STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA
Date of Institution: 24.11.2017
Date of final hearing: 02.11.2023
Date of pronouncement: 12.12.2023
First Appeal No.1484 of 2017
IN THE MATTER OF:-
Smt. Amarjeet W/o Late Sh. Satta Ram S/o Sh. Mana Ram, R/o Village and P.O. Gasho Kalan, Tehsil Narwana, District Jind.
....Appellant
Versus
- Life Insurance Corporation of India, through its Branch Manager, Narwana.
- Life Insurance Corporation of India, Divisional Office, 489 Model Town, Karnal through its Senior Divisional Manager, Karnal. …..Respondent
CORAM: Naresh Katyal, Judicial Member
Argued by:- Ms. Sunita Nain proxy counsel for Sh. Harish Nain, counsel for the appellant.
Sh. S.C. Thatai, counsel for respondent.
ORDER
NARESH KATYAL, JUDICIAL MEMBER:
Delay of 14 days in filing of present appeal stands condoned for the reasons stated in the application for condonation of delay.
2. Challenge in this appeal No.1484 of 2017 has been invited by unsuccessful complainant-Amarjeet wd/o Late Satta Ram to the legality of order dated 27.09.2017 passed by District Consumer Disputes Redressal Forum-Jind (In short “District Consumer Commission”) in complaint case No.77 of 2015, vide which her complaint has been dismissed.
3. Complainant’s husband-Satta Ram got himself insured with OPs vide insurance policy No.171434668 on 28.01.1998 for Rs.2.00 lacs and policy No.173519997 on 28.02.2009 for Rs.1.00 lac, wherein complainant has been recorded as ‘nominee’. Satta Ram died on 04.08.2010, during service. Complainant lodged claim with OPs but claim was not settled by OPs. Legal notice dated 30.04.2015 was served upon OPs, to which OPs replied that: claim under policy No.173519997 has been ‘repudiated’ and copy of letter dated 13.07.2011 has been sent by registered post, whereas, death claim under policy No.171434668 has been paid on 25.01.2011. Complainant alleged that: OPs have neither sent any repudiation letter to her, nor any letter has been received by her, nor she has received any amount under policy No. 171434668 has been paid on 25.01.2011. Act and conduct of OPs is illegal, arbitrary, wrong and not binding on her. Taking arbitrary decision amounts to deficiency in service of OPs. She filed complaint to seek directions against OPs: to pay her Rs.3.00 lacs along with deposited amount, bonus and other benefits of Insurance Policy along with interest @ 18% p.a. from date of amount becoming due, till final payment; pay her Rs.50,000/- as damages for mental harassment and Rs.11,000/- for litigation expenses.
4. Upon notice, OPs in their defence, in preliminary objections pleaded that: complainant has no cause of action & locus-standi to file complaint; it is time barred, as claim of complainant was repudiated on 13.07.2011 and complaint has been filed, beyond the limitation period of two years. On merits, it is admitted that policies No.173519997 & 171434668 were obtained by Satta Ram-husband of complainant and date of commencement was 28.02.2009 & 28.01.1998 under T & T-179-12-12 and 111-20-20 for sum assured Rs.1.00 lac and Rs.2.00 lacs respectively. Monthly premium of Rs.665/- & Rs.267/- was payable under both policies, which were under Salary Saving Scheme of Corporation. Claim under policy No.173519997 was ‘repudiated’ vide registered letter dated 13.07.2011 due to reason that: life assured (Satta Ram) was suffering from TB, prior to date of proposal, whereas, claim under Policy No.171434668 was processed and found that: policy was in lapsed condition for non-deposit of monthly premium for period 6/2010 to 8/2010, so, paid up value Rs.40,584/- was payable under policy, which was adjusted against excess payment made under another policy No.171764025. Recovery of Rs.39,865/- is still pending against said policy, for which registered letters dated 16.05.2012 & 31.05.2012 were sent to complainant to refund excess amount of Rs.39,865/- to OPs-insurer, but amount has not been refunded yet, by complainant. There is no deficiency in service on their part.
5. Parties to this lis led evidence, oral as well as documentary.
6. On subjectively analyzing the same; learned District Consumer Commission-Jind vide order dated 27.09.2017 has dismissed the complaint, thereby giving rise to filing of this appeal by complainant.
7. Learned counsel for parties have been heard at length. With their able assistance; record too has been perused.
8. On behalf of complainant/appellant, it is contended that impugned order dated 27.09.2017 is erroneous on all fronts-legal and factual. It is urged that: Vide policy No. 171434668 dated 28.01.1998 of Rs.2.00 Lacs; life assured was insured with OPs. Monthly Premium amount of Rs. 267/- was automatically deducted from salary of Satta Ram. Contract between employer and Life Insurance Company stood established and as such insurer is liable. Life Assured is not responsible for paying installment/premium amount for month of June-2010 and July-2010. OPs have not paid: paid up value of Rs.40,584/- under Policy No. 171434668. No notice has been sent to complainant before adjusting aforesaid paid-up value of Rs.40,584/- against some other policy bearing No. 171764025. No evidence has been led by insurer to establish that: before obtaining Insurance policy; deceased life assured-Satta Ram was suffering from T.B. Hence, as per contention, repudiation of death claim under policy No. 173519997 was illegal. Further, it is urged that: appellant came to know about repudiation of death claim on 10.05.2015, when OPs replied to her legal notice. Hence, complaint filed on 11.06.2015 is within limitation period prescribed under law.
9. Per contra, learned counsel appearing for OPs/respondents-insurer has supported impugned order dated 27.09.2017 and urged that: learned District Consumer Commission has meticulously analyzed all facets of complaint and its decision dated 27.09.2017 does not call for any interference in this appeal.
10. There are two policies which are subject matter of complaint filed by appellant. One policy is bearing No.173519997, it was purchased on 28.02.2009. Sum Assured was Rs.1.00 lacs. Monthly, premium was Rs.665/-. Premium paying term, enhanced term was 12 years. This policy is Ex. OP-2. Proposal form in relation to this policy is Ex.OP-20 it also carries declaration by proposer dated 26.12.2008. This policy was repudiated vide OPs letter dated 13.07.2011 sent to Amarjeet by Registered Post. Reason quoted for repudiation was: in the proposal for insurance dated 26.12.2008/personal statement signed by life insured dated 26.12.2008 at the time of medical examination, he answered following questions as under noted:-
“11(e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? No
11(i) What has been your usual state of Health? GOOD”
Insurer has invoked exclusion clause under aforesaid policy. Right here, it has to be borne in mind the legal portion, which is no more res-integra that: “in case, insurer invokes exclusion clause it has to lead express and positive evidence specific to justify/substantiate their act of exclusion from insurance policy”. While observing so, this Commission gain strength from the observations laid down by Hon’ble Apex in cases titled as “National Insurance Co. Ltd. Vs. Vedic Resorts and Hotels Pvt. Ltd.” (Civil Appeal No.4979 of 2019) decided on 17.05.2023, and “National Insurance Company Limited vs. Ishar Das Madan Lal” (2007) 4SCC 105 wherein it has been held that: “It is trite to say that wherever such an exclusionary clause is contained in a policy, it would be for the insurer to show that the case falls within the purview of such clause. In case of ambiguity, the contract of insurance has to be construed in favour of insured.”
11. While applying above cardinal principle so enunciated in above quoted judgments; this Commission is of firm opinion that exclusion by insurer from above policy (173519997) Ex.OP-2, in present case is justified. Insurer has led express evidence in this regard, in form of discharge summary Ex. OP-9, which reflects that: life assured-Satta Ram was admitted in Metro Hospital and Heart Institute on 15.07.2010. He was diagnosed as suffering from: 1. Smear Positive Pulmonary Tuberculosis (? MDR). 2. Severe Sepsis. It is mentioned in discharge summary that: Satta Ram 45 Years male was brought in chest emergency in critical condition. His relative gave history of progressively worsening breathlessness and cough expectation since last 2 years. They also gave history of irregular ATT intake in last two years.
12. Policy Ex. OP-2 was purchased on 28.02.2009. Satta Ram was suffering from worse breathlessness and cough, since last two years prior to his admission in Metro Hospital and Heart Institute on 15.07.2010. Meaning thereby, when policy Ex.OP-2 was purchased by him on 28.02.2009; then at that time; he was suffering from worsening breathlessness and cough, which was intrinsically co-related to Pulmonary Tuberculosis. Since, he was suffering from pre-existing disease (T.B.) at the time of obtaining insurance policy Ex. OP-2, therefore, he had wrongly mentioned in proposal form Ex.OP-20 and also in his personal statement/declaration signed by him dated 26.12.2008 at the time of his medical examination that: he is not suffering from T.B. Document Ex.OP-20 also bear signature and stamp of Dr. K.C. Jain.
13. In firm opinion of this Commission, OP-insurer has rightly justified its repudiation through letter dated 13.07.2011 regarding death claim under Policy No. (173519997)-Ex.OP-2. Ratio of law laid down by Hon’ble Supreme Court in case titled as “Anil Rishi Versus Gurbax Singh” 2006(2) PLR 775 is attracted to the factual scenario of this case. In this case it has been held as under:-
“there is an essential distinction between the concept 'burden of proof and onus of proof. Burden of proof lay upon a person, who has to prove the fact and which never shifts, whereas, onus of proof shifts. Such a shifting of onus is a continuous process in the evaluation of evidence. The elementary rule of Section 101 of Evidence Act is inflexible. In terms of Section 102 of the Evidence Act; the initial burden is always on plaintiff. If the plaintiff discharge that onus and makes out a case, which entitles him to relief, then onus shifts upon the defendant to prove those circumstances, which would dis-entitle the plaintiff to the same.”
14. Insurer has led specific evidence as discussed above in order to wriggle out from import of policy Ex.OP-2 and there is no evidence on the part of complainant/appellant to counter the evidence in form of discharge summary-Ex.OP-9 led by insurer. Meaning thereby, on the date of filling proposal and making personal statement; deceased-life assured Satta Ram had prior history of T.B. and he had conveniently concealed this fact.
15. It is visible from glancing proposal form Ex.OP-20 that deceased-life assured Satta Ram has given answer ‘NO’ to question 11 (e) and given answer ‘GOOD’ to question 11 (i) so reproduced above. Thus deceased had landed himself to be guilty of concealment/suppression of material facts regarding pre-existing ailment of T.B. It would disentitle the complainant/appellant being widow of life assured, from any equitable relief. OPs-insurer has succeeded in proving circumstance which would disentitle complainant to the relief claimed as per Anil Rishi’s judgment (supra). Legal position on above facts and evidence is also attracted, as laid down by Hon’ble Apex Court in case titled as “Satwant Kaur Sandu Vs. New India Assurance Company Ltd.”, Civil Appeal No. 2776 of 2002 decided on 10.07.2009 has held as under in Para 12 of its judgment:-
- There is no dispute that Section 45 of the Insurance Act, 1938 (for short “the Act”), which places restrictions on the right of the insurer to call in question a life insurance policy on the ground of mis-statement after a particular period, has no application on facts at hand, inasmuch as the said provision applies only in a case of life insurance policy. The present case relates to a mediclaim policy, which is entirely different from a life insurance policy. A mediclaim policy is a non-life insurance policy meant to assure the policy holder in respect of certain expenses pertaining to injury, accidents or hospitalizations. Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a 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. His opinion of the materiality of that knowledge is of no moment. (See: Joel Vs. Law Union & Crown Ins. Co.1)
Hon’ble Apex Court in this judgment has also observed that: the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not. 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, which is based on the principle of utmost faith-uberrima fides. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary.”
16. Having given anxious consideration to the material/evidence available on record of this appeal and in light of above cited pronouncements; this Commission is of opinion that: answer given by deceased-life assured Satta Ram in the proposal form dated 26.12.2008, as well as, in his statement/declaration signed by him on 26.12.2008, so made at the time of his medical examination, was untrue to his knowledge. There was clear suppression of material fact in regard to health of insured. It was not for the insured to determine, whether information sought for through questionnaire was material for the purpose of obtaining insurance policies. At any rate, statement made by him was untrue and incorrect.
17. Thus, this Commission in this appeal of appellant/complainant affirms and maintains the finding of Learned District Consumer Commission-Jind that: insurance company (OPs) has rightly proved its exclusion from policy No. 173519997 and rightly repudiated the claim vide Registered letter dated 13.07.2011. It is more than clear from the evidence that information about past medical history of deceased life assured should have been supplied by him. Had, it been so supplied, then insurer/OP might not had issued insurance policy (173519997)-Ex.OP-2 on 28.02.2009. However, deceased-life assured (Satta Ram) in his wisdom had withheld material information regarding his past medical history in the proposal for insurance and in his personal statement respectively (both dated 26.12.2008) from OPs/insurer. Hence, on that pedestal, complainant/appellant herein has been rightly non-suited by learned District Consumer Commission through its order dated 27.09.2017 (impugned in this appeal). This order dated 27.09.2017 does not carry any manifest error, legal or factual. It is accordingly affirmed and maintained. Present appeal, being devoid of merits, is hereby dismissed qua credibility of insurance policy No. 173519997-Ex.OP-2.
18. Now coming to second policy bearing No. 171434668. In this policy as per stance of insurer; life insured did not pay installments for months of June-2010 to August-2010 and policy stood lapsed. Rs.40584/- was paid-up value under this policy, which was adjusted against excess payment made under another policy bearing No. 171764025. Factum of adjustment of excess payment against another policy was not disclosed by complainant in her complaint. Instead, this fact has been unveiled and disclosed by insurer in its defence. Complainant was required to assert all relevant facts, vis. a. vis. this policy No. 171434668. Why some fact should come from the defence of opposite party? Why not it was pleaded at the first instance by complainant in her complaint? Obviously, complainant/appellant is guilty of concealment and suppressing material fact regarding adjustment of paid-up value of Rs.40,584/-. She has to be non-suited on this ground and accordingly, her complaint is thrown overboard, being dismissed because of complainant’s act of concealing material facts qua Policy No. 171434668. Finding of learned District Consumer Commission-Jind in its order dated 27.09.2017, qua non-suiting complainant vis.a.vis credibility of policy No. 171434668 is also affirmed and maintained.
19. Coming to last leg of argument regarding limitation to file this complaint. This complaint was filed on 11.06.2015. It is concerning two insurance policies. Death Claim against one policy bearing No. 173519997 was repudiated through insurer’s communication dated 13.07.2011. Cause of Action has accrued in favour complainant on 13.07.2011 itself and obviously, at legal pedestal; limitation to file complaint had begun to run from 13.07.2011 onwards. Complaint was filed on 11.06.2015, it is clearly time barred. This being so, the vociferous contention as raised in pleading of appellant/complainant (Para No. 7 of complaint) that complainant sent legal notice dated 30.04.2015-Ex.C6 and in response to this legal notice; insurer communicated its act of repudiation dated 13.07.2011 regarding death claim of life assured, through its reply dated 07.05.2015-Ex.C-3, is thus not acceptable. Allied contention on the basis of complainant’s pleading that she has not received repudiation letter dated 13.07.2011 is also bereft of credence, being vague in nature. No evidence, worth the name, has been lead by appellant/complainant to prove that she had not received registered communication dated 13.07.2011. Claim amount of Rs.40,584/- payable under second policy bearing No. 171434668 was adjusted against excess payment received by complainant under another policy No. 171764025, against recovery. It is pleaded by OPs/insurer that complainant had been intimated to deposit Rs.39,865/- as excess payment, by insurer through its registered letters dated 16.05.2012 and 31.05.2012. One letter dated 16.05.2012 is Ex. OP-19 so addressed to Sh. Gita Ram Parmar, Advocate in response to his legal notice. Obviously, if limitation to file this complaint is reckoned from date (16.05.2012) of this letter-Ex. OP-19, then also this complaint filed on 11.06.2015 is time barred. This is also because: in this communication viz. Ex. OP-19, insurer has given reference to second policy No. 171434668 by mentioning that Rs.39,783/- was paid-up value under policy No. 171434668 and by mistake Rs.1.00 lacs was paid under policy No. 171764025. Paid-up value under this policy viz. No. 171764025 was Rs.19,152/-. Rs.39,865/- was the excess payment made to Amarjeet Kaur. Complainant has thus, acquired knowledge of excess payment through insurer’s letter dated 16.05.2012 Ex. OP-19. This compliant should have been filed within two years period reckoning from 16.05.2012 qua Policy No. 171434668. Having filed on 11.06.2015 it is time barred. Learned District Consumer Commission has not committed any illegality by dismissing the complaint under Section 24 A of Act, being time barred. This finding recorded by learned District Consumer Commission-Jind in its order dated 27.09.2017 is also upheld.
20. In totality, this appeal being devoid of merits, is hereby dismissed. It is ordered accordingly. Impugned order dated 27.09.2017 passed by learned District Consumer Commission-Jind is affirmed, maintained and upheld.
21. Application(s) pending, if any stand disposed of in terms of the aforesaid judgment.
22. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986/2019. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
23. File be consigned to record room.
Date of pronouncement: 12th December, 2023
Naresh Katyal
Judicial Member
Addl. Bench-II
