Complaint filed on 27.07.2009

                                                                                                                                        Compliant disposed on 25.11.2014 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM ::AT:: KARIMNAGAR, TELANGANA STATE

PRESENT: HON'BLE SRI B.SURESH, B.A., LL.M., Ist ADDL. DIST. & SESSIONS JUDGE AND PRESIDENT (FAC)

AND

SRI G.SREENIVASRAO, M.Sc.,B.Ed.,LL.B., PGADR (NALSAR), MEMBER

TUESDAY, THE  25^TH DAY OF NOVEMBER, TWO THOUSAND FOURTEEN

CONSUMER COMPLAINT  NO.114 OF 2009

(This case was remanded back to this Forum through order  of A.P.State Commission in

FA No. 260 of 2011 Dt: 13 August, 2012 for fresh disposal)

Between:-

Boddula Devendar @ Devi W/o.Late Boddula Rajaiah, Age 29 years, Occu: Kirana Shop and Agriculture Employee R/o. Seethampally, Post: Kammapalli Mdl: Mutharam, Karimnagar Dist.

                                                                                                                                               ... Complainant  

                                                                        AND

Life Insurance Corporation of India, Peddapally Branch, Peddapally Proper & Mandal, Dist: Karimnagar, R/by its’ Manager.

                                                                                                                                             … Opposite Party

          This complaint is coming up before us for hearing on 15-10-2014, in the presence of Sri B.Srinivas Advocate, counsel for complainant and Sri J.Sriramulu Advocate, counsel for opposite party and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:

                                                                                                                          ::O R D E R::

          This complaint is filed under Sec 12 of C.P.Act, 1986 to direct the opposite party to pay Rs.5 lakhs with entitled benefits and 18% interest per annum from the date of claim (30.10.2004) and also to pay Rs.50,000/- towards damages and mental agony & costs of the legal proceedings.

Brief facts of the case:

1.       The complainant is the wife and nominee of the deceased Boddula Rajaiah who obtained a policy during his life time bearing no.683409221 for the sum assured of Rs.5 lakhs from the opposite party. After the death of her husband (DOD 30.10.2004), she filed claim before the opposite party, who kept it pending due to the reason known to him. As such vexed with the attitude of the opposite party, the complainant sent a legal notice on 07.07.2009, even then there was no response from the opposite party, which led to deficiency in service on the part of opposite party. Hence the case is before the Forum.

2.       The opposite party in his written version denied all allegations of the complaint and informed that they have repudiated the claim through letter Dt: 09.11.2006 and the complaint Dt: 27.07.2009 is barred by limitation. Further stated that the policy of the deceased commenced from 28.01.2002 bearing no.683409221 with payment of premium of Rs.12,535/- under table 112-25 (16) of LIC. The policy was lapsed due to non-payment of premia from July 2002 to January 2004. The policy was revived by the opposite party no.1 on 15.04.2004 under loan cum revival scheme. They also specifically stated that the life assured submitted a personal statement regarding health in form no.680 Dt: 29.03.2004 along with a medical report for the revival of the policy. Then the opposite party in “utmost good faith” revived the policy of life assured by obtaining Rs.30,222/- against the dues of the premia. The opposite party also stated that they knew about the death of the life assured occurred on 30.10.2004 due to jaundice which was informed by the complainant. Since the death occurred within one year of revival of the policy, the LIC conducted claim enquiry.

           In the enquiry it was found that life assured was admitted on 15.04.2004 at Mahathma Gandi Institute of Medical Sciences (MGIMS), Kasturba Hospital Sewagram, Wardha, Maharashtra for jaundice and it was diagnosed as “Acute Viral Hepatitis and he was discharged on 18.04.2004 with medication of Becosules (Capsules) and Aptivate (Syrup). Hence the life assured had not mentioned the above facts at the time of revival and the policy was revived on the strength of “Personal Statement of Health (PSH)” Dt: 29.03.2004, in which to the question – Are you in sound health at present ? The life assured answered as “Good”, but the life assured did not disclose jaundice despite suffering from it, this constitutes suppression of material facts regarding his health at the time of revival as per the terms of policy contract, hence the revival is null and void and the claim was repudiated and conveyed to claimant on 09.11.2006. The opposite party finally submits that there is no delay or deficiency in service on the part of opposite party. To support his contention he filed settled case laws as given below:

1. Maharashtra Telephone Nigam Ltd Vs VK Ahuja,                          2009 (2) CPR 203 (NC).
2. T.Seshaiah & Anr. Vs Standard Chartered Bank & Anr.,                2009 (2) CPR 257 (NC).

3.       The complainant filed evidentiary proof and documents were marked as Ex.A1 to A4 and the opposite party through its Administrative Office filed documents which were marked as Ex.B1 to B12.

4.       Heard both sides.

Now the point for consideration is, Whether there is any deficiency in service on the part of the opposite party? If so, to what relief the complainant is entitled?

POINT:

          The instant case is very simple wherein the complainant/wife –nominee made a death claim for the policy bearing no.683409221 of her husband which commenced on 28.01.2002 for a sum assured of Rs.5 lakhs. The husband of the complainant died on 30.10.2004. The said policy was revived on 15.04.2004 under loan cum revival scheme by adjusting the premium amount from the loan released by the opposite party.

          The opposite party’s contention is that the revival of the said policy was done on 15.04.2004 and the death of the life assured occurred on 30.10.2004 so considering it as early claim, the opposite party conducted claim enquiry in which the cause of the death of the insured was revealed as “acute viral hepatitis” and he was treated for the same from 15 to 18.04.2004 at Kasturba Hospital of MGIMS at Sevagram, Wardha, Maharashtra State. It was known from the medical report that prior to revival of the policy he was suffering from the ailment before admission into the hospital. So the life assured suppressed the ill-health during medical examination and while giving Personal Statement of the Health at the time of revival of the policy, thereby the opposite party repudiated the claim on 09.11.2006 and also stated that the complaint was not filed within the period of limitation.

          On scrutiny of the documentary evidence, it is observed that Ex.A1 speaks about the “Status Report of policy no.683409221 with the status mentioned as “Death CLM 71” and the Ex.B1 is the letter of life assured for revival of policy, with adjustment of loan showing Dt: 15^th April, 2004 & Seal of the opposite party; the Ex.B2 Dt: 29 March, 2004 is the personal statement regarding health in which the life assured answered as “maintaining good health” and it also reveals that Mr.Dr.K.Ashok Kumar with LIC agent code no.15204652 Khammapelly counter signed with his seal ; the Ex.B3 Dt: 29 March, 2004 is the Medical Examination Confidential Report certified by the opposite party’s Dr.N.Suresh Kumar as “on examination, the life assured appears to be healthy”; the Ex.B6 & B7 are the revival quotation & statement shows loan and revival premia paid & adjusted; Ex.B8 is the claim letter by the complainant – nominee without any inward number or seal of opposite party; the Ex.B9 is the claimant’s statement given by the nominee written by Dr.K.Ashok Kumar  & Dr.N.Laxma Reddy shows that the cause of death of life assured was jaundice and suffering illness for 10 days. The Ex.B10 Dt:15.04.2004 is the Xerox copy of outpatient record showing the patient name as B.Raju Ramulu. The Ex.B11 is the MGIMS, Kasturba Hospital discharge sheet date from 15.04.2004 to 18.04.2004 with patient name as B.Raju Ramulu; The Ex.B12 is the repudiation letter of opposite party Dt:09.11.2006 with an observation that due to incorrect statements regarding health at the time of revival, the claim was denied.

          The complainant relied on the following decisions of the State Commission/National Commission & Supreme Court to support his contention.

1. LIC Vs Chhaya Hanmayya Appeal No.695/2004, Dt:04.12.2008 of Maharastra State Commission reported in 2010(1) CPR 129:-

In this the Commission considered the views of Hon’ble Supreme Court Judgment in LIC Vs Asha Goyal, AIR 2001 SC 549 as given below.

“merely on the ground that deceased had withheld correct information regarding his health at the time of effecting insurance with corporation not proper. Matter of repudiation of policy should not be dealt with in mechanical and routine manner but should be one of extreme care and caution”.

The State Commission perused that “where the deceased was medically examined and declared fit before taking the policy of insurance, claim cannot be repudiated on ground of pre-existing disease”.

(ii)      LIC Vs Kulwant Kumari in RP No.485 of 2006 Dt: 01.05.2009 of National Commission, 2009(2) CPR 385 (NC) (A case of revival).

In this the Commission considered the view of Apex Court verdict in Mithoolal Nayak Vs LIC, AIR 1962 SC 814 it was held that:-

“for the purpose of Sec 45 of the LIC Act, 1938, the period of two years has to be caused from the date on which the policy was originally effected and not from the date of revival of the policy”

(iii)     LIC Vs Smt. Tejalben Kanambhai Patel 2007 (1) CPR 249 (NC)

The National Commission held that “hospitalization for fever rigour pain in throat & difficulty in swallowing eight months before death of insured due to heart attack could not be said to be a suppression of material fact by insured so as to disentitle to claim under life insurance policy”.

(iv)     M/s. Murari Wollen Mills Ltd Vs United Insurance Co. Ltd & Other 2005 (2) CPR 122 (NC)

The National Commission held that “the cause of action in insurance cases arises on the date of repudiation but not on the date of accident.”

          The opposite party relied on the citation mentioned supra (under written version) which relate to other than insurance cases and confined to limitation under C.P.Act.  

           On careful perusal of the above, the contention of opposite party, that the life assured suppressed material facts by furnishing incorrect statements regarding his health at the time of revival of the policy does not carry any weight. More over the Ex.B2 & B3 are the relevant documents in the present case which carry the certification of the opposite party’s doctors & Agent on the life assured who was found to be sound & healthy at the time of revival of policy. The life assured also updated & cleared all outstanding Premia on his policy on 15.04.2004 and it cannot be disputed by the opposite parties evidence through Ex.B6 & B7. The other option available if mandatory, the opposite party/LIC had, was to conduct second medical examination through a different panel of doctors at the time of revival of policy. In the Ex.B9/claimant’s statement shows that the life assured died of jaundice with 10 days illness which was certified by the opposite party doctor Dr.K.Ashok Kumar & Dr.N.Laxma Reddy. Adding to this, the death of life assured occurred on 30.10.2004 (Ex.A2) whereas the opposite party seems to have repudiated the claim through his letter Dt: 09.11.2006. This proves there is an inordinate delay of nearly two years in repudiation of the claim and the reason for it could not be explained by the opposite party. Hence, these lapses amount to deficiency in service on the part of opposite party/LIC. However, the cause of action continues in the instant case, hence no bar on limitation side. The point is answered against the opposite party/LIC. And the complainant – nominee/ wife deserves relief from this  Forum for the long struggle of litigation since 2009.

           In the result, the complaint is allowed and the opposite party/LIC is directed to pay Rs.5 lakhs along with entitled benefits with interest @ 12% per annum from the date of claim (30.10.2004) till realisation, in addition to payment of compensation of Rs.25,000/- for mental agony and Rs.10,000/- for the litigation costs.  

              Time for compliance 30 days only.

Typed to my dictation by Stenographer and after correction the order pronounced by us in the open court this the 25^th day of November, 2014.

Sd/-                                                                                                               Sd/-

MEMBER                                                                                          PRESIDENT(FAC)

NO ORAL EVIDENCE HAS BEEN ADDUCED ON EITHER SIDE
 

FOR COMPLAINANT:                       

1. Ex.A1 is the Status Report of Policy No. 683409221 Dt: 1.7.2009.
2. Ex.A2 is the original Death Certificate issued by Grampanchayat Seethampeta Dt: 14.7.2005.
3. Ex.A3 is the office copy of Legal Notice got issued by complainant Dt: 7.7.2009.
4. Ex.A4 is the receipt of Professional Courier addressed to opposite party Dt: 9.7.2009.

FOR OPPOSITE PARTY:

1. Ex.B1 is the original Loan cum Revival letter from complainant addressed to opposite party.
2. Ex.B2 is the Personal Statement Regarding Health Dt: 29.3.2004.
3. Ex.B3 is the Special Examiner’s Confidential Report Dt: 29.03.2004.
4. Ex.B4 is the original Insurance Policy no.683409221 Dt: 8.2.2002.
5. Ex.B5 is the proposal for insurance on own life Dt: 30.1.2002.
6. Ex.B6 is the Ordinary Revival Quotation of policy no.683409221 Dt: 13.4.2004.
7. Ex.B7 is the letter from opposite party addressed to deceased Dt: 15.4.2004.
8. Ex.B8 is the letter from complainant addressed to opposite party in respect of death claim benefits.
9. Ex.B9 is the Claimant’s Statement of opposite party.
10. Ex.B10 is the photo copy of Out Patient Record of B.Raju issued by Kasturba Hospital Sevagram.
11. Ex.B11 is the photo copy of Discharge Summary of B.Raju Ramlu Dt: 15.4.2004 issued by Mahatma Gandhi Institute of Medical Sciences, Kasturba Hospital, Sewagram, Department of Medicine.
12. Ex.B12 is the letter from opposite party addressed to deceased Dt: 9.11.2006 in respect of Death Claim.

Sd/-                                                                                                               Sd/-

MEMBER                                                                                          PRESIDENT(FAC)