BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL

FORUM, FEROZEPUR.

                                                C.C. No.193 of 2014                                                               Date of Institution: 9.5.2014           

                                                          Date of Decision:  24.12.2014

Swaran Kaur widow of Dr. Pritam Singh Sauna Care of Sauna Hospital Opposite Bus Stand, Ferozepur City.

                                                                                      ….Complainant

                                      Versus

1.       Life Insurance Corporation of India, Malwal Road, Ferozepur City, through its Branch Manager.

2.       Divisional Manager, Life Insurance Corporation of India, Amritsar Divisional Office, 4-5, District Shopping Complex, Ranjit Avenue, Amritsar-143001.

3.     Zonal Manager, Life Insurance Corporation of India, Zonal Office, Jeewan Bharti, Cannaught Circus, New Delhi-110001.

                                                                             …….Opposite parties

Complaint under Section 12 of the Consumer Protection Act, 1986.

          *        *        *        *        *

PRESENT :

For the complainant               :         Sh. T.S. Gill, Advocate

For the opposite parties                    :         Sh. Vishal Arora, Advocate

QUORUM

S. Gurpartap Singh Brar, President

S. Gyan Singh, Member 

ORDER

GURPARTAP SINGH BRAR, PRESIDENT:-

                   Briefly stated the version of the complainant is that Pritam Singh Sauna, who was husband of the complainant, got himself insured for

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Rs.7,00,000/- vide policy bearing No.473240864 with the opposite parties by depositing Rs.5,00,000/- as single payment of premium on 23.2.2011. The said policy was issued by the opposite parties after getting conducted the medical of husband of the complainant from their Dr. Hem Raj  Sethi, Ferozepur City. The opposite parties were liable to return Rs.7,00,000/- to the husband of the complainant after maturity or on the death of policy holder Pritam Singh Sauna, to the complainant. It has been pleaded that husband of the complainant namely Dr. Pritam Singh Sauna died on 9.2.2013 in his house. After his death, the complainant submitted her claim on 29.4.2013 before opposite party No.1, which was duly received by opposite party No.1. But the complainant received a letter dated 3.9.2013 vide which the opposite parties informed the complainant that the opposite parties are willing  to pay  Rs.4,91,096/- i.e. 95% of the single premium deposited under the policy by the deceased Dr. Pritam Singh Sauna and remaining claim was rejected. In the end of the letter, it has been mentioned that in case of dis-agree with the decision, the complainant can make the written representation to the Zonal Office, i.e. opposite party No.3. The complainant made a representation dated 26.11.2013 through registered post and reminder thereto on 13.3.2014, but opposite party No.3 did not give any reply to the representation and letter dated 13.3.2014. The opposite parties rejected the claim of the complainant on the ground that

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the policy holder Dr. Pritam Singh Sauna was admitted in DMC Hospital, Ludhiana in the year 2009. The complainant has pleaded that Dr. Pritam Singh Sauna was not admitted in DMC Hospital in the year 2009, but he was admitted in the said hospital in the year 2004. Due to the mistake of the staff of DMC Hospital, the year was mentioned as 2009 instead of 2004. The complainant also sent the corrected form issued by the

Doctor of DMC Hospital alongwith her representation to opposite party No.3, but opposite party No.3 has not given any reply to the representation made by the complainant. Thereafter, reminder was also issued by the complainant to opposite party No.3 on 13.3.2014. The complainant has suffered a loss of Rs.7,00,000/- for not giving claim to her. The act and conduct of the opposite parties amounts to deficiency in service and unfair trade practice on the their part. Hence this complaint for a direction to the opposite parties to pay Rs.7,00,000/- as amount of insurance policy alongwith interest at the rate of 18% per annum from the date of claim i.e. 29.4.2013 till realization. Further a sum of Rs.1,00,000/- has been claimed as compensation for mental agony, pain and harassment and Rs.30,000/- as litigation expenses.

2.                Upon notice, the opposite parties appeared and filed their written reply to the complaint, wherein it has been pleaded that life assured Pritam Singh had made deliberate misstatement and had withheld material

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fact regarding health at the time of filling up the proposal form dated 23.2.2011, wherein he had concealed the factum of undergoing coronary artery byepass grafting (CABG-open bye pass surgery) in 2004 in DMC Unit-Hero DMC Heart Institute, Ludhiana. As per Form No.3816 issued by Dr. Sanjeev and counter signed by Coordinator-cum-Chief Cardiologist of the said hospital, deceased life assured was diagnosed as a case of coronary artery byepass grafting (CABG-open bye pass surgery) in 2004 along with Diabetes Mellitus, Abdomen Koch (TB), Hepatitis and Encephalopathy. Earlier, it was wrongly mentioned by the hospital in clause 6 of Form No.3816, the year of said byepass surgery and hospitalization as 2009 instead of 2004 and thereafter on the request of the complainant, the same doctor of the hospital rectified the same as 2004 with his stamp and signature after rechecking the record and also issued certificate to this effect. However, the year of coronary artery byepass grafting (CABG-open byepass surgery) and other above said diseases is immaterial, as the proposal was filled up on 23.2.2011 and these material facts were not disclosed by the decease life assured while making the proposal. The deceased life assured had admittedly died on 9.2.2013 within 1 year 10 months of taking the policy. As such the claim of the complainant has been rightly repudiated on account of the concealment made by the life assured in the proposal form dated 23.2.2011. Since the claim was not found

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genuine and there was suppression/non-disclosure of material fact, the claim has been settled on ex-gratia basis. A speaking order repudiating the death claim signed by Senior Divisional Manager has also been issued. The date of commencement of risk as per policy bond is 28.2.2011 and life assured Pritam Singh admittedly died on 9.2.2013. So the life assured died after one year and before two years of the commencement of the policy and refund of Rs.4,91,096/- on Ex-Gratia basis i.e. 95% of Single Premium of Rs.5,16,943/- has been paid as per Clause 5 (2) of the terms and conditions of the policy. The complainant represented the case to the higher office of the LIC, where it has been considered by the Zonal Office Disputes Redressal Committee, but the decision of repudiation was also upheld by the higher office of the LIC and the complainant was informed regarding the same vide letter dated 9.4.2014. Rest of the averments of the complaint have been denied and dismissal of the complaint has been prayed for.

3.                Learned counsel for the complainant tendered into evidence Ex.C-1 to Ex.C-10 and closed evidence on behalf of the complainant. On the other hand, learned counsel for the opposite parties tendered into evidence Ex.OP-1 to 3/1 to Ex.OP-1 to 3/10 and closed evidence on behalf of the opposite parties.

4.                We have heard the learned counsel for the parties and have also gone through the file.

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5.                It is the admitted case of the parties that husband of the complainant deceased life assured Pritam Singh Sauna was insured with the opposite parties vide insurance policy No.473240864 on payment of single payment of premium on 23.2.2011 and the Sum Assured under the policy was Rs.7,00,000/-. However, claim of the complainant on account of death of her husband deceased life assured Pritam Singh Sauna has been repudiated and an Ex-Gratia amount of Rs.4,91,096/- as 95% of the Single Premium deposited under the policy has been paid to the complainant vide letter dated 30.9.2013 Ex.OP-1 to 3/8. The opposite parties have also placed on the file a copy of terms and conditions of the policy (LIC’s Bima Bachat** Plan No.175) as Ex.OP-1 to 3/6 and its relevant conditions are extracted below for facility of reference:-   

                   “(I) DEATH CLAIM

                        1)         -           -           -           -           -          

                        2)         -           -           -           -           -

3)         Where the claim is not found to be genuine or there is any suppression/non-disclosure of material fact, the claim may be settled on ex-gratia basis as under.

4)         A speaking order repudiating the death as per policy conditions pertaining to ‘forfeiture in certain events’ signed by the Sr/Divisional manager is required to be issued, the order should also contain the decision to pay ex-gratia amount.

5)         The ex-gratia amount shall be worked out and paid as under:-

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6)         Please note that ex-gratia payment will be allowed only after repudiation of death claim.”

Admittedly, deceased life assured Pritam Singh Sauna was admitted in Dayanand Medical College & Hospital, Unit-Hero DMC Heart Institute, Ludhiana in the year 2009 and underwent Coronary Artery Byepass Grafting (CABG-open bye pass surgery). The proposal form Ex.OP-1 to 3/5 for the policy in question was filled up and signed by the deceased life assured Pritam Singh Sauna on 24.2.2011.  In Column No.11 (a) to (h) and (j), the decease life assured had given his reply in negative, whereas, he was well within knowledge that he had already underwent Coronary Artery Byepass Grafting (CABG-open bye pass surgery) in the year 2009 in Dayanand Medical College & Hospital, Ludhiana. Therefore, the deceased life assured had concealed material fact regarding his health while filling up proposal form for the insurance policy in question. Therefore, the opposite party has not committed any error in repudiating the claim of the complainant on account of concealment of material fact by the deceased life assured. As per above extracted Clause  5 (2) of the terms and

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conditions of the policy, 95% of the single premium paid is to be refunded in case of death of the insured after one year and before two years of commencement of the policy. In the present case, the date of commencement of risk as per policy bond Ex.OP-1 to 3/7 is 28.3.2011 and life assured Pritam Singh Sauna admittedly died on 9.2.2013. So the life assured died after one year and before two years of the commencement of the policy and refund of Rs.4,91,096/- on Ex-Gratia basis i.e. 95% of Single Premium of Rs.5,16,943/- has been paid by the opposite parties to the complainant after the repudiation of the claim of the complainant by passing speaking order in this regard signed by Senior Divisional Manager of the opposite parties vide letter dated 30.9.2013 Ex.OP-1 to 3/8. Therefore, no case of deficiency in service or unfair trade practice is made out against the opposite parties. Resultantly, the present complaint fails and the same is hereby dismissed without any order as to costs. File be consigned to the record room.

Announced                                                                   

24.12.2014                                        (Gurpartap Singh Brar)

                                                            President

                                                                             (Gyan Singh)                                                                                    Member