District Consumer Disputes Redressal Forum, Tarn Taran (Punjab)

Consumer complaint No: 06/2015

Date of Institution  : 02.02.2015

Date of Decision    : 22.06.2015

Charanjit Singh son of S.Puran Singh, resident of Village and Post Office, Baath, Tehsil and District Tarn Taran.

                                                                   …Complainant

Versus

1. Life Insurance Corporation of India, Divisional Office 4-5, District Shopping Complex, Ranjit Avenue, Amritsar through its Senior Divisional Manager/ Principal Officer.
2. Life Insurance Corporation of India, having Branch Office at Jeevan Jyoti Building, Sarhali Road, Tarn Taran, through its Branch Head/ Principal Officer.

…Opposite Parties

Complaint Under Section 12  & 13 of the Consumer Protection Act, 1986.

Present:       Sh.P.S.Tegh, Advocate, counsel for Complainant.

                    Sh.M.S.Bhatia, Advocate, counsel for Opposite Parties.

Quorum:     Sh. J.S.Khushdil,  President.

Sh. R.D. Sharma, Member.

Smt.Jaswinder Kaur Dolly, Member

(Sh.J,S.Khushdil, President)

1. The complainant Charanjit Singh has filed the present complaint under Section 12 & 13 of the Consumer Protection Act, 1986 (herein-after called as  ‘the Act’) against Life Insurance Corporation of India, Divisional Office 4-5, District Shopping Complex, Ranjit Avenue, Amritsar through its Senior Divisional Manager/ Principal Officer and another (herein-after called as ‘LIC-Opposite Parties’) supported by various documents levelling allegations of deficiency of service on the part of the opposite parties.
2. Brief facts of the complaint are that Surjit Kaur (since deceased) wife of the complainant, during her life time, obtained insurance policy i.e. LIC’s New Bima Gold Policy bearing No.473427557 on 22.4.2012 (as per policy 23.04.2012). She paid regular premium on 25.4.2012, 24.11.2012, 20.05.2013 and 26.11.2013 and next premium was to be paid in April, 2014. But unfortunately, Surjit Kaur wife of the complainant expired on 11.1.2014 as natural death at the house of the complainant. The complainant being legal heir and beneficiary of Surjit Kaur DLA (deceased life assured) approached the Opposite Parties-LIC  alongwith relevant documents claiming benefits under the aforementioned policy and the Opposite Parties-LIC assured that the file was being processed and the claim would be settled shortly. The complainant was astonished to receive letter dated 21.10.2014 (Ex.C8) vide which the Opposite Parties-LIC alleged that they had declared the policy in question as void and repudiated the claim of the complainant on the ground that the DLA Surjit Kaur was having some ailment before the commencement of the policy in question and she had withheld the correct information from the Opposite Parties-LIC about her ill health. The complainant averred that DLA Surjit Kaur was neither suffering from any ailment nor she remained under any medical treatment, as such, the alleged record of the Opposite Parties-LIC is false and frivolous. It was further averred by the complainant that when the policy was taken, the requisite check up was done and she was found to be healthy and not suffering from any disease by medical team of the Opposite Parties-LIC. It was submitted  that had the wife of the complainant was suffering from any disease, then why the insurance was done by Opposite Parties-LIC and why the premium was taken by the Opposite Parties-LIC. In these circumstances, the Opposite Parties-LIC be estopped from taking such plea to disentitle the complainant for receiving the benefits under the policy in question. The complainant approached the Opposite Parties-LIC on so many occasions in this regard, but of no avail. It was averred that the Opposite Parties-LIC is guilty of imperfection, short coming and deficient in providing the services besides indulging in unfair trade practice. The complainant further alleged that he suffered mental agony, harassment, inconvenience and monetary loss allegedly caused by the Opposite Parties-LIC. It is further averred that cause of action accrued within the territorial jurisdiction   of this Forum, as such, this Forum is competent to entertain and try the present complaint. The complainant has claimed Rs.1 lac being sum assured under the  policy on account of death of his wife alongwith interest w.e.f.11.1.2014  @ 24% per annum besides compensation of Rs.50,000/- on account of mental agony suffered by the complainant due to deficiency in service and unfair trade practice on the part of the Opposite Parties-LIC. The complainant has also claimed Rs.5,000/- as litigation expenses and Rs.11,000/- as counsel fee from the Opposite Parties-LIC.                   
3. Notice of the complaint was issued to the Opposite Parties-LIC which appeared through their counsel and filed written version wherein various preliminary objections have been taken interalia that the complaint is not maintainable as Surjit Kaur wife of the complainant had withheld the correct information regarding her health while taking the policy bearing No. 473427557 with date of commencement as 23.4.2012 from Branch Office, Tarn Taran. DLA Sujrit Kaur allegedly gave wrong answers in the proposal form. DLA Sujrit Kaur remained admitted in Fortis Escorts Hospital Department of Nephrology, Amritsar from 14.10.2011 to 21.10.2011 as a case of Medical Renal Disease-CRF, Coronary Artery Disease, LV Dysfunction and Hypertension. She expired on 11.1.2014 within two years of taking the policy in question by committing fraud on the Opposite Parties-LIC and wanted to grab the public money for her legal heirs; that the complainant is estopped to file the present complaint as there is no deficiency in service on the part of the Opposite Parties-LIC; that complainant is not a consumer within the meaning of Section 2(i)(d) of the Act; that complainant has not approached the Zonal Office claims Review Committee, New Delhi; that the opposite party has rightly declared the claim of the complainant null and void as insurance policy was barred by misrepresentation and fraud as per Section 17 and 18 of Indian Contract Act 1872; that wife of the complainant contravened the conditions contained in Para No. 5 of the policy printed on the back of the policy bond, therefore the Opposite Parties-LIC has rightly repudiated the claim of the complainant; that the complainant has not approached the Zonal office of the Life Insurance Corporation of India and requires dismissal as alleged in Para No. 7 of the Preliminary Objection; that contract of insurance is based on Principles of good faith and the life assured was supposed to disclose every material information to the insurance company. On merits, the residence of the complainant was denied for want of knowledge. The Opposite Parties-LIC however, admitted that the DLA Surjit Kaur had taken policy No.473427557 w.e.f. 23.4.2012 from Branch office Tarn Taran for a sum assured of Rs. One Lac under table- term 179-120 New Bima Gold Policy. It was admitted that the premiums were paid on 25.4.2012, 24.11.2012, 20.05.2013 and 26.11.2013 and next premium was to be paid in April, 2014. The death of wife of the complainant on 11.1.2014 has also been admitted as per information received from the complainant. However, it was alleged that  DLA Surjit Kaur was not keeping good health prior to the date of proposal and she remained admitted in Fortis Escorts Hospital Department of Nephrology, Amritsar from 14.10.2011 to 21.10.2011 as a case of Medical Renal Disease-CRF, Coronary Artery Disease, LV Dysfunction and Hypertension. It was admitted that the complainant is the nominee of DLA Surjit Kaur under the policy in question. It was alleged that as DLA Surjit Kaur has suppressed material facts and withheld vital information from the Opposite Parties-LIC at the time of issuance of insurance policy, therefore the claim of the complainant was rightly repudiated after due and thorough investigation done on the part of the Opposite Parties-LIC. It is alleged that DLA Surjit Kaur had given in proposal form dated 22.4.2012 following answers to the questions

          It was alleged that DLA Surjit Kaur was knowing that answers were false. She was treated in Fortis Escorts Hospital Department of Nephrology, Amritsar between 14.10.2011 and 21.10.2011, but the complainant is alleging the said hospital record as forged. It is admitted that medical checkup by the doctors of Opposite Parties-LIC is a simple medical checkup based on disclosure of a life assured. Allegations of deficiency in service and unfair trade practice have been denied and dismissal of complaint has been prayed for.

4        The complainant in order to substantiate his claim tendered in to evidence his duly sworn affidavit Ex. C1, self attested copy of policy Ex. C2, self attested copy of death certificate Ex. C3, self attested copies of deposit of premium receipts Ex. C4 to C7, self attested copy of repudiation letter Ex. C8 and closed the evidence.

5        On the other hand, to rebut the evidence of the complainant, ld. counsel for Opposite Parties-LIC has tendered in to evidence affidavit of Sh. Yogender Singh Sidodia Manager Legal Ex. OPs/1 alongwith documents i.e. self attested copy of proposal Form dated 22.4.2012 Ex. OPs/2, self attested copy of Certificate of Hospital Treatment Ex. OPs/3, self attested copy of Claim inquiry report Ex. OPs/4, self attested copy of Claimant’s statement Ex. OPs/5, self attested copy of Discharge summary of Fortis Escort hospital Ex. OPs/6, self attested copy of repudiation letter dated 21.10.2014 Ex. OPs/7, self attested copy of registered envelop of Fortis Escort Hospital Ex. OPs/8, self attested copy of letter dated 21.8.2014 Ex. OPs/9 and close the evidence on behalf of opposite parties.

6        Ex. C1 is the duly sworn affidavit of complainant in which he has stated the version as per claim submitted with the Opposite Parties-LIC, Ex. C2 is the copy of policy which shows the policy in question commenced from 23.4.2012 under table 179.12, Ex. C3 is the copy of death certificate of DLA Surjit Kaur on 11.1.2014. Ex. C4 to Ex. C7 are the premium receipts, Ex. C8 is the communication of the Opposite Parties-LIC to complainant rejecting his claim on the ground of non supply of correct information at the time of issuance of the policy. Ex. OPs/1 is affidavit of Sh.Yogender Singh Sidodia Manager Legal who has deposed on the line of the written version. Ex. OPs/2 is the proposal for insurance on own life, Ex. OPs/3 is the claim inquiry showing that DLA Surjit Kaur remained admitted in hospital from 14.10.2011 to 21.10.2011, 1.10.2012 to 1.10.2012 and 3.12.12 to 5.12.2012. Ex. OPs/4 is the claim enquiry report in which it was mentioned that DLA Surjit Kaur was suffering from Kidney disease from the last 3 years. Ex. OPs/5 is claimant’s statement, Ex. OPs/6 is discharge summary of Fortis Escorts Hospital Department of Nephrology, Amritsar in which it is mentioned that as per past history of DLA Surjit Kaur, she was suffering from Chronic Kidney Disease LV Dysfunction (EF-40%) hypertension COPD. At the time of discharge her condition was found stable. Ex. OPs/7 is the repudiation letter, Ex. OPs/8 is the copy of envelop written by Fortis Escorts Hospital Department of Nephrology, Amritsar to Branch Manager LIC. Ex. OPs/9 is the letter dated 21.8.2014 showing that claim was under active consideration.

7        We have heard the ld counsel for the complainant as well as Opposite Parties-LIC and also gone through the written arguments filed by both the parties and also perused the evidence produced on record by both the parties with the assistance of ld. counsel for the parties.

8.       Ld. Counsel for the complainant Sh. P.S. Tegh Advocate has argued that insurance policy bearing No.473427557 was obtained by the wife of the complainant Smt. Surjit Kaur on 23.4.2012. She paid a few installments which are admitted by the Opposite Parties-LIC, but unfortunately, she died on 11.1.2014. It was alleged that at the time of issuance of the said policy, the medical examination of the wife of the complainant was done and this fact has also been admitted by Opposite Parties-LIC. Opposite Parties-LIC has mentioned that the medical check up by the doctors of the LIC is a simple medical check up based on the disclosures of life assured. It is submitted that it is for the Opposite Parties-LIC to do any type of the medical check up before issuance of the above said policy. It is also submitted that the proposal form Ex. OPs/2 was filled up by the agent of the insurance company. Agent of the Opposite Parties-LIC asked a few questions which were replied by the wife of the complainant. It is submitted that previously also identical policy was issued and the DLA Surjit Kaur had received the maturity amount of the previous policy. It is submitted that the present claim of the complainant being legal heir/ beneficiary of DLA Surjit Kaur has been wrongly rejected on flimsy ground that, too, after the death of DLA Surjit Kaur. It is argued that during life time of Surjit Kaur no such information or investigation was done though admittedly, Opposite Parties-LIC went on receiving the premium. It is further averred that insurance policy was admittedly issued on 23.4.2012 and death of Surjit Kaur occurred on 11.1.2014. It is submitted that the Opposite Parties-LIC is apparently has a duel stand. Surjit Kaur lived till the expiry of policy then the information what so ever was supplied by her in the proposal form would have been treated as correct. But unfortunately when she died, the Opposite Parties-LIC have to make the payment of assured sum then, it is alleging misrepresentation and false information given by DLA Surjit Kaur. It was prayed to accept the complaint while allowing the claim referred to in the complaint and for grant of relief as prayed for.

9.       On the other hand, Sh. M.S. Bhatia Advocate ld counsel for the Opposite Parties-LIC has vehemently opposed the submissions raised by ld counsel for the complainant and has contended that the DLA Surjit Kaur has suppressed the material facts and had given wrong and false information at the time of taking the policy, though she was suffering from various ailments and she remained under medical treatment in Fortis Escorts Hospital Department of Nephrology, Amritsar w.e.f. 14.10.2011 to 21.10.2011 and reference was made of Para No. 1 of preliminary objection and Para No. 4 on merits of written version and then corresponding evidence. After the death of Surjit Kaur, Opposite Parties-LIC got conducted thorough investigation and thereafter repudiated the claim of the complainant. It was contended that Opposite Parties-LIC had issued the policy in question believing the information supplied by DLA Surjit Kaur, being correct. It is submitted that complainant in his statement mentioned that DLA Surjit Kaur died of heart attack but complainant has not disclosed the name of doctors to whom they consulted during the last three years. It was contended that DLA Surjit Kaur has suppressed the material and correct information from LIC and inquiry officer was appointed by Opposite Parties-LIC had found so. It was submitted that DLA Surjit Kaur died on 11.1.2014 within two years of taking the policy. The attention of this Forum was drawn to discharge summary issued by Fortis Escorts Hospital Department of Nephrology, Amritsar Ex. OPs/6 (10 pages) wherein it was mentioned that DLA Surjit Kaur was admitted in the hospital on 19.2.2013 and discharged on 20.2.2013 and it was further mentioned in diagnosis column that patient was of chronic kidney disease, LV Dysfunction (EF-40%) Hypertension and COPD. It was further mentioned that in the past history column the DLA Surjit Kaur is ‘known case of (K/c/o) CKD on HD x 2 years, K/c/o, HTN (hypertension), k/c/o LVD (LV Dysfunction). It was further mentioned at page No. 4 of discharge summary that she was admitted in the hospital on 3.12.2012 and discharged on 5.12.2012 and she was found to be k/c/o Hypertension x 4 years and k/c/o of CRF (Chronic Renal Failure). Similarly at page No. 8 of the discharge summery, it is mentioned that DLA Surjit Kaur was admitted in the hospital on 14.10.2011 and discharged on 21.10.2011 and she was diagnosed as patient of all the above said disease.  It was argued that she remained under treatment being a case of Medical Renal Disease- CRF, Coronary Artery Disease, LV Dysfunction and Hypertension which she did not disclose in the proposal form. It is contended that DLA Surjit Kaur has deliberately gave the false, frivolous information and withheld the material information regarding her health prior to the date of proposal  i.e.22.4.2012 and she died within 2 years of taking the policy, though she was suffering from various ailment mentioned above for the last 4 years. It was argued that it was the obligation of the life assured to disclose every material facts about her health at the time of taking the policy. It is further contented that the complainant has failed to prove any deficiency in service on the part of the Opposite Parties-LIC.  To support and strengthen these contentions, ld.counsel for the Opposite Parties –LIC has relied upon various rulings viz;

i)        Satwant Kaur Sandhu Vs. New India Assurance Company (Legal Digest, April 2010 page 1) SCALE (2009) 8 SCC // 2009 IV CPJ 8 SC.

ii)       Senior Divisional Manager, LIC of India Vs. Smt.Satwant Kaur Sandhu (Legal Digest, April 2011 Page 85 NC)

iii)      LIC of India Vs. Muddu Lakshmi (Legal Digest October 2014  Page 280 NC)

iv)      LIC of India Vs. S.S.Jamuna, (Legal Digest April, 2014 NC page 95 NC)

v)       LIC of India Vs. M.Bhavani (Legal Digest October 2009 NC 233 NC)

vi)      Sulochana Devi Vs. LIC of India (Legal Digest January 2012 Page 8 NC)

Ld. counsel for the Opposite Parties –LIC has prayed for the dismissal of the complaint.

10.     We have considered the contentions and rival contentions of both the parties in the light of record.

11      First of all, we would like to mention here that this is summary procedure. A few of the facts are admitted. It is admitted that the complainant is the husband of DLA Surjit Kaur. It is further admitted that  DLA Surjit Kaur had obtained policy bearing No.473427557 from Branch office Tarn Taran for a sum assured of Rs. One Lac under Table- Term 179-120 New Bima Gold Policy. It is further admitted that DLA-Surjit Kaur died on 11.1.2014. It is further admitted that she deposited premiums on 25.4.2012, 24.11.2012, 20.05.2013 and 26.11.2013. It is apparent that policy in question was issued on 23.4.2012 and DLA Surjit Kaur died on 11.1.2014 i.e. within 1¾ years. The sole and hot contention remains that as per the view of the Opposite Parties –LIC that DLA Surjit Kaur had suppressed the material facts from the Opposite Parties-LIC and misstated about her health because she remained under treatment for various ailments in Fortis Escorts Hospital (Supra). According to the Opposite Parties –LIC, the matter was surfaced after investigation which was got conducted by the Opposite Parties –LIC and thereafter, the Opposite Parties –LIC then rejected the claim of the complainant. As per the version of the complainant, the proposal form was filled by the agent  of the Opposite Parties –LIC. Opposite Parties –LIC in para No.7 on merits admitted that simple medical check up was conducted at the time of issuance of the policy. But there was no bar on the Opposite Parties–LIC to get the thorough medical check up at the time of issuance of the policy.  The Opposite Parties–LIC went on accepting the premiums from DLA Surjit Kaur without any doubt rather believed whatever DLA Surjit Kaur  had disclosed in the proposal form. The Opposite Parties–LIC were within their right to cancel the policy if it doubted or found any information supplied by the life assured being false or wrong but this has not been done by the Opposite Parties–LIC. The investigation has been got done after the death of DLA Surjit Kaur that, too, at the time when the claim was lodged by the complainant. It was for the Opposite Parties–LIC to ensure about the health of the insured before issuance of the policy of such amount. Many times a person may not know himself/ herself if he/ she is suffering from any particular disease. The Opposite Parties-LIC have conducted the simple medical check up as is admitted by it, but at the same time, it was required to check up life assured thoroughly. It was the bounden duty of the Opposite Parties–LIC to make thorough investigation at the initial stage, rather on the stage when the claim has been lodged. It appears that the Opposite Parties–LIC have different yard stick at the time of accepting the policy  for procuring the business and different face at the time of discharge of its lawful liability. The authorities cited by ld.counsel for the Opposite Parties–LIC are not helpful to Opposite Parties–LIC because these are based on some different facts. We are rather, of the view that the act of the Opposite Parties–LIC is  illegal in rejecting the claim of the complainant who is none else but the legal heir of DLA Surjit Kaur. The act of the Opposite Parties–LIC by repudiating the  claim of the complainant  is illegal and void. In this regard, we are supported  with the rulings:  Life Insurance Corporation of India Vs. Ambika Prasad Pandey, AIR 1999 MP 13 and Life Insurance Corporation of India Vs. Narmada Agarwalla, AIR 1993 Ori 103. In the facts of this case, ratio of the decision of Hon’ble Apex Court in case of Dharmendra Goel Vs. Oriental Insurance Co. Ltd., 2008(3) CPJ 377 (SC) is fully attracted.  It was held that

“Insurance Company being in a dominant position, often acts in an unreasonable manner and after having accepted the value of a particular insured goods, disowns that very figure on one pretext or the other, when they are called upon to pay compensation.  This ‘take it or leave it’, attitude is clearly unwarranted not only as being bad in law, but ethically indefensible.”

 On this point, Hon’ble Punjab & Haryana High Court in case titled as New India Assurance Company Limited Vs. Smt.Usha Yadav & Others (2008) 151 PLR 313 has held to the following effect:-

“It seems that the Insurance Companies are only interested in earning the premiums, which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance Companies make the effected people to fight for getting their genuine claims. The Insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus, pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy………………………………………………

In fact, all these conditions, which generally are hidden, need to be simplified so that these are easily understood by a person at the time of buying any policy…… .”

12      As a sequel to the above said discussion we are of the considered opinion that the rejection of claim of the complainant by the opposite parties is illegal and unjustified and that amounts to deficiency in providing services and deficient in manner of performance. It is generally seen that the insurance companies are only interested in earning the premiums and find ways and means to decline claims. Apart from this, it also amounts to unfair trade practice on the part of the opposite parties. The complaint filed by the complainant has merits, therefore, the same is accepted. The opposite parties are directed to make the payment of Rs. 1,00,000/-  to the complainant. Further the opposite parties are directed to pay a sum of Rs. 11,000/- being consolidated amount of compensation which includes counsel fee and litigation expenses. The opposite parties are directed to comply with this order within 60 days from the receipt of copy of order, failing which the opposite parties will pay interest at the rate of 9% per annum on the amount of Rs. 1,00,000/- from the date of this order till its realization. Copy of order be supplied to the parties free of costs as per rules. File be consigned to record room. 

Pronounced in open Forum.

Dated: 22.06.2015

                                                                     (J.S.Khushdil)

     President

                                                (Jaswinder Kaur)     (R.D.Sharma)

  Member               Member