DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Karnail Singh s/o Late Sh. Narang Singh, r/o H.No.1, Mariwala Town, Manimajra, Chandigarh.

                                                                                    ---Complainant

V E R S U S

1]       Life Insurance Corporation of India, Bay No. 71-72, Sector 2, Panchkula, through its Branch Manager.

2]       Life Insurance Corporation of India, Divisional Office Jeevan Prakash, 489, Model town, Karnal – 132001, through its Divisional Manager.

---Opposite Parties

BEFORE:            SHRI LAKSHMAN SHARMA                    PRESIDENT

                        MRS.MADHU MUTNEJA                   MEMBER

                        SH.JASWINDER SINGH SIDHU            MEMBER

Argued By:      Sh.Jagtar Kureel, Adv. for the Complainant.

Sh.Rajneesh Malhotra, Adv. for the OPs.

PER JASWINDER SINGH SIDHU, MEMBER

1.             Complainant (hereinafter referred to as CC for short) has filed the present complaint against the Opposite Parties (hereinafter referred to as OPs for short), on the grounds that the wife of the CC Late Smt.Hardeep Kaur subscribed for an Endowment Assurance Policy, bearing No. 176097186 dated 22.12.2008, having sum assured Rs.1,00,000/-. The date of maturity of the said policy was 22.12.2029, for which a premium of Rs.2557/- was payable bi-annually in the month of June and December every year. Copy of the policy is annexed C-1.

                The CC was mentioned as the nominee in the policy in the name of his wife, and was legally entitled to receive the amount as claimed.  At the time of subscribing for the policy, the benefits assured clearly mentioned that in the event of death of the insured, before the date of maturity, the nominee would receive Rs.1,00,000/-, along with Vested Bonus. The wife of the CC died on 18.1.2009, due to heart attack at her residence.

                At the time of subscribing for the policy, late Smt. Hardeep Kaur wife of the CC was medically examined by a doctor, who was on the panel of the OPs and was found to be fit for insurance. The examining doctor did not find any abnormality during detailed examination.  

                The CC has alleged that the agent of the OPs who had filled up the proposal form on behalf of the deceased did not supply the copy of the said proposal form, so that the same could be cross checked with the insurance policy, which was supplied at a later stage. The CC intimated the death of the insured to the OPs and lodged the claim with their Panchkula office (Annex.C-3). The CC claims that the OPs repudiated the claim vide their letter dated 9.9.2009 on flimsy grounds and the reasons assigned for the same are baseless and unfounded.

                The CC claims that the denial of the claim to the CC is a deficiency in service on the part of the OPs and prays for direction of payment of Rs.1.00 lac plus Vested Bonus along with an interest @18% p.a.  & compensation to the tune of Rs.25000/- for mental agony, harassment and suffering caused by the OPs. 

2.              On notice, OPs filed their collective version.

                The OPs have taken preliminary objections to the present complaint on the ground of locus standi, CC not being a consumer as per CPA, present complaint being pre-mature as the CC failed to provide necessary documents, and finally, on the grounds of territorial jurisdiction as mentioned in Para 6 of their reply.

                On merits, in Para 2 Ops have claimed that “it is respectfully submitted that one Mrs. Hardeep Kaur had filled up the proposal form, the copy of which is annexed herewith as Annexure R-1”, who is herself the subscriber of the Policy in question. It is also mentioned that she has specifically quoted that she was not suffering from any of the ailments as mentioned diabetes; tuberculosis, low B.P., high B.P., nor diseases related to liver, stomach, heart, lungs, kidney, brain, neverous system and further stated that she was in good health. On the basis of the proposal form filled by the subscriber Late Mrs. Hardeep Kaur, and answers given to the doctor, the policy was issued. 

                It is admitted that the CC, husband of the deceased, was the nominee in the said Policy of the Life Assured.

                OPs have alleged that at the time of subscribing for the Policy, the Life Assured (L.A.) failed to disclose to the doctor or the company that she was not in good health and hence, having suppressed an important information with regard to her health, has breached the principle of utmost good faith and as this fact had come to light on being investigated upon, the OPs were very much within their rights to repudiate the claim of the CC. OPs have mentioned a judgment of the Hon’ble National Commission in the case No. FA 163/1995 titled as LIC of India Vs. M. Gowri & Others, 1986-95 Consumer 1387 (NS), wherein it is mentioned that the proposal form filled up by the agent is done on behalf of the proposer i.e. the subscriber of the policy and the information so supplied by the insured is as per her disclosures.

                OPs have further mentioned that the CC while lodging the claim had himself revealed the fact that the LA had died due to hear attack and the copy of the Claim Form No. 3816 is annexed as Annex.R-4.  OPs have objected to the fact that LA died within 26 days of having subscribed for the Policy and in these circumstances, the matter was investigated by one Sh.A.K. Sharma, Assistant Branch Manager, Hisar and during investigation, it came to light that the LA was suffering from hypertension prior to obtaining the insurance policy. It is resultant to the hypertension and high blood pressure that the LA died due to heart attack. Investigation report is annexed at Annex.R-5.  On these facts, the repudiation of the claim of the CC is very much within the terms and conditions of the policy and hence, no claim is made out against the answering OPs, nor there is any deficiency on the part of the OPs. Hence, the present complaint be dismissed with heavy costs.

3.              Parties led their respective evidences.

4.              Having gone through the entire complaint and version of OPs, the evidence of the parties and able assistance of the ld. counsels we have come to the following conclusions.-

i)      As the CC has specifically raised allegations about LA Late Mrs. Hardeep Kaur being medically examined by the doctor on the panel of the Insurance Company at the time of taking insurance policy and herself being found fit for insurance, after detailed examination, as mentioned in Para 5 (Pg.2) of the complaint.

ii)        The second allegation is with regard to the conduct of the Agent of the Insurance Company, who filled up the proposal form and the OPs did not supply the copy of the proposal form, so that the same could be cross checked at a later stage, when the insurance policy was issued to the LA.  

iii)       It is also important to explore the fact with regard to the territorial jurisdiction of this Forum as the same is specifically raised in Para No.6 of the version of the OPs. 

5.              While dealing with the allegations of the CC with regard to the fact that the proposal form was filled up by the Agent of the OPs, and OPs claim that the information as supplied by the LA, was written down in toto.  It is also mentioned in the reply of the OPs that the agent while filling up the form acts as the Agent of the Proposer i.e. the L.A. and the OPs are in no way responsible for any discrepancy or misinformation as quoted in the proposal form, because the same is being written down on behalf of the proposer i.e. the L.A. 

a.  It is very important to visit the proposal form (Annex.R-1), wherein on the last page, we find three thumb impressions and the same are attributed to the LA. It is also important to mention that in the column meant for the signature of the witness, a name of one “Suman Sharma – 679-16N, ZM club Member”, is mentioned.  At the same time, on page 01 of Annex.R-1, the Column that was to be filled up by the Agent, is blank and there is only one entry with regard to the Code No. of the Agent mentioned as 679-16N. From above observations, it is very much clear that the proposal form was filled up by Agent Suman Sharma, No. 679-16N and hence the Proposal Form does not bear the signature of any witness.  This aspect points to the fact that there was no witness when the proposal form was being filled. 

b.  Further, on the same page, in Col. No.2, it is mentioned that in case the proposer is illiterate, “his/her thumb impression should be attested by a person of standing whose identity can be easily established, but unconnected with the corporation and this declaration should be made by him”. The column is completely blank, which points to the fact that while the L.A. had given her right hand thumb impression on the proposal form, she was not disclosed nor explained the facts as mentioned in the proposal form by the Agent, who had filled up the form on her behalf. In the present circumstances, it is not established that the facts claimed to be disclosed by the LA to the insurance company were actually mentioned by her. 

c.  The third aspect, which is of utmost importance is that on the last page of the proposal form, under the heading “For Medical Cases Only”, it is mentioned that “I certify that the life assured has put his/her thumb impression in my presence after admitting that all the answers to Question Nos. 10 onwards of this form have been correctly recorded”. And further, it is mentioned that “signature or thumb impression of the life proposed should be affixed in the presence of medical examiner”. In this particular column, where the signature of the medial examiner should have been appended, is completely blank.  In light of this fact, it is very much clear, and beyond all reasonable doubts that the information, as mentioned in the proposal form, is not what the OPs have claimed to be disclosed by the LA. Hence, the contention of the OPs with regard to the information supplied by the LA cannot be believed, but the fact that the proposal form in its present form is incomplete is established. Hence it is wrong on the part of the OPs to have issued an insurance policy to the deceased L.A. and after having received money on account of the premium, they cannot deny the CC his rightful claim by raising silly and unfounded reasons.    

d.  The specific allegation of the CC as mentioned in his present complaint with regard to the non-supply of the copy of the proposal form, along with insurance policy, goes unrebutted; as the OPs have failed to establish that they have supplied the same to the L.A. or the CC, and had taken a due receipt from him/her.  It is also important to visit the IRDA,s (Protection of Policy Holders’ interest) Regulation, 2002, under the Regulation No.3 under the heading” Point of Sale”, sub-regulation 3(3) speaks that”where the prospect depends upon the advice of the insurer or his agent or an insurance intermediary, such a person must advise the prospect dispassionately”. Further, sub-regulation 3(4) speaks that “where, for any reason, the proposal and other connected papers are not filled by the prospect, a certificate may be incorporated at the end of proposal form from the prospect that the contents of the form and documents have been fully explained to him and that he has fully understood the significance of the proposed contract”.  In the light of this fact it is very much clear that the OPs failed to adhere to the directions of the IRDA, which was their responsibility towards the L.A. from whom they had collected the premium for the said insurance Policy.

6.              Though the OPs have taken a strong objection to the territorial jurisdiction of this Forum, on the ground that no cause of action had arose in the territorial jurisdiction of this Forum, as the proposal form mentioned the same to have been filled up at Panchkula and the claim was lodged by the CC at their Panchkula Branch.

                As we have already discussed the proposal form in detail, but it is no where mentioned in the version of the OPs that the LA deceased wife of the CC ever visited OPs Panchkula office, so as to defeat the jurisdiction of this Forum. Further, the affidavit of the agent of the OPs one Suman Sharma (Code No.679-16N) could have thrown light on the fact as to where the said proposal form was filled up i.e. either at the residence of the LA, which lies in the territorial jurisdiction of this Forum, or at the OPs Panchkula Branch, which could have ousted the jurisdiction of this Forum in entertaining the present complaint. Though it clear from the documents Annexed vide Page 14/15, 16/17 and 18 of the complaint that the Agent Suman Sharma 679-16M, remained part of the investigation of the OPs, In the absence of any evidence qua this fact we feel that the contentions of the CC with regard to the territorial jurisdiction of this Forum hold ground, as OPs have failed to contest this aspect in a just and legal manner.   

7.              The most important aspect of the version of the OPs, which is supported by an affidavit of one officer P. Kwatra and the same is duly verified and attested by an Oath Commissioner, is that the opening Para No.2 of the affidavit speaks about that one Mrs. Hardeep Kaur had filled up the proposal form, the copy of which is annexed herewith as Annexure R-1.  We are surprised that the high ranking officers of the OPs are making statements on oath; whereas, the documents tendered by them, along with their version, reflect to the contrary, because the proposal form clearly shows that the LA is illiterate as she has given her Right Hand Thumb impression and as such, she cannot fill up the form in English language.  Furthermore, on page 3 (Para 2) it is mentioned that on the basis of the proposal form filled up by the L.A. Mrs. Hardeep Kaur and the answers given to the “Doctor”, the Policy in question was issued. As a matter of fact, the column where the “Doctor” is supposed to have appended his signatures on Page 4 of the Proposal Form is completely blank. Hence, the statement tendered by the OPs is completely unbelievable, and hence the Affidavit of the OPs too is a bad piece of evidence. 

8.              We have also visited the judgment F.A. No. 163 of 1995 titled as LIC of India Vs. M.Gowri and Ors., 1986-95, wherein Hon’ble National Commission has held that while filling up the proposal form, an agent acts as an agent of the insured for whose benefit the insurance is to be obtained.  We feel that the observations made in the above titled case relate to the fact where the proposal form is filled up in all its correct form; whereas, in the present case, it is not so. It was incumbent upon the OPs to not to entertain an incomplete proposal form whether whosoever may have filled it up.  OPs having entertained such documents by shutting their eyes tight and on having received money from the L.A. cannot refuse the claim by quoting the discrepancies they had themselves ignored in the same document, while issuing the said policy.  It is under such circumstances that the Hon’ble Supreme Court of India in the case titled Dharmendra Goel Vs. Oriental Insurance Co. Ltd. 2008(3) CPC 262 SC, has observed “Held that the insurer can’t disown their liability when they are called upon to pay the compensation. The take it or leave it attitude of the OPs is not only unwarranted being bad in law, but is ethically indefensible as well. That in such case the insurer would be liable to pay compensation on the insured amount as it has accepted the premium for the same. 

9.              One more aspect which requires to be dealt with is with regard to the fact that the OPs while investigating the matter had come up with a certificate of a doctor (Annex.R-6) dated as 28.4.2009. The OPs have heavily relied upon the observations of Dr. Naresh Kumar, BAMS, who has submitted this certificate.  The same doctor was called up to face the cross-examination, after having submitted the reply to the questionnaire sent to him.  During cross – examination, as recorded on 29.8.2011, the doctor claimed that he had filled up Annex.R-4 brought to him by the Agent of LIC (OPs).  The doctor further said that he maintained the register of the visits of the patients in his clinic. But at the same time, he failed to bring the relevant register, so that the same could be corroborated with the details as mentioned in Annex.R-4.  Annexure R-4 is an undated document and it is difficult to know as to on what date the same was filled up. As such, this piece of evidence, which is heavily relied upon by the OPs, too cannot be believed, because the doctor who  himself is not maintaining his records in proper order could not be believed to have remembered all the details of all his patients over the previous period of his practice.  

10.    (a)        In the light of the above observations, we allow the present complaint and direct the OPs to pay the assured sum of Rs.1,00,000/-, along with Vested Bonus the CC was entitled for , on the date of his lodging the claim. OPs are also saddled with a consolidated amount of compensation to the tune of Rs.20,000/-, along with Rs.7,000/- as litigation expenses. This order of ours shall be complied within 30 days of its receipt; where after the OPs shall be further liable to an interest @18% p.a. on the amount due towards them, apart from the litigation expenses.   

       (b)     We further direct the OPs to investigate and fix up the responsibility on the erring officials who issued the said policy on an incomplete “Proposal Form”. The OPs shall complete this enquiry within “NINETY DAYS” from the receipt of this order and may recover the entire amount of compensation from such officials as we feel that the Tax Payers money is not wasted due to such acts of omission and commission of officers who fail in their duties and responsibilities.

                    Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

05.10.2011                                                           

Sd/-

           (LAKSHMAN SHARMA)

PRESIDENT

Sd/-

(MADHU MUTNEJA)

MEMBER

Sd/-

 (JASWINDER SINGH SIDHU)