BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, KAITHAL.
Complaint Case No.149 of 2018.
Date of institution: 28.05.2018.
Date of decision:24.5.2019.
Sahdev son of Sh. Sahi Ram.
, resident of Village Bhana, Tehsil Pundri, District Kaithal.
…Complainant.
Versus
- Life Insurance Corporation of India Ltd., Kaithal through its Branch Manager.
- Life Insurance Corporation of India Ltd., Karnal, through its Regional Manager.
….Respondents.
Before: Sh. D.N. Arora, President.
Sh. Rajbir Singh, Member.
Smt. Suman Rana, Member.
Present: Sh. Zile Singh Bhanwala, Advocate for the complainant.
Sh. D.S. Punia, Advocate for the OPs.
ORDER
D.N. ARORA, PRESIDENT
The complainant has filed the present complaint under Section 12 of Consumer Protection Act, 1986, with the averments that the wife of complainant namely Smt. Sudesh Rani took one life insurance policy bearing No.178489165 on 12.07.2014 for a sum of Rs.4,00,000/-. It is alleged that the wife of complainant died on 09.01.2015. The complainant lodged the claim with the Ops and submitted all the necessary documents but the Ops repudiated the claim of complainant vide letter dt. 20.08.2016 on the ground of concealment of age. The said repudiation of claim is wrong and illegal. So, it is a clear cut case of deficiency in service on the part of Ops and prayed for acceptance of complaint. Hence, this complaint.
2. Upon notice, the OPs appeared before this Forum and contested the complaint by filing their reply raising preliminary objections with regard to locus-standi; maintainability; cause of action; that the deceased Smt. Sudesh Rani has suppressed the true and material facts from this Forum. The true facts are that during the consideration of death claim, it was found that the deceased life assured had understated her age by four years and she was not less than 35 years of age on the date of proposal and her qualification was under middle at that time. Further she had not eligible for Rs.4,00,000/- policy at the time of insurance. Had she disclosed her correct age and qualification, the insurance company would not have accepted the proposal for the insurance. Hence, the Ops have repudiated the claim of complainant vide letter dt. 20.08.2016. The said repudiation of claim is legal and valid. There is no deficiency in service on the part of Ops. On merits, the objections raised in the preliminary objections are reiterated and so, prayed for dismissal of complaint.
3. The complainant tendered into evidence affidavit Ex.CW1/A and documents Ex.C1 to Ex.C6, Mark-C1 and thereafter, closed the evidence.
4. On the other hand, the Ops tendered into evidence affidavit Ex.RW1/A and documents Ex.R1 to Ex.R13 and thereafter, closed the evidence.
5. We have heard the learned Counsel for both the parties and perused the record carefully.
6. From the pleadings and evidence of the parties, it is not disputed that the wife of complainant namely Smt. Sudesh Rani (deceased) got insured herself with the OPs vide policy No.178489165 and the complainant is the nominee of that policy vide policy Ex.R3. It is also not disputed that the wife of the complainant died during the subsistence of the policy. The grievance of the complainant is that after the death of her wife, he submitted the claim with the OPs, but the OPs illegally repudiated the claim on the ground of incorrect age and qualification has been given by the deceased in the proposal form.
7. On the other hand, it is contended by the Ops that the LA had grossly understated her age by about 4 years and her qualification was under middle at the time of proposing for assurance and concealed the material facts and therefore, the claim was rightly repudiated vide letter dt. 20.8.2016 Ex.C2/Ex.R2. To support their contention, the OPs have drawn our attention towards the clause mentioned in the end of proposal form Ex.R2 “DECLARATION BY THE PROPOSER”, wherein, it is mentioned that “Any omission on my part to do so shall render this assurance invalid and all moneys which shall have been paid in respect thereof shall stand forfeited to corporation” and at the time of argument the Op has also placed the complete copy of terms and conditions of the policy Annexure-R3 and its Column No.6 Forfeiture in Certain Events, reads as under:
“6. Forfeiture in Certain Events: In case any condition herein contained or endorsed hereon shall be contravened or in case it is found that nay untrue or incorrect statement is contained in the proposal, personal statement, declaration and connected documents or any material information is withheld, then and in every such case this policy shall be void and all claims to nay benefit in virtue of this policy shall be subject to the provisions of Section 45 of the Insurance Act, 1938, as amended from time to time.”
On the other hand, the complainant has drawn our attention towards attested copy of circular U & R/84/2013 dt. 07.03.2018 Ex.R4 and as per clause “Other conditions applicable to married women falling under Female Category III, reads as under:-
“Maximum age at entry restricted to 60 years (beyond age 60 years upto the maximum permissible age at entry under the proposed plan, can be allowed under ULIP plans only, with single premium mode of payment [(Conditions as per circular Ref: U & R /61/2011 dated 28th March, 2011)]”.
8. From the above condition, it is clear that age restriction to give policy to someone upto 60 years, but in the present case, the LA was about 35 years old as per DMC Ex.R5, Ex.R6 & Certificate issued by the Principal, Govt. Girls School, Gonder (Karnal) Ex.R8. The other plea taken by the OPs that the LA concealed about her qualification in the proposal form. However, it is pertinent to mention here that the deceased has mentioned in the proposal form her qualification 10th although her qualification shown as 10+2 as per Ex.R5 & R6, Secondary Certificate but in the present case, qualification does not affect the fate of policy in question whether it is 10th or secondary class (10+2), and so, there was no hindrance to give the policy in question to the LA. As per the Circular Ex.R4, it is mentioned that if any insurer having the age 18 to 25, two lacs of insurance is provided. But there is no other provision shown, if any insurer having the age above 25 years, to what extent the insurance cover will be provided. Although, it is mentioned in Ex.R4 that “Maximum cover that can be granted is equal to 7 times of average annual income subject to an upper ceiling of-
- Rs.2 lacs if illiterate or educated upto 8th standard.
- Rs. 5 lacs if educated upto 9th standard or above upto undergraduate level.
- Rs.7 lacs if educated upto graduate level or above.
In view of the above said provision, the insurer has given the insured insurance cover upto 4 lacs. There is no bar in the case of the deceased. However, it is made clear that when the insurance company has accepted the proposal form as correct, then now they cannot take the plea of incorrect date of birth & qualification. We are of the view that if the insurance company was doubtful about the correctness of date of birth/age, qualification of insured, then the insurance company was duty bound to obtain the record from the deceased regarding age and qualification before issuance of the policy. Moreover, when the insurance company has accepted the proposal form by treating the date of birth & qualification of insured as correct, then the insurance company cannot turn around now and challenge the correctness of the date of birth & qualification of insured. The conduct of OPs shows that it is their sweet wills whether to accept the claim of any person or not. The OPs only want to make the profit and not to compensate the insured. In this era, when there is a competition among the Insurance Companies for developing their business, unhealthy practices are developing to get maximum benefits and profits. It has become a common experience of the Insurance Policies to repudiate genuine claims of the insured on one pretext or other. A common man is not supposed to know all the niceties and technicalities of law. The insured puts his hard earned money in taking Insurance with a hope and aspiration that in case of any mishap, he or his family shall get some immediate financial assistance, but in most of cases, claims are rejected with a stroke of pen on the ground that he/she did not abide the terms & conditions of the Insurance Policy, which were never supplied by the Insurance Company. Reliance on this point can also be taken from case law titled as Life Insurance Corporation of India Vs. Balbir Singh & Anr. IV (2008) CPJ 326, wherein, it has been held by Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh, that Life Insurance- Repudiation of claim-Contention, wrong date of birth given in proposal form, Date of birth given from ration card, with bonafide intention-Date of birth wrong not known to insured-School leaving certificate not demanded by insurer, cannot be placed reliance to justify repudiation of claim-Payment of assured amount with interest directed-Compensation and cost awarded. The complainant also relied upon the case law cited in 1981 AIR Madhya Pradesh 69 titled as Smt. Ram Bai Vs. LIC, wherein it has been held that “In view of Section 45, the policy cannot be avoided on the ground of misrepresentation unless the insurer proves that material facts have been suppressed with the full knowledge of the assured. Proof of material and deliberate fraud is imperative. Where the insured knew that he was above 60 years of age and thus was beyond insurable age and deliberately made a false statement about his age in order to take out policy and thus practiced a fraud on the insurer, for otherwise the insurer would not have insured his life, the insurer would not have insured his life, the insurer was entitled to avoid the policy. The proviso to S.45 on its plan reading is an enabling provision. It enables the insurer to re-adjust the premium payable by the insured when the age stated in the proposal is found to be incorrect on calling for the proof of age after issuance of the insurance policy on the basis of the age that was mentioned in the proposal. It does not take away the right of the insurer under the body of the section to avoid the policy on the ground of fraud”. Keeping in view the facts and circumstances of the case and the case law mentioned above, we are of the opinion that there is deficiency in service on the part of OPs as it had wrongly repudiated the claim of the complainant.
9. Thus, as a sequel of above discussion, we allow the present complaint and direct the OPs to pay a sum of Rs.4,00,000/- to the complainant with interest @ 9% per annum from the date of filing of the complaint till realization of the amount within one month. However, it is made clear that the premium amount which already paid by the life assured to the insurance company and the same is returned by the OPs to the complainant, if any, will be deducted from the entitled amount. We further clarify that if there is any difference of the premium amount between age of 31 to 35 years, the Ops can deduct the difference of premium amount from the entitled amount and further direct the OPs to pay Rs.5,000/- to the complainant on account of compensation for harassment, mental agony and costs of litigation charges. Let the order be complied with within 30 days from the date of preparation of copy of the order. A copy of this order be supplied to both the parties free of costs. File be consigned after due compliance.
Announced in open court:
Dt.:24.5.2019.
(D.N. Arora)
President.
(Suman Rana), (Rajbir Singh)
Member Member.
Present: Sh. Zile Singh Bhanwala, Advocate for the complainant.
Sh. D.S. Punia, Advocate for the OPs.
Remaining arguments heard. Order pronounced, vide our separate order in detail of even dated, the present complaint is allowed. File be consigned to record-room after due compliance.
Dated:24.5.2019. Member. Member. President.
