Order by:

Sh.Mohinder Singh Brar, Member

1.       The complainant has filed the instant complaint under section 35 of the Consumer Protection Act, 2019 stating that complainant no.1 is a widow of Late Kuldeep Singh Kaila, who was the policy holder of opposite parties vide policy numbers 144879507 & 144879508. The complainant no.2 is minor daughter and complainant no.3 & 4 are minor sons of the deceased Kuldeep Singh Kaila. The Complainants are nominee/ legal heirs of the deceased, so becomes the consumer within the meaning of the Consumer Protection Act. The complainant nos.2 to 4 are minors, so the complaint is being filed by complainant no.2 to 4 through their mother and natural guardian complainant no.1. Alleged that employees of the LIC/opposite parties approached the husband of the complainant no.1 and told the husband of the complainant no.1 to take Jeevan Lakshya Policy of the opposite parties and also told about the benefits of the said policy. So on the allurement of agents/officials of the Opposite Parties, the husband of the complainant no.1 availed two policies and paid the premium of the same. On 26.05.2022, the husband of complainant came from work and suddenly suffered stomach ache and when pain becomes unbearable, the husband of the complainant got admitted in Medicity Hospital, Moga. Thereafter, the husband of the complainant was referred to DMC Hospital, Ludhiana, where the doctors told that the husband of the complainant no.1 has blockage in intestines and they have to operate him. The husband of the complainant no.1 undergone surgery and after one day of surgery, the junior doctor told to the complainant no.1 that due to some complications in the surgery, the senior doctors were again running some sought of operation on the husband of the complainant no.1.  However, on 30.05.2022, the doctors told the complainant no.1 that her husband has died due to some sort of infection. The hospital take bills and gave discharge card/summary to the relatives of the complainant no.1. After the death of her husband, the complainant no.1 immediately registered the claim with opposite party no.1. Thereafter, the opposite party no.1 told the complainant that some documents were needed by them to process the claim. The complainant no.1 submitted all the documents as required by opposite parties such as insurance policy documents, death certificate, aadhar card etc. to the opposite parties. Thereafter, the complainant no.1 many times visited the office of opposite party no.1 and requested them to process the claim and to pay the death benefits of the policies, but they did not pay any attention to the requests of the complainant and delayed the matter on one pretext or another. Thereafter, the complainant no.1 received a letter dated 30.12.2022 from the opposite parties in which the opposite parties repudiated the claim of the complainants. The claim of the complainants were repudiated by the opposite parties stating that the husband of the complainant no.1 was addicted to opium and this fact was not disclosed in the proposal form, hence due to suppression of material fact the opposite parties decided to repudiate the claim and were refunding the premiums paid under both the policies. Alleged that DMC Hospital have falsely written in the death summary that deceased was addicted to opium only to save themselves from medical negligence. Hence, this complaint. Vide instant complaint, the complainant has sought the following reliefs:-

a)       Opposite Parties may be directed to pay the complainants the death benefits against the policy numbers 144879507 & 144879508 of deceased Kuldeep Singh Kaila alongwith bonus and other benefits and interest thereon @ 8% per annum from 30.05.2022 till realization.

b)      To pay an amount of Rs.50,000/- as compensation for mental tension and harassment.

c)       To pay an amount of Rs.18,000/- as litigation expenses.

d)      And any other relief which this Commission may deem fit and proper be granted to the complainant in the interest of justice and equity.

2.       Opposite Parties appeared through counsel and contested the complaint by filing written reply taking preliminary objections therein inter alia that the present complaint is framed is not maintainable and is liable to be dismissed due to non-joinder of necessary parties. The Corporate Office of the answering Opposite Parties as well as the alleged employees/agents against whom the complainant has made serious allegations, are the necessary parties, in whose absence, the present complaint is not maintainable; no cause of action arisen to the complainants to file the instant complaint; there is no deficiency in rendering services on the part of the Opposite Parties. Averred that Kuldeep Singh Kaila took two life insurance policies on his life bearing no.144879507 and 144879508 for a sum assured of Rs.3,50,000/- each, with half yearly payable premium of Rs.10042 for each policy under table term 933/24/21 from the branch office of the opposite parties, with date of commencement as 28/10/2021 for both the policies. The life assured reportedly died on 30/05/2022 in DMC & hospital, Ludhiana. On lodging of claim the same was investigated being an early claim as both the policy has run only for 7 months and 1 day only. In the investigation it was found that deceased life assured was an Opioid addict as per medical certificate of cause of death issued by DMC & hospital, Ludhiana. As per the death summary of the deceased life assured issued by DMC & hospital, Ludhiana, it was diagnosed that he was a patient of Perforated Diverticulum Adhesive Band w1 Gangrenous Gut changes w1 and having history of heavy Opioid addiction. At the time of taking both the policies, the deceased life assured concealed and did not disclose his addiction to opium, in the proposal from. In both the Proposal cum Declaration forms, in section III regarding Personal & Family details of health/habits, he gave the answers to the questionnaire II (b) "Have you ever consumed the Narcotics", II (c) "Any other drug, if yes, which one" as Negative, which were false as can be seen from the treatment record of the hospital. The suppression of material facts by the policy holder, concealing facts of his opium addiction prior to the date of proposal/commencement of the policies has material bearing upon the judgment of opposite parties in accepting the risk, which has vitiated the contract of insurance. Had the deceased life assured disclosed about his true state of personal habits/history, the opposite parties would have called for extra reports on the basis of which the decision whether to accept or not the risk of Rs.7,00,000/- would have been taken. As the contract of life insurance is based upon the principles of "Uberrima fides" the competent authority, after due application of mind, has decided to repudiated the claim on the basis of cogent and convincing evidence and as per recommendation made by Divisional Office Disputes Redressal Committee and also as per the terms and condition of the policy. Averred further that as per section 45 of the Insurance Act, 1938, the opposite parties have returned to the claimant the amount payable under the policy i.e. the premium paid amounting to Rs.20084/- against both the policies on 30/12/2022. The claimant vide letter dated 28/02/2023, also filed appeal against the decision of the competent authority conveyed to her vide letter dated 30/12/2022, which has also been dismissed by the Zonal Office Claims Dispute Redressal Committee and the decision to this effect has also been conveyed to the claimant vide registered letter dated 31/03/2023. Thus nothing more is payable to the complainants under both the policies. Averred further that the present complaint has intentionally been filed by the complainants on false and frivolous facts and by concealing the real facts from this Commission. On merits, all other allegations made in the complaint are denied and a prayer for dismissal of the complaint is made.

3.       Complainant has also filed replication to the written reply of Opposite Parties denying the objections raised by Opposite Parties in their written reply.

4.       In order to prove their case, the complainants have placed on record affidavit of complainant no.1 as  Ex.C1 alongwith copies of documents Ex.C2 to Ex.C7, affidavit of Sh.Lakhvir Singh as Ex.C8, copy of aadhar card of Lakhvir Singh Ex.C9, affidavit of Sh.Lovepreet Singh Ex.C10 alongwith aadhar card Ex.C11, affidavit of Sh.Amrik Singh Sekhon Ex.C12 alongwith aadhar card Ex.C13, affidavit of Sh.Deepak Kumar Ex.C14 alongwith aadhar card Ex.C15, aadhar card of Kuldeep Singh Ex.C16 and death certificate of Kuldeep Singh Ex.C17.

5.       On the other hand, Opposite Parties has placed on record affidavit of Sh.Ramesh Kumar, Manager (Legal), LIC of India as Ex.OP1 & 2/A alongwith copies of documents Ex.OP1 & 2/B to Ex.OP1 & 2/Q.

6.         We have heard the ld. counsel for both the parties and also gone through the record.

7.       It is not disputed that Kuldeep Singh Kaila husband of the complainant (now deceased) took two life insurance policies bearing no.144879507 and 144879508 for a sum assured of Rs.3,50,000/- each, with half yearly payable premium of Rs.10042 for each policy under table term 933/24/21 from the opposite parties, with date of commencement as 28.10.2021 for both the policies. It is also not disputed that during the policy coverage, the life assured expired on 30.05.2022 in DMC & hospital, Ludhiana. After the death of her husband, the complainant no.1 lodged the claim with opposite parties being nominee under the said policies, but the Opposite Parties vide letter dated 30.12.2022 repudiated the claim of the complainants.

8.       Perusal of the record reveal that firstly the Divisional Office of Opposite Parties repudiated the claim of the complainant, vide letter dated 30.12.2022 on the following grounds:-

“While examining the claim we note from the following documents i.e. Prop Forms No.300 dated 28.10.2021 of above cases that the deceased life assured had answered the following questions as noted herein below:-

SECTION-III Personal & Family details of health/habits

Q No.                   Question                                  Answer Given      

II (b) Have you ever consumed the Narcotics         :        No

II (c) Any other drug, if yes, which one:                No    

4. We may however, stated that the aforesaid answers were false as can be seen from the following

a)      Patient Record of Sh.Kuldeep Singh Kaila shows that he was addicted to opium and he was admitted in DMCH on 26.05.2022 with pain abdomen, perforated Diverticulum & with history of heavy opioid addiction.

5.       This suppression of material facts, which have had a bearing on the granting of risk, was clearly done with the intent to mislead the Corporation. Hence, it has been decided to repudiate all the liabilities and in terms of provisions of Section 45 of the Insurance Act, 1938, we are refunding premiums paid under both policies.

6.       However, if you disagree with our above decision and feel that we have not considered any particular facts and circumstances in support of your claim, you may send your representation within three months from the date of receipt of this letter for review of your claim alongwith all supporting document to our Zonal Manager at the following address.

9.       The complainant filed an appeal before the Zonal Office of opposite parties and they upheld the decision of Divisional Office and the same was conveyed to the complainant by the Divisional Office vide letter dated 31.03.2023. The contents of said letter are reproduced as under:-

“With reference to your appeal vide your letter dated 28.02.2023, the matter regarding repudiation of claim under the above said policy was placed before the Zonal Office Claims Disputes Redressal Committee.

The Zonal Office Claims Disputes Redressal Committee has examined the facts of the case and it has been decided to uphold the Repudiation action taken by Divisional Office under the above policy.”

10.     Now, we have to decide whether repudiation of the claim of the complainant by the Opposite Parties is genuine or not?

11.     We have perused the documents carefully placed on record by the parties. Perusal of the record reveals that in the Medical Certificate of DMC & Hospital, Ludhiana (Ex.OP1 & 2/I), in the column ‘Cause of Death’ against the point (II): Other significant conditions contributing to the death but not related to disease or condition causing it, it is mentioned as ‘Opioid Addiction’. Further in the document i.e. Performa for Registration of death (Ex.OP1 & 2/J) under the heading “Past Medical/Surgical History (Mention duration), it is clearly mentioned as “History of heavy opioid addiction”. Further perusal of ‘Proposal Cum Declaration Forms’ placed on record by Opposite Parties (Ex.OP1 & 2/D) reveals that in ‘Section III (II) (b) Personal Habits’ DLA gave the answer to the following questionnaire in negative

‘Do Your smoke/consume or have you ever smoked/consumed the following (a,b,c):-

(a) Alcoholic drinks                                     ‘No’

(b) Narcotics                                               ‘No’

(c) Any other drugs, if yes, which one          ‘No’

From the above document, it is proved that the DLA availed the policies in question by way of misrepresentation and concealment of facts, as the DLA Kuldeep Singh Kaila has suppressed the material facts pertaining to his opium addiction prior to applying the insurance policies in question and hence, violated the terms and conditions of the policy in question. It is well settled principle of law that the parties are bound by the terms and conditions of the Insurance Policy, and none of the parties can seek any relief beyond those terms and conditions. In this regard reference may be made to the observation made by the Hon’ble Apex Court in case cited as Suraj Mal Ram Niwas Oil Mills (P) Ltd. Versus United India Insurance Co. Ltd and another, 2011 CTJ 11 (Supreme Court) (CP) wherein the Division Bench of the Hon’ble Apex Court consisting of Hon’ble Mr. Justice D.K. Jain and Hon’ble Mr. Justice T.S. Thakur, held that:-

“22.   Before embarking on an examination of the correctness of the grounds of repudiation of the policy, it would be apposite to examine the nature of a contract of insurance. It is trite that in a contract of insurance, the rights and obligations are governed by the terms of the said contract. Therefore, the terms of a contract of insurance have to be strictly construed, and no exception can be made on the ground of equity………..”

“24.     Thus, it needs little emphasis that in construing the terms of a contract of insurance, the words used therein must be given paramount important, and it is not open for the Court to add, delete or substitute any words. It is also well settled that since upon issuance of an insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risk covered by the policy, its terms have to be strictly construed to determine the extent of liability of the insurer. Therefore, the endeavour of the court should always be to interpret the words in which the contract is expressed by the parties.”

Ld. counsel for the Opposite Parties put reliance upon prouncement of Hon’ble Supreme Court of India in case Branch Manager, Bajaj Allianz Life Insurance Company Limited and other Vs. Dalbir Kaur, wherein it was hled that 

“13. The medical records which have been obtained during the course of the investigation clearly indicate that the deceased was suffering from a serious pre- existing medical condition which was not disclosed to the insurer. In fact, the deceased was hospitalized to undergo treatment for such condition in proximity to the date of his death, which was also not disclosed in spite of the specific queries relating to any ailment, hospitalization or treatment undergone by the proposer in Column 22 of the policy proposal form. We are, therefore, of the view that the judgment of the NCDRC in the present case does not lay down the correct principle of law and would have to be set aside. We order accordingly.

Further put reliance on Hon’ble National Commission, New Delhi in case LIC of India Vs. Ms. Mamta, Revision Petition No.3223/2010 decided on 12 Jan 2015, wherein it has been held as under:-

(2). If the life assured was suffering from diabetes mellitus for the last five years prior to the date of his admission in Maharaja Agrasen Hospital i.e. 19.8.2005 and was on insulin treatment for the last three years he obviously was aware of his ailment at the time of filling in proposal form dated 23.3.2005 wherein he has concealed his aforesaid ailment from the petitioner/opposite party. Thus, this is clear case of concealment of material fact regarding previous ailment by the life assured. That being the case, in view of the judgment of the Honble Supreme Court in the matter of Satwant Kaur Sandhu (supra) as also the judgment of Co-ordinate Bench of this Commission in Kokilaben Narendrabhai Patel (supra), the petitioner cannot be faulted for repudiating the claim on the ground that the insurance policy was obtained by concealment of previous ailment of the life assured. The State Commission while reversing the order of the District Forum has totally ignored the above-referred medical evidence. Therefore, the impugned order cannot be sustained.

9. In view of the discussion above, revision petition is allowed, impugned order is set aside and the complaint filed by the respondent/complainant is dismissed with no order as to cost.

 Ld. counsel for the Opposite Parties also relied upon judgements of Hon’ble National Commission, New Dlehi titled as ‘LIC of India   Vs.  Jyothi Sudhi’ Revision Petition No.1134 of 2016, Life Insurance Corporation of India    Vs..  Smt. Rekha (Revision Petition No.1001 of 2011,  Pushpa Patel w/o Late Suresh Kumar Patel  Vs HDFC Standard Life Insurance Co. Ltd. & Anr. First Appeal No.630 of 2018.

12.     In view of the judgements (supra), it has clearly been  held that the insurer is justified in repudiating a claim wherever there is a suppression of material fact. In the instant case, the DLA/policy holder did not disclose even in the proposal form at the time of purchasing the policy regarding his addiction of opium and hence suppressed/ concealed the material facts from the Opposite Parties. On the other hand, the judgements cited by the Complainant are not applicable to the facts of the present dispute and the same are quite distinguishable.   

13.     Sequel to the above discussion, the instant complaint is dismissed. However, keeping in view the peculiar circumstances of the case, the parties are left to bear their own costs. Copies of the order be furnished to the parties free of cost. File be consigned to record room after compliance.

Announced in Open Commission