Tamil Nadu

StateCommission

A/318/2019

The Divisional Manager, - Complainant(s)

Versus

M.Selvaraj, - Opp.Party(s)

M/s.M.B.Gopalan Associates

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. 318 of 2019

[Against the order passed in C.C. No.5 of 2010 dated 19.09.2019 on the file of the D.C.D.R.F., Vellore].

 

Friday, the  28^th day of April 2023

 

 

The Divisional Manager

Life Insurance Corporation of India

Jeevan Prakash

Arcot Road, Vellore – 4.                                      ..  Appellant/   Opposite party 

            

- Vs –

 

M.Selvaraj

S/o.Munusamy Mudaliar

No.20/30/1, Othaivadai Brahmin Street

Cheyyar Town,

Tiruvannamalai District.                                       .. Respondent/  Complainant

 

 Counsel for Appellant/Opposite Party               : M/s. M.B.Gopalan Associates

 Counsel for the Respondent/ Complainant      : M/s. K. Sudha

 

This appeal came up before us for final hearing on 31.03.2023, and on hearing the arguments of the counsel for the Appellant and the counsel for the respondent 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, 2019 as against the order dated 19.09.2019 passed by the District Consumer Disputes Redressal Forum, Vellore in C.C. No.5 of 2010, allowing the complaint filed by the Respondent herein, in part.

 

        2.  The Appellant is the opposite party 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. It is the case of the complainant that his daughter S.Amudha, had taken an Insurance policy bearing No.733977718 dated 30.03.2006 for an assured sum of Rs.1,00,000/- from the opposite party.  She died on 27.06.2007.  She had paid all the premium dues to the opposite party regularly, till the date of her death.  Hence, the complainant approached the opposite party for payment of the sum assured, to him due to the death of his daughter S.Amudha, who was unmarried and died leaving behind only the complainant as her sole heir to succeed her estate as well as her nominee.  The opposite party asked the complainant to produce all the documents relating to the insurance policy and the complainant also produced all the documents.  But, for a long time the complainant did not hear anything from the respondent.  Finally, on 06.07.2009, the complainant received a letter from the respondent informing that his daughter S.Amudha had given false answers for the questions in the proposal form and that the opposite party came to know that she was suffering from Mixed Connective Tissue Disorder from 19.08.2002, for which she had taken treatment from a hospital.  But, she did not disclose these facts in the proposal form.  Hence, the opposite party had repudiated the claim of the complainant.  On receipt of the repudiation letter, the complainant sent a reply dated 30.08.2009 through his Advocate, denying the allegations contained in the repudiation letter dated 06.07.2009 and calling upon the Opposite party/insurance company to pay the assured amount within 3 days, stating that failing which the complainant would file a complaint before the District Forum, Vellore.  But the opposite party did not comply with the demand of the complainant.  On          the other hand, they sent a letter dated 08.09.2009 stating that they have arranged to place the representation made by the complainant before the Claims Review Committee and the decision of the Claims Review Committee would be communicated to the complainant.  But, no such communication was received by the complainant, inspite of his reminder notice dated 02.11.2009.  Therefore, the complainant was left with no other alternative other than to file a complaint before the District Forum, seeking the following directions to the opposite party:

1. To pay the assured amount of Rs.1,00,000/- with interest at 12% per month from the date of death of Amudha i.e.27.06.2007;
2. To pay a sum of Rs.84,000/- towards the damages for having caused physical torture, mental agony;
3. To pay a sum of Rs.500/- for pre-suit expenses ;
4. To pay a sum of Rs.1000/- towards notice charges; and
5. To pay a sum of Rs.5000/- towards cost.

 

 

                4.  Resisting the case of the complainant, the opposite party had filed a version stating that based on a proposal dated 31.03.2006 made by one S.Amudha, D/o.Selvaraj, for an insurance coverage of Rs.1,00,000/- at Cheyyar Branch of the opposite party, a BIMA GOLD INSURANCE Policy No.733977718 was issued with retrospective effect from 28.04.2005.  The complainant by letter dated 26.09.2007 informed the Cheyyar Branch of the opposite party that his daughter S.Amudha died on 27.06.2007 at Bharani Hospital, Chennai, where she was taking treatment for Arthritis and fever and sought for payment of the amount insured.  Based on the request letter of the complainant dated 26.09.2007, the opposite party made independent enquiry and came to know that the insured Amudha had taken treatment for Arthritis, fever and Mixed Connective Tissue Disorder in the Department of Medicine II, CMC Hospital, Vellore from 22.08.2002 till 07.04.2003.  Thereafter the insured Amudha had taken treatment with Dr.K.Senthilkumar at Cheyyar, from 02.03.2007 to 23.06.2007. Subsequently, the insured got admitted at Bharani Hospital, Chennai on 25.06.2007 for treatment and later died there due to Rheumatoid Arthritis and Pulmonary Hypertension at 11.00 pm on 27.06.2007.  After confirming the facts of the disease Mixed Connective Tissue Disorder and the treatment taken by the insured for the same from 22.08.2002 at CMC Hospital, Vellore, it was shocked to find that the insured had suppressed all these material facts in the proposal form dated 31.03.2006 given by her.  The insured had not disclosed the treatment particulars while proposing the policy by her proposal dated 31.03.2006 and thus intentionally concealed the material facts.  Hence, the opposite party by its letter dated 06.07.2009 had informed the complainant that the insured was suffering from Mixed Connective Tissue Disorder from 19.08.2002 for which she had taken treatment at a hospital but did not disclose the same in the proposal and have given false answers in the proposal.  Therefore, the opposite party had repudiated the claim.  Hence there is no deficiency of service on the part of the opposite party and sought for dismissal of the complaint.        

 

                5.  In order to prove the case, both the parties have filed their proof affidavits and on the side of the complainant, 7 documents have been marked as Exhibits A1 to A7 and 10 documents were filed on the side of the opposite party and marked as Exhibits B1 to B10.  

 

                6.   The District Forum, after analyzing the entire evidence on records had observed that on perusal of the proposal form it is found that the proposal form has been signed by the deceased Amudha in Tamil.  But, the proposal form has been filled up by some other person in English, not by the deceased Amudha.  Further, in column 11(a) it is stated as follows:

“During the last 5 years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week ?”

Answered “No”.

This answer is not suppression of material facts because she has not taken treatment continuously for more than one week.  Thus, the District Forum had come to a conclusion that there is no suppression of material facts and thus allowed the complaint by directing the opposite party to pay a sum of Rs.1,00,000/- being the policy assured amount, Rs.20,000/- towards compensation for mental agony and Rs.5000/- as costs.  Aggrieved over the same, the present appeal has been filed by   the opposite party.

 

                7.  Learned Counsel appearing for the appellant/ opposite party submitted that the policy was taken based on the proposal dated 31.03.2006 and the same was marked as Ex.B1.  The life assured policy holder died on 27.06.2007 due to cardiac arrest, pulmonary hypertension and rheumatoid arthritis after being hospitalised on 25.06.2007.  Being an early claim, upon verification, the appellant/ opposite party found that the life assured was suffering from various ailments since 2002 particularly Mixed Connective Tissue disease – CMC Vellore Certificate in Ex.B2, which revealed that the policy holder had complaints of fever and arthritis for 6 months and was under treatment for about 6 months.  One of the causes of death was Rheumatoid Arthritis as per Ex.B6.  But this was not disclosed in the proposal form. Therefore, the appellant/opposite party had rightly repudiated the claim.  But the District Forum without properly considering these facts had erroneously held that the claim of the complainant was wrongly repudiated.  The District Forum had proceeded on the basis of the proposal form having been signed in Tamil by the life assured, it was filled up by someone else and as such there is no suppression of material facts on the part of the deceased.  But the said finding of the District Forum is not legally sustainable.  In this regard, counsel for the appellant/ opposite party has also relied upon the following judgments:

1. (2009)8SCC 316 in the case of Satwant Kaur Sandhu Vs New India Assurance Co. Ltd. 
2. (2019) 6 SCC 175 in the case of Reliance Life Insurance Co.Ltd. & anr. Vs. Rekhaben Nareshbhai Rathod  and
3. 2020 SCC Online SC 848  in the case of Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., & Ors  Vs. Dalbir Kaur.  

 Further, the counsel for the appellant/opposite party submitted that the District Forum had wrongly held that there was no evidence of treatment for more than a week when the medical records clearly show that the deceased was treated even in 2002 for Mixed Connective Tissue Disorder and Rheumatoid Arthritis.  The District Forum has wrongly decided based on an answer given by the deceased in the proposal form to the effect that she has not taken treatment for more than a week.  But a perusal of the medical records would establish significant ailments/treatment taken by the deceased prior to insurance which was not disclosed in the proposal form, despite specific questions.  Therefore, there is no deficiency of service on the part of the opposite party in repudiating the claim. 

 

                8.  Per contra, the counsel for the respondent/complainant made submissions supporting the order passed by the District Forum.  It is the specific contention of the counsel for the respondent/ complainant that the District Forum by thoroughly analysing the documents filed on the side of the appellant/opposite party had come to a conclusion that there is no suppression of material facts in the proposal form.  The contents of the proposal form is in English.  Whereas the insured have signed the same in Tamil, which would go to show that the proposal form would have been filled up by some other person and not by the insured Amudha.  Considering this aspect, the District Forum has correctly come to the conclusion that the insured Amudha was not aware about the contents of the proposal form and thus negatived the case projected by the appellant/ opposite party.  Therefore, there is no error in the order passed by the District Forum.  Hence, sought for dismissal of the appeal.

 

        9.  Keeping in mind the submissions of the learned counsel for the appellant/opposite party and the respondent/complainant, we have carefully perused the entire material available on records. 

 

 

                10.  The complainant’s daughter S.Amudha took policy from the opposite party on 30.03.2006.  She died on 27.06.2007.  Following her death, the complainant made a claim to the Insurance Company.  Since it is an early claim, the Insurance company conducted enquiry and found that the deceased was suffering from various ailments such as Mixed Connective Tissue disease, Rheumatoid Arthritis and fever.  But this fact was suppressed in the proposal form. But the District Forum had observed that the proposal form having been signed in Tamil by the deceased, it was filled up by someone else.  Therefore, the deceased cannot be blamed for any suppression of material facts.  But, we are not inclined to accept this submission made by the counsel for the respondent/complainant.  In view of the dictum laid down by the Supreme Court in    (2019) 6 SCC 175 [Reliance Life Insurance Co.Ltd. & anr. Vs. Rekhaben Nareshbhai Rathod] it is held that when the signature of proposal by the proposer is not disputed, it cannot be argued that the contents of the proposal were filled up by agent or that they are not binding on the signatory/proposer.  The second reasoning stated by the District Forum is that there was no evidence to prove that the deceased undertook treatment for more than a week.  Therefore, it cannot be stated that there is suppression of material facts.  But, as pointed out by the counsel for the appellant/ opposite party, it is clear from the records that the deceased was treated even in 2002 for Mixed Connective Tissue Disorder and Rheumatoid Arthritis.  Therefore, the finding of the District Forum in this regard is not legally sustainable.  Be that as it may, it is 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 her 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 appellant/opposite party:

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 treatment taken by her for Mixed Connective Tissue disorder and Arthritis in the year 2002, which is evident from the Medical Report of CMC Hospital, Vellore marked as Ex.B3.  Therefore, there is a 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 19.09.2019 passed by the District Consumer Disputes Redressal Forum, Vellore in C.C. No.5 of 2010. Consequently, the complaint is dismissed.

 

 

 

R  VENKATESAPERUMAL                                                                                     R.SUBBIAH

         MEMBER                                                                                                          PRESIDENT

 

 

Index :  Yes/ No

AVR/SCDRC/Chennai/Orders/April/2023