IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.Ashok Kumar J.Dhole<br /> B.A(Hons), LL.B - President<br /> <br /> 2. Smt.M.Mahadevi<br /> M.Sc., M.Ed., -Member<br /> <br /> 3. G.V.Balasubramanya<br /> B.E., LL.M - Member<br /> <br /> CC 35/06 DATED 29-02-2006<br /> <br /> Complainant 1. Leelamani W/o M.Shivakumar<br /> 2. K.S.Prasad S/o M.Shivakumar<br /> Both are resident at<br /> No.22, 10th Main, 7th Cross, Saraswathipuram, Mysore-09.<br /> (By B.K.Mohan, Advocate)<br /> <br /> Vs. <br /> <br /> Opposite Party Life Insurance Corporation of India, Divisional Office “Jeeva Prakash”, P.B.No.37, Mysore-Bangalore Road, Bannimantap, Mysore.<br /> (By B.N.Shashidhara, Advocate)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 13-02-2006<br /> Date of appearance of O.P. : 07-03-2006<br /> Date of order : 29-08-2006<br /> Duration of Proceeding : 5 ½ MONTHS<br /> <br /> <br /> PRESIDENT<br /> <br /> <br /> MEMBER<br /> <br /> <br /> MEMBER<br /> <br /> <br /> <br /> Sri. Ashok Kumar J.Dhole<br /> President,<br /> <br /> 1. Initially, this complaint was filed by Smt.Leelamani, W/o M.Shivakumar under section 12 of the C.P.Act, 1986, on the ground of deficiency in service against the L.I.C. During pendency of this complaint, an application was filed to implead her son named K.S.Prasad, S/o M.Shivakumar on the ground that the disputed L.I.C. policy was assigned in his favour. He was impleaded as Complainant no.2.<br /> 2. The dispute between the parties is in respect of Life Insurance Policy taken by Sri.C.N.Avinash during his life time, named “Jeevan Shree” LIC policy bearing No.721162908. The assured amount under the said policy is Rs.5,00,000/- with Annual premium of Rs.24,375/-. The assured – C.N.Avinash died on 23.04.04. The claim was repudiated by letter dated 16-05-05 on the ground that there was suppression of material fact in respect of the income of assured, when proposal was submitted to the LIC. The complainants have filed this complaint on the ground that such repudiation is unjust and improper. They have claimed the entire amount of Rs.5,00,000/- with cost and interest.<br /> 3. Notice was duly served on the O.P, who appeared and contested the complaint by filing a version contending that the repudiation was just and proper, and the complainants are not entitled to claim any benefit under the said policy.<br /> 4. Both parties were given full opportunity to adduce oral and documentary evidence. The father of deceased named Nanjundaswamy is examined as C.W.1. On behalf of the O.P Sri.N.V.Ramesh is examined as R.W.1. Heard the learned counsel for both sides.<br /> 5. Undisputed facts can be briefly summarized as under:-<br /> Late C.N.Avinash submitted a proposal seeking “Jeevan Shree” policy from the O.P and as per the said proposal, the assured amount was Rs.5,00,000/-. Late C.N.Avinash was aged about 20 years (Date of birth 13-10-1981) at the time of the proposal and he was not having any independent source of income. He was a full time student studying at Mysore. On the basis of proposal dated 27-01-02 O.P. has issued policy bearing No.721162908 dated 31-01-02. It is also not disputed that the 1st premium of Rs.24,375/- was paid through a cheque issued by complainant no.1 Smt.Leelamani, who was also nominee under the said policy, and paternal aunt of Late C.N.Avinash. There is also no dispute that subsequent premiums up to the date of death were paid and the policy was inforce on 23-04-04.<br /> 6. It is also clear from the evidence of the parties that the body of C.N.Avinash was found in “Kukkarahalli lake” and he died on 23.04.04. The complainants claimed benefits under the said policy and investigation was conducted. As per the report dated 27-09-04, the O.P repudiated the claim on the ground that the policy was obtained by suppression of material facts.<br /> 7. It is the simple contention of the O.P that Late C.N.Avinash had no source of income. He had shown in the proposal that his occupation was agriculture landlord and student. He has further shown having income of Rs.65,000/- per year from the Agriculture. On the basis of such proposal, the policy was issued, but in reality Late C.N.Avinash was not having such income, hence the repudiation is just and proper.<br /> 8. On the basis of above pleadings, following points arise for our consideration:-<br /> 1. Whether O.P has proved that Annual income of the proposer is a “Material fact”?<br /> 2. Whether complainants have proved that Late C.N.Avinash had income of Rs.65,000/- per year from his Agricultural land?<br /> 3. Whether O.P has proved that there was suppression of material fact and Late C.N.Avinash had no such income?<br /> 4. Whether complainants have proved deficiency in service?<br /> 5. What order?<br /> 9. Our findings are as under:-<br /> a. Point no.1 : Affirmative.<br /> b. Point no.2 : Negative and point no.3 : Affirmative.<br /> c. Point no. 4 : Negative.<br /> d. Point no. 5 : As per final order.<br /> <br /> REASONS<br /> <br /> 10. General:- The learned counsel for the complainant Sri.Jerold Castelino vehemently argued the case and submitted that complainant has examined the father of Late C.N.Avinash as C.W.1 and produced certified copies of the RTCs, to show that Late C.N.Avinash was member of joint Hindu family and he was looking after the agriculture. He further submitted that C.W.1 Nanjundaswamy has entrusted the supervision of cultivation to Late C.N.Avinash and he was in-charge of the income from the landed properties. He further submitted that evidence of C.W.1 is sufficient to come to conclusion that Late C.N.Avinash had income of Rs.65,000/- per year from the landed properties. <br /> 11. The learned counsel for the O.P Sri.B.N.Shashidhara vehemently argued and brought to the notice of the Forum number of facts and circumstances; and submitted that the claim is surrounded by suspicious circumstances. He further submitted that O.P has collected documentary evidence to show that Late C.N.Avinash and his father have obtained certificate from the competent Tahasildar to the effect that the income of Late C.N.Avinash and his father was only Rs.10,000/- from all sources. He further submitted that these documents operate as admission as well as estoppel against Late C.N.Avinash and his father Nanjundaswamy. He further submitted that mere production of the RTCs, is not sufficient to come to conclusion that Late C.N.Avinash had income of Rs.65,000/- per year. Such policy was obtained on the basis of in-correct information. Hence, the repudiation is proper.<br /> 12. POINT NO.1:- The first question, which is required to be decided is whether the information regarding the means of livelihood or income of the proposer, with details relating to occupation is a “Material fact”. Late C.N.Avinash had shown in Col. No.4(A) of the proposal that his present occupation was “Agriculture landlord and student”. He has further shown the nature of duties or nature of business as “Agriculture and studying”. He has further disclosed that he was not employed and studying in 2nd year PUC. Late C.N.Avinash has disclosed in Col.No.5 that he had Annual income of Rs.65,000/- from Agriculture and he is not an Income tax payee.<br /> 13. The income of a proposer plays very important role in deciding the “Moral hazard” involved in acceptance of the risk on his life. Moral hazard would operate in cases, where there is no genuine need for insurance. The need for insurance, which is a financial transaction, can be measured by the financial loss to the “Beneficiary” resulting from the cessation of the income earned by the life assured, due to his death.<br /> 14. Where there is no genuine need for insurance, the object in taking out insurance would be speculative. In view of the above fact, the Corporation must be supplied with correct information as regards the means of livelihood, and income of the proposer to enable it to judge, whether the amount of assurance proposed, is commensurate with the proposers income. For this purpose, a Moral hazard report is obtained in all cases of large sum proposed by the assured. It is important to keep in mind that in all the cases of insurance, the concept of moral hazard plays vital role. For consideration of risk on the life of the proposer, three basic factors i.e. Physical hazard, Occupational hazard, and Moral hazard, are required to be looked into. Life insurance is a long-term contract and correct appraisal of the risk can only be made if the information of all points pertaining to three different types of hazards is carefully and truthfully recorded. <br /> 15. In this context, the learned counsel for the O.P relied on the case of LIC of India Vs. Smt. Minulalita (Rev.Pit. No.1167/97) reported in III (2002) CPJ page 10 (NC). In the concluding para, the Hon’ble National Commission has observed as under: -<br /> <br /> “This ground of in-correct information and false statements regarding age of the insured and income make the insurance contract Null and vide”.<br /> <br /> It is well settled law that contract of insurance is based on utter good faith. All questions, which are posed in the proposal form are with a view to get correct information for the purpose of issuing a policy. Hence, we have no hesitation to come to conclusion that disclosure of correct information regarding present occupation; exact nature of the duties or work, educational qualification, annual income and source of income are “material facts”. The proposer is bound to disclose these facts correctly, in failure of which the contract is bound to fail. So, point no.1 is answered in affirmative.<br /> 16. POINTS NO.2 & 3:- In this case, both complainants are not examined before the Forum. The father of Late C.N.Avinash named Nanjundaswamy is examined as C.W.1 and he has produced four certified copies of the RTC to show that he had certain landed properties. There is no other corroborative oral or documentary evidence to show the gross and net annual income of Nanjundaswamy from these lands. On the contrary, there is formal evidence of Sri.N.V.Ramesh who has no personal knowledge and his evidence is based only on the documents. Any how, O.P. has produced number of documents including the investigation report filed by Sri.C.K.Ravi dated 20-09-04, where he has concluded as under: - <br /> <br /> <br /> “Since the nature of transaction is – <br /> (1) I.P. payment by nominee, who had no insurable interest.<br /> (2) Swiftness and method in which policy was got assigned.<br /> (3) The cause of death.<br /> (4) The occupation of the L.A. was stated as agriculturist and student, but he was only a student and had no income of his own.<br /> (5) Whether a loan of Rs.5,00,000/- was given to him which itself was a moral hazard.<br /> <br /> Gives raise to doubt about the genuineness of the claim. It appears to be a “Fraud”. I request your kindself to call for further investigation at his native place and by an external agency”.<br /> 17. Unfortunately, inspite of such report, the O.P has not referred the matter to any external agency for further investigation, but repudiated the claim only on the basis of available records i.e. the certificate, which was obtained by Late C.N.Avinash for securing benefit in the school by showing his income as Rs.10,000/-p.a. Such being the fact, great care and caution is required to be taken when appreciating the evidence.<br /> 18. It is a case where both parties were given full opportunity to adduce oral and documentary evidence. In such cases the initial burden of proof looses it’s significance. Whatever evidence is placed on record is required to be seen Objectively and not Subjectively. In cases of fraud, mis-representation of fact, or suppression of material fact direct evidence is rarely available, and certain inferences are required to be drawn objectively. There are number of circumstances, which are successfully placed on record by the O.P to show that everything was not well when the proposal was submitted. In that context, we have to consider the facts disclosed in the proposal.<br /> 19. Certain facts and circumstances, which are placed on record, and which give raise to reasonable suspicious regarding “Moral hazard” can be briefly summarised as under:<br /> a. Father of late C.N.Avinash named Nanjundaswamy (CW-1) was not a novice to the Insurance business and transaction. It is disclosed from his evidence that he is a B.A. graduate and he worked as LIC Agent from 1997. It is also undisputed that there was no partition between the late C.N.Avinash who has aged about 20 years and his father. It is difficult to believe the evidence of CW-1 that late C.N.Avinash had taken a decision to obtain a Policy for an amount of Rs.5,00,000/- without consultation with his father. CW-1 states before the Forum that he came to know about policy only after the death of late C.N.Avinash. Late C.N.Avinash had no source of income of his own. He was a full time student in the college. He was permanently residing at Mysore away from the village. In the proposal form and the policy the address of late C.N.Avinash shown at Mysore. But CW-1 states that his son was looking after cultivation of one land bearing No.110 measuring 11 acre 30 gnts. of Bommanahalli Village, and he was traveling to Mysore for the purpose of education. The payment under the policy was Rs.24,375/- per year, which was not a small amount looking the age, education and avocation of late C.N.Avinash. Hence, the evidence of CW-1 that the policy was proposed to be taken by late C.N.Avinash without his knowledge or concurrence cannot be accepted perse. There is a conscious effort to hide something.<br /> b. The second important circumstance is that the family of late C.N.Avinash, consists of father (49 years); mother (40 years); and brother (18 years). But none of them was shown as nominee in the proposal form. No satisfactory or acceptable reason is given as to why the Complainant No.1 Leelamani who is maternal aunt was shown as nominee. O.P. has produced a letter given by Canara Bank, Mysore to show that first premium of Rs.24,375/- was paid by Smt.Leelamani through a cheque and the amount has been debited in her SB A/c No.635. If late C.N.Avinash had income of Rs.65,000/- per year, there was no need for him to borrow the premium amount of Rs.24,375/- at the time of inception of the policy. There is also no evidence to show that this amount was repaid by late C.N.Avinash or his father.<br /> c. The original proposal form is produced by the O.P. Proposal was made by late C.N.Avinash on 27.01.2002. On the basis of cheque issued by Complainant No.1 Smt.Leelamani, the disputed policy was issued on 31.01.2002 though the cheque was encashed on 02.02.2002. Obviously this policy was sent to the address of late C.N.Avinash by post and it might have taken sometime to deliver the same. It is further seen that without loosing much time an assignment letter was allegedly signed by late C.N.Avinash on 26.02.2002. In simple words, the policy was allegedly assigned in favour Complainant No.2, who is also son of Complainant No.1, within 26 days from the date of the policy. This circumstance speaks volume about the nature of the transaction. <br /> d. O.P. has produced the original assignment letter along with endorsement on the policy. It is clear that though assignment was made on 26.02.2002; it was registered in the Office of LIC on 09.04.2002. As there was a separate assignment letter, which was witnessed by one LIC Agent named K.C.Mallikarjuna, there was no need to have separate endorsement on the backside of the policy. But, we find that there was an attempt to put rubber seal of assignment in three places. In two places, there was no proper print and in the third place there is assignment endorsement, which is similar to that of separate letter. Hence, the time gap between obtaining the policy and assigning the same in favour of Complainant No.2 is another material fact, which is not properly explained. <br /> e. Complainant No.2 K.S.Prasad was aged about 24 years at that time and he was also a student without having any source of own income. Complainant No.2 has not entered the witness box to prove that he has paid an amount of Rs.5,00,000/- to late C.N.Avinash either in cash or through a cheque. No material is produced to show that such assignment in favour of Complainant No.2 was for a consideration. Assignment is different from the “Gift”. Unless, complainant No.2 proves that there was consideration for such assignment, the contract is null and void and Complainant No.2 cannot claim any benefit under such policy. But, there is a stoic silence on the part of Complainant No.2. He has filed only his affidavit and kept quiet. There is no evidence to show that Complainant no.2 had amount of Rs.5,00,000/- for payment to late C.N.Avinash. This circumstance suggests that there was something else, which the parties are not willing to disclose before the Forum.<br /> f. The agents who were involved in obtaining the policy and assignment are also necessary to seen. Father of Late C.N.Avinash who had experience as an agent since 1997 is said to be not involved in obtaining the policy. The proposal form is signed by one agent named Thejas.K.M. who has given his address as 520/1, 15th main, Saraswathipuram, Mysore. The LIC agent who has attested the assignment letter and assignment endorsement is “K.C.Mallikarjuna” and his address is also shown as 520/1, 15th main, Saraswathipuram, Mysore. It is obvious that these two agents are either close relatives or interested in the business of each other. When policy was obtained with the help of agent named “Thejas.K.S.” why the assignment letter was signed by K.C.Mallikarjuna is not clear.<br /> g. The most important circumstance is regarding the cause of death. C.W.1 Nanjundaswamy states in his evidence that it was an accidental death, whereas O.Ps have produced clinching evidence that it was a case of suicide. It is un disputed that body of Late C.N.Avinash was found in Kukkarahalli lake on 23-04-04. There was also a news published in the daily paper produced by the O.P, and post-mortem was conducted. In simple words, Late C.N.Avinash died within a period of two years three months from the date of obtaining such policy. We have no hesitation to conclude that it was “Unnatural and untimely death”, and it was not a natural death due to ill health or some other cause.<br /> 20. We have to keep the above narrated circumstances in mind while we proceed to appreciate the question of “Suppression of material fact” regarding the income of Late C.N.Avinash. Here, we may like to make it clear, that we are not drawing any inference and deciding the fate of this case only on the basis of such inference.<br /> 21. It is a case where policy was issued on 31-01-02 and Late C.N.Avinash faced with “untimely and un naturally death” on 23.04.04 i.e. beyond a period of two years. In such cases, section 45 of the Insurance Act, 1938 (Act no.4 of 1938) is applicable. The Hon’ble Supreme Court in the famous case of Mithoolal Nayak Vs. LIC of India reported in AIR 1962 SC page 814 has observed that three conditions are required for application of 2nd part of section 45. They are as under:-<br /> a. The statement must be on a material matter, or must suppress facts, which it was material to disclose. <br /> b. The suppression must be fraudulently made by the policy holder, and<br /> c. The policy holder must have known at the time of making the statement that it was false, or that he suppressed fact, which was material to disclose.<br /> 22. Keeping in view the above well established principles, we proceed to consider the evidence on record.<br /> 23. We have already concluded while answering point No.1 that correct disclosure about present occupation, nature and duties of business, the nature of avocation, the annual income and the source of such income should be correctly disclosed. Disclosure of such fact is a “material matter” for the purpose of issuing a policy. L.C. for the Complainant has placed on record, the evidence of Nanjundaswamy and four certified copies of the RTC. Sy.No.110 situated at Bommanahalli Village is measuring 11 acre 30 gnts. and it is a dry land where crops like, horsegram, ragi was taken in the year 2000-01. It is the evidence of CW-1 Nanjundaswamy that his son Late C.N.Avinash was looking after cultivation of this land. Though CW-1 states that income from this land was Rs.1.5 lakhs per year, there is no corroborating evidence to prove income from this land. Nevertheless, there was no partition between CW-1 and his son Late C.N.Avinash. The above mentioned land is still standing in the name of Nanjundaswamy. It is seen from column No.10 that this land was mutated in his name as entry no.9 of 2000-01. There is no oral or documentary evidence to show that cultivation of this land, infact and reality, was exclusively entrusted to Late C.N.Avinash. Hence, mere say of CW-1 that Late C.N.Avinash was looking after cultivation of this land and getting income of Rs.1.5 lakhs per year cannot be accepted. The learned counsel for the Complainant has produced copies of three RTCs, which are in respect of Sy.No.74 and 55 situated at Arjunahalli Village and Sy.No.15 situated at Chikkapadara Gudi. In Arjunahalli land CW-1 is having only 26 cents of share. In Sy.No.55 three persons are jointly holding 2.08 acres, which means CW-1, has got 0.90 cents share. In Sy.No.15 CW-1 along with two other sharer is having 1.3 acres which means CW-1 has got 0.44 cents of land. The approximate land held by CW-1 is 1.60 acres. Merely because these lands are standing in the name of CW-1, no inference can be drawn that he had agreed to pay income from these lands to Late C.N.Avinash for the purpose of premium every year. Except production of these documents there is no evidence to show that the income received from these lands, and the income, which Late C.N.Avinash was in control at his disposal. Even if there was some income from these lands, it was income from the joint family assets and the same could be utilized only with the prior knowledge of CW-1. But, CW-1 clearly states that there was neither prior consultation, nor he had knowledge about this policy till the death of Avinash. In such cases no inference can be drawn regarding the gross income from the landed property. <br /> 24. It is undisputed that when policy was taken in the year 2002 Late C.N.Avinash was studying in 2nd year PUC. It is also undisputed that in the year 2004, when he died he was studying in B.Sc.,. There is no dispute that he was a full timer student without having any other avocation or any other source of independent income. As per the various circular issued by the LIC there is a relation between the annual income of the proposer and allowable cover. O.P. has produced the brochure in respect of “Jeevan Shree” policy introduced in the year 2002. It is important to note that this policy was meant to be issued only for an amount of Rs.5 lakhs and above and not below Rs.5 lakhs. The object for which such policy was meant is clearly mentioned in the said literature which reads as under:<br /> “¦ÐÔÆÐË÷ ÀÐØ´ê»Ð¤Ð ÀЖÐþ–ÐÎѕРÊÐÀЦѡ•Ð ‡•ÐôÁԖÐÎÐÔ, ›ÑªÙþ®ý ƒ‘ہªÙªý–ÐÎÐÔ, ÀÙڕÐô¤ÐÔ, •ÙÖ®Ðç ‘ÐØɑФÐÔ, ŠÊÙåÓªý–ÐÎÐ ®Ù¦ÐÔ¤ÐÔ, ˺ÀÐ¦Ñ ³Ñ¤Ù¦ÐÔ¤ÐÔ, NRI –ÐÎÐÔ ÀÐôÀÐÌѤЕР»ÑÃԕѤФÐÔ ÍӖ٠ÌÐÃÀѤÐÔ ÀÐØ´ê»Ð¤Ð§–Ù ƒÀФРÊЁ»Ñ•Ð¹Ù ÌіÐÖ ƒ³ÐËê–Ù ³Ð‘ÐÔܕѕРÁÀÐ¦Ñ ¤Ð‘Ðù²Ù¦ÐÔ ƒ–гÐô …•Ù. …³ÐÌÐ ÊÐÀЦѡ•Ð ‡¹Ðî³Ð ÆÙõӱҁ¦ÐÔ ¡¹Ð¤Ð¹ÐÔî –ÐÀÐԹЕÐÅö§Ë‘Ùց®ÐÔ £ÓÀÐÁÀÐ¦Ñ º–ÐÀÐÔÀÐÕ •ÐÔ ÌÙÖÊÐ »ÑÅË “£ÓÀйý ÇõӔ ¦ÐÔ¹ÐÔî ¤Ðּ˕Ù.<br /> <br /> † »ÑÅˁ¦ÐÔÔ ‡•ÙÖôӖлд–ÐÎÐ ÌіÐÖ/®Ù¦ÐÔ¤ÐԖÐÎÐ ƒÀÐÆÐô‘гف¦ÐÔ¹ÐÔî »ÐÖ¤ÙÚÊÐÔ³Ðê•Ù. •ÐÔ ÊЁÊÙ끦ÐÔ ƒ³Ðô³Ù ͧ¦ÐÔ, •Ð‘Ðù ÀÐÔ³ÐÔê ƒ´ ƒºÀс¦ÐÔþ ÀÐô’ê (Key Man), ƒ•Ð¤Ù ¦Ð¦Ñ¤Ð ƒº§Ó’ù³Ð ÀÐԤб¸•Ð ÊЁÊÙë–Ù „¶þ‘Ð ÌѺ „–нÌÐԕÙÖÓ ƒ³ÐÌÐ ÀÐô’ê ÀÙÔÓÄÙ ÁÀÙÔ ÀЦѯÊÐÃÔ (Key man Insurance) † ¦ÙÖÓ¡¹Ù¦ÐÔÔ ƒ³Ðô³Ð ÊÐ֑ÐêÀї ÊЧ ÌÙց•ÐÔ³Ðê•Ù”.<br /> 25. LIC is issuing polices of different types which can be roughly classified as under:<br /> a. Policy covering the risk on the lives of a minor child aged above 10 years and upto 18 years, who are not having income of their own, but income of their parents.<br /> b. Policy covering the risk on the lives of major child upto the age of 25 years without having any income of his own, but having some other source of income.<br /> c. Person having his own income i.e., a major person from the age of 18 years to 16 years.<br /> d. There are some other types of policies.<br /> 26. The L.C. for the O.P. has produced copy of the guidelines issued by the LIC to it’s Officers dated 20th February 2003. Clause No.5 of this letter, is a relaxation to the existing terms and conditions. For ready reference the direction No.5 is as under:<br /> “Insurance to major children aged upto 25 on the basis of parents’ income:- At present major children aged about 25 who do not have their own income, are allowed maximum cover upto Rs.1 crore on the basis of their parents income, subject to equal parents insurance and adequacy of parents income. However, if the children have their own income, they are allowed maximum cover as per own eligibility.<br /> <br /> It is now decided to allow maximum cover of Rs.1 crore or equal to parents insurance whichever is lower, to major children aged upto 25 years irrespective of whether they have their own income or not subject to adequacy parents income. <br /> <br /> While allowing insurance to major children aged upto 25 on the basis of parents income it should be ensured that all members of the family are adequately insured. As far as possible, parents should propose on the lives of all their children and not on the life of any particular child. <br /> <br /> It may be mentioned that children having their own income can be allowed cover on the basis of their own eligibility as per the existing rules, in addition to insurance allowed on the basis of parents income”.<br /> 27. Now, it is clear that proposer should have given a correct picture about his avocation and source of income. Late C.N.Avinash has not mentioned in the proposal form that he has got any income of his own from any other source. He has briefly mentioned that he is an Agriculturist whereas the facts will disclose that he was a full timer student in the college. He has not disclosed the fact that all landed properties are joint family properties and he has got a share in such properties. If such fact would have been disclosed, the O.P. would have secured further information by sending him a “personal financial questionnaire”. If we read the proposal as it is, it means that late C.N.Avinash has represented that he is having agricultural land of his own, he is doing agriculture in person as an evocation and he is having annual income of Rs.65,000/-. Such twisted facts amounts to suppression of material fact. Atleast late C.N.Avinash would have disclosed that agricultural land is a joint family property and he was not having any income of his own. Non-disclosure of this fact is also a material fact. He could have further disclosed that though he is a student, his joint family is having sufficient source of income and on the basis of such disclosure he could have obtained the policy. The LIC would have taken special care while issuing such policy in favour of a person who is not having his own source of income but depending on the income of the joint family.<br /> 28. Apart from the about facts, the O.P. has produced two more documents. A letter issued by the University of Mysore dated 09.03.2005 states that Late C.N.Avinash claimed benefit under category III-B showing his annual income as Rs.10,000/-. He has also enclosed the Xerox copy of the certificate, which was produced by Late C.N.Avinash. CW-1 Nanjundaswamy admits during cross-examination that the Xerox copy of such certificate bears his signature. In simple words, this income certificate was obtained by late C.N.Avinash with the knowledge of CW-1. This amounts to admission of CW-1. When O.P has produced such clinching evidence about the gross annual income showing it as Rs.10,000/- per annum, it is difficult to accept uncorroborated say of CW-1 that late C.N.Avinash had income of Rs.1.5 lakhs per year. If this was the truth, why late C.N.Avinash has mentioned only Rs.65,000/- in the proposal is not made clear.<br /> 29. Having regard to the facts and circumstances, we come to conclusion that Complainants have failed to prove that late C.N.Avinash had income of Rs.65,000/- of his own as on the date of proposal. Such wrong disclosure amounts to “suppression of material fact”. So, point No.2 & 3 are answered accordingly.<br /> 30. POINTS NO.4 & 5:- Initially burden is on the Complainants to prove that there was deficiency in service on the part of the O.P. As already observed in the above paras, the Complainant No.1 Smt.Leelamani lost interest in the policy after it was assigned in favour of Complainant No.2. Even then, initially this Complaint was filed by Smt.Leelamani alone. Complainant No.2 K.S.Prasad has failed to establish that he had paid an amount of Rs.5 lakhs to late C.N.Avinash as a consideration for assignment of such policy. Such assignment being without consideration is void in law, and Complainant No.2 is also not entitled to claim any benefits under the policy. They have miserably failed to establish deficiency in service. So, point No.4 & 5 are accordingly and we proceed to pass the following order:-<br /> <br /> <br /> <br /> ORDER<br /> <br /> 1. Complaint is dismissed. <br /> 2. Parties to bear the costs.<br /> 3. Give a copy of this order to both parties according to Rules.<br /> <br /> (Dictated to the Stenographer, transcribed by her, transcript revised by us and then pronounced in the open court on this the day 29th August 2006)<br /> <br /> <br /> (Ashok Kumar J.Dhole)<br /> President<br /> <br /> <br /> (M.Mahadevi)<br /> Member<br /> <br /> <br /> (G.V.Balasubramanya)<br /> Member<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />