Andhra Pradesh

East Godwari-II at Rajahmundry

CC/53/2015

Kaki Naveen Krishna - Complainant(s)

Versus

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

Ch. Venkateswara Rao

29 Jul 2016

ORDER

                                                                                               Date of filing:   06.07.2015

                                                                                                Date of Order: 29.07.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

          PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

             Friday, the 29^th day of July, 2016

 

 

C.C.No.53 /2015

Between:-

 

Kaki Naveen Krishna, S/o.late Ravi Kumar, Hindu,

Aged 21 years, Student, C/o. Yeleti Atchiyya,

R/o. D.No.4-60, Vadapalli, Kovvur Mandal,

West Godavari District.                                                                     …        Complainant

 

                                    And

 

Life Insurance Corporation of India, Rep. by its

Senior Divisional Manager, Divisional Office,

Jeevan Godavari, D.No.85-6-18/1, V.L. Puram,

Morumpudi Road, Rajahmundry.                                                            …        Opposite party

 

 

            This case coming on 22.07.2016 for final hearing before this Forum in the presence of Sri Ch. Venkateswara Rao, Advocate for the complainant and Sri Barla Srinivasa Rao, Advocate for the opposite party, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Smt.H.V. Ramana, President(FAC)] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the opposite party to pay an amount of Rs.10,00,000/- together with interest @ 24% p.a. from December, 2013; to pay an amount of Rs.1,00,000/- towards mental agony and award costs of the complaint.

2.         The case of the complainant is as follows:- It is submitted that the opposite party insurance company has issued Policy on 13.1.2011 after conducting all medical tests on the person of father of the complainant viz., Kaki Ravi Kumar. The above medical tests were conducted on 3.1.2011 by the opposite party panel and authorized doctor, after conducting all the medical tests on the person of Kaki Ravi Kumar having satisfied with his health condition, the opposite party was issued the policy in favour of Kaki Ravi Kumar on 13.1.2011. The opposite party issued Policy No.805314609 on the life of Kaki Ravi Kumar for Rs.10 lakhs under Plan and Term 149-21. The complainant submits that the mode of payment of the premium is yearly once and the father of the complainant was in regular in payment of premiums. The complainant submits that his father late Kaki Ravi Kumar obtained loan from the opposite party insurance company on 22.8.2013 for Rs.45,000/- by pledging his insurance policy bond i.e. 805314609. The complainant submits that he is the nominee and son of late Kaki Ravi Kumar. Unfortunately, the father of the complainant died on 22.10.2013. The complainant submits that after the death of his father, the complainant approached the authorities of opposite party along with his senior paternal uncle Kaki Vijay Kumar in the month of December, 2013 and the opposite party informed to the complainant that the opposite party will settle the claim by the month end of April, 2014 and also directed the complainant to produce the death certificate of his father Kaki Ravi Kumar and also the opposite party obtained signatures of the complainant on the applications given by the opposite party, but the opposite party have been postponing the same on some pretext or the other without settling the claim of late Kaki Ravi Kumar. The complainant submits that the opposite party has raised baseless allegations that the father of the complainant had suffered from diabetes mellitus and hypertension etc. since 4 years and the opposite party insurance company is liable to pay the amount to the complainant. There is no negligence and deficiency in service on the part of the opposite party. Hence, the complaint.   

3.         The opposite party filed its written version and denied the allegations made by the complainant and the complaint is not maintainable either under law or on facts. This opposite party submits that the Policy No.805314609 was issued to Sri Kaki Ravi Kumar with date of commencement 13.1.2011 for a sum assured of Rs.10,00,000/- under Plan 149-21 which is pure term insurance policy and Kaki Ravi Kumar died to Cardiac arrest due to consumption of Ethyl alcohol on 22.10.2013. This policy was issued under medical scheme and only basic medical tests needed for issuing 10 lakhs sum assured were conducted more over the policyholder mentioned in the proposal dt.3.1.2011 that he was neither hospitalized not undergone any treatment for any disease or illness in last five years prior to taking the proposal and has not mentioned about his habit of “Alcholish” also. This opposite party submits that unless the policyholder reveals his personal history with all details, the opposite party did not conduct Special tests to reveal the exact condition of the body system or organ. With utmost good faith on the answers given by the proposer in the proposal, this opposite party have issued the policy without conducting any special tests relevant to suppressed facts even though he was chronic alcoholic. This opposite party submits that the policy is issued under yearly mode and only 3 years premiums were received under the policy and paid up is 13.1.2014. The policyholder availed Rs.45,000/- as loan on 22.8.2013. This opposite party received death intimation on this policy as policy holder died on 22.10.2013 and the complainant is the son of the deceased is the nominee under the policy. This opposite party submits that after receipt of death intimation, the claim forms were issued to the complainant. This opposite party received the completed claim forms from the nominee and these claim forms are required to consider the claim under the policy. This opposite party submits that the death claim of the policy arose within a period of two years, six months and 28 days and as such this opposite party conducted enquiry and the enquiry reveals that late K. Ravi Kumar had taken treatment in Appollo Hospital, Hyderabad where he admitted on 3.10.2011 for haematrmesis and malena and the case discloses that the policy holder had Thrombocytopenia and HI+ since December, 2010, CD4HAART912.6.2011 and stopped HAART and had other problems Viz., hypertension, Diabetic mellitus, Hepatic encephalopathy. The complainant has revealed these facts, in the claim form nor policy holder in his proposals at the time of taking policy. Before taking final reply/decision taken on this policy, this opposite party informed the complainant in the middle many times, regarding his claim position and there is no negligence or deficiency of service on the part of the opposite party. This opposite party informed the complainant or his relatives who approached out office about the claim position and the complainant has not given proper/ complete information required to settle the claim. This opposite party submits that the opposite party collected evidence i.e. case sheet from Apollo Hospital, Hyderabad, the competent authority repudiated the claim as the policy holder was suppressed material information that he was suffering from HIV+ and also hepatic encephalopathy while taking the policy which is very much essential in underwriting the risk and claim was repudiated on 15.12.2014 and same was informed to the complainant to his mailing address. This opposite party submits that a legal notice dt.11.2.2015 received on 19.2.2015 and as the claim already repudiated at our level and same was conveyed to the complainant, the legal notice itself take as appeal and their high office viz., ZCDRC took the claim and after examination of the facts and records the ZCDRC also upheld the decision of repudiation taken by the Divisional office and said decision was conveyed to the complainant on 15.4.2015 to his Rajahmundry address and again on 30.4.2015 to his Kovvur address also. This opposite party submits that after collecting case sheet of the life assured, it was confirmed that the life assured is a ‘Substandard life before taking policy itself and the claim was repudiated, but not flimsy grounds. The questions in the proposal form and the answers given by him were produced as follows:

Q.No.s	During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week?	Answers given by life assured
11(a)	During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week?	No
b)	Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation?	No
c)	Have you remained absent from place of work on grounds of health during the last 5 years?	No
d)	Are you suffering from or have ever suffered from ailments pertaining to Liver, stomach, heart, kidney, brain or nervous system?	No
e)	Are you suffering from or have ever suffered from Diabetes, Tuberculosis, High blood pressure, Low blood pressure, Cancer, Epilepsy, Hernia, hydrocele, Leprosy or any other disease?	No
f)	Do you have any bodily defect or deformity?	No
g)	Did you ever have any accident or injury?	No
h)	Do you use or have you ever used alcoholic drinks, narcotics, tobacco in any form or any other drugs?	No
i)	What has been your usual state of health?	Good
j)	Have you ever received at present availing/undergoing medical advice, treatment or tests in connection with hepatitis B or AIDS related conditions?	No.

 

The above answers were false that the corporation has reasons to believe that the life assured suppressed material facts about his health at the time of proposal. The material record discloses that the life assured had made incorrect statement and withheld vital information from this opposite party regarding his health at the time of revival of the policy. On this ground, this opposite party repudiated the claim vide letter dt.15.12.2014. This opposite party has repudiated the claim basing on the material available with the corporation and they have not committed any illegality. Hence, there is no deficiency of service on the part of this opposite party and the complaint is liable to be dismissed with costs.

4.         The proof affidavit filed by the complainant and Exs.A1 to A7 have been marked for the complainant. The proof affidavit filed by the opposite party and Exs.B1 to B19 have been marked for the opposite party.

5.         Heard both sides. The opposite party filed written arguments.

6.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite party?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

 

7.  POINT Nos.1 & 2:   The admitted facts of the complaint are that the complainant’s father obtained a Policy bearing No.805314609 on 13.1.2011 from the opposite party for Rs.10,00,000/- under Plan and Term 149-21 and the mode of payment of the premium is yearly once. The complainant also submitted that his father late Kaki Ravi Kumar obtained a loan from the opposite party on 28.8.2013 for Rs.45,000/- by pledging his insurance policy vide Ex.A7. He also submitted that his father was died on 22.10.2013 and the death certificate is marked as Ex.A1. Immediately, he informed the death of his father to the opposite party vide Ex.A2. After receiving of the letter, the opposite party informed the complainant that they repudiated the claim on the ground deliberate misstatements and withheld the material information with regard to his health vide Ex.A3.  The complainant gave a reply notice to Ex.A3 through their advocate dated 11.2.2015 to the opposite party and to the zonal office vide Ex.A4.  The opposite party received the said notice and acknowledged the same vide Ex.A5, for which they gave reply to the complainant vide Ex.A6 by stating that the matter is referred to the Zonal Claims Disputes Redressal Committee for its consideration and decision.

The opposite party also admitted that the deceased Kaki Ravi Kumar obtained a policy from them and paid yearly premium and also stated that the deceased Ravi Kumar took the policy for Rs.10 lakhs which is pure term insurance policy. At the time of taking the policy, the life assured submitted the proposal form vide Ex.B1 and this opposite party received only three premiums from him. This opposite party was informed that the life assured died due to cardiac arrest and due to consumption of ethyl alcohol on 22.10.2013. It is admitted that the policy was issued to the life assured under the medical scheme and only basic medical tests are conducted for issuance of 10 lakhs policy.  The life assured never mentioned in the proposal form that he was neither hospitalized nor undergone any treatment for any disease or illness in the last five years prior to taking of the policy and he has not mentioned that he is in the habit of taking alcohol. Issuance of the policy to the insured people is with utmost good faith and the proposal form will be issued without conducting any special tests relevant to suppress the facts even though he was chronic alcoholic. The life assured availed loan of Rs.45,000/- on 22.8.2013 by pledging the policy vide Ex.B2. The life assured also filed the personal statement of his health and also gave a declaration with regard to his health vide Ex.B3. The complainant informed to the opposite party about the death of his father vide Ex.B4 and also submitted claimant’s statement vide Ex.B5 and medical attendants certificate vide Ex.B6, in which it is stated in column No.9 that the life assured brought dead to GGH, Rajahmundry. He also filed certificate of hospital treatment issued by Civil Assistant Surgeon vide Ex.B7, in which it is clearly mentioned that the life assured died due to cardiac arrest due to consumption of ethyl alcohol. The opposite party also submitted that the certificate of identity and burial or cremation vide Ex.B8. The opposite party submitted that the death claim policy arose within a period of 2 years, 6 months and 28 days. In such cases, they conduct enquiry and the enquiry reveals that late K. Ravi Kumar had taken treatment in Apollo Hopistal, Hyderabad where he admitted on 3.10.2011 for haematrmesis and malena and the case discloses that the policy holder had Thrombocytopenia and HIV+ since December, 2010, CD4HAART912-6-2011 and stopped HAART and had other problems Viz., hypertension, diabetic mellitus and Hepatic encephalopathy. For which, they filed Ex.B9 discharge summary given by Department of Internal medicine of Apollo Hospital. The opposite party contended that the deceased life assured has not revealed these facts in the claim form or in proposal form by the time of taking the policy. This opposite party also responded to the complainant as and when they received any letter from them. The opposite party also submitted that the admission record of the deceased life assured vide Ex.B10. The opposite party filed Ex.B11, the discharge summary of the Department of Internal Medicine, in which they diagnosed as that the deceased life assured had Vericeal Banding done in November, 2011, Acquired Immuno Deficiency Syndrome (HIV-II), ?Alcohols Induced Thrombocytopenia, Alcoholic Hepatitis.

The opposite party further submitted that the deceased life assured suppressed his health condition and obtained the policy and the questions in the proposal form and  answers were false that the corporation reasons to believe that the life assured suppressed the material fact about his health at the time of proposal form vide Ex.B12. Basing on the enquiry conducted by them, they repudiated the claim vide Ex.B13 and they also informed the complainant that he can make a representation within three months for reconsideration of the claim to the Zonal office at Hyderabad vide Ex.B14. The Zonal office at Hyderabad also informed that due to suppression of material facts by the deceased life assured, the repudiation made by the divisional office is justified and upheld vide Ex.B15. Ex.B16 is the registered letter written by the opposite party to the complainant that they repudiated the claim as per the directions of the Zonal office. The claim department filed the medical opinion of the deceased life assured is herewith filed vide Ex.B17 and also filed Inquest report dt.22.10.2013 vide Ex.B18 and also filed F.I.R. vide Ex.B19.

The main contention of the complainant is that the opposite party repudiated the claim of his deceased father and also made a request to the Zonal office at Hyderabad to look into the matter, but he has not received any information from L.I.C. of India, South Central Zonal Office, Saifabad, Hyderabad. He also contended that his father was hale and healthy in the month of September, 2012 and the platelet count was down on that, he got medical treatment at Apollo Hospital, Hyderabad. He also contended that the opposite party intentionally evading the settlement of claim and making baseless allegations. The opposite party issued the policy on the basis of medical tests and after satisfying with his health, then only they issued the policy in favour of his father late Kaki Ravi Kumar. The complainant denied all the allegations made by the opposite party that his father was having diabetes, hypertension and HIV+ since December, 2010. The complainant contended that his father obtained Rs.45,000/- as loan from the opposite party by pledging the policy with them. He also contended that it is the bounden duty of the opposite party to settle the claim of late Kaki Ravi Kumar and also contended that there is a deficiency in service on the part of the opposite party for not settling the claim amount of his father.

The opposite party contended that they conducted medical tests to Kaki Ravi Kumar and issued the policy on 13.1.2011, but the policy holder has to reveal his personal history of his health. This opposite party will not conduct special tests which reveals the exact condition of the body system and organs. They further contended that with utmost good faith on the answers given by the proposer in the proposal form, this opposite party issued the policy without conducting any special tests relevant to the suppressed facts, even though he was chronic alcoholic. The opposite party also contended that the complainant availed a loan of Rs.45,000/- on 22.8.2013 on the policy. As soon as they received information about the death of the Ravi Kumar and for the death claim of the policy, which is within a period of       2 years 6 months and 28 days, the opposite party made an enquiry and the enquiry reveals that the life assured had taken treatment in Apollo Hospital, Hyderabad from 3.10.2011. In the said report, it is clearly disclosed that the policyholder had various ailments mentioned in Exs.B9, B10 and B11. The life assured has not revealed all these facts either in the claim form nor the policy holder in his proposal form at the time of taking the policy. The complainant contended that he informed several times for payment of the claim, but as and when they made a representation, this opposite party gave a reply and there is no negligence or deficiency in service on their part. The opposite party repudiated the claim on the basis of suppression of material fact with regard to the health of the deceased life assured.

The complainant relied on the following citations: (1) Meena Devi Vs. Director General/Additional Director General & Anr., I (2014) CPJ 36 (NC) and (2) Bajaj Allianz Life Insurance Co. Ltd., & Ors. Vs. Raj Kumar, III (2014) CPJ 221 (NC).

The opposite party relied on the following citations: 

(1) The Hon’ble Supreme Court held in  United Insurance Company Ltd. Vs. Bhushan Sachdeva AIR 2002 SC 662 that “The Nationalized Insurance Companies in India are holding public money. What they have to deal with is public fund. They are accountable to public for every pie of it”, (2) P.C. Chacko Vs. LIC of India: 2008(1) SCC321, (3) LIC of India Vs. Kishan Chander Sharma: 2007(2) CPJ 51 (NC), (4) NCDRC in R.P.No.1072/97 Radhamma Vs. LIC of India and (5) NCDRC in LIC of India Vs. Gangamma: 23002 (3) CPR 24.

After perusing the material on record, it is observed that as per Ex.A9, it is clearly mentioned that the complainant’s father K. Ravi Kumar was having health problems such as haematrmesis and malena and the case discloses that the policy holder had Thrombocytopenia and HIV+ since December, 2010, CD4-HAART(12-6-2011) and stopped HAART and had other problems Viz., hypertension, diabetic mellitus and Hepatic encephalopathy. In this report, it is also observed that his liver and spleen are enlarged in size. They clearly mentioned the status of his health in the discussion portion of Ex.B9. As seen from Exs.B9, B10 and B11, it is evident that the complainant’s father suppressed his health condition and also had Acquired Immuno Deficiency Syndrome (HIV-II)                          since 2010 and he obtained policy in the year 2011 by concealing the facts that he was having the above said health problems. As far as issuance of policy by Life Insurance Corporation of India believes in trust. In this case, the life assured suppressed the material fact with reference to his health with fraudulent intention and obtained the policy. After perusing the proposal form, the life assured never mentioned that he was having any pre-existing disease or he was hospitalized prior to taking the policy and he gave wrong answers in the proposal form.

The citations filed by the complainant are not applicable on the present case on hand.  The opposite party also filed the citations, in which the Apex court gave a detailed order with regard to the accountability of public money in case of suppression of material facts. In another case also, they held that there is no need of nexus between death and non-disclousre of health at the time of taking policy to suppression of material fact thereby leading to the repudiation of death claim which is justified as per contract of life insurance.   

Therefore, the discussion held supra and the facts and circumstances of the case, were in the considered opinion that the complainant is not entitled for any relief and the opposite party rightly repudiated the claim because of suppression of material facts with regard to the pre-existing diseases of the deceased life assured. In our opinion, it is observed that there is no deficiency in service on the part of the opposite party in not settling the claim of the complainant.  Hence, the claim against the opposite party is dismissed.    

             

8.   POINT No.3:  In the result, the complaint is dismissed, without costs.

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the 29^th day of July, 2016.

    

                    Sd/-                                                                                          Sd/-

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                         FOR OPPOSITE PARTY: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANT:

 

 

Ex.A1    Death certificate of K. Ravi Kumar, dated 22.10.2013.

Ex.A2    Copy of the Representation dt.17.12.2013 submitted by the complainant to the

             opposite party.

Ex.A3    Copy of the notice sent by the opposite party on 15.12.2014 to the complainant.

Ex.A4    Office copy of the reply notice dt.11.2.2015 got issued by the complainant to the

              opposite party and to the Zonal Manager of the Life Insurance Company.

Ex.A5    Acknowledgement of the opposite party dated 18.2.2015.

Ex.A6    Copy of the reply notice sent by the Zonal Manager to the office of the

             complainant’s advocate.

Ex.A7    Copy of the statement sent by the opposite party on 20.1.2015 pertaining to the loan

              amount of late Kaki Ravi Kumar.

 

 

 

FOR OPPOSITE PARTY:-  

 

Ex.B1    Original proposal dt.13.1.2011 form No.300 (E) submitted by policy holder.

Ex.B2    Original policy bond under policy No.805314609.

Ex.B3    Personal statement on health dated 3.1.2011 submitted by K.R. Kumar.

Ex.B4    Letter submitted by the complainant informing the death.

Ex.B5    Claimant Certificate form No.3783 submitted by Kaki Naveen Krishna.

Ex.B6    Medical attendant’s certificate from No.3784 dated 10.2.2014 certified by                 

             Dr. B. Rambabu Naik, Rajahmundry.

Ex.B7    Certificate of Hospital treatment form No.3816 certified by Dr. B. Rambabu Naik,

             Rajahmundry.

Ex.B8    Certificate of Identity and Burial or Cremation of Kaki Ravi Kumar by N.S.

             Chowdary.

Ex.B9    Copy of case sheet of Apollo Hospital – 6 sheets.

Ex.B10  Patient history and physical record (Admission record) from Apollo Hospitals –       

             7 pages.

Ex.B11  Discharge certificate by Apollo Hospitals – 3 sheets.

Ex.B12  Copy of letter addressed to Kaki Naveen Krishna dated 15.12.2014 from Sr.

             Divisional Manager, LIC, Rajahmundry informing the decision of Repudiation of

            death claim on the policy No.805314609.

Ex.B13  Letter dt.15.12.2014 sent by the opposite party to his address at Rajahmundry

             returned undelivered.

Ex.B14  Letter dt.15.12.2014 sent by the opposite party to his address at Vizag returned

             undelivered.

Ex.B15  Letter dt.30.3.2015 from LIC of India, Zonal office sending the decision of ZO-

             CDRC upholding the repudiation by Divisional office.

Ex.B16  Letter dt.15.4.2015 from Div. Office, Rajahmundry informing the claimant Sri K.

            Naveen Krishna about the decision of ZO CDRC and further informing that the

            claimant may prefer appeal to Central Office Claims Dispute Redressal Committee

             (COCDRC) at Mumbai providing the address of CO CDRC.

Ex.B17  Opinion by Dr. Subba Rao, MD, Divisional Medical Referee who recommended for

             repudiation of the claim due to suppression of material facts.

Ex.B18  Panchanama dated 22.10.2013.

Ex.B19  FIR No.280/2013 dated 21.10.2013.

 

 

                   Sd/-                                                                                         Sd/-

              MEMBER                                                                              PRESIDENT(FAC)