BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,RAJASTHAN,JAIPUR BENCH NO.1

FIRST APPEAL NO: 912 /2015

Smt.Pooja d/o Late Sh.Virendra Kumar w/o Ramesh r/o Ward No. 20 Maharaja Surajmal Nagar, Sangaria Distt. Hanumangarh

Vs.

Life Insurance Corporation of India, Jeevan Prakash, Post Box no. 66, Sagar Road, Bikaner & ors.

Date of Order 11.3.2016

Before:

Hon'ble Mrs. Justice Nisha Gupta- President

Mr. Kailash Soyal -Member

Mr. Aditya Mitruka counsel for the appellant

Mr.Vizzy Agarwal counsel for the respondents

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BY THE STATE COMMISSION ( PER HON'BLE MRS. JUSTICE NISHA GUPTA,PRESIDENT):

This appeal has been filed against the judgment of the learned DCF, Hanumangarh dated 23.6.2015 whereby the claim has been denied by the court below.

The contention of the appellant is that her father took the insurance policy no. 503245877 and paid the premium of Rs. 5800/- and the sum assured was Rs. 10 lakhs. After satisfaction about the health condition of the father of the appellant the policy was issued. He had only signed the proposal form and information as regard to other policies taken from the LIC were asked and replied by the father of the appellant. Hence, no material facts have been suppressed by the appellant and for agent's mistake he cannot be penalized. Agent has not explained him each and every condition of the policy and to support this contention an affidavit of agent has not been submitted. Hence, an adverse inference should have been taken against the respondent. Further it has been argued that there is no nexus between the facts not disclosed and death of the father of the appellant which was caused admittedly due

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to heart attack. It has also been stressed upon that two other policies which were taken from the respondents claim was paid hence, for the third policy claim cannot be denied.

Per contra the contention of the respondents is that it is true that two policies have been honoured but where there is an illegality it cannot be allowed to perpetuate. Specific question has been asked from the father of the appellant about the previous insurance policies in which material fact has been suppressed by the appellant. Policy conditions have been explained to the appellant and due attestation by the agent is there hence, there was no need of filing the affidavit of the agent. Further the contention of the respondent is that the father of the appellant was only 48 years of age and he was a petrol pump Manager having a meager income inspite of this he has taken number of policies from different companies and sum assured of the total policies was more than Rs. 56 lakhs which shows the intention of the father of the appellant. It was a unique policy wherein on the maturity nothing was payable. Hence, the claim has rightly been repudiated and no infirmity could be found in the impugned order of the court below if material facts have been in the knowledge of the respondent,

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the proposal could not be accepted as allowable cover to the father of appellant looking to the age was only Rs. 1,60,000/-.

Heard the counsel for the parties and perused the impugned judgment as well as original record of the case.

The proposal form has been submitted by the father of the appellant himself which shows that the policy has been taken on the impugned proposal form wherein specific question has been asked about the details of previous insurance policies in which there is narration of only two policies which were issued by the LIC whereas admittedly the father of the appellant has taken nine other policies from different insurance companies. Thus, the material fact has been withheld by the father of the appellant and rightly contended by the respondent that there is a relation between annual income, age and sum assured and a table to this effect has been submitted before the court below which shows that upto the age of 55 years, coverage can be given only 12 times of the annual income which comes only to Rs. 1,60,000/- whereas in the present matter the sum assured is Rs. 10 lakhs. Further it has been rightly argued that at the age of 48 years, there is a schedule

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which prescribes special medical test including test regarding cardio were also prescribed but as the father of the appellant has not disclosed the material facts regarding the previous policies, all this could not have been done and reliance has rightly been placed on the judgment passed in Civil Appeal No. 2776/ 2002 Satwant Kaur Sandhu Vs. New India Assurance Co. decided on 10.7.2009 where the court has held as under:

“... Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not....”

Under the Insurance Regulatory & Development Authority (Protection of Policyholders' Interests ) Regulations,2002 material has also been explained as under:

“ Explanation: 'Material' for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer. Thus,

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the regulation also defines the work 'material' to mean and include all ' important', 'essential' and ' relevant' information in the context of guiding the insurer to decide whether to undertake the risk or not.”

Hence, looking to the above provisions it was obligatory on the part of the father of the appellant to give important,essential and relevant information and whether any information is material or not, it has to be decided by the insurer not the insured. Further reliance has been placed on 1962 AIR 814 Mithoolal Nayak Vs. Life Insurance Corporation of India where scope of S.45 of the Insurance Act has been explained and admittedly from the date of the policy within two years father of the appellant has died. Hence, defence was available to the insurance company.

The contention of the appellant is that terms and conditions of the policy have not been explained to the appellant and to prove this fact agent's affidavit has not been submitted and reliance has been placed on III (2014) CPJ 582 (NC) Sahara India Life Insurance Co. Vs. Rayani Ramanjaneyulu and IV (2011) CPJ 130 Life Insurance Corporation Vs. Vijendra Singh Yadav but here in the present

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case the contention of the appellant himself was that he has been asked about the previous policies. The only rider that he has been asked only for the policies taken through LIC of India but the proposal form clearly contains question no. 7 & 9 in which details of all previous insurance was material and should have been disclosed. The agent has also attested that he had explained the contents of the form to the consumer. This attestation has not been disputed by the appellant rather the proposal form is the document of the appellant and he has relied upon it. Hence, there was no need for the respondent to place the affidavit of the agent on record.

It has rightly been argued by the counsel for the respondent that in two previous policies if claim has been allowed, the illegality cannot be allowed to perpetuate.

Further more one relevant fact is also on the record that the father of the appellant has taken policies for the sume assured for more than Rs. 56 lakhs whereas he was simply petrol pump Manager and within two years of the impugned policy he has died and nothing was payable on the maturity of the policy which also cast shadow on the genuineness of the claim.

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The court below has rightly considered the rival contentions and dismissed the claim. There is no infirmity in the impugned order and the appeal is liable to be rejected

(Kailash Soyal) (Nisha Gupta )

Member President

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