DATE OF INSTITUTION: 03.11.2015
DATE OF DISPOSAL: 10.01.2018
Dr. N.Tuna Sahu, Presiding Member:
The complainant has filed this consumer dispute under Section 12 of the Consumer Protection Act, 1986 alleging deficiency in insurance service against the Opposite Parties ( in short the O.Ps) and for redressal of his grievances before this Forum.
2. The brief facts that are relevantly required for disposal of this consumer dispute are that the present complainant is son and nominee of the deceased policyholder Late Adhibas Raut who obtained a Policy bearing No.00619503 under product name Sahara Kavach Pure Term Policy. It is stated in the complaint that the deceased policyholder submitted the proposal form for the aforesaid policy duly written by the agent of O.Ps and signed by the policyholder. The doctor appointed by the O.Ps examined the health of policyholder prior to procurement of the policy and being satisfied on his health conditions recommended for issuance of the policy in question. The policyholder Late Adhibas Raut was advised to deposit a sum of Rs.10,224.60 paisa towards annual premium installment and accordingly it was deposited and policy was issued. The acceptance letter-cum-first premium receipt of the said policy was communicated to the complainant on 27.11.2013 by the O.Ps after being satisfied on the contents of the proposal form. It is also mentioned in the complaint that as per terms and conditions of the said policy, a sum of Rs.7,00,000/- was assured on the event of death of the policyholder and the last installment was fixed to be deposited on 27.11.2027. The age of the policyholder at the time of commencement of the policy was 49 years and date of birth was 05.06.1964. The policy holder was sound in health having no vices which was found true by the investigating doctor on 21.09.2013 at the time the policy was proposed. While the policy was in force, the policy holder suffered from acute abdomen pain on 11.02.2014 and was undergoing treatment as an outdoor patient at A.Karadabadi P.H.C. Ganjam. The treating doctor referred the patient to MKCG Medical College & Hospital, Berhampur and while he was ready to be shifted to the said Hospital for better treatment, he was died on 12.02.2014 at its village. The death of the policyholder was registered under the Registrar of Births and Deaths-cum-Medical Officer, C.H.C-II, Buguda, District-Ganjam, who issued the death certificate on 07.03.2014. It is further stated that as per the terms and conditions of the policy, the present complainant filed a claim application before O.P.No.2 on 23.04.2015 for settlement of the death claim of Rs.7,00,000/-. However, the O.P.No.1 repudiated the claim of the complainant on the ground that the deceased was suffering from cancer. It is also contended that the O.P. insurance company has failed to appreciate that the deceased policyholder was examined in detail by their own doctor Dr. K.C. Moheswar, MBBS, Regd. No. 4219 (Odisha) on 21.09.2013 prior to issuance of the policy in dispute. However, the O.Ps repudiated the claim of the complainant in their letter No.62681 dated 15.06.2015 on the ground that the deceased policyholder was undergoing treatment for cancer. The complainant approached the O.Ps for settlement of his claim but O.Ps did not give any need to his grievances, so he has filed this consumer dispute alleging deficiency in service on the part of the O.Ps and prayed to direct the O.Ps to pay the assured sum of Rs.7,00,000/- along with interest from 13.02.2014 till actual payment is made. He has also prayed to direct the O.Ps to pay Rs.30,000/- as compensation for harassment and mental agony along with Rs.7,500/- as cost of litigation in the best interest of justice.
3. Upon notice, the O.Ps appeared on 20.01.2016 through learned counsel Shri Somonath Nanda, Advocate & Associates and filed written version on 09.05.2015 and written argument on 02.07.2017. In the written version/ arguments, it is stated that the claim under the impugned policy of insurance was repudiated in terms of the policy contract after careful consideration of facts including the documents on record which reveals deliberate suppression of material facts including his medical history of the life assured while submitting the proposal there under. There has been absolutely no deficiency in service on part of O.Ps i.e. Sahara Life. The complaint is thus misconceived and untenable under the Consumer Protection Act, 1986 and is liable to be dismissed in limine. On 20.09.2013 deceased Adhibas Rout had proposed for insurance on his own life with Sahara Life under which a sum of Rs.7.00 Lakhs was assured and the policy is for a term of 15 years. In his proposal for insurance deceased Adhibas Rout had furnished information as sought for in proposal form and had also replied various questions contained therein including those relating to his present status of health, his medical history, any symptoms or any medical advice, investigations or treatment for cancer, tumor, cyst, or any other unusual growth. Mr. Adhibas Rout had also made a declaration in the proposal form on 20.09.2013 interalia statements made that answers given by him were true and complete and correct and he had not withheld any information. He had further declared that these statements and declarations shall be the basis of contract between him and Sahara Life and in case of any untrue statement is contained therein, the contract shall be rendered absolutely null and void and all monies paid there under shall stand forfeited. Relying upon the statements made and replies to various questions contained therein and the declarations made in the proposal form on 20.09.2013, the policy of insurance bearing No.00619503 was issued to Mr. Adbihas Rout for an assured sum of Rs.7 Lakhs under Sahara Kavach Pure Term plan for a term of 15 years. The date of commencement of the policy was 27.11.2013 with installment premium of Rs.9,099/- (exclusive of service tax) payable on 27.11.2013 every year. Mr. Akula Rout, son of Mr. Adhibas Rout and the complainant herein was the nominee under the said policy in terms of Section 39 of the Insurance Act, 1938. Sahara Life policy was forwarded to the policyholder Mr. Adhibas Rout vide letter dated 27.11.2013 along with policy bond and copy of the first premium receipt - a scanned image of the proposal form dated 20.09.2013 for his information and record. In our letter dated 27.11.2013 the life of assured attention was specifically invited to the free-look period provision as contained in the policy bond which inter-alia provided that he was entitled to review the terms and conditions of the policy within a period of 15 days from the date of receipt of the policy bond and in case of any disagreement, he had the option to return the policy bond in which he was entitled to refund of paid premium after deductions as stated therein. The policy was accepted by Mr. Adhibas Rout without demur. The life assured Mr. Adhibas Rout died on 12.02.2014 within 77 days of the commencement of the policy. Intimation about the death was however, received by Sahara Life on 03.06.2015 when claim was lodged by Mr. Akula Rout, the complainant herein. This being a case of very early death, investigations were carried out to ascertain bona fide of the claim which revealed that the life assured Mr. Adhibas Rout was admitted to TATA Memorial Hospital, Mumbai as an outpatient on 08.04.2013 with complaint of Dysphagia Grade IV and loss of weight and appetite since 3 months. Electronic Medical Record maintained at TATA Memorial Hospital further reveals that the life assured had earlier undergone IDGSCIOT and GE junction BX at Berhampur suggesting GE junction 38cm-UPG and infiltrating Adeno Carcinoma on 18.03.2013 and 25.03.2013. It is also submitted that reports after investigations carried out by the Department of Nuclear Medicine and Molecular imaging at the TATA Memorial Centre reveals that life assured had active disease in soft tissue thickening involving lower third oesophagus, GEJ and lessor curvature of stomach. The Final Histopathology Report dated 12.04.2013 by the Diagnostic Services- Surgical Pathology, TATA Memorial Centre after gastro esophageal junction biopsy of the life assured also reveals that “technically suboptimal tissue section showing features of poorly differentiated adenocarcinoma”. Evidently, the life assured was a known case of oesophageal cancer and was undergoing pathological tests and treatment much before proposing for the insurance under the impugned policy. This material fact was knowingly and deliberately suppressed and concealed by him while submitting his proposal dated 20.09.2013. The policy was thus obtained fraudulently and in violation of declarations in the proposal form and breach of doctrine of utmost good faith, an essential ingredient of insurance contracts. Accordingly, the claim lodged by the complainant was repudiated vide O.Ps letter dated 10.06.2015 for the reason stated therein. The reference is craved to the question No.5 in the proposal form interalia seeking details of all existing or proposed insurance on the life of the proponent. In reply the proponent Mr. Adhibas Rout, had not made mention of any existing policy on his life. In fact, he already had policies on his life including policy No.0300259360 and 0302591341 issued by Bajaj Allianz Life Insurance Company on 28.04.2013 and 28.06.2013 for Rs.5 Lakh and Rs.4 Lakh sum assured respectively. In addition, the life assured had another policy No. NN141300061092 issued by Shriram Life Insurance Company for Rs.3.5 Lakhs issued on 21.08.2013. That fully aware of his serious illness and cancer affliction as diagnosed by TATA Memorial Hospital, Mumbai, the life assured manoveuvered heavy insurances on his life disproportionate to his income by defrauding various insurance companies including Sahara life. Mr. Akula Rout, the complainant himself and the nominee under the policy accompanied the life assured when the letter was admitted in the Tata Memorial Hospital, Mumbai as an out-patient on 08.04.2013 as is evident from personal details on the Electronic Medical Records. Hence, the learned counsel for the O.Ps prayed to dismiss the case of the complainant with costs.
4. On the date of hearing, we have heard the learned counsel for the complainant as well as for the O.P. No.1 & 2. We perused the pleadings of parties and have gone through the materials placed on the case record. On perusal of materials, it appears that in this case admittedly the deceased policy holder obtained the policy in dispute on 27.11.2013 and died on 12.02.2014. On the death of deceased policy holder, the nominee/complainant submitted the claim before O.Ps on 23.04.2015 and requested for settlement of death claim of Rs.7,00,000/- under the said policy bearing No.00619503. However, the O.Ps in their letter No.62681 dated 15.06.2015 repudiated the claim of nominee complainant on the ground of suppression of material fact that the deceased policy holder was suffering from cancer and undergoing treatment at Tata Memorial Hospital at Mumbai since the policy in dispute was commenced on 27.11.2013 and the policyholder was died on 12.02.2014. It is further submitted by the learned counsel for O.P. No.1 &2 that the deceased had suppressed the material facts regarding his health conditions by not disclosing the disease particulars, treatment history and being an early claim it was investigated and found that the deceased policyholder was suffering from cancer as discussed above. In view of suppression of material fact and false declaration, the contract of insurance becomes void and the premium paid under said policy is forfeited and the present complainant is not entitled for the sum assured under the policy due to suppression of material facts during filing of the proposal form.
5. In view of the above fact and circumstances and considering the pleadings of parties the issues crop up for our consideration as to – (i)whether in this case there was suppression of material facts by the deceased policyholder regarding his health conditions? (ii) Whether the O.P. No.1&2 are justified repudiating the claim of the nominee complainant? And (iii) whether the complainant is entitled for any benefit under the policy in dispute?
6. To address and adjudicate the first issue in dispute as framed above, we would like to say that in this case as per the materials placed on case record like policy bond and premium receipt, the deceased policyholder obtained the policy on 27.11.2013 for a term of 15 years on payment of Rs.10,223.64 paisa towards annual premium for an assured sum of Rs.7,00,000/- under policy bearing No.00619503. It is a fact not in dispute that the deceased policy holder procured the policy on 27.11.2013 and died on 12.02.2014 as is evidence from the death certificate placed as Annexure-6 on the case record. The policy was issued by the O.Ps on 27.11.2013 and the deceased policy holder died on 12.02.2014 i.e. only within 77 days of issuance of policy in dispute. This is being an early claim, the O.Ps investigated the matter and on investigation it was revealed that the deceased policyholder was undergoing treatment at Tata Memorial Centre. On verification of the treatment records of deceased policyholder it reveals that he was suffering from cancer as per final tumor marker report dated 09.04.2013, final report dated 10.04.2013, final histopathology report dated 12.04.2013 and provisional endoscopy report dated 16.04.2013 of Tata Memorial Centre/Hospital. In the foregoing context, it is required to be examined whether there was any suppression of material facts regarding his health condition during the time of taking the insurance policy in dispute. As discussed above, the policyholder filled up the policy form of the insurance policy on 20.09.2013 on payment of Rs.10,223.64 paisa towards annual premium and the policy was communicated to the deceased policyholder on 27.11.2013. Similarly, on careful perusal of the proposal form vide Sl.No.7.6(c ) pertaining to health details, it reveals that the deceased policyholder had furnished wrong information regarding his health conditions and negatively replied that he was not suffering from cancer, tumor, cyst or any unusual growth. However, as per the treatment details of Tata Memorial Centre/Hospital as discussed above, he was first diagnosed and detected as a cancer patient according to the final tumor marker report dated 09.04.2013 of Tata Memorial Centre/Hospital placed on the case record. In fact, it is beyond any doubt or dispute that the deceased policy holder was suffering from cancer at the time of fill up of the proposal form for procuring the said insurance policy. It is, therefore, confirmed that there was suppression of material facts by the deceased policyholder regarding his health conditions at the time of procurement of policy which is violation of the principles of insurance law. Moreover, in this case, the deceased policy holder was died only after 77 days of issuance of the insurance policy which is not disputed or denied. We, therefore, confirmed and convinced that there was suppression of material facts regarding his health and disease during taking of the policy which was not disclosed for underwriting risk by the insurer. It is also a fact not in dispute that the complainant failed to produce any convincing documentary evidence to the effect that he had undergone medical test by the O.Ps prior to issuance of the insurance policy in dispute. Nothing has been placed on case record to hold otherwise and we on this account only convinced that there was suppression of material facts by the deceased policy holder. Accordingly, we are not convinced by contentions of the learned counsel for the complainant that he had undergone medical test by a panel doctor of O.Ps prior to obtaining of the policy in dispute since merely putting a signature and seal of a panel doctor on the proposal form without supporting medial test reports of deceased policyholder in our view it can’t be construed that the deceased was medically examined.
7. With regard to the second issue as framed above, we would like to view that since the deceased policyholder had suppressed the material facts regarding his health conditions during procurement of the policy in dispute, the O.Ps are justified repudiating the claim of the nominee complainant since insurance contract is a matter of uberrima fide i.e. issued on good faith. In the light of foregoing discussions and considering the documentary evidence placed on case record, in our considered view there is nothing wrong repudiating the claim of the nominee complainant by the O.P. insurance company.
8. Insofar as the third issue is concerned, we would like to state that insurance policy obtained by false representation would be void and claimant would get nothing but amount of premium deposited. In this case, though there was nothing wrong repudiating the claim of the present complainant due to suppression of material facts by the deceased policy holder but we are convinced that the O.Ps received the amount under a void agreement but failed to refund the premium amounts to the nominee complainant while repudiating the claim after getting to know that the premium was received under a void contract. The equity, justice and good conscience say that it should be refunded to the nominee complainant. This is a welfare society and in a welfare state, the O.P. insurance company is to help the legal representatives of the deceased in their crisis period and not to even digest the deposits made as by them as premiums on technical and legal grounds. Our finding is fortified by the decision of Hon’ble State Commission (Uttaranchal) in the case of Life Insurance Corporation of India versus Smt. Kamla Devi reported in (2004) 10 CLD 145(SCDRC-Uttaranchal).
9. However, the learned counsel for the O.P. insurance company has relied on a few decisions of Hon’ble Supreme Court of India, in the case of Mithoolal Nayak Vs. Life Insurance Corporation of India decided on 15th January 1962 reported in AIR 814, SCR and a decision of Hon’ble State Consumer Disputes Redressal Commission, Chennai decided vide FA No.549/2005 in the case of the Branch Manager, Life Insurance Corporation of India& Ors Vs. K. Malarvizhi & Ors and another decision of Tamil Nadu State Consumer Disputes Redressal Commission, Chennai, decided on 07.03.2012 vide FA No.395 of 2011 in the case of The Branch Manager, M/s Ing Vysya Life Insurance Co. Ltd and Another Vs. J. Delphin and Others in support of his arguments and copies of which are placed on the case record. On careful going through the above citations and on a careful perusal of those decisions, we find that in all the above cases, facts are distinctly different that of the present case so the above citations are not applicable to the instant case due to distinguished factual differences of cases thus we are not inclined to accept the aforesaid citations in the instant case hence rejected.
10.With regard to cost and compensation as claimed by the complainant, in this case the O.Ps when repudiated the claim of the complainant did not prefer to refund the premium amount and it is illegal to retain the premium under a void contract. In the present case the insurance contract is void due to suppression of material fact by the deceased insured. We are, therefore, convinced that the O.Ps are jointly liable to pay cost of litigation to the complainant since the Opposite Parties have forced the complainant to file this consumer complaint to assert his rights due to non-settlement of his claim/ non-refund of the premiums. As far as cost of litigation is concerned, we feel that a sum of Rs.2,000/- will be just and proper in the fact and circumstances of the case since the complainant has hired the services of a professional Advocate and has paid court fee and also incurred other expenses during filing of this consumer complaint. However, in the foregoing fact and circumstances we are not inclined to pass any order as to payment of compensation by the O.Ps. In a sequel to the above discussions, deliberation and decision of law and considering peculiar facts and circumstance of the case in hand, we partly allowed the case of the complainant against O.Ps who are jointly and severally liable to refund the premium amounts to the complainant along with cast of Rs.2000/- towards litigation expenses.
11. In the result, the case of complainant is partially allowed against O.Ps. We direct the O.Ps who are jointly and severally liable to refund the premium amount of Rs.10,223,64 paisa together with litigation cost of Rs.2,000/- to the complainant within 45 days from the date of receipt of this order failing which the complainant is at liberty to recover the same under Section 25/27 of the Consumer Protection Act, 1986. The case of the complainant is disposed of accordingly. No order as to compensation.
12. The order is pronounced on this day of 10th January 2018 under the signature and seal of this Forum. The office is directed to supply copy of this order to the parties free of cost and a copy of same be sent to the server of
