C.C.No.16/09 (Filed on 04.02.2009)

                   Complainants filed this complaint for getting a relief from the Forum.

                   2. Fact of the case in brief is as follows:  The 1^st complainant is the wife of deceased Abraham George and 2^nd complainant is the mother of the deceased.  The 1^st and 2^nd opposite parties are SBI Life Insurance Company and Branch head respectively.  The 3^rd of is the Branch Manager of State Bank of India, Pathanamthitta.

                   3. The deceased Abraham George had availed an housing loan from the 3^rd opposite party on 28.3.03.  The 1^st opposite party had provided life insurance coverage to the said Abraham George as part of its Super Suraksha Group Insurance Scheme.  The first opposite party issued insurance certificate to Abraham George dated 22.01.2005.  The said insurance policy is valid from 22.12.2004.  The policy holder Abraham George expired on 02.11.2007.  As per the terms and conditions of the Super Suraksha Group Insurance Scheme, in the event of death of the insured; the insured will be indemnified by the insurance company for the outstanding loan amount including interest.  Therefore the complainants approached the 3^rd opposite party to disburse the insurance amount for settling the dues of the deceased.  The opposite parties 1 and 2 had not yet disbursed the insurance amount.

                   4. The complainants issued a legal notice dated 11.8.08 to close the housing loan account by adjusting the insurance amount towards the amount outstanding in the said account.  But opposite parties are evading from their duty.  Hence this complaint for directing the 1^st and 2^nd opposite parties to disburse the insurance amount due and the 3^rd opposite party to close the housing loan account by adjusting the insurance amount towards the amount outstanding with compensation and cost.

                   5. Opposite parties 1 and 2 entered appearance and filed a common version.  According to them, they grants insurance coverage to individuals through individual assurances and to groups of individuals through Group Life Insurance Schemes.  The proposer/life to be assured, submits to the insurer a detailed proposal form giving full details about the life to be insured, such as his health and habits, occupation and annual income, family history, previous insurances, if any, etc. under Group Schemes, each individual member of the Group, in order to be enrolled in the scheme submits consent-cum authorisation-cum-Good Health Declaration forms.

                   6. In this case, the deceased Abraham George, the life assured, committed breach of the principle of utmost good faith by suppression of material facts i.e. his pre-existing illness of chronic liver cirrhosis.  Evidence shows that he was suffering from liver cirrhosis and ascites since 05.12.2004 i.e. before signing the declaration of good faith and before entering into the contract of insurance.  Therefore, the repudiation by the opposite parties 1 and 2 are just and legal.  There is no negligence, carelessness or deficiency in service on their part.  The complainant committed a fraud with an intention to obtain the insurance cover by suppressing his pre-existing illness.  Therefore, as per Sec.17 of Indian Contract Act, 1872, the contract is void.          The repudiation action was based on the terms and conditions of the policy, which is just and legal.  Therefore, the complainant is not entitled to get any relief.  Hence opposite parties 1 and 2 canvassed for the dismissal of the complaint. 

                   7. The 3^rd opposite party entered appearance and filed separate version stating that the complaint is not maintainable either in law or on facts.  According to them, the 1^st opposite party introduced a Group Insurance Scheme named SBI Life Insurance Scheme.  Housing loan insurance to provide Group Life Insurance cover to housing loan borrowers of SBI Group as protection against the risk of death.  The 3^rd opposite party is the administrator of the Group.  The deceased Abraham George availed a home loan for an amount of ` 7,25,000 from the 3<sup>rd</sup> opposite party.  He applied for enrolment under the SBI Home Loan Insurance Scheme.  He was covered under SBI Life Super Suraksha Group Life Insurance Scheme from 22.12.04 on payment of premium of ` 44,025.  The 3^rd opposite party facilitated enrolment of borrower in the Group Life Insurance Scheme on receiving consent-cum-authorisation-cum-good health declaration from the borrower as required by the 1^st opposite party.  The borrower expired on 02.11.07.  The death claim forwarded by the 3^rd opposite party was repudiated by the 1^st opposite party on the ground that the deceased life assured had given a false good health declaration.

                   8. According to the 3^rd opposite party, the Master Policy shall form the basis of the contract.  Master Policy states that the company and the grantees having further agreed that the grant of the benefit is subject to the payment of appropriate premium and the terms and conditions contained in the document.  The rights and liabilities of the parties are strictly limited to the compliance of the terms and conditions stipulated and procedures mentioned in the policy and also subject to the exclusion therein.  The obligation of the 3^rd opposite party is limited to liquidate the loan amount due from the deceased borrower only on receipt of the sum assured from the 1^st opposite party.  The 1^st opposite party has not so far disbursed the amount to the 3^rd opposite party.  The 1^st opposite party has to prove the grounds for repudiation of the claim.  The dispute between the complainant and the 1^st opposite party in no way affects the right of this opposite party to realise the amount as per the original agreement entered into between this opposite party and the deceased Abraham George.  Therefore, there is no deficiency of service on their part and hence they also canvassed for the dismissal of the complaint.

                   9. From the above pleadings, the following points are raised for consideration:

(1)   Whether the complaint is maintainable before this Forum?

(2)   Whether the reliefs sought for in the complaint are allowable?

(3)   Reliefs & Costs?

          10. Evidence of the complaint consists of the oral deposition of PW1 and as Exts.A1 to A5. Evidence of the opposite parties consists of the oral deposition of DWs. 1 to 3 and Ext.B1 to B6. After the closure of evidence, both parties were heard.

          11. Points 1 to 3:-  In order to prove the complainant’s case, the 1^st complainant filed proof affidavit along with certain documents.  She was examined as PW1 and the documents produced were marked as Exts.A1 to A5.  Ext.A1 is the copy of death certificate of Abraham George.  Ext.A2 is the copy of certificate of insurance issued by the 1^st and 2^nd opposite parties.  Ext.A3 is the copy of advocate notice dated 11.8.08 issued to the opposite parties.  Ext.A4 is the letter issued by the 3^rd opposite party dated 13.10.03 to the deceased Abraham George.  Ext.A5 is the copy of loan passbook of the deceased Abraham George issued by the 3^rd opposite party.

          12. In order to prove the opposite parties’ contention, 2^nd and 3^rd opposite parties filed proof affidavits along with certain documents.  They were examined as DWs.1 and 3 and documents produced were marked as Exts.B1 to B6.  Ext.B1 is the authorisation dated 15.09.2010 issued by the 1^st opposite party in favour of DW1.  Ext.B1(a) is the power of attorney issued by the 1^st opposite party in favour of DW1.  Ext.B2 is the discharge summary dated 09.12.2004 pertaining to the treatment of the deceased Abraham George issued from Muthoot Medical Centre, Pathanamthitta.  Ext.B3 is the discharge summary dated 03.03.2005 pertaining to the treatment of the deceased Abraham George issued by Muthoot Medical Centre.  Ext.B4 is the copy of claim application dated 18.12.2007 sent by 3^rd opposite party to opposite parties 1 and 2.  Ext.B5 is the repudiation letter dated 2.2.08 issued by opposite parties 1 and 2 to the 3^rd opposite party.  Ext.B6 is the copy of Home Loan Insurance Master Policy of the first opposite party.  Dr. Abraham Koshy of Muthoot Medical Centre was also examined as DW2 for the opposite parties and Exts. B2 and B3 were marked through DW2.

          13. The complainants’ case is that the deceased Abraham George, a housing loan borrower joined in the Super Suraksha Group Insurance Scheme of the first opposite party as a precaution to cover the outstanding loan amount in the event of risk.  He died during the tenure of the policy.  But the claim for the insurance amount was repudiated.  The opposite parties’ contention is that the deceased Abraham George was ailing from pre-existing disease.  By suppressing the same, he joined in the insurance scheme and died due to the said disease.  Therefore, as per the terms and conditions they rightly repudiated it. 

          14. It is seen that the deceased availed home loan from third opposite party on 28.03.2003.  Existing or new home loan borrowers are eligible to enroll in the Super Surakha Group Insurance Scheme of the first opposite party.  As a borrower, the deceased has given his consent to enroll in the said scheme.  The contention of the opposite parties 1 and 2 is that the deceased joined the scheme on 22.12.2004, but he suppressed the treatment of liver cirrhosis on 5.12.04 in the good health declaration.

          15. On a perusal of Ext.A4 it is seen that 3^rd opposite party issued a letter to the deceased on 13.10.03 as part of their canvassing to join in the Super Suraksha Group Insurance Scheme seeking his consent.  The 3^rd opposite party conducted home loan borrowers meeting at Mannil Regency Hotel, Pathanamthitta and the deceased was also invited and attended the meeting and signed in the proposal form and good health declaration etc.  It is also seen that the 3^rd opposite party is the corporate agent of opposite parties 1 and 2 for enrolling the borrowers in the scheme.  All the above facts show that the deceased has signed the said documents on or after 13.10.2003.  This fact is not denied by DW1 in his deposition which is as follows:- “deceased-s\ Cu kvIoan tNÀ¯Xv SBI BWv.  Housing loan DÅ customersþs\ 3-þmw  FXrI£n ]¯\wXn« a®n doP³kn tlm«en h¨v Hcp programme \S¯n Cu insurance schemeþ tNÀ¸n¡pIbmbncp¶p F¶v ]dbp¶Xv F\n¡dnbnÃ.  Cu tIknse proposal formþDw good health declaration þDw deceased  H¸n«p \ÂInb XobXn F\n¡dnbnÃ.  a®n doP³knbn  \S¶ programme date Bb 13.10.2003 emWv proposal formþDw aäpw H¸n«p \ÂInbXv F¶p ]dbp¶Xns\¸än F\n¡dnbnÓ.

          16. It is pertinent to note that opposite parties 1 and 2 filed a copy of proposal form and good health declaration along with their version.  In that good health declaration form date is not recorded but signature of deceased is seen in it.  Therefore it cannot be ruled out that the deceased signed the good health declaration on or immediately after 13.10.2003.

          17. As per Ext.A2, opposite parties 1 and 2 received Rs.44,023 as total premium from the deceased.  The said amount is debited from deceased’s account by 3^rd opposite party only on 22.12.2004 inspite the deceased was enrolled in the scheme during 10/2003.  Even though the deceased given the consent and executed and signed the proposal and good health declaration on 13.10.03, 3^rd opposite party did not release the premium amount till 22.12.04.  All this facts are more or less admitted by 3^rd opposite party in his deposition which is as follows:- “tcJIfn proposal formþDw good health declarationþDw DÄs¸Spw. Documents \ÂInbXn\p tijamWv 3rd opposite party premium collect sNbvXncn¡p¶Xv F¶p ]dbp¶p.  F\n¡dnbnÃ. Deceased þsâ loan accountþ \n¶pw 3^rd opposite party premium adjust sN¿pIbmbncp¶p.  loan accountþ \n¶pw premium adjust sNbvX Znhkw \nÝbn¨Xv 3^rd opposite party BWv. premium loan account-þ adjust sNbvXp F¶ hnhcw 3^rd opposite party, opposite party 1 and 2þs\ Adnbn¨Xn\p tijamWv R§Ä policy issued sNbvXXv.  Policy {]m_ey¯n hcp¶ XobXn ]Ww In«p¶Xnsâ ASnØm\¯nemWv “.

              18. It is seen that 3^rd opposite party delayed more than one year to release the premium amount from the deceased’s account even though he had given consent and entrusted signed documents.  What prevented them to release the premium from his account on 13.10.03 or the next day?  Delayed withdrawal and the delayed remittance of the premium is not the fault of the deceased.  They are bound to answer on what ground they waited till 22.12.04 for releasing the amount and why they have not recorded the date in the good health declaration.  All this shows the laches and inaction of opposite party 3 in discharging their duty.  It is unjust, unfair and against the spirit of consumer justice.  The date shown in proposal form is an after thought for tallying the premium releasing date.  At the time of signing the proposal form by the deceased the date is not recorded.  It is also admitted by DW1 in his deposition as follows:- “Cu tIknse deceased \ÂInbn«pÅ proposal form- date Cusöp ]dbp¶Xv icnbmWv“. 

          19. On going through the available materials on record, it is crystal clear that at the time of signing the good health declaration and proposal form during 10/2003, the deceased had no ailments.  Opposite parties has not produced any materials to shows that the deceased has any ailment prior to 8.12.04.  Ext.B2 and Ext.B3 show that the deceased has been treated on 8.12.04 onwards for liver cirrhosis.  It does not mean that the deceased had either suppressed material facts or he had pre-existing disease at the time of making the good health declaration.

          20. Moreover as per Ext.B2 and B3, the deceased was not ailing from any critical illness.  He was not treated for irreversible liver failure.  He is suffering from liver cirrhosis.  Ailment of liver cirrhosis does not mean that he has irreversible liver failure.  This fact is clarified by DW3, the medical officer in his deposition which is as follows:- “Ext.B2 \ÂInb Imebfhn Cu tIknse deceased sâ medical condition irreversible liver failure F¶ AhØbnembncp¶nÃ.  Cu Imebfhn deceased AbmÄ¡v irreversible liver failure F¶ AhØbsöv FhnsSsb¦nepw FgpXn \ÂInbn«ps­¦n AXv Hcp truthful statement BWv.

            21. Opposite parties have no case that the deceased availed the loan and joined in the insurance scheme suppressing the ailment only for getting the benefit of the scheme.  He was not a defaulter in paying the EMI of loan.  Ext.A5 shows that he was regular and punctual in paying the EMI.  There is no stretch of imagination that the deceased has any ailment during Ext.A4 period.  Since date is not mentioned in good health declaration, it is presumed that at the time of signing the said declaration during 10/2003, the deceased has no ailment as alleged by the opposite parties.  The opposite parties failed to produce any cogent evidence to prove their case. Therefore, we are of the view that by obtaining signature on proposal form and good health declaration during 10/2003 without recording the date in it and on 22.12.2004, they have remitted the premium amount from the deceased’s account and recorded the date in tune with the above date and it is illegal, malafide and against all cannons of justice.  The above said act of the third opposite party is a deficiency in service.

             22. Moreover, Ext.A2 is a special group insurance scheme only for the benefit of the home loan borrowers and the deceased’s ailment does not come within the purview of critical illness as per clause @ of good health declaration.  The death of the insured occurred on 02.11.2007, which is a long period from the date of signing of good health declaration.  Therefore, we cannot find even any remote chance of suppression of pre-existing disease as alleged by the opposite parties.  Hence the repudiation is unjustifiable and it is a clear deficiency of service and hence the complaint is maintainable and allowable with cost against all opposite parties.

            23. In the result, this complaint is allowed as follows:

(i)               1^st and 2^nd opposite parties are directed to pay the amount  

           entitled to the insured as on the date of death of the 

           insured as per the loan account of the insured to the 3^rd 

           opposite party with 9% interest from 02.11.2007 i.e. the   

           outstanding liability of the deceased as on 2.11.2007

           along with 9% interest from 2.11.2007 onwards till the

           effecting the whole payment.

(ii)            3^rd opposite party is directed to close the loan account of the deceased by using the amount received from 1^st and 2^nd opposite parties if the loan account is not closed so far, provided that 3^rd opposite party is entitled only the actual dues of the deceased as on 2.11.2007.

(iii)         3^rd opposite party is further directed to pay an amount of ` 2,000 (Rupees Two Thousand only) as cost to the complainants and return the excess amount if any to the complainants after closing the loan account.

(iv)          3^rd opposite party is also directed to pay interest at the rate of 9% to the complainants from the date of payment for the payments, if any, made by the complainants to the loan account after the death of the insured.

(v)             Since interest is allowed to the complainants no separate compensation is allowed.

(vi)          Opposite parties 1 to 3 are directed to comply this order within 30 days from the date of receipt of this order, failing which complainants are allowed to realise the respective amounts from the defaulters at the rate of 10% from today till the whole realisation.

                 Declared in the Open Forum on this the 16^th day of August, 2011.

                                                                                                      (Sd/-)

                                                                                                N. Premkumar,

                                                                                                     (Member)

Sri. Jacob Stephen (President)                 :         (Sd/-)        

Appendix:

Witness examined on the side of the complainants:

PW1 :         Beena Abraham.

Exhibits marked on the side of the complainants:

A1     :         Copy of death certificate of Abraham George.

A2     :         Copy of certificate of insurance issued by the 1^st and 2^nd 

                     opposite parties.

A3     :         Copy of advocate notice dated 11.8.08 issued to the opposite

                     parties.

A4     :         Letter issued by the 3^rd opposite party dated 13.10.03 to the

                     deceased Abraham George.

A5     :         Copy of loan passbook of the deceased Abraham George

                      issued by the 3^rd opposite party.

Witness examined on the side of the opposite parties:

DW1 :         Salin. S.

DW2 :         Dr. Abu Abraham Koshy.

DW3 :         Jose Paul.

Exhibits marked on the side of the opposite parties:

B1     :         Authorisation dated 15.09.2010 issued by the 1^st opposite party

                     in favour of DW1.

B1(a) :         Power of attorney issued by the 1^st opposite party.

B2     :         Discharge summary dated 9.12.2004 pertaining to the treatment

                    of the deceased Abraham George issued from Muthoot Medical

                    Centre, Pathanamthitta. 

B3     :         Discharge summary dated 03.03.2005 pertaining to the

                    treatment of the deceased Abraham George issued by Muthoot

                    Medical Centre..

B4     :         Copy of claim application sent by 3^rd opposite party to

                     opposite parties 1 and 2. 

B5     :         Repudiation letter dated 02.02.2008 issued by opposite parties

                     1 and 2 to the 3^rd opposite party.

B6     :         Copy of Home Loan Insurance Master Policy of the first

                     opposite party.

                                                                                          (By Order)

                                                                                 Senior Superintendent

Copy to:- (1) Beena Abraham, Ezhikkattu House, Chittar-Seethathodu 

                       Village, Chittar. P.O. – 689 663.

       (2) Kunjamma George,       -do.   –do.

(3) Manager, SBI Life Insurance Co. Ltd., 2^nd Floor, Terner 

                          Morison Building, G.N. Vaidya Marg, Mumbai – 400 023.

(4) The Branch Head, SBI Life Insurance Co. Ltd.,

                4^th Floor, Khadi Tower, Near Kaloor Bus Stand,

                Kaloor, Kochi – 682 017.

(5) Branch Manager, State Bank of India, Pathanamthitta Branch, Tellarthu Arcade, Pathanamthitta – 689 645.

(6)  The Stock File.