Haryana

Fatehabad

CC/116/2019

krishna Bai - Complainant(s)

Versus

Life Insurance Corporation of india - Opp.Party(s)

Inder Karwasra

17 Aug 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM; FATEHABAD.

                              Sh. Rajbir Singh, President.                                                 Smt.Harisha Mehta and Sh.K.S.Nirania, Members

 

                                                          Complaint case No.116 of 2019.                                                       Date of Instt.: 08.03.2019.                                                                 Date of Decision: 17.08.2023.

Smt.Krishna Bai widow of Baldev Kumar son of Sohna Ram, resident of Ratia Chungi, Fatehabad District Fatehabad now at Shri Pannu Ram SDE, Kothi No.835, Sector-3, HUDA Fatehabad Tehsil & District Fatehabad.

                                                                             ..Complainant.                                   Versus

1. Life Insurance Corporation of India, Branch Sector -3 HUDA, Fatehabad Tehsil & District Fatehabda through its Branch Manager.

 

2.  Life Insurance Corporation of India, Divisional Office SCO No.3, 4 & 5 Sector-1, HUDA Rohtak District Rohtak through its Senior Divisional Manager.

 

                                                                   ..Opposite Parties.

          Complaint U/S 12 of the CP Act,1986              

Present:                  Sh. Inder Singh Karwasra, Advocate for complainant.                        Sh. P.K.Jora, Advocate for Ops.             

ORDER

Sh.Rajbir Singh, President

 

                              Briefly stated the facts of the present complaint are that the husband of the complainant Baldev Kumar had obtained an insurance policy bearing No.176846702 from Ops  on dated 28.08.2009 for a sum assured of Rs.2 lac; that prior to obtaining the policy in question his medical examination was conducted and on his being fit the policy in question was issued to him; that the complainant has been named as his nominee; that unfortunately the husband of the complainant died on 14.07.2015  and regarding this death claim was lodged with the Ops besides submitting the all relevant documents; that the Ops only refunded only Rs.40,000/- to the complainant under the said policy; that the complainant requested the Ops number of times to release the full amount on account of death claim but they repudiated the claim vide letter No.Claims/Rep/2015-16 dated 30.03.2016 on the ground that the life assured had withheld the correct information at the time of getting the renew/revive the policy in question; that thereafter the complainant preferred an appeal before Zonal Manager on 11.05.2016 but the same was also dismissed on 18.05.2016; that thereafter the complainant preferred an appeal before the Central Office Claims Review Committee on 08.07.2016 and also sent reminders dated 16.08.2016, 27.05.2017 and 18.06.2018 but till today the claim of the complainant has not been decided; that the complainant requested the Ops to release the balance amount alongwith other benefits but to no avail. The act and conduct of the Ops clearly amounts to deficiency in service on their part. In evidence, the complainant has tendered affidavit Ex.CW1/A and documents Annexure C-1 to Annexure C-21.

2.                On notice, OPs appeared and resisted the claim of the complainant by filing joint reply taking several preliminary objections such as maintainability, locus standi, estoppal, jurisdiction and concealment of material facts and cause of action etc.; that a policy No.17684702 was issued to Baldev Kumar with date of commencement 28.08.2009 under plan 178-15 for a sum assured of Rs.2,00,000/- and the installments of Rs.7044/- were to be paid half yearly; that the above said policy was lapsed due to non-payment of premium in between August 2012 to August 2013 which was further revived on 05.10.2013 on the strength of a personal statement regarding health made by the policy holder (DLA). The relevant questions are as under:

3. Since the date of your last medical examination for the above mentioned proposal of policy:

(a) Have you suffered from any physical or mental illness, injury or disability and if so, give details:       NO

(b) Have you been required to take medical treatment, if so give details 9shc as date and duration of illness effect of treatment etc. as also name and address of doctor who treated you:                                                                 NO 

4.Are you at present in sound health:                YES

It has been further submitted that as per the certificate given by the employer of policy holder, he had met with an accident and took leave from 30.08.2011 to 23.01.2022 for 147 days; that he concealed this material facts from the Ops at the time of revival of the policy which was revived on 12.12.2014; that after declaring the revival null and void, paid survival value to the tune of Rs.40,000/- was paid to the complainant on 15.03.2016; that there is no deficiency in service and unfair trade practice on the part of Ops. Prayer for dismissal of the complaint has been made. In evidence, the Ops have tendered affidavit of Sh.Rajender Singh, Manager (Legal) as Ex.RW1/A alongwith documents  Annexure R1 to Annexure R6.

4.                          We have heard learned counsels for the parties and perused the case file minutely.

5.                          The fact regarding obtaining of policy by the DLA from the Ops, lapsing of the policy in question, revival of the policy in question by the Ops as well as making the payment of survival benefit to the tune of Rs.40,000/- to the complainant is not disputed. The complainant has come with the plea that the Ops have not only wrongly and illegally withheld the policy benefits but also paid part payment of the policy in question and further repudiated the claim of the complainant on the ground that the DLA had concealed the vital and material information from the insurance company.

6.                          Per contra, it has been argued by learned counsel for the Ops that the DLA had concealed the vital and material information with regard to his state of health at the time of getting revival of the policy in question in the year 2013. In support of his arguments he drew the attention of this Commission towards the documents Annexure R2 and Annexure 5 i.e. Leave application and employer certificate of Mr.Baldev Kumar, DLA for 147 days commleave and further argued that the ground on which Commleave was applied for MEDICAL LEAVE due to road side accident and fracture in leg (Annexure R2). Learned counsel for the Ops further argued that this very document is a government document and the same has been issued by concerned department of the DLA and this very document is duly signed by the DLA, therefore, the survival benefits to the tune of Rs.40,000/- was returned to the complainant on 15.03.2016 and there is no deficiency in service and unfair trade practice on the part of the Ops. Prayer for the dismissal of the complaint has also been made.

7.                          It is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – uberrimae fidei, applicable to both the parties.  The rule of non-disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out facts which would materially affect the risk.  The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries.  A contract of insurance, therefore, can be repudiated for non-disclosure of “material facts.”  On this point reliance can be taken from case law titled as M/s Kotak Mahindra Old Mutual Life Insurance Company Limited and others 2017 (4) CLT 84 wherein Hon’ble State Commission Haryana has held as under :

7.      In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

8.      Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

9.      In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

In the present case the policy was revived and at the time of revival of the policy, the DLA not only misled the Ops but also gave wrong answers to the questions, mentioned herein above, put to him by the Ops at the time of revival of the policy. It was the duty of the policy holder to disclose all the material facts about his state of health but in the present case the complainant had taken medical leave from 30.08.2011 to 23.01.2012 (147 days) before getting his policy revived, as is evident through Annexure R2 wherein it has been clearly mentioned that that the leaves were taken due to road side accident and fracture in leg, therefore, the pleas made on behalf of the complainant are not sustainable and are hereby rejected.

8.                          In view of the above mentioned reasons/discussions, we do not find any merits in this complaint, as the complainant has not been able to prove any deficiency in service and unfair trade practice on the part of Ops, therefore, the present complaint is hereby dismissed.  In the given facts and circumstances of this case, parties are left to bear their own costs. Copy of this order be supplied to the parties concerned, free of cost, as per rules, and thereafter, the case file be consigned to record room, as per rules, after necessary compliance. Application, if any, pending on the case file, needs not to be dealt with further and same is hereby disposed of. This order be also uploaded forthwith on website of this Commission, as per rules, for perusal of parties herein.

          

Announced in open Commission.                                                            Dated: 17.08.2023

 

                                                                                                        

          (K.S.Nirania)                 (Harisha Mehta)                 (Rajbir Singh)                        Member                                 Member                              President