BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.317 of 2013

Date of Instt. 26.7.2013

Date of Decision :27.11.2014

Parvinder Singh son of Jaspal Singh R/o 293, Gupta Colony, Jalandhar City-144001.

..........Complainant

Versus

1. Life Insurance Corporation of India, Divisional Office, Jeevan Parkash, Model Town Road, Jalandhar- 144001, through its Senior Divisional Manager.

2. Life Insurance Corporation of India, Branch Office, Industrial Area Branch, Jeevan Raksha Building, PUDA Complex, Opposite District Administrative Complex, Jalandhar through its Branch Manager.

3. Manager(Claims), Life Insurance Corporation of India, Divisional Office, Jeevan Parkash, Model Town Road, Jalandhar- 144001.

4. Manager (NB/Actt), Life Insurance Corporation of India, Divisional Office, Jeevan Parkash, Model Town Road, Jalandhar- 144001.

5. Manager (CRM)/ Central Public Information Officer, Jalandhar Division, Life Insurance Corporation of India, Divisional Office, Jeevan Parkash, Model Town Road, Jalandhar- 144001.

.........Opposite parties

Complaint Under Section 12 of the Consumer Protection Act.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Present: Sh.KC Malhotra Adv., counsel for complainant.

Sh.SC Sood Adv., counsel for opposite parties.

Order

J.S. Bhatia (President)

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act 1986 against the opposite parties on the averments that the complainant is unfortunate son of Harbhajan Kaur(since deceased) wife of late Jaspal Singh, who whilst alive had taken life insurance policy on her life for sum assured Rs.7 Lacs through authorized agent of opposite parties. The policy number allotted was 132774893. The plan of policy of life insurance was "Jeewan Anand" (With Profit) with accident benefit risk coverage under table No.149 for term 16 years. The risk under the policy commenced from 28.3.2009 with mode of payment of premium yearly with installment of Rs.63,850/-. The yearly installment of premium was paid regularly without any default on due date. The signature of the life assured on printed proposal form No.300 dated 25.3.2009 was taken in routine and mechanically on dotted lines. The life assured had perfect health and the insurability with no trace of physical impairment and disease/ill health at the time of proposing for life insurance. The proposal for life insurance for own life dated 25.3.2009 was under medical scheme. The life assured underwent thorough, complete, comprehensive and careful medical check up by panel doctor(medical examiner) Dr.Mrs.Ratna Kalsi Khullar of chose of opposite party No.2 at the time of submission of proposal for life insurance and additional special medical test reports relating to health profile were also obtained. The life assured had good and perfect health, insurability as standard life with no trace of any physical impairment and disease/illness after clinical and physical check up and special test reports were duly certified by the panel doctor in prescribed medical examination in form No.300 in answer to the specific query/question. The panel medical examiner further categorical certified that the panel medical examiner did not notice/observe any adverse feature of past history and habit or existence of any other complaint/complication and that the panel doctor had examined the life assured personally in private and recorded true findings in her own hand on the eve of proposing for life insurance. Opposite party No.2 after scrutiny and verifying particulars of proposal form, medical examination and special additional medical reports on requisite prescribed forms also obtained agent's confidential report/moral hazard report from securing agent and development officer and fully satisfying as to health and habits, physical condition and insurability of the life assured referred the proposal with proposal review slip dated 8.4.2009 duly completed, alongwith special reports to opposite party No.4 for acceptance of risk. Opposite party No.4 obtained written medical opinion from its panel DMR(Divisional Manager Referee) on prescribed rating sheet for purpose of assessing risk of life insurance and under writing and thereafter recorded its decision on proposal review slip as accepted 149-44 for 7 Lakhs S/T consent of LA W/o AB confirmation of SA. The risk of life insurance was accepted without raising any kind of objection as to the details given in proposal and personal statement and in all these reports collected premium at the tabular rate of premium as standard life and accepted risk of life insurance without any demur. However, written consent was never ever taken as directed by opposite party No.4. All these reports with opposite party No.2 would reveal that there was no adverse feature found after due medical examination of the life assured by the panel medical examiner of opposite parties and special test reports and the life assured could not be found fault with for non-disclosure after acceptance of risk later on. All these forms are with opposite parties after policy resulted in death claim are kept safely with opposite party No.3. In column No.9 of proposal form dated 25.3.2009 the complete details of previous six policies were mentioned. The life assured was not stranger to opposite parties. To misfortune and ill luck of the complainant, the life assured died on 8.9.2010. The cause of death was kidney failure which had no nexus. She was totally unaware when diagnosed kidney disorder first time on 22.8.2010. She had no prior medical treatment at any time before submitting the proposal form for the above policy. The death was natural. Subsequent to death of the life assured the complainant made a claim based on insurance policy for paying claim amount of sum assured with bonus accrued thereon and other benefits flowing from the policy with opposite party No.1 through its policy servicing branch opposite party No.2. Claim so made covered by the policy has been repudiated and conveyed vide letter claims/death/Rpdt/13X/35 dated 28.4.2012 by registered post by opposite party No1. The claim has been repudiated after expiry of period of two years from the date the policy was effected. Obviously the provisions of second part of section 45 of Insurance Act, 1938 are attracted. There was no fraud or deliberate misrepresentation by the life assured. The onus probendi to establish these circumstances and three conditions is heavily on opposite parties and policy can not be avoided on ground of deliberate mis-statement. Opposite parties baselessly assumed that the life assured was a patient of renal disease and suffering from Type 2 DM and Nephropathy and had not, however, disclosed these facts in the proposal form and instead had made deliberate incorrect statement and withheld information regarding health at the time of effecting the assurance. The life assured was neither suffering from alleged diseases as attributed nor knew at the time of the proposal from filled up by authorized agent of opposite parties who obtained signatures on dotted lines. Opposite parties No.1 & 2 have not adhered to and followed mandate of IRDA(Protection of Policy Holder's Interests) Regulations 2002, which obligate upon opposite party to furnish to the insured free of charge, within 30 days of the acceptance of proposal, a copy of proposal form as well as while acting under Regulations 6(1) in forwarding policy inform the insured provision of cooling period of 15 days for exercising option to return the policy for cancellation and refund of premium paid. These regulations have been violated in as much as neither copy of proposal form free of charge was furnished nor written intimation of cooling of provision was given to opposite party No.2. Repudiation of liability of death claim was germane to the facts prior to the date of proposal form, the life assured had no such health problem nor had taken any treatment nor she was aware of the purposed illness. The averments regarding pre-existing disease had no link and unrelated to cause of death. On such like averments, the complainant has prayed for directing the opposite parties to pay Rs.7 Lacs to the complainant/nominee being the sum assured with vested bonus alongwith interest. He has also claimed compensation and litigation expenses.

2. Upon notice, opposite parties appeared and filed joint written reply pleading that Harbhajan Kaur life assured, while taking the policy has concealed the material facts of her ailment and as such, there was no valid contract between Harbhajan Kaur and the opposite party. Harbhajan Kaur life assured was a patient of renal disease and Gall Bladder stones as per test report dated 14.1.2009 under CR No.110713 of Kidney Hospital and lifeline Medical Institution, Cool Road, Jalandhar and she was suffering from Type-2 DM, Nephropathy (Kidney related disease) as per card dated 29.1.2009 of Modern Hospital, Model Town, Jalandhar, test report of Shri Guru Harkrishan Sahib(C), Eye Hospital Trust Registered Subaha, Sector 77 Mohali, Punjab dated 29.3.2009 showed blood urea 99(normal 15-45) and HBAIC test showed 10.2%(poor blood glucose control is more than 8%) before taking policy. The life assured did not disclose this fact while taking the policy and gave false answers. And as such, the claim has been rightly repudiated. Routine medical examination and tests were conducted on the basis of information disclosed by the LA to the medical examiner. The LA did not disclose her ailment/disease type-II DM and Nephropathly(Kidney related disease) for which she was already taking treatment. Believing upon the information given by the proposer life assured no further pathological tests were conducted and as such, the complainant has no right to file present complaint. In case the deceased had disclosed the ailment to the opposite party, opposite party would have not insured the deceased. After the death, the opposite party has got the information from the Kidney Hospital and Life Line Medical Institution, Cool Road, Jalandhar and also from Modern Hospital, Model Town, Jalandhar and test report of Shri Guru Harkrishan Sahib(C), Eye Hospital Trust(Regd.) Suhana, Sector 77, Mohali. It was found that the deceased was under treatment prior to the date of taking policy, as such, the complainant can not take any benefit due to the fact that some tests were conducted by the opposite party. It is incorrect that the life assured had good and perfect health. She has suppressed her disease at the time of taking the policy. The opposite party is within his rights to reject the claim and the rejection is correct and the section 45 of the Insurance Act has not been correctly stated by the complainant. It has already been brought to the notice of the complainant that there was deliberate misrepresentation and concealment of the material facts i.e ailment by the life assured at the time of taking the policy. They denied other material averments of the complaint.

3. In support of his complaint, learned counsel for complainant has tendered affidavits Ex.CA to Ex.CD alongwith copies of documents Ex.C1 to C9 and closed evidence.

4. On the other hand, learned counsel for opposite parties has tendered affidavits Ex.OPW1/A & Ex.OPW2/A alongwith copies of documents Ex.O1 to O12 and closed evidence.

5. We have carefully gone through the record and also heard learned counsel for the parties.

6. Counsel for complainant contended that deceased life assured was an insurance minded person and she had taken six policies previously as mentioned in coloumn of the proposal forum dated 25.3.1999 Ex.O4. He further contended that claim of the complainant has been repudiated vide letter Ex.C-1 after expiry of period of three years from the date of effecting policy subject matter of the complaint and provisions of section 45 of the Insurance Act are attracted. He further contended that insurer can call into question a policy of life insurance more than three years after it has been effected only on three conditions:-

i) the statement must be on a material matter or must suppress facts which it was material to disclose.

ii) the suppression must be fraudulently made by the policy holder, and

iii) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose

7. He further contended that the onus is on the insurer to prove these facts. He further contended that proposal form was filled by the agent and it was not sent free of charge, so as to deprive the deceased life assured to avail free look provision period to point discrepancies in the proposal form filled by the agent. In support of above contentions, the learned counsel for the complainant has relied upon Miithonial Nayak Vs Life Insurance Corporation of India AIR 1962 Supreme Court 814, Daulat Ram Vs. Bharat Insurance Company and another AIR 1973 Delhi 180, Life Insurance Corporation of India Vs. Gurmail Kaur, RSA No.4497 of 1999, decided on 18.11.1999 by State Commissioner, Chandigarh, Athayee(died) and another Vs. Life Insurance Corporation of India AIR 2003 Madras 382, Life Insurance Corporation of India, Machilipatnam Vs. Vankadaru Koteswaramma AIR 2003 Andhra Pradesh 153, Branch Manager, Life Insurance Corporation of India Vs Gayathri, Karnataka High Court in Appeal No.97 of 2006, decided on 6.12.2006, Life Insurance Corporation of India Vs. Sajida Begum, 2007 CTJ 1062 (CP) (NCDRC), Suresh Vs. Insurance Ombudsman, 2012(2) Civil Court Cases 314, Life Insurance Corporation of India Vs. Parvathavardhini Ammal, AIR 1965 Madras 357, Life Insurance Corporation of India Vs Janaki Ammal, AIR 1968 Madrass 324, Life Insurance Corporation of India Vs Smt.G.M.Channabasemma, AIR 1991 Supreme Court 392, Life Insurance Corporation of India & others Vs. Asha Goel and another, Supreme Court of India in Civil Appeal Nos.4186-87 of 1988 decided on 13.12.2001, P.Vankat Naidu Vs. Life Insurance Corporation of India & Anr, IV(2011) CPJ 6(SC), Swaran Singh Multaini Vs. Life Insurance Corporation of India, First Appeal No.1090 of 2006 decided on 3.4.2009 by Hon'ble State Commissioner of Punjab.

8. On the other hand it has been contended by learned counsel for the opposite parties that deceased was suffering from diabetes and renal problem before the date of filling the proposal form and she intentionally suppressed these material facts fraudulently. He further contended that from the evidence on record it is clear that the deceased was suffering from diabetes and renal problem before the date of taking the policy and the opposite party i.e Life Insurance Corporation has rightly repudiated the claim of the complainant.

9. We have carefully considered the contentions advanced by learned counsel for both the parties.

10. The above cited authorities are on its own facts. It depends upon the facts and circumstances of each case whether the deceased life assured has suppressed the material facts fraudulently or not. The contention of learned counsel for complainant that copy of proposal form was not not sent which deprived the deceased life assured to see any discrepancies in the proposal form or to avail free look period, can not be accepted. The proposal form was filled up on 25.3.2009 and complainant has come up with this version for the first time in the present complaint. Moreover according to own version of the complainant the deceased has taken six policies previous to the policy in question. Moreover, it is not a case of the complainant that life assured had given correct answers to the questions relating to her health in the proposal form. Whether the opposite party has conducted medical examination or special tests on the deceased life assured or not, it was duty of the DLA to give correct answers regarding her health while filling the proposal form. It is for the insurance company to see whether any fact is material or not.

11. The expression "material fact" is not defined in the Insurance Act, 1938 and, therefore, as observed by the Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd, VI(2009) SLT 338, it has to be understood in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact, which goes to the root of the contract of insurance and has a bearing on the risk involved would be "material" and if the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance. In this behalf it would be useful to notice the following observations of the Supreme Court in Satwant Kaur's case(Supra):-

" thus it needs little emphasis that when an information on specific aspect is asked for in the proposal form, an assured is under solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses".

12 Now we are to see if the deceased life assured was suffering from diabetes and renal problem before filling the proposal form on 25.3.2009. In the repudiation letter dated 28.4.2012 Ex.C-1 the opposite party corporation has mentioned the questions and answers given by the DLA while filling the proposal form which are as under:-

Questions Answers.

11(a) Have you consulted medical practitioner

within the last five years for any ailment requiring NO

treatment for more than a week?

(b) Have you ever been admitted to any hospital,

for general check-up, Treatment or operation No

(c) Have you remained absent from place of your

work on grounds of health during last five years? No

(d) Have you ever suffered from or are you

suffering from stomach, Heart, Lungs, Kidney, No

Brain, Nervous system, Liver, Cancer, Leprosy,

reheumatism, gout, enlarged glands.

(i) What has been your usual state of health? Good.

13. The opposite parties have produced medical record dated 29.1.2009 Ex.O1 of Modern Hospital i.e before the date of filling the proposal form wherein the name of patient is mentioned as Mrs.Harbhajan Kaur and ailment is mentioned as Type-2 DM, H/T, Nephropathy i.e Kidney problem. The fact that deceased was suffering from Kidney problem is also evident from test report dated 13.3.2009 Ex.O-2 of Modern Hospital wherein blood urea of the patient is mentioned as 90 against normal range of 15 to 40 mg% and her blood glucose random as 270. This test report also shows that deceased was not only suffering from Kidney problem but diabetes. Ex.O-3 is report of Sonography of Kidney Hospital & Lifeline Medical Institution, wherein against coloumn of comments B/L Renal deceased is mentioned. Ex.O6 is certificate of hospital treatment of the deceased Harbhajan Kaur. In coloumn 10-C nature of ailment is mentioned as DM/DN/HTN/CKDV i.e Chronic Kidney deceased etc. In this document the name of the doctor under whose treatment the patient is mentioned as Dr.Ajay Marwsha(Kidney Hospital), Jalandhar. Ex.O-7 is medical attendant's certificate wherein DM X 15 years is mentioned. Further the date when such first observed-15 years back is mentioned. Name of the doctor who treated the patient is mentioned as Dr.Vipin Talwar, Jalandhar. Ex.OPW2/A is affidavit of Dr.Vipin Talwar wherein he has stated that as per record Mrs.Harbhajan Kaur had visited on 29.1.2009 and was examined against registration No.D-5485 and the consultant slip has been issued by the doctor and she was regularly attending the hospital and the documents attached to her ailment is correct and as per medical treatment she was suffering from Type-2 DM, Nephropathy i.e Kidney related disease and remained under treatment upto 22.5.2009 and the entries are correct. So from the affidavit of Dr.Vipin Talwar of Modern Hospital, no doubt is left that Harbhajan Kaur deceased life assured was suffering from DM Type-2 and Nephropathy i.e Kidney disease before filling the proposal form. It is not case of the complainant that deceased had given correct answers in the proposal form and same were wrongly recorded. So no doubt is left that Harbhajan Kaur deceased life assured was suffering from DM Type-2 and Kidney problem before taking the policy and filling the proposal form. Kidney problem is definitely a material fact. The deceased life assured suppressed this material fact while filling the proposal forum and only inference is that she did so fraudulently. So the opposite parties have rightly repudiated the claim of the complainant on the above said grounds.

14. In view of above discussion, we hold that there is no merit in the present complaint and same is hereby dismissed with no order as to cost. Copies of the order be sent to the parties free of costs under the rules. File be consigned to the record room.

Dated Jyotsna Thatai Jaspal Singh Bhatia

27.11.2014 Member President