Tamil Nadu

StateCommission

FA/364/2017

1.The Divisional Manager, - Complainant(s)

Versus

M.Leela W/o. Late Murugan, - Opp.Party(s)

M.B. Gopalan & Asso.

28 Apr 2023

ORDER

    IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:   Hon’ble THIRU. JUSTICE R. SUBBIAH  :     PRESIDENT

                 THIRU R   VENKATESAPERUMAL           :      MEMBER

 

F.A. No. 364 of 2017

[Against the order passed in C.C. No.13 of 2014 dated 03.10.2017 on the file of the D.C.D.R.F., Vellore].

 

Friday, the  28^th day of April 2023

 

 

1.  The Divisional Manager

     LIC Divisional Office

     Jeevan Prakash Arcot Road

     Vellore – 4

 

2.  The Zonal Manager

     LIC of India

     Southern Zonal Office

     LIC Building,

     102, Anna Salai

     Chennai 600 002.                                         ..  Appellants/

                                                                                Opposite parties     

 

- Vs –

M. Leela, W/o.Late Murugan

No.3/33, Bajanai Koil Street

Pudhur Village, Katpadi Taluk

Sembarayanallur Post

Vellore District.                                                  .. Respondent/ Complainant

 

 

 Counsel for Appellants/Opposite Parties      : M/s. M.B.Gopalan

 Counsel for the Respondent/Complainant    : M/s.S.R. Shanmugham

                                                               

 

This appeal came up before us for final hearing on 18.04.2023, and on hearing the arguments of the counsel for the Appellants and on perusing the material records, this Commission passes the following order:-

O R D E R

R.SUBBIAH J., PRESIDENT

 

                This appeal has been filed under Section 15 of the Consumer Protection Act, 1986 as against the order dated 03.10.2017 passed by the District Consumer Disputes Redressal Forum, Vellore in C.C. No.13 of 2014, allowing the complaint filed by the Respondent herein.

 

        2.  The Appellants are the opposite parties 1 & 2 and the respondent is the complainant.  For the sake of convenience, the parties will be referred as per their ranking before the District Forum. 

 

        3.  The case of the complainant, as given in the complaint filed before the District Forum, is as follows :-

                The complainant is the wife of deceased M.Murugan, who was working as Commercial Assistant in Tamil Nadu Electricity Board at Karnampattu.  The said Murugan had taken a policy from the opposite party through one K.M. Manokaran an agent of the opposite party, on 24.01.2011 for a sum of Rs.2,00,000/-, under Policy No. 732528596.  The complainant’s husband had regularly paid all the premiums till his death on 11.07.2011.  He had nominated his wife as a nominee in the policy.  At the time of taking policy, the deceased had signed a proposal form, which was filled up by the agent.  After the death of her husband, the complainant made a claim for payment of the policy assured amount. But her claim was repudiated on 11.04.2012 on the ground that the deceased had made deliberate mistakes and had withheld correct information regarding his health in the proposal form at the time of effecting assurance.  But actually, the proposal form was filled by the Agent of the 1^st opposite party and not by the complainant’s husband.  According to the complainant, the act of the opposite parties in repudiating the claim would amount to deficiency of service and unfair trade practice.  Hence, she had filed a complaint before the District Forum for the following directions to the opposite parties :-

1.  To pay the policy amount of Rs.2,00,000/- with interest at 18% per annum from the date of refusal of the claim;
2.  To pay a sum of Rs.50,000/- for the mental agony, physical torture and lot of inconvenience caused to the complainant; and
3. To pay a sum of Rs.5,000/- towards cost of the appeal.

 

                3.  The said complaint was resisted by the opposite party by filing a version denying the entire allegations made in the complaint.  It is the specific defence of the opposite parties that the deceased Murugan had taken Policy No.732528596, with the date of commencement from 24.01.2011 under New Bima Gold Plan No.179 for 20 years term, for a sum assured of Rs.2,00,000/-.  The date of proposal for the life assured was on 24.01.2011 and the monthly premium of Rs.637/- has been paid upto 28.03.2012.  There is a valid nomination in favour of Tmt.M.Leela, wife of the deceased Murugan, in respect of the said Policy.  The opposite parties repudiated the death claim of the deceased Murugan and intimated the same to the complainant by letter dated 11.04.2012, stating that the death claim has been repudiated due to suppression of material facts as per Section 45 of the Insurance Act, 1938 and hence the complainant is not entitled for the claim amount.  The opposite parties have got material evidence to prove the habit and illness of the life assured, which has been suppressed by the life assured at the time of commencement of the policy, thereby violating the principle of utmost good faith while entering into the contract with the insurer.  It is evident that the complainant’s husband had made deliberate mis-statements and had withheld correct information from the opposite parties regarding his health, at the time of inception of the policy.  If the deceased life assured had disclosed that he was an alcoholic and was having tumour in spleen, then the opposite parties would have called for treatment details and the Doctors’ reports and would have referred to ZUS for underwriting.  The Claim Review Committee at Southern Zonal Office, Chennai had upheld the decision of the opposite parties to repudiate the claim on 18.09.2012 and this was also conveyed to the complainant by letter dated 11.10.2012.  Suitable reply had also been given to the legal notice dated 09.10.2013 sent by the complainant.  As per Form B and B1 issued by Dr.L.Ravali Hickson, Assistant Professor received from CMC Hospital, Vellore it could be seen that the life assured had undergone treatment from 28.06.2011 to 11.07.2011 for multiple hepatic masses likely malignant (Rt) pleural effusion.  The deceased life assured was working in TNEB and had availed medical leave for 303 days on various spells from 01.07.2004. As per CMC case sheets the life assured was chronic alcoholic consuming 360 ml per day for 7 years.  Hence, the opposite parties are not liable to pay any amount to the complainant.  Thus, the opposite parties have not committed any deficiency of service to the complainant and had acted on utmost good faith while entering into contract with the deceased and prayed for dismissal of the complaint.

 

                4.  In order to prove the case, both the parties have filed their proof affidavits and on the side of the complainant, 16 documents have been marked as Exhibits A1 to A16 and 4 documents were filed on the side of the opposite parties and marked as Exhibits B1 to B4.  

 

                5.   The District Forum, after analyzing the entire evidence on records had observed that there is no proof to show that the complainant’s husband was taking treatment for his illness before taking the policy.  Further, there is no suppression of any material facts and that there is deficiency of service on the part of the opposite parties and directed the opposite parties to pay the sum assured.  Aggrieved over the same, the present appeal has been filed by the opposite parties.

 

                6.  It is the submission of the counsel for the appellants/ opposite parties that the respondent/complainant’s husband Late Murugan, was a TNEB employee.  He had taken 5 policies between 28.12.2008 and 24.01.2011.  The subject policy bearing Policy No.732528596 is one among them.  The said policy was taken on 24.01.2011 for a sum of Rs.2 lakh.  Several successive policies were taken within a short period.  He died on 11.07.2011 i.e., within a period of two years of taking insurance.  Prior to death, the deceased took treatment in CMC at Vellore.  The medical records of CMC, Vellore in Ex.B3 would reveal that Late Murugan was a chronic Alcoholic.  In the proposal form marked as Ex.A2, there is a specific question under Question No.11, wherein he did not disclose that he is an alcoholic, as recorded in the case sheets of CMC Hospital, Vellore.  Therefore, it is clear that the policies have been taken by suppression of material facts.  But, the District Forum totally ignoring these facts had come to the conclusion that there is no nexus between alcoholism and the cause of death.  Assailing the same, counsel for the appellants/opposite parties submitted that the questions in the proposal form are themselves proof of the materiality of the facts.  When the same is not correctly answered, the insurer is entitled to deny liability.  In support of his contention, learned counsel for the appellants/ opposite parties relied upon the judgment reported in (2009)8SCC 316 in the case of Satwant Kaur Sandhu Vs New India Assurance Co. Ltd.  For the similar proposition, he has also relied upon the judgments reported in (2019) 6 SCC 175 in the case of Reliance Life Insurance Co.Ltd. & anr. Vs. Rekhaben Nareshbhai Rathod  and 2020 SCC Online SC 848  in the case of Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., & Ors  Vs. Dalbir Kaur.  

 

                7.   Per contra, learned counsel for the respondent/ complainant submitted that having accepted the proposal by receiving the premium, now the opposite parties are not correct in repudiating the claim.  Furthermore, there is a concluded contract and hence the appellants/opposite parties are bound to reimburse the amount with interest.  But, simply refusing the claim without any reasoning is not proper on the part of the insurance company.  In fact, the respondent/ complainant had been reimbursed with the claim amount, in respect of other six policies.  Therefore, there is no justification in repudiating the claim made by the respondent/complainant in the present case.

 

                8.  Keeping in mind the submission of the learned counsel for the appellants/opposite parties and the learned counsel for the respondent/complainant, we have carefully perused the entire material available on records. 

 

                9.  We find that the complainant’s husband had given the following answers in the proposal form, under Question No.11.

“11.  Personal History:

(a)	During the last 5 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 you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system?	No
(e)	Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Cancer, Epilepsy, Hernia, Leprosy or any other disease?	No
(f)	Do you have bodily defect or deformity?	No
(g)	Did you ever have any accident or injury?	No

 

 

(h)	Do you use or have ever used Alcoholic drinks Narcotics Any other drugs Tobacco, in any form	No No No No
(i)	What has been your usual state of health?	Good
(j)	Have you ever received or at present awaiting/undergoing medical advice/treatment or tests in connection with Hepatitis B or AIDS related condition?	No

 

Subsequently, after taking policy, the complainant’s husband got himself admitted for treatment of Tumor in spleen.  Inspite of the treatment taken in CMC Hospital, Vellore, he died on 11.07.2011.  Therefore, wife of the deceased had made a claim under the said policy.  Now it is the contention of the Insurance Company, as per Ex.B3 Hospital Treatment Certificate, the complainant’s husband is an alcoholic.  But, while answering Question No.11 in the proposal form, he had not disclosed this fact, especially, when there is a specific question in the proposal form under Question No.11 (h), “Do you use or have ever used Alcoholic Drinks?”.  However, the District Forum had come to the conclusion that there is no nexus between alcoholism and the Spleen Tumour being the cause of death.  The finding of the District Forum is not legally sustainable.  It is well settled legal principle that, in matter of insurance policies like the present instance, suppression and misrepresentation of material facts would render the policy invalid in the eye of law.  Such an instance enables the Insurance Company to repudiate the claim arising from the policy for the reason that the principle of uberrima fides/ utmost good faith is flouted due to suppression of material facts.  If the insured has knowledge of facts which others cannot know, he should not resort to suppressio veri/suppression of truth.  In the case on hand, since the insured had suppressed the material facts about his medical history which is the criterion for considering the issuance of the policy itself, the complainant cannot expect any positive consideration of the claim.  With regard to the same, it would be appropriate to rely upon some of the following judgments submitted by the counsel for the appellants/opposite parties:

 

1. (2019) 6 SCC 175 [Reliance Life Insurance Co.Ltd. & anr. Vs. Rekhaben Nareshbhai Rathod] wherein it is held that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitles the insurer to repudiate the claim under the policy.

 

2. 2020 SCC Online SC 848 [Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., & Ors  Vs. Dalbir Kaur]  wherein it is held that, “A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk. In the present case, as we have indicated, the proposer failed to disclose the vomiting of blood which had taken place barely a month prior to the issuance of the policy of insurance and of the hospitalization which had been occasioned as a consequence. The investigation by the insurer indicated that the assured was suffering from a pre-existing ailment, consequent upon alcohol abuse and that the facts which were in the knowledge of the proposer had not been disclosed. This brings the ground for repudiation squarely within the principles which have been formulated by this Court in the decisions to which a reference has been made earlier. In Life Insurance Corporation of India vs Asha Goel, this Court held:

“12…The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of risk which may take place between the proposal and its acceptance. If there is any mis-statements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.” 

 

The above judgements are squarely applicable to the facts of this case also.  Even in this case, the proposer has failed to disclose the fact that he was an alcoholic, which is evident from the Medical records of CMC, Hospital, Vellore, marked as Ex.B3. Therefore, there is clear suppression of material facts in this case.  But, without considering these factual aspects properly, the District Forum had allowed the complaint.  Therefore, the said order is not legally sustainable.  We find no valid reason to sustain the orders passed by the District Forum and hence the same is liable to be set aside.

 

                10.  In the result, the Appeal is allowed, by setting aside the impugned order dated 03.10.2017 passed by the District Consumer Disputes Redressal Forum, Vellore in C.C. No.13 of 2014.   Consequently, the complaint is dismissed.

 

 

R  VENKATESAPERUMAL                                                                                                         R.SUBBIAH

         MEMBER                                                                                                                         PRESIDENT

 

 

Index :  Yes/ No

AVR/SCDRC/Chennai/Orders/April/2023