Delhi

West Delhi

CC/05/471

Smt. ReenaAgarwal W/o. ShriPremPrakash - Complainant(s)

Versus

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

23 Mar 2017

ORDER

CONSUMER DISPUTES REDRESSAL FORUM (WEST)

                            GOVERNMENT OF NCT OF DELHI

  150-151, Community Centre, C-Block, JanakPuri, New Delhi – 110058

 

                                                                                     Date of institution: 05.08.2005

Complaint Case. No.471/05                                              Date of order:23 .03.2017

IN  MATTER OF

Smt. ReenaAgarwal W/o. ShriPremPrakash, M-86, ChankyaPlace, Part-II, New Delhi-110059.                                                                                       Complainant

 

VERSUS

1.        Life Insurance Corporation of India, Central Office, “Yogaskshema”, JeevanBimaMarg,  Mumai-400021, through its Managing Director                                                                                                                                          Opposite party no.1

2.        Life Insurance Corporation of India, Divisional Office-III, “JeevanPravah”, District Centre, Janakpuri, Delhi-110058 through its Senior Divisional Manager

                                                                                                            Opposite party no.2

3.        Life Insurance Corporation of India, Branch Unit 128, DDA Commercial Complex, Near Janak Cinema, Janakpuri, New Delhi-110058 through its Branch/ Sr. Manager                                                                               Opposite party no.3

 

ORDER

R.S. BAGRI,PRESIDENT

The present complaint under Section 12 of the Consumer Protection Act is filed by Smt. ReenaAgarwal named above here in the complainant for directions to LIC of India and others herein the opposite parties to pay assured sum of Rs.2,00,000/- of two insurance policies no.330725353 and 330728319commencing from 28.02.2001 and 28.03.2001  respectively of her deceased husband, Rs.2,00,000/ compensationfor harassment and mental agony etc. on account of deficiency in service by the opposite parties, Rs.3,680/- for litigation expenses and Rs.11,000/- as counsel fee.

The brief relevant facts necessary for disposal of the complaint as stated are that ShriPremPrakash deceasedhusband of the complainant took two Life Insurance Policies no.330725353 and 330728319 with assured sum of Rs.1,00,000/- each commencing from 28.02.2001 and 28.03.2001 respectively and Aaryan and Mehakminor daughtersas nominees respectively. ShriPremPrakash insured fully and correctly answered all questions of the insurance agent at the time of furnishing proposal form. The information given by him to the insurance agent was noted on blank paper and later on incorporated in the proposal form in his own way.

That the opposite party no.3 got the full medical examination done of the insured from a senior Medical Examiner of the opposite party no.3at the time of issuance of the insurance policies,accepted the proposals of the insured and issued the policies.The insured unfortunately died on 22.10.2001 at the young age of 33 years because of acute abdominal pain leaving behind the complainant and two minor girl children as destitute with no source of income.

That the complainant being appointee of the minor nominees under the respective policies of her husband sent intimation of death of her husband to the opposite party no.3. There upon the opposite party no.3 called for certain forms to be completed. The complainant submitted duly completed forms alongwith death certificate and original  policies bonds etc. of both the policies on 11.11.2001 to the opposite party no.3. The insured was a law graduate and worked as an advocate for some time in Tis Hazari Courts Delhi.But not finding it a paying profession, shifted to the profession of property dealership. Where he was successful and had lucrative income.

That the opposite parties informed the complainant that the insurance policies were under the “Marriage” plan of the opposite parties and the assured sum under the policies would be payable after expiry of period of the policies in the year 2021 when both the nominees would be of marriageable age. Therefore, the complainant did not follow up the matter with the opposite parties after submission of the documents. But to utter shock, surprise and horror of the complainant after elapse of about 3 years from the date of submission of claim papers, the complainant received letter no. 128/REPUD  dated 22.05.2004 from the opposite party no.2 on 09.06.2004 informing the complainant that they had  decided to repudiate all  liabilities under the policies on account of the deceasedhaving withheld information  regarding his health and habits at the time of taking assurance policies and that all moneys that have been paid in consequence of the insurance policies stand forfeited. The opposite party no.2 stated that in the proposal forms for insurance policies dated 04.02.2001, the deceasedhad given false answers to certain questions and that they have indisputable evidence to show that the life assured was suffering from Alcoholic necrotizing pancreatitis, septiceamia, multi organ failure and was a chronic alcoholic which has direct nexus with cause of death.

That the insured was a sober and of temperate habits, non drinker and non smoker and was not suffering from nor he had taken any treatment for any disease prior to taking the insurance policies. Therefore, the allegations made by the opposite parties in their letter dated 22.05.2004 are absolutely false, baseless, misconceived and malafide and are made only to repudiate the genuine and legitimate claimunder the policies. The complainant disputed the allegations and made several representations to the opposite parties but in vain. Hence, the present complaint for directions to the opposite parties to pay assured sum of Rs.2,00,000/- of two LIC policies no.330725353 and 330728319 commencing from 28.02.2001 and 28.03.2001  respectively, Rs.2,00,000/ compensation for harassment and mental agony etc. on account of deficiency in service by the opposite parties, Rs.3,680/- for litigation expenses and Rs.11,000/- as counsel fee.

After notice the opposite parties appeared and filed joint reply while contesting the complaint and raising preliminary objections that the insured will-fully withheld material information about his health and incorporated wrong answers to relevant questions in the proposal forms and had correct informations been given by the insured about his health the opposite partywould not have issued the policies. Therefore, claim of the complainant has been legally and validly rejected by the opposite parties. The deceased  insured had been suffering from alcoholic necrotizing pancreatitis, septiceamia, multi organ failure and was a chronic alcoholic. Which has direct nexus with cause of death. He concealed these facts and fraudulently obtained insurance policies. The complaint is gross misuse of process of law. The contract of insurance isuberri-malfidebased on utmost faith and expected that the insured shall give correct information in the proposal form. But in the present case theinsured deliberately gave false information about his health and the complaint is not maintainable and there is no deficiency in service on the part of the opposite party.

On merits the opposite parties denied all the allegations of the complaint and asserted that the complainant has cooked up a false and frivolous story just to get compensation. The deceasedconcealed correct information and gave wrong information about his health in the proposal forms. He  was suffering from alcoholic necrotizing pancreatitis, septiceamia, multi organ failure and was a chronic alcoholic. Which has direct nexus with cause of his death but did not disclose the same. Therefore, the opposite parties rightly repudiated claim of the complainant and prayed for dismissal of the complaint.

The complainant filed rejoinder to the reply of the opposite parties controverting allegations and stand of the opposite parties and reiterating her stand taken in the complaint.

When Smt. ReenaAgarwal complainant was asked to lead evidence shefiled her affidavit in support of her claim narrating facts of the complaint. She also filed affidavit of Shri Jai Kishan Jindal stating that ShriPremPrakash deceased was highly qualified and a disciplined man, having very good habits. He had very pleasant behavior and was very social and helping. He was caring father. He was neither smoker nor a drinker and was enjoying perfect health.The complainant in support of her complaint and version relied upon Annexure-C/1 acceptance letter, Annexure-C/2 repudiation letter dated 22.05.2004 andAnnexure-C/3 postal receipt

The opposite parties in support of their case have submitted affidavit of Shri D.S. DharamShaktu. He has narrated facts of the complaint. The opposite parties have also relied upon Ex.OPW-2/1proposal form, Ex.OPW-2/2 proposal form, Ex.OPW-2/3 medical history of deceased from Ganga Ram Hospital and Ex.OPW-2/4 medical certificate.

The parties have also submitted written arguments in support of their respective version.

We have heard Ld. Counsel for the parties and have gone through the record carefully and thoroughly.

After having heard Ld. Counsel for the parties and going through the material available on the record, it is common case of the parties that ShriPremPrakash deceased husband of the complainant took two insurance policies no.330725353 and 330728319 commencing from dated 28.02.2001 and 28.03.2001respectively with assured sum of Rs.1,00,000/- each. He died on 22.10.2001. The complainant submitted claim forms with original policies and death certificate with the opposite party no.3 on 11.11.2001. The opposite party no.2 vide letter no.128/REPUD. dated 22.05.2014 received by complainant on 09.06.2014 informed her that the opposite parties had decided to repudiate all liabilities under the policies on account of the deceased having withheld information regarding his health and habits at the time of taking insurance policy. Hence, it is evident that the opposite parties repudiated claim of the complainant after lapse of period of more than 2 years and 6 months from submitting complete claim forms. Whereas regulation 8(3) of the Insurance Regulatory and Development Authority (Protection of policy holder’s interest) regulations 2002 hereinafter referred as the IRDA Regulations reads as under:-

A claim under a life policy shall be paid or be disputed giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required. However, where the circumstances of a claim warrant an investigation in the opinion of the insurance company, it shall initiate and complete such investigation at the earliest. Wherein the opinion of the insurance company the circumstances of a claim warrant an investigation, it shall initiate and complete such investigation at the earliest, in any case not later than 6 months from the time of lodging the claim.

           From bare reading of regulation 8(3) of the IRDA Regulations, it is crystal clear that in general circumstance claim under a life policy shall be paid within 30 days from the date of receipt of all relevant documents and clarifications required. But wherein opinion of the insurance company investigation of facts is required at the earliest and not later than 6 months from the date of filing the claim.  But in the present case the claim of the complainant is repudiated by the opposite parties after 2 years and 6 months from submitting complete set of papers by the complainant.

Hon’ble Punjab State ConsumersDisputesRedressal Commission, Chandigarh in case law reported as LIC of India V/s. MohinderjitKaur1998 (I) CPJ 159 has held that this commission has repeatedly held that if the claim lodged is not decided within  3 or 4months of the date of lodging of the complaint by the Corporation, the delay per-se is sufficient enough to saddle the charge of deficiency of service against the Corporation. In this view of the matter also, the repudiation letter cannot be justified.Similar view is taken by Hon’ble West Bengal State Consumer Disputes RedressalForum  in case law reported as Life Insurance Corporation of India V/s. Mahabir PrasadHansaria2003 (III) CPJ 419.

Hon’bleNational Consumer Disputes Redressal Commission in case law reported as M/s. Super Teak Wood Industries V/s. Oriental Insurance Co. Ld. & Others 1992(III) CPJ 66 has held that unless there is  reasoned reply which clearly shows that there has been such an application of mind and arrival at a conclusion in good faith regarding the truth and maintainability or otherwise of the claim put forward by the insured there is a responsibility cast on the Redressal Forum to investigate into the dispute and come to its own conclusion in regard to the aforesaid matter.

In the  present case of the opposite parties have taken defencethat the deceased  insured  concealed correct facts in proposal formsand gave wrong information regarding his health and eating habits. He concealed that he was suffering from Alcoholic necrotizing pancreatitis, septiceamia, multi organ failure and was a chronic alcoholic which has direct nexus with cause of death.Therefore, the opposite parties rightly rejected claim of the complainant.

Admittedly, the opposite parties before issuing the insurance policies got the deceased examined from Senior Medical examiner. He could not trace any ailment on person of insured. Therefore, in our opinion the opposite parties have failed to prove that the deceased insured gave wrong information in the proposal form.

Hon’bleSupreme court of India in case law reported as LIC of India V/s. Smt. G.M. Channabasemma  AIR 1991 Supreme Court 392 has heldthat it is well settled that a contract of insurance is contract uberrimae fides and there must be  complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts  which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. The burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the Corporation. Similar view is taken by Hon’ble National Commission in case reported as LIC of India V/s. Smt. Chandra Baghrecha 2003 (IV) CPJ 16.

Similar are facts of the present  case. First of all the opposite parties have failed to prove that at the time of submitting proposal forms, the deceased insured was suffering fromAlcoholic necrotizing pancreatitis, septiceamia, multi organ failure and was a chronic alcoholic which has direct nexus with cause of death and gave wrong information in the proposal forms.Secondly, the opposite parties repudiated claim of the complainant after lapse of a period of 2 years and 6 months from submitting the claim. Hence, as held by Hon’ble Punjab State Consumers Disputes Redressal Commission, Chandigarh in LIC of India is case (Supra) Hon’ble State Commission of West Bengal in Life Corporation of India’s case (Supra)Hon’bleNational Commission is LIC of India’s case (Supra) and Hon’bleSupreme Court of India in LIC of India’s case (Supra) the complainant succeeded to prove that there is deficiency in service on the part of the opposite parties. Therefore, the complainant suffered on account of  deficiency on the part of the opposite parties. The complainant has suffered mentally, physically and financially on account of non payment of the assured amount in time.

In the light of above discussion and observations the complaint succeeds and is hereby allowed. The oppositesparties are directed to pay assured sum of Rs.2,00,000/- of both the policies  with interest @9% per annum from 11.112001 date of submitting the claim till actual realization and compensation of Rs.50,000/- onmental, physical and financial suffering and deficiency inservice by the opposite parties and expenses born by the complainant.

Order pronounced on :23.03.2017

• Compliance of the order be made within 30 days after receipt of the order.
• Copy of order be sent to the concerned parties free of cost.
• Thereafter, file be consigned to record.

                  

 

 

(PUNEET LAMBA)                                                                          ( R.S.  BAGRI )

             MEMBER                                                                                           PRESIDENT