filed written statement raising preliminary objections qua complaint is barred by limitation & there is concealment of facts by life assured while purchasing policy.  On merits, it has been urged that Sh. Parminder Kumar, life assured died on 18.04.2009 on account of blood vomiting as per intimation letter, affidavit given by Smt. Meena Rani and even confirmed by the Sarpanch of  the village too. So, now the complainant cannot be allowed to twist the facts to obtain the claim in question. Hence, the claim has rightly been repudiated by them. It has been further submitted that the investigation was conducted and medical records were collected and it was found that the DLA was suffering from TB which firstly reported on 27.05.2006 and DLA took treatment w.e.f. 03.06.2006  as per F-3784 & 3816 of Medical Officer, TB Hospital, Ambala which shows that the life assured was not in good health  before taking insurance policy and the same was not disclosed by the Life assured in his proposal form dated 28.12.2007 while taking his policy. Thus, the answering OP has prayed that the complaint may be dismissed with costs.

3.                     In evidence, the counsel for complainant tendered affidavits of complainant as Annexure CX, of Sh.Wadhawa Ram as Annexure CW/A and of Sh.Surender Singh as Annexure CW/B alongwith documents as Annexures C-1 to C-8 and closed the evidence whereas on the other hand, counsel for Ops has tendered affidavit of Sh.P.K. Saxena, Manager (Legal) as Annexure RA alongwith documents as Annexures R-1 to R-18 and closed the evidence on behalf of Ops.   

5.                     We have heard the learned counsel of parties and gone through the record very carefully.  Learned counsel for complainant argued that the claim of the complainant regarding death of her husband Parminder Kumar who was insured with OP Life Insurance Company has wrongly and illegally been rejected by the OP on the ground that the deceased (life assured) was suffering from ailment of T.B. The counsel for complainant has denied the factum of disease of Tuberculosis and has placed reliance on case law rendered by Hon’ble National Consumer Disputes Redressal Commission in Revision Petition No.2370 of 2012 titled as Abdul Lateef & others Vs. The Life Insurance Corporation of India & others decided on 04.07.2014 reported in 2014(3) CLT Page 386 wherein it is held that “Insurance claim- Material facts-Fraudulently suppression-Death of insured due to Cancer-Repudiation of Claim on the ground that  insured suppressed the previous illness i.e. bipolar mood disorder-Held- There is no nexus at all between the illness suppressed  and cause of death i.e. Cancer-insured did not suppress any material fact with any fraudulent intention-Revision Petition allowed. The counsel for the complainant also placed reliance on another  case law reported in 2012(1) CLT Pg. 185 titled as Life Insurance Corporation of India & Another Vs. Ashok Manocha decided by Hon’ble National Commission, New Delhi in Revision Petition No.10 & 11 of 2007. Counsel for complainant further placed reliance on another case law rendered by Hon’ble Andhra Pradesh State Commission reported in 2014(4) CLT Pg. 115 wherein General Observations have been rendered by the Hon’ble Bench that “we have been observing  that in a number of cases, the insurance companies are issuing policies basing on the statements made by the proposer  in utmost good faith but when it comes to settlement of claims, they start examining the matter under the microscope.  In a majority of policies issued by the insurance companies they were routed through their agents. The agents in their anxiety to get their commission and the insurance company in order to do more and more business see that  the policies are  issued the moment they received the premium amount. Even the insurance companies are not aware as to who is the proposer, what is his /her status or health condition etc.. Here, the intention is very clear that first they induce the people to purchase the policies and later they start litigation.  Even in the instant case also, the proposal was made through agent.  On Ex.B1 we find the rubber stamps of the agent and specified person code and license Nos. on the first and last pages of the proposal.  A  close scrutiny of the proposal form would reveal  even the columns were filled up by the agent and simply obtained the signatures of proposer on ‘x’marks. It is manifest that the proposal was routed through the agent of the LIC.  If we may say so, the agents are playing fraud on LIC as well as gullible consumers with false assurances.  When the policy was issued by the insurance company with utmost good faith, the same yardstick has to be applied while settling  the claims also.  The LIC ought to have made thorough enquiry, investigation or necessary medical health check—ups before issuance of policy irrespective of the amount involved.  Without doing so, when they have issued the policy, now they cannot turn round and contend that they need not pay any amount as there was suppression of material information with regard to his health”.  Besides it, counsel for complainant also placed reliance on plethora of judgments to strengthen his case which are detailed below:-

            (i)        2001(1)CLT Pg 162 (SC) LIC & Others Vs. Asha Goel & others.

(ii)       2001(2) CPC Pg.52 (State Commission Punjab) LIC Vs. Mrs. Neelam Sharma.

(iii)     2000(1) CPC Pg. 543 (State Commission Chandigarh) LIC Vs. Mrs. Asha Rani Khanna.

 

and prayed for acceptance of the complaint.

                        On the other hand, the counsel for Ops has argued that at the time of filling of proposal form by deceased Parminder Kumar (life assured), he did not disclose true facts about his disease of T.B. intentionally and made a false answer to the questions mentioned in the proposal form.  Had  he disclosed, the said disease in the proposal form, the OP insurance company would not have issued the policy in question to the life assured. As such, he has played fraud upon the answering OP.  Thus under the terms and conditions of the OP-company, if any information given by the assured person in the proposal form is found false or incorrect, in that event, the contract  become void ab-initio and nothing is payable to the insured person and the amount deposited by him/her shall be forfeited.  Hence, OP have rightly repudiated the claim of the complainant. The counsel for the Ops has placed reliance on case law rendered by Hon’ble Supreme Court of India in Civil Appeal No.2776 of 2002 titled as Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. decided on 10.07.2009 reported in 2009(4) RCR (Civil) Page 692  wherein it has been held that “Insurance Act, 1938, Section 45-Consumer Protection Act, 1986 Sections 2(1)(o)(g) and (c)(xiii)-Insurance Regulating and Development Authority (Protection of Policy holders interests) Regulations, 2002 Regulation 2(1(d)-Repudiations of medical insurance claim-Material Fact-Suppression of  -“Material fact” means  any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether to accept the risk or not-If the proposer has knowledge of such fact, he is obliged to disclose the same-Failure to do so entitled the insurer to repudiate his  liability under the policy”. The counsel for the Ops also placed reliance on another case law rendered by Hon’ble National Consumer Disputes Redressal Commission, Circuit Bench, Hyderabad in First Appeal No.401/2003 titled as Goparatnam and others Vs. LIC of India & others decided on 27.01.2005 and reported in 2005(2) CLT Page 174 wherein it has been held that “Insurance contract-Held that contract of life insurance is a contract of good faith-Violation of it by any of the party ousts its claim against the other-Appellant having suppressed the information of his past ailment both at the time of revival of the two policies not entitled to any relief”.  Besides it, counsel for Ops also placed reliance on various judgments detailed below:-

1. 2008(1) SCC Pg. 321  P.C. Chacko and another Vs. Chairman, LIC.
2. 2008 (2) CLT Pg. 192 LIC Vs. Piari Devi (Punjab State Commission).
3. LIC Vs. Krishna Devi (NC) decided on 04.09.2013.
4. 2011(IV) CPJ-6 (SC) P.Naidu Vs LIC.
5.  K. Malleswari & Ors Vs.LIC (NC) decided on 03.03.2014.
6. LIC Vs. Shahida Khatoon & Anr. (NC) decided on 10.09.2013.
7. Smt. A. Sujata Vs. LIC (NC) decided on 04.03.2014.
8. LIC Vs. Saroj Devi Devi decided on 05.07.2012 (State Commission Punjab).

 

9. Jaikishan Vs. LIC & Ors (NC) decided on 12.08.2015
10. Kalyan Singh Chouhan Vs. C.P. Joshi (SC) decided on 24.01.2011 and prayed for dismissal of complaint with costs.  

 6.                    At the very outset, it is admitted case of both the parties that Parminder Kumar (deceased) got her life assured with the Ops. Perusal of the proposal form Annexure R-1 reveals that it has been filled up by Sh. Mukesh Kumar, LIC Agent of OP insurance company and he simply obtained the signatures of proposer Late Sh. Parminder Kumar on the form  meaning thereby that the proposal was routed through the agent of LIC. The main objection of the OP insurance company is that the life assured was suffering from disease of T.B. prior to issuing of the policy to him.  Regarding the alleged illness of the life assured, the Ops have relied upon documents Annexure R-6 to  R-15 which  are alleged  to be treatment record, OPD slips and certificates to be issued by  Medical Officers of T.B. Hospital, Ambala as well as writing made by one Sh. Jai Singh of village Tharwa, District Ambala respectively  but from the said documents, it is nowhere proved that the complainant had died due to T.B. rather it can be taken as that the patient might have died due to accidental death as averred in the complaint.  Further, no any affidavit of concerned doctors to prove the contents of treatment record etc. including form No.3784 (Annexure R-14), Form No.3816 (Annexure R-15) who treated the patient or issued the alleged certificates of disease of Tuberculosis has been produced in the case wherefrom it may be concluded that  the deceased was suffering from alleged disease of T.B. prior to purchasing the policy in question from Ops. Besides it, no any affidavit of Jai Singh R/o village Tharwa qua submitting of writing (Annexure R-13) and affidavit of village Sarpanch qua his signatures on document (Annexure R-6) has been placed on file by Ops to substantiate their version.  Further, the citations referred above submitted by the counsel for complainant are conforming to the facts and circumstances of the present case whereas  the citations submitted by counsel for the Ops are not applicable to the facts and circumstances of the present case and thus are not helpful in deciding the case in hand.

7.                     So, from the facts narrated above, we are of the confirmed view that OP- Life insurance company has failed to establish that the cause of death of life assured was  alleged ailment of  T.B. nor could prove any nexus between the alleged ailment & cause of death and thus the OP insurance company has wrongly repudiated the claim of  the complainant for which she was legally entitled.  Now next  question arises for consideration before the Forum is that after the death of Parminder Kumar, whether complainant  alone is entitled to succeed the claim amount from OP Insurance Company.  From the perusal of document Annexure R-2 i.e. insurance policy No.175776662 issued by the Ops, complainant Smt. Mena Rani  wife of deceased Parminder Kumar has been specifically mentioned as nominee of the Life Assured.  So, the complainant  alone is entitled  for the amount of policy being nominee.  Accordingly, the complaint is allowed and the Ops are directed to comply with the following directions within thirty days from the communication of this order:-

(i)        To pay a sum of Rs.1,00,000/- to the complainant alongwith interest @ 9% per annum from the date of repudiation of claim i.e. 14.07.2010 to till its actual realization.

 

(ii)       Also to pay a sum of Rs.10,000/- in lump-sum on account of causing mental harassment as well as costs of litigation etc. incurred by the complainant.

                        Further the award in question/directions issued above must be complied with by the OPs within the stipulated period failing which all the awarded amounts  shall further attract simple interest @ 12% per annum for the period of default.  Copies of this order be sent to the parties concerned, free of costs.  File be consigned to the record room after due compliance. 

 

Announced:26.11.2015                                                                        Sd/-

                                                                                                (A.K. SARDANA)

                                                                                                          PRESIDENT

                                                                                                                

                                                                                                          Sd/-

                                                                                   (PUSHPENDER KUMAR)                                                                                                                                                                                                MEMBER