Jharkhand

Bokaro

CC/18/18

Sitesh Kumar Singh - Complainant(s)

Versus

Life Insurance Co. Ltd. - Opp.Party(s)

Rakesh kumar Shashi

13 Apr 2022

ORDER

1. Complainant has filed this case with prayer for direction to O.Ps. (Life Insurance Corporation) to pay insured amount (Rs. 15,00,000/- along with accrued bonus on LIC policy  on account of death of insured late Suman Singh with 18% compound interest  per annum and for payment of Rs.1,00,000/- and Rs. 40,000/-  as compensation and litigation cost respectively to the complainant.

2       Complainant’s case in brief is that insured Suman was wife of the complainant who obtained LIC policy on 01.04.2010 for sum insured Rs. 15,00,000/- and paid premium till the year 2014 but she died on 19.07.2013 during enforcement of the policy. Further case is that complainant applied for payment of claim amount of the insured which was repudiated on the ground that insured has not given correct information in respect of her disease. The claim was also rejected by Zonal Office of LIC thereafter, complainant placed his claim before Central Office Claims  Disputes Redressal Committee of LIC where also his claim was dismissed, thereafter, he approached the office of Insurance Ombudsman but he was directed to approach the Patna Office, accordingly he went there but his claim has not been settled. Further case is that as per record of the insurance co. insured was medically examined by the doctor of the insurance co. and all papers submitted by Suman were verified and found correct, thereafter, policy bond was issued. Further case is that as per insurance law on continuation of policy for three consecutive years insurance co. is having no right to reject the claim but inspite of it claim of the complainant has been rejected hence this case has been filed.

3       W.S. has been filed by O.Ps. mentioning therein that as per Death Certificate  it was a case of Octeosarcoma of Cervical Spine with Quadriplegia and deceased died due to “Metastic Octeosarcoma of Cervical Spine with Quadriplegia leading to CR failure. It is reply that deceased was suffering with cancer since 2007 which was not disclosed in the proposal form rather false reply was submitted by her who was treated at CMC Vellore since the year 2007 but it was also not disclosed, hence claim has been rightly repudiated which was challenged before superior Authorities where also claim of the complainant was not accepted, hence this case is liable to be dismissed.

4       In light of the pleadings of the parties it is apparent that following questions are required to be decided by this Commission in respect to present case.

A. Whether repudiation of claim by the O.Ps. is in accordance with law ?

B. Whether complainant is entitled to get any relief as claimed ?

5       Following facts are admitted facts in this case as it is apparent  from the record:-

i) That deceased Suman W/o  the complainant obtained Jeevan Anand (with profits)  (with accident benefit) policy commenced on 01.04.2010.

ii) That said policy was for the sum assured Rs. 15,00,000/-.

iii) That yearly premium for that very policy was Rs. 77560/- payable yearly in the month of April of each year.

iv) That insured has paid the premium regularly during her life time.

V) That insured Suman died on 19.07.2013.

Vi) That at the time of obtaining the insurance policy insured was medically examined by the doctor of the LIC.

Vii) That the complainant Sitesh Kumar Singh is nominee of said policy.

6       In light of above admitted facts we would like to examine the matter as per the provision of law as well as facts of the case.

7       Learned Counsel for the complainant has argued mainly in view of the provision of section 45 of the Life Insurance Act and  submits that as per that very provision prevailing in the year 2010 O.Ps. were having no authority to question the claim after laps of two years period and at present after lapse of three years period but ignoring that very provision legal claim  has been refused. Further it is submitted that the alleged letter on which basis claim has been refused have not been proved by competent witness or by legal mode prescribed by law.

8       On the other hand Learned Counsel for the O.Ps. has given more stress on the hand written letters dt. 18.07.2013, dt. 09.09. year not visible, 25.09. year not visible alleged to be written by Hari Mohan Singh father of the deceased and letter dt. 18.07. year not visible alleged to be written by deceased Suman Singh and submits that deceased and her father have clearly intimated the LIC regarding suppression of material facts in obtaining the insurance policy of the deceased hence claim has been rightly repudiated.

9       On careful perusal of the record it appears that main reply of the O.Ps. is based on letters  alleged to be written by the deceased and her father. On perusal of first letter it appears that it is bearing the date 18-07-2013 alleged to be written by Hari Mohan Singh. On perusal of other letters it appears that non of them is bearing its year rather it has been purposely wiped out at the time of preparation of photo copies. However as per first letter it has been written on 18-07-2013 which is being contradicted form the contents of first para of letter dated 09-09- year not visible in which date of that very letter has been mentioned 19-07-2013 in this way both letters are contradicting the facts mentioned in each other. So for 3^rd letter is concerned it is not disclosing its year but it is alleged to be written on 25 Sept. It further appears that author of those letters has not come forward before this commission to prove the contents of those letters.

10     It is important to mention here that date of death of the deceased is 19-07-2013 and one letter about which it is said that it has been  written by insured Suman on 18-07-2013 has also been brought on record to show that the insured herself has opposed the policy by that very letter. On this aspect we would like to mention here that said letter has not been signed by the insured rather it bears thumb impression mark. It is mentioned in that very letter that due to laches in treatment by the complainant  writer suffered with cancer and due to it her organs below the neck are non functional. It is surprising that when deceased was paralyzed then how she has put her thumb impression on that very petition, another glaring feature of that very letter is that it is bearing some of the handwriting of the writer of other three letters but it has not been disclosed in this letter that who is writer of this letter. Further when insured was paralyzed then it is apparent that she would have not in a position to understand any facts of this letter.

11     In light of above discussion it is apparent that original letters have not been brought on record and O.Ps. have not proved those letters with legal evidence on which basis claim has been repudiated. Further as discussed above those letters are full of doubt and have not been proved by competent witness on which basis any opinion cannot be formed .

12     Now we would examine the matter in respect to the provision of section 45 of the insurance Act. which is as fallow:-

“.—(1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.

(2) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:

Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based.

Explanation I.—For the purposes of this sub-section, the expression “fraud” means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy:

(a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;

(b) the active concealment of a fact by the insured having knowledge or belief of the fact;

(c) any other act fitted to deceive; and

(d) any such act or omission as the law specially declares to be fraudulent.

Explanation II.—Mere silence as to facts likely to affect the assessment of the risk by the insurer is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the insured or his agent keeping silence, to speak, or unless his silence is, in itself, equivalent to speak.

(3) Notwithstanding anything contained in sub-section (2), no insurer shall repudiate a life insurance policy on the ground of fraud if the insured can prove that the misstatement of or suppression of a material fact was true to the best of his knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement of or suppression of a material fact are within the knowledge of the insurer:

Provided that in case of fraud, the onus of disproving lies upon the beneficiaries, in case the policyholder is not alive.

Explanation.—A person who solicits and negotiates a contract of insurance shall be deemed for the purpose of the formation of the contract, to be the agent of the insurer.

(4) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground that any statement of or suppression of a fact material to the expectancy of the life of the insured was incorrectly made in the proposal or other document on the basis of which the policy was issued or revived or rider issued:

Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision to repudiate the policy of life insurance is based:

Provided further that in case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy till the date of repudiation shall be paid to the insured or the legal representatives or nominees or assignees of the insured within a period of ninety days from the date of such repudiation.

Explanation.—For the purposes of this sub-section, the misstatement of or suppression of fact shall not be considered material unless it has a direct bearing on the risk undertaken by the insurer, the onus is on the insurer to show that had the insurer been aware of the said fact no life insurance policy would have been issued to the insured.

(5) Nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”

13.    On careful perusal of above mentioned provision as well as the policy paper it appears that alleged policy commenced on 01-04-2010 and its regular premium was being paid in which from the date of inception total four premiums were paid in the year 2010, 2011, 2012 & 2013 and next premium was due on 01-04-2014 but prior to it insured died on 19-07-2013. In this way policy has already completed more than three years continuous period from its inception. Therefore in view of the provision of above mentioned section 45 Insurance Act. O.Ps. were having no legal right to question the policy on any ground. However it is also to important to mention here that as per complainant at the time of opening of the policy insured was examined by the doctor of the insurance company hence especially in that very case O.Ps. were having no right to raise such questions about legality of the policy.

14     On examination of the matter with another angle it is apparent that as per policy bond policy started on 01-04-2010 with annual premium of Rs. 77560/- which was to be paid till 01-04-2030 in this way if policy would have continued till the date of maturity then insured was to pay Rs. (77560 X 21 ) 16,28,760/- for the sum insured Rs. 15 Lac only. Till death insured has paid Rs. 3,10,240/-. As per policy bond in case of death of insured before the end of the stipulated premium paying term then sum assured together with accrued bonus is to be paid to the nominee.

15     Therefore in light of above discussion we are of the view that repudiation of the claim by the O.Ps. is illegal and against the provisions of law hence there is deficiency in service by the O.Ps. Therefore complainant is entitled to get relief as prayed accordingly both questions are being decided against the O.Ps. in favour of the complainant.

16   Accordingly, the prayer made by the complainant is being allowed in the following manner:-

O.P. No.1 and 2 are directed to pay Rs. 15,00,000/-(Rs. Fifteen Lakh) with accrued bonus there on only to the complainant as claim amount within 60 days from today, failing which they shall pay interest thereon @ 10% per annum from 09-02-2018 (i.e. the date of filing of the case) till the realization of the money. Further O.P. No.1 &2 are directed to pay compensation of Rs. 20000/- and litigation cost of Rs. 10000/- within 60 days from today failing which complainant will have right to recover it through the process of law.