Complainant through Lrd. Adv. Sanjay Gaikwad
Opponent through Lrd. Adv. Smt. Mharolkar
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Per : Mr. V. P. Utpat, President Place : PUNE
// J U D G M E N T //
(25/04/2014)
This complaint is filed by the widow and minor children of deceased Milind Pachange, who had obtained life insurance policy from the opponent and the opponent repudiated the claim of the complainants on the ground of suppression of material facts. The brief facts are as follows,
1] The complainant no. 1 is a widow and complainant no. 2 and 3 are the children of deceased Milind Pachange. The opponent no. 1 is a Head Office of insurance company and the opponent no. 2 is its Regional office. It is the case of the complainants that, their predecessor Milind Pachange had obtained “Jeevan Saral” policy, which was commencing from 28/08/2010 and the date of maturity of the said policy is 28/08/2026. The sum assured was Rs. 1,50,000/-. Since the date of commencement of the policy, the risk of life of Milind Pachange was covered. He had paid premium of Rs. 1,837/-. On 25/2/2011 Milind Pachange died due to “Cardio Respiratory Failure”. The complainants were not aware about the said policy; hence they have submitted their claim to the opponents at belated stage. The opponents have collected documents from the complainant as well as from other sources and repudiated the claim on the ground that the deceased had suppressed material facts as regards his previous medical treatment and diseases. According to the complainants, the deceased was not suffering from any major disease. He never suppressed material facts and the opponents have wrongly repudiated the insurance claim and the services rendered by the opponents are deficient in nature. The complainants have claimed an amount of Rs.1,50,000/- along with interest, compensation of Rs. 50,000/- for mental torture and harassment and cost of the complaint to the tune of Rs. 20,000/-.
2] The opponents have resisted the complaint by filing written version. The contentions of the complaint are denied by the opponent. It was not disputed that the deceased Milind Pachange had obtained life insurance policy for Rs. 1,50,000/-. It is also not disputed that, he had paid premium for the said policy and it was live at the time of death of Milind Pachange. It is the case of the opponent that the deceased had suppressed material facts even though he had obtained sick leave for the period from 04/01/2010 to 19/01/2010 and from 09/08/2010 to 13/08/2010. He had not disclosed these facts at the time of submitting proposal. The certificate of medical attendant issued by Dr. Chillal has disclosed that the deceased was suffering from Hypertension and was taking medical treatment for four months. It is the case of the opponent that, the claim is rightly repudiated by the opponents, as the contract between deceased and insurance company was based upon utmost good faith. The deceased had suppressed material facts. In such circumstances, the legal heirs of the insurer are not entitled for policy claim. They have prayed for dismissal of the complaint.
3] After scrutinizing the documentary evidence, which is produced before this Forum, hearing the arguments of both the counsels and considering pleadings, the following points arise for my determination. The points, findings and the reasons thereon are as follows-
Sr.No. | POINTS | FINDINGS |
1. | Do the opponents have established that deceased had suppressed material facts and those material facts were of such a nature that the opponent could not accept the proposal? | In the negative. |
2. | Whether there is deficiency in service? | In the affirmative. |
3. | What order? | Complaint is partly allowed. |
REASONS :-
4] The admitted facts in the present proceeding are that the claimants are the legal heirs of the deceased Milind Pachange, who had obtained life insurance policy from the opponent for Rs.1,50,000/-. The premium for the said policy was paid by the deceased and the policy was live at the time of death of Milind Pachange. The undisputed fact between the parties is that, according to the complainants, the deceased had not suppressed any material fact and according to the opponent, the deceased has suppressed that he was on sick leave prior to submitting the proposal for the insurance policy and he was taking medical treatment for Hypertension. In that context, the opponent has strongly relied upon the letter issued by the Employer of the deceased i.e. I.D.B.I. Bank, who had informed that the deceased was on medical leave on two occasions i.e. from 04/01/2010 to 19/01/2010 and from 09/08/2010 to 13/08/2010, but it is not disclosed in the said letter, as to by which disease Milind Pachange was suffering. The opponent has also relied upon the certificate issued by Dr. Chillal as regards death of the Milind Pachange. It is significant to note that, the Branch Manager of LIC, Mr. Avinash Vaidya had submitted his report to the opponents, who had made enquiry in the medical shops and Doctors and informed that there is no any previous history of illness or treatment of DLA. He died of heart attack. The prescriptions, which were given by Dr. Chillal were produced on record and these prescriptions are relating with the hyper acidity, vomiting and other minor illness. In such circumstances, it is very difficult to accept the reason for repudiation, which was given by the opponent.
5] The learned Advocate for the opponent argued before this Forum that if the insured person has suppressed material fact, then that is sufficient cause for the repudiation of the insurance claim. The learned Advocate for the opponent strongly relied upon the following judgments in that context,
I] Revision Petition No. 1322 of 2012 between
“Smt. Satyavati Sharma V/S Life Insurance
Corporation”
II] First Appeal No. 1385/2009 by State
Commission, Maharashtra, between
“Hemlata Mhatre V/S Life Insurance
Corporation” &
III] Civil Appeal No. 2776 of 2002 between
“Satwant Kaur Sandhu V/S New India
Assurance Co.”
If facts of all these rulings are carefully seen, it is evident that the deceased persons in those proceedings were on leave for the period of 289 days and 400 days. They were suffering from various kinds of diseases and in that context, it has been observed that those facts were material facts and were suppressed by the insured person. In the judgment of “Satwant Kaur Sandhu V/S New India Assurance Co.” it has been quoted that,
“The term & quot; material fact; is not defined
in the Act and, therefore, it has been understood
and explained by the Courts in general terms to
mean as any fact which would influence the
judgment of a prudent insurer in fixing the
premium or determining whether he would like
to accept the risk. Any fact which goes to the
root of the Contract of Insurance and has a
bearing on the risk involved would be and
quot;material"”.
6] There is no quarrel about the principle laid down in above quoted Rulings. However, in the present proceeding, the deceased was 44 years old at the time of death, hence he was not medically examined by the insurance authorities and after considering small amount of Rs.1,50,000/- as well as his age, he was exempted from medical examination. That means, the insurance authorities agreed upon the sound health of the insured person and exempted him from medical examination. In such circumstances, it is very difficult to accept the person who obtained sick leave for one or two weeks prior to obtaining the policy, had suppressed the material facts. It is the cardinal principal of the law that, the party who alleges should prove the facts. The Insurance company alleges that the complainant has suppressed the material facts. Suppression of facts is altogether different than the suppression of material facts. It is the considered opinion of this Forum that, even though the insured person might have been disclosed his sick leave for two weeks; the insurance company would not have refused to insure him. As per the quotation, in the above quoted Ruling, the fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk and any fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be material fact. It has been also pointed out that the deceased was taking medical treatment for hypertension for 4 months. It is significant to note that the deceased was attending office during those four months; he was never treated as an indoor patient, prior to obtaining the insurance policy. In such circumstances, it is very difficult to digest that, the deceased had suppressed the material facts, which would seriously prejudice the rights of the insurance company. In such circumstances, this Forum held that there is no suppression of material fact. As the opponents have repudiated the claim of the complainants on flimsy ground, that should be amounts to deficiency in service. Hence, this Forum observes that the complainant has proved that there is deficiency in service on the part of the opponents. In the light of the above discussion, this Forum answer the points accordingly and pass the following order.
** O R D E R **
1. Complaint is partly allowed.
2. It is hereby declared that the opponents
have caused deficiency in service by
wrongly repudiating the insurance claim
of the complainants.
3. The opponents are directed to pay an
amount of Rs. 1,50,000/- (Rs. One Lac
Fifty Thousand only) along with interest
@ 9% p.a. from the date of filing of the
complaint till its realization, within six
weeks from the date of receipt of copy
of this order.
4. The opponents are also directed to pay
of Rs. 10,000/- (Rs. Ten Thousand
only on the ground of compensation for
mental and physical sufferings and cost
of the litigation.
5. Copies of this order be furnished to
the parties free of cost.
6. Parties are directed to collect the sets,
which were provided for Members within
one month from the date of order, otherwise
those will be destroyed.
Place – Pune
Date- 25/04/2014
