Tamil Nadu

StateCommission

CC/142/2015

Smt.Jayasree Abbineni, w/o.Late Muralikrishna Abbineni, - Complainant(s)

Versus

Life Insurance Corporation of India, and anr - Opp.Party(s)

M/s.S.Udayakumar

28 Apr 2022

ORDER

IN THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

BEFORE       Hon’ble Thiru Justice R. SUBBIAH         PRESIDENT

                   Thiru R. VENKATESAPERUMAL                MEMBER

 

CC.NO. 142/2015

 DATED THIS THE  28^th DAY OF  APRIL 2022

1.       Jayasree Abbineni

W/o. Late Muralikrishna Abbineni

 

2.       Vamsee Krishna Abineni

S/o. Late Muralikrishna Abbineni

 

3.       Varun Abbineni

S/o. Late Muralikrishna Abbineni

 

All are residing at

New No.6, Old No.23, Officer’s Colony

1^st Street, Metha Nagar

Chennai – 600 029                                                                                                                                        ....Complainants

 

                                                  Vs 

 

1.       Life Insurance Corporation of India

          Rep. by its Zonal Manager

LIC Buildings, No.153, Anna Salai

Chennai – 600 002

 

2.       Life Insurance Corporation of India

Rep. by its Manager (Claims)

C-47, 2^nd Avenue, Anna Plaza

3^rd Floor, Chennai Division Office II

Anna  Nagar, Chennai – 600 040                                                                                                            ....Opposite parties

 

Counsel for complainant                               :   M/s S. Udhaya Kumar

Counsel for opposite parties                          :  M/s. Manoj Sreevalson

 

                This complaint coming before us for hearing finally on 19.4.2022         and on hearing the arguments of counsel appearing for bothsides and upon perusing the material records this Commission made the following order:

 

ORDER

Justice R. SUBBIAH,  PRESIDENT    

1.       This complaint has been filed under Sec.17 of Consumer Protection Act 1986, against the opposite parties claiming a sum of Rs.25,00,000/- under Jeevan Anand (with profits) (with accident benefit) Policy alongwtih interest @ 18% p.a., from the date of death i.e, 28.1.2014 till payment alongwith compensation of Rs.1,00,000/- for mental agony and Rs.1,00,000/- towards compensation for deficiency in service and cost.

2.       The averments in the complaint reads as follows:

           The complainant had taken an insurance policy viz. Jeevan Anand (with profits) (with accident benefits) in the name of A.Muralikrishna, who is the husband of the 1^st complainant, and father of the 2^nd 3^rd complainant.  The policy No.707876419 commences from 2.2.2013, and the period of policy is 149-43-18 and sum assured is Rs.2500000/-.  The premium is yearly.  At the time of taking the policy the life insured was 57 years.  The policy holder was not having any ailment before taking the policy, and the opposite party had done medical examination and after satisfaction of the said medical examination and its report, the policy was accepted.  The policy holder was also remitting the premium promptly.   While so on 28.1.2014 the policy holder died, which was also intimated to the opposite party.  The 1^st complainant is the nominee of the said policy.  She has claimed the insurance amount due to the death of the policy holder.   But the death claim in policy No. 707876419 was withheld on flimsy reasons stating that in the proposal for life assurance dt.18.3.2013, the policy holder had stated that during the last 5 years there was no ailment and that he was not suffering due to tuberculosis.  According to the opposite parties the information furnished are false and the opposite party have reason to believe that the deceased life assured had history of tuberculosis in April 2012 and had taken treatment for the same.  In fact before taking the policy, the approved medical practitioner of the opposite party had examined the deceased and medical report was also submitted alongwith the proposal form.  Admittedly the policy holder was not having any ailment such as tuberculosis or any other decease at the time of taking policy during 2012.  But the claim of the complainant was repudiated by the Senior Manager of the opposite party vide letter dt.14.7.2014.  The complainants had sent representation to reconsider the same on 23.7.2014, and also requested the opposite parties to furnish the evidence available with regard to tuberculosis in April 2012.  After several correspondence, left with no other option, the complainants have filed this complaint alleging deficiency on the part of the opposite parties, and praying for a direction to the opposite parties to pay a sum of Rs.25 lakhs towards policy amount alongwith 18% interest and compensation of Rs.1 lakh towards mental agony and Rs.1 lakh towards deficiency in service apart from cost.

3.       The case of the complainant was resisted by the opposite party as follows:

          It is true that Jeevan Anand (With profits) (with accident benefit) policy with policy number 707876419  with date of commencement as 20.2.2013 was in the name of Sri.Muralikrishna Abbineni.  In the said policy Smt.Jayasree Abbineni is the nominee.  The 2^nd and 3^rd complainants are not named in the said policy.  At the time of taking policy, the policy holder was not having any ailment and that the opposite party had done medical examination is false and misleading.  At the time of considering the new proposal for insurance, only limited medical examinations were taken notwithstanding the fact that this does not absolve the individual of his responsibility to reveal all previous ailment requiring treatment under the principle of insurance namely “uberrima fide”.  If the Life assured disclosed the previous illness in the proposal itself, the opposite parties would have called for additional medical tests such as (i)  TB questionnaire;  (ii) Physician’s report  (iii) Result of recent TB culture test  (iv) full details regarding previous diagnosis and treatment details including relapse or multi drug resistance if any.  The life assured died on 28.1.2014 which is one year nine months and twenty nine days only from the date of risk i.e., on 30.3.2013.  This is a very early claim.  Hence a detailed investigation was done and it was found that the deceased had suppressed the vital material facts that he had a history of tuberculosis in April 2012 and had been on treatment for the same.  The fact that he was taking treatment from the Apollo Hospitals is supported by the  records from Apollo Speciality Hospital.   As per the records of Apollo Speciality Hospital it was mentioned that TB was diagnosed in the year 1988, and during 2012 it was diagnosed as TB lymphademesis.  The above reports disclose that the patient had not disclosed the treatment details and the various tests done for identifying the organism.  Subsequently the patient had died of Hodgkins Lymphoma.   In the report dt.8.5.2012 the impression is given as subacute inflammation, focal necrosis and ill defined granulomas suggestive of tuberculosis.  All the above details are material facts for considering the proposal which were within the knowledge of the life assured at the time of proposal and the same were suppressed by the deceased life assured.  Hence the claim was repudiated as per Sec.45 of Insurance Act 1938 by letter dt.14.7.2014.  Thus there is no deficiency in service on their part.

4.       In order to prove their claim, proof affidavits are filed alongwith documents, which are marked as Ex.A1 to A19 on the side of the complainant, and Ex.B1 to B12 on the side of the opposite parties.  Written arguments are filed on either side. 

 

5.       The learned counsel for the complainant submitted that the policy had ben taken by the deceased A.Muralikrishna Abbineni, and his wife was shown as nominee, which was accepted as per Sec.35 of the Insurance Act 1938.  The nominee has claimed the insurance amount due to the death of policy holder, the death claim under policy No. 707876419 was withheld on flimsy reasons stating that in the proposal for life assurance dt.18.3.2013 the policy holder stated that “during last 5 years no ailment or not suffering due to tuberculosis or anyother disease”.   But according to the opposite parties these informations are false, and the complainant had a history of tuberculosis and had taken treatment for the tuberculosis.  But the facts remains that the opposite party had examined the policy holder, and the medical report was also submitted.  At the time of taking the policy, the policy holder was hale and healthy and doing business in the Chennai city.  The complainant had sent representation to reconsider the repudiation on 23.7.2014 and requested the opposite parties to furnish the evidence available with regard to tuberculosis in April 2012.  In the said letter it was also stated that during 2012 the elaborate evaluation, screening was done in VRF referral laboratory and the said report gives negative result for the test done, and thus requested the opposite party to reconsider the claim.  But the same was not reconsidered by the opposite party.  The complainant was not in a position to approach insurance ombudsman, since the claim is above Rs.20 lakhs.  As per the Consumer Protection Act 1986 and as per Sec.15 and  Sec.45 of Insurance Act the opposite party is bound to prove for the alleged repudiation since the opposite party had kept quiet after the medical examination report submitted by their own doctor before issuing the policy.  In this regard the learned counsel for the complainant also relied upon few judgments.  Thus submitted that absolutely there is no suppression of material fact by them, and prayed for the setting aside the repudiation letter and granting of compensation. 

 

6.       The learned counsel for the opposite parties would contend that Late Sri Muralikrishna Abbineni had taken a policy viz.Jeevan Anand on 2.2.2013 which the policy bearing No.707876419.  In the said policy, the date of acceptance of risk was 2.2..2013.  But the life assured died on 28.1.2014 which is 9 months and 26 days only.  Since it is an early claim, a detailed investigation was done, and it was found that the deceased had suppressed the vital material facts that he had a history of tuberculosis in April 2012 and had been on treatment for the same.  In support of this contention, the treatment records of the year 1988 from Apollo Speciality Hospital was marked as Ex.B3, and a report from Sundaram Medical Foundation  was marked as Ex.B4, the Discharge Summary from Apollo Speciality Hospital was marked as Ex.B6, and the certificate of treatment given by Sundaram Medical Foundation was marked as Ex.B7.  Thus submitted that there was no deficiency in service on their part.

          In support of the contentions, the learned counsel for the complainant had relied upon the judgements of the State Commissions and National Commission and also a judgement of the Hon’ble Supreme Court in New India Assurance Co., Ltd., Vs. Protection Manufacturers Private Ltd., reported in (2010) 7 Supreme Court Cases 386. 

          The learned counsel for the Opposite parties have relied upon the judgement of the Hon’ble Supreme Court held in Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., and another Vs. Dalbir Kaur reported in AIR 2020 SC 5210;   and the judgement of the Hon’ble National Commission held in Senior Manger, LIC Vs. Rajesh Kumar reported in IV 2020 CPJ 229 (NC) etc.

 

7.         In view of the submissions made on either side, the following questions falls for consideration;

          1.Whether there is suppression of material facts in the proposal form by the policy holder/ deceased?

          2.       Whether the complainant is entitled for policy claim?

8.       POINT NO.1:

          It is an assertive submission of the learned counsel for the complainant that at the time of taking policy the deceased was hale and healthy.  He was not having any ailment such as TB or anyother ailment. 

          Per contra it is the submission of the learned counsel for the opposite party that prior to taking the policy the complainant has taken treatment for TB.  To support their contentions, they have conducted detailed investigations and produced records which are marked Ex.B3 to B9 i.e., the records from Apollo Speciality Hospital and Sundaram Medical Foundation. 

9.       Keeping the submissions in mind, we have carefully gone through the materials available on record.

          As seen from Ex.B4 the Medical Report from Sundaram Medical Foundation dt.28.4.2012, it was stated as “FNAC of swelling left side of neck showing abscess formation with few granulomas suspicious of tuberculosis”.  Specifically as seen from Ex.B7, The Certificate of Treatment obtained from the Sundaram Medical Foundation,  for the question raised by the opposite party, the answer was given as:

 What was the diagnosis arrived at by you?  TB Lymphademisis. 

 As submitted by the complainant, the policy viz   Jeevan Anand policy was taken by the complainant on 2.2.2013.  Whereas the documents as seen from Ex.B4 to B9 the reports of Apollo Speciality Hospital, it is noted that the complainant was taking treatment for TB from May 2011. 

          From the above records it is crystal clear that the deceased was suffering from Tuberculosis and had suppressed the same at the time of taking the policy.  The deceased Sri.Muralikrishna Abbineni had taken a policy dt.2.2.2013 viz. Jeevan Anand.  As per records since the treatment for continuous cough was taken during May 2011 and diagnosis for TB was done on 28.4.2012.  Therefore, at the time of taking the fresh policy on 2.2.2013, the complainant ought to have disclosed about his illness and treatment taken in the proposal form. Whereas the complainant had stated that he was not suffering from any disease.   But the policy holder / Life assured died on 28.1.2014 which is 9 months and 29 days only from the date of risk.  Since this seems to be a very early claim, the insurance company made a detailed investigation, and came to the conclusion that there is a suppression of material facts, and therefore they have repudiated the claim as per Sec.45 of Insurance Act.   At the time of considering the new proposal for insurance, only limited medical examinations were taken notwithstanding the fact that this does not absolve the individual of his responsibility to reveal all previous ailment requiring treatment under the principle of insurance namely “uberrima fide”. 

          The learned counsel for opposite party would further submit that Sec.45 of Insurance Act enables the Insurance provider to repudiate a policy within two years on the ground of suppression of material facts.  As per Regulation 2(1)(d) of IRDA (Protection of Policyholders’ interest ) Regulations 2002, the term material has been explained to “mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer”.  

          In this regard, reliance has been placed by the learned counsel for the opposite party to a judgement of the Hon’ble Supreme Court held in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., reported in 2009 (8) SCC 316, wherein it was held that “If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form”. 

          The learned counsel also drawn our attention to a judgement of the Hon’ble Supreme Court in Mithoolal Nayak Vs. Life Insurance Corporation of India reported in AIR 1962 SC 814, wherein the Apex Court has framed three conditions for repudiation to be satisfied by the insurer, if the repudiation is done after two years.  Which are:

1. The statement must be on a material matter or must suppress facts which it was material to disclose;

 

2. The suppression must be fraudulently made by the policy-holder; and
3. The suppression must be fraudulently made by the policy holder

The learned counsel would further submit that since this policy claim is within two years the insurer will be required to only establish that the life assured had suppressed the material facts. 

The learned counsel for the complainant also had drawn the attention of this commission to the series of judgements of various State Commissions, National Commission as well as the Hon’ble Supreme Court.  A careful perusal of these judgements would show that the facts and circumstances dealt with those judgements are not corroborative to the fact of this case.  The facts dealt with the cases handled in those cases, it was decided that the insurers have not proved their reason for repudiation.  Whereas in the case on our hand, the reason for repudiation, i.e., pre-existing disease has been proved undoubtedly.  Therefore we find no deficiency in service on the part of the opposite parties, thus the complaint is liable to be dismissed. 

 

10.     In the result, the complaint is dismissed.  No order as to cost. 

 

         

 

  R. VENKATESAPERUMAL                                                                                                                        R SUBBIAH     

           MEMBER                                                                                                                                             PRESIDENT

 

Exhibits filed on the side of complainant

 

A1      08.05.12        Copy of VRF Lab report

A2      18.3.2012      Copy of proposal

A3      04.04.13        Copy of proposal submitted by deceased

A4      04.04.13        Copy of Jeevan Anand Policy

A5      20.02.14        Cop of Medical attendant’s certificate

A6      27.02.14        Copy of certificate of Hospital treatment

A7      14.07.14        Copy of letter by OP

A8      23.07.14        Copy of reply by complainants

A9      29.10.14        Copy of reply sent by OP

A10     27.11.14        Copy of appeal by complainants

A11     05.03.15        Copy of reply by OP

A12     25.03.15        Copy of letter by insurance ombudsman

A13     30.04.15        Copy of Notice by complainants counsel to OP

A14     14.05.15        Coy of reply by OP

A15                        Copy of Death certificate

A16     28.04.12        Department of Histopathalogy outpatient report

A17     01.03.14        Acknowldgement for Revival of original policy

A18     13.03.14        Acknowledgement for original death summary

A19     28.04.14        Letter of OP

 

Exhibits filed on the side of Opposite parties

B1      20.02.13        LIC Policy

B2                         Proposal form

B3      May 2011      Treatment record from Apollo Hospital

B4      Apr/May 2012 Treatment records from Sundaram Medical Foundation

B5      20.12.13        Treatment record from Apollo Hospital

B6      06.01.14        Discharge summary from Apollo Hospitals

B7      13.05.14        Certificate of treatment – claim form B2

B8      06.01.14        In- patient death summary by Sundaram Medical Foundation

B9      28.01.14        Death certificate by Sundaram Medical Foundation         

B10     14.07.14        Letter from LIC

B11     29.10.14                 -do-

B12     05.03.15                 -do-

 

 

  R. VENKATESAPERUMAL                                                                                                                          R SUBBIAH     

           MEMBER                                                                                                                                              PRESIDENT

 

 

INDEX : YES / NO

Rsh/d/rsj/ Open court