DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, ANANTAPUR. PRESENT: - Sri C.Thyagaraja Naidu, B.Sc., B.L., President Smt.S.Lalitha, M.A., M.L., Lady Member, Sri S.Niranjan Babu, B.A., B.L., Male Member Thursday, the 21st day of January, 2010 C.C.NO.113/2008 Between: 1. Smt.Y.Chenna Krishnamma W/o Late Y.Narasimha Reddy 2. Y.Madhusudhana Reddy S/o Late Y.Narasimha Reddy 3. Y.Y.Narayana Reddy S/o Late Y.Narasimha Reddy All are residents of Venkapalli Village Katamavaripalli Post, Gandlapenta Mandal Anantapur District. … Complainants Vs Life Insurance Corporation of India rep. by its Branch Manager, Kadiri, Anantapur District. … Opposite parties This case coming on this day for final hearing before us in the presence of Sri A.Suresh Kumar, Advocate for the complainants and Sri T.Viswanath, advocate for the opposite party and after perusing the material papers on record and after hearing the arguments of both sides, the Forum delivered the following: O R D E R Sri C.Thyagaraja Naidu, President: - This complaint has been filed by the complainants under section 12 of the Consumer Protection Act, 1986 against the opposite party to direct the opposite party to pay Rs.25,000/- towards the sum assured with interest @ 18% p.a. from the date of death of Narasimha Reddy i.e. 30-06-2007 and to pay Rs.10,000/- towards deficiency in service of the opposite party and mental agony suffered by the complainants and for costs. 2. The brief facts of the complaint are that:-The 1st complainant is wife and the complainants 2 & 3 are sons of late Y.Narasimha Reddy. Late Narasimha Reddy died on 30-06-2007 in a normal course leaving behind the complainants as his only legal heirs. The opposite party is doing its business in insuring the lives of the individuals. In its course of business, it has canvassed the Money plus Plan to late Narasimha Reddy. The said Narasimha Reddy entered into the said scheme and sent a proposal form. The opposite party officials after taking all the requirements into consideration accepted the policy and issued policy bearing No.654527685. As per the said policy, the sum assured is Rs.25,000/- under basic plan. Subsequently and unfortunately, the said Narasimha Reddy died on 30-06-2007 in a normal course. After death of Narasimha Reddy, the complainants made a claim through 1st complainant before the opposite party as they are entitled for the said amount. Inspite of several requests, the opposite party put deaf ear. Finally, the complainants received a letter from the Head office of the opposite party on 23-10-2007 that they have repudiated the claim. The reasons in repudiating the claim are arbitrary, illegal and unsound. The same is against the principles of natural justice. Hence, this complaint is filed to direct the opposite party to pay Rs.25,000/- towards the sum assured with interest @ 18% p.a. from the date of death of Narasimha Reddy i.e. from 30-06-2007, to pay Rs.10,000/- towards deficiency of service of the opposite party and mental agony suffered by the complainants and for costs. 3. The opposite party filed counter and contended that late Y.Narasimha Reddy declared himself to be healthy as per his statements and replies to question No.6 (a to f & i) and signed the declaration at the foot of the said proposal form. Basing on his statements and declaration, the risk on his life was accepted and insurance policy No.654527685 was issued with 23-02-2007 as the date of commencement of the above said policy for a sum assured Rs.25,000/- with a premium of Rs.5,000/- per annum as sought by the deceased. The deceased life assured died on 30-03-2007 i.e. within 7 days from the date of commencement of the above said policy. As the death claim arose within 2 years from the date of commencement of the said insurance policy, the claim of the complainants was treated as early claim and investigation was conducted by this opposite party-corporation. During the course of investigation, it was disclosed that the deceased life assured Y.Narasimha Reddy was born blind (deformity was congenital). Medical Certificate dt.31-10-2002 issued by the Superintendent, District Medical Board, Anantapur and the particulars furnished by the deceased life assured in his loan application to A.P.Disabled Co-operative Society for raising loan of Rs.30,000/- to run petty shop clearly establishes that the deceased life assured was 100% blind by birth. The deceased life assured obtained the above said insurance policy in his favour by not disclosing the fact that he is a born blind in the proposal form, which amounts suppression of material fact. The declaration signed by the deceased life assured at the bottom of the proposal form makes the contract of insurance null and void in the event of with-holding of any information or giving untrue information. Had the deceased life assured disclosed the true and correct information in the proposal form with regard to his born blindness, this opposite party-Corporation would not have accepted his proposal and issued the above said Insurance Policy in favour of the deceased life assured. Hence, the contract has become null and void and all the monies paid to the opposite party corporation shall stand forfeited to the said corporation as per the policy condition No.13. The repudiation of the present claim of the complainants was made on justifiable grounds after due application of mind and basing on the evidence available and the repudiation is done strictly according to the terms and conditions of the Insurance Contract. Therefore, the complaint is liable to be dismissed with costs. 4. Now basing on the above pleadings, the points that arise for consideration are:- 1. Whether the repudiation of the claim of the complainants by the opposite party is Justified or not? 2. Whether the complainants are entitled for the relief’s as claimed for in the complaint? 3. To what relief. 5. In order to prove the case of the complainants, the 1st complainant filed evidence on affidavit in support of the complainants’ case and marked Ex.A1 & A2. On behalf of the opposite party evidence on affidavit of the opposite party was filed and Ex.B1 to B5 were marked. 6. Heard both sides. 7. The counsel for the complainant filed written arguments. The counsel for the opposite party filed citations. 8. POINT NO.1:- The opposite party in the counter as well as in the evidence on affidavit has clearly admitted that the deceased Y.Narasimha Reddy obtained Insurance Policy bearing No.654527685 for Rs.25,000/- on 23-03-2007. It is also an admitted fact that the 1st complainant approached the opposite party for payment of the insurance amount for the death of her husband Y.Narasimha Reddy. The opposite party sent Ex.A2 letter dt.23-10-2007 to the 1st complainant repudiating the claim. 9. The contention of the counsel for the complainants is that the repudiation of the claim by the opposite party is illegal, arbitrary and unsound. He contended that late Y.Narasimha Reddy admittedly born blind and it is not the reason for his death. At the time of taking policy from Narasimha Reddy, the officials of the opposite party verified the person and the doctor, who examined the insured has mentioned that in his presence the insured has answered the questions mentioned in Ex.B1 proposal form. Thus, the doctor was very much knew about the blindness of late Narasimha Reddy at the time when the proposal form was filled up by late Narasimha Reddy. Now the opposite party taking plea that late Narasimha Reddy suppressed his blindness can not be accepted. Therefore, the conduct of the opposite party in repudiating the claim amounts to deficiency of service. In support of his contention, he relied on the decision reported in 2005(5) ALT 28 (CPA) between Y.Vijayalakshmi Vs. Life Insurance Corporation, wherein it was held that:- “In all matters of repudiation of policy, insurance company can not act in a mechanical and routine manner. It should act with responsibility being a State within the meaning of Article 12 of Constitution of India. Mere inaccuracy or falsity in respect of some recitals in the proposal is not sufficient. Unless the insurer is able to establish those facts, the claim should not be repudiated on the ground of misstatement of facts. “ 10. The counsel for the opposite party contended that the insured late Y.Narasimha Reddy was 100% born blind and the said fact was not disclosed by the insured at the time of submitting his proposal and after issuance of the policy on 23-03-2007 within a week the insured died. Therefore, the opposite party made investigation and in the investigation it was disclosed that the insured was born blind and the opposite party filed Ex.B1 to B5 documents to show that the insured has suppressed the material facts with regard to his blindness.Therefore, the opposite party has rightly repudiated the claim under Ex.B5 letter dt.23-10-2007. In support of his contention, he placed reliance in the reported decisions: - 1. (1) 1992 CPJ 255 (NC) between LIC of India Vs. Chandrawati Devi, wherein it was held that:- “Misdeclaration and concealment of facts by the insured in the proposal form - the policy of insurance vitiates - No deficiency in service - The claim of the widow repudiated. “ 2. 1986-95 Consumer 1387 (NS) between LIC of India Vs. M.Gowri & others, wherein it was held that:- “Claim repudiated due to suppression of material fact – Appeal of the Corporation against the finding of the State Commission that mere signature on the forms, who does not understand English is not enough to prove his knowledge – The policy of insurance is a policy of utmost good faith – while filling up proposal form an agent acts as an agent of the insured for whose benefit the insurance is to be obtained.” 3. IV (2008) CPJ 187 (NC) between Angoori Devi Vs. LIC of India & others, wherein it was held that:- “Deceased life assured was suffering from chronic renal disease which he willfully suppressed at time of taking of policy. He expired within 5 months of taking of policy. Complaint was allowed by CDRF without appreciating the evidence. Order of the CDRF was set-aside by State Commission. The National Commission held that the order passed by the State Commission does not call for interference. “ 4. IV (2008) CPJ 74 (NC) between Shankar Soni Vs. LIC of India, where it was held that:- “Deceased was suffering from Bronchial Asthama and Allergical Dysphonia before the submission of the proposal. Complaint allowed by Forum ignoring evidence. Cause of death was due to Broncho Pneumonia. The deceased suppressed information within his knowledge. While dismissing revision petition, National Commission held that the petitioner was not entitled to any relief. “ 5. AIR 1997 157 Karnataka between Life Insurance Corporation of India and others Vs. Ajit Gangadhar Shanbhag and others, wherein it was held that:- “Contract Act (9 of 1872) section 10 – Insurance contract – misrepresentation or concealment of material facts by insured – Insurer can repudiate contract.” 11. Having regards to the arguments advanced by the Counsel for the complainants and the opposite party and on perusal of the decisions cited by both sides, which are referred above, we are of the opinion that there is no force in the contention of the counsel for the opposite party that the insured has suppressed the material facts with regard to his health conditions at the time of filling up the proposal form of the insurance policy for the following reasons. 12. Ex.B1 is the filled original proposal form for LIC Money Plus plan filed by the opposite party officials, In Ex.B1 all the columns were filled up by one and the same person. Late Narasimha Reddy was blind-man and he has only signed in Telugu at page 3 at 3 places and at page 4 at one place in Ex.B1. The Doctor counter-signed in Ex.B1 and the endorsement reads as hereunder:- “ I certify that the proposer has signed/put his thumb impression in my presence after admitting the answers to questions Nos.6 and onwards of this form have been correctly recorded. “ Question No.6 relates to personal statement regarding health of life to be assured. Question No.6 (f) relating to the question. Do you have bodily defect or deformity? For which answer was given as ‘No ‘. Deceased photo was also affixed on the proposal form at the time of filling up the same. When the doctor counter-signed in the said proposal form naturally the doctor must have seen the blindness of the deceased. If the blindness of the insured disentitles for accepting the policy, then the doctor, who attested the said proposal form should have informed the opposite party with regard to the blindness of the deceased, but he has not informed the same. Therefore, considering the said fact mere non-disclosure of blindness can not be taken into consideration that the insured has suppressed the material fact with regard to his health conditions. 13. As seen from Ex.B3 Medical Certificate for the Blind issued by Medical Board, it goes to show that the deceased was having visual disability 100%. As seen from Ex.B4 the deceased has submitted an application for financial aid relating to disabled person, wherein he has mentioned that he was born blind. Ex.B5 is the repudiation letter of the opposite party addressed to the 1st complainant on 23-10-2007, wherein it is stated that the deceased was totally blind prior to the proposal dt.09-03-2005. He had not however disclosed these facts in his proposal instead he gave false answers therein as stated above. Hence, they repudiated the claim and accordingly they are not liable for any payment under the policy and all the moneys paid in consequence thereof belong to them. 14. The opposite party has not placed any material before this Forum to show that the blind persons are not eligible to insure their life and that for blind person’s insurance policy will not be accepted. Therefore, on considering the said facts and circumstances we are of the view that the repudiation of the claim of the complainants by the opposite party amounts to deficiency in service and decisions cited by the counsel for the opposite party do not apply to the facts of this case. On the other hand the decision cited by the counsel for the complainants squarely applies to the facts of this case. Therefore, we hold that the repudiation of the claim of the complainants by the opposite party is not justified. Accordingly, this point is answered. 15. POINT NO.2:- The evidence on affidavit of the 1st complainant, the evidence on affidavit of the opposite party and Ex.B2 Insurance Policy issued by the Opposite party to the insured clearly goes to prove the fact that the insured has taken Life Insurance Corporation’s Money Plus for Rs.25,000/- which commences from 23-03-2007. The evidence on affidavit of the 1st complainant as well as Ex.A1 Death Certificate of the deceased clearly goes to prove that the deceased died on 30-03-2007. Since the deceased died on 30-03-2007 and by that date the Insurance Policy of the deceased under Ex.B2 was in force. Therefore, the opposite party is liable to pay a sum of Rs.25,000/- to the complainants, who are legal heirs of the deceased. Further, the opposite party is also liable to pay interest @ 12% p.a. from the date of filing of this complaint since the repudiation of the opposite party in settling the claim of the complainants amounts to deficiency in service of the opposite party. Since the opposite party is directed to pay interest, the claim of the complainants of Rs.10,000/- in respect of mental agony can not be granted. Accordingly, this point is answered. 16. POINT NO.3:- In the result, the complaint is allowed. The opposite party is directed to pay a sum of Rs.25,000/- (Rupees twenty five thousand only) to the complainants with interest @ 12% p.a. from the date of filing of this complaint i.e. from 04-10-2008 till the date of realization. All the complainants are entitled for equal share out of the said amount. The opposite party shall also pay towards costs of Rs.2, 000/- (Rupees two thousand only) to the complainants. The said amount shall be paid within one month from the date of this order. Dictated to the Steno, transcribed by him, corrected and pronounced by us in open Forum, this the 21st day of January, 2010. Sd/- Sd/- Sd/- LADY MEMBER MALE MEMBER PRESIDENT DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM ANANTAPUR ANANTAPUR ANANTAPUR APPENDIX OF EVIDENCE WITNESSES EXAMINED ON BEHALF OF THE COMPLAINANTS: ON BEHALF OF THE OPPOISITE PARTY -NIL - - NIL EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT Ex.A1 – Death Certificate relating to late Y.Narasimha Reddy issued by the Deputy Tahsildar, Gandlapenta, Anantapur District dt.11-05-2007. Ex.A2 – Repudiation letter dt.23-10-2007 issued by the Senior Divisional Manager, Life Insurance Corporation of India, Kadapa. EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY Ex.B1 - Proposal form for LIC’s Money Plus plan submitted by the deceased Y.Narasimha Reddy to the opposite party dt.09-03-2007. Ex.B2 - LIC’s Money Plus Insurance Policy bearing No.654527685 issued by the opposite party In the name of deceased Y.Narasimha Reddy. Ex.B3 - Xerox copy of Medical Certificate for the Blind issued by the Superintendent, Medical Board, Govt. General Hospital, Anantapur. Ex.B4 - Xerox copy of the application submitted by the deceased Y.Narasimha Reddy to A.P.Disabled Co-operative Society for obtaining loan. Ex.B5 - Repudiation letter dt.23-10-2007 issued by the Senior Divisional Manager, Life Insurance Corporation of India, Kadapa. Sd/- Sd/- Sd/- LADY MEMBER MALE MEMBER PRESIDENT DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM DISTRICT CONSUMER FORUM ANANTAPUR ANANTAPUR ANANTAPUR Typed by JPNN
......................Smt.S.Lalitha
......................Sri S.Niranjan Babu
......................Sri. C.Thyagaraja Naidu | | 
