DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Sandeep Kumar (now deceased) s/o Sh. Madan Gopal Malhotra through Madan Gopal Malhotra father/nominee of Sh. Sandeep Kumar resident of H.No.2943, Sec.37-C, Chandigarh.

                                      ---Complainant.

Versus

i)             Max Newyork Life Insurance Company Ltd., SCO 136-137, Sec.8-C, Chandigarh

ii)           Max Newyork Life Insurance Company Ltd., 11^th Floor, DLF Square, Jacaranda Marg, DLF City, Ph-II, Gurgaon.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SMT. MADHU MUTNEJA                       MEMBER

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by:  Sh. Madan Gopal Malhotra, agent of the complainant

                        Sh. Vaneesh Khanna, Counsel for the OPs

PER JASWINDER SINGH SIDHU, MEMBER

1.                      In brief, the case of the complainant is that his son Sandeep Kumar (deceased) was insured by the opposite parties.  At the time of insurance, the complainant had told the agents of the opposite parties that his son was sick and bed ridden.  Accordingly the proposal form was got filled at the complainant’s residence at Chandigarh and was also got signed from him because his son could not sign being 100% physically disabled.  The premium of Rs.30,000/- was paid through cheque dated 31.12.2005 which was duly encashed on 4.1.2006. 

On receipt of the policy, the complainant was surprised to find that the proposal form got signed from him was not there and.  In fact, the proposal form, so sent, carried the signatures of his son in English whereas he was illiterate and could sign in Hindi only (when not sick).   He immediately contacted the agents of the opposite parties and was told that the rectified policy would be received by him soon.  However, nothing was done in spite of writing letter dated 23.9.2006 by the complainant.    In the meantime, the complainant’s son expired on 30.11.2006.

The complainant informed the opposite parties about the death of his son.  According to the complainant, as per the policy, a sum of Rs.4,59,982/- plus other benefits was required to be paid by the opposite parties.  However, the opposite parties sent a cheque dated 8.9.2008 for Rs.14,004.74 only on the ground that the complainant had not disclosed the degenerative spondylosis at the proposal stage. The complainant vide his letter dated 29.5.2009 made a reference to the Grievance Cell of the opposite parties but the same was rejected vide letter dated 25.8.2009. Thereafter the complainant approached the Insurance Ombudsman vide his letter dated 17.1.2010 and vide order dated 26.5.2011 the opposite parties were directed to refund the amount with interest.  According to the complainant, failure of the opposite parties to refund the sum assured plus other benefits amounts to deficiency in service. Hence this complaint. 

2.                      In their written statement the opposite parties have denied that the proposal was not signed by the life assured or that he could not sign in English and was illiterate.  It has further been denied that the complainant (life assured) or his nominee informed the agent about the illness of the life assured.   It has been averred that the policy was issued on the basis of the information and declaration made in the proposal form.  It has further been averred that the complainant did not approach the opposite parties within the free look period.  It has been pleaded that the claim of the complainant was rightly repudiated on the ground of non-disclosure of the medical history of the life assured.  It has been denied that the complainant was misguided or harassed.   It has also been denied that the policy was in operation at the time of death of the life assured.  It has been averred that in terms of the order of the Insurance Ombudsman, the refund of the premium alongwith interest could not be made as the complainant failed to give consent.  Pleading that there is no deficiency in service on their part, prayer for dismissal of the complaint has been made.

                   The opposite parties have also taken a number of preliminary objections.

3.                      We have heard the learned counsel for the parties and have gone through the documents on record.

4.                      The present complaint has been filed by the Complainant in the name of his son namely Sandeep Kumar (now deceased), on the ground that in original, the Complainant had subscribed for a ULIP policy by filling up the proposal form in his own name and having named his son Sandeep Kumar as a life assured.  However, on receiving the policy document bearing no. 418190617, at his end, he found that in this policy the proposal was shown to have been filled up by his son Sandeep Kumar.  After repeatedly raising this issue with the Opposite Parties, he finally, brought this fact to the notice of the Opposite Parties, by writing a letter dated 29.05.2009 (Annexure F). Even before this, during the life time of Sandeep Kumar, this issue was brought to the notice of the Opposite Parties. Unfortunately, the life assured Sandeep Kumar expired during the 1^st year of the subscription of the policy and on the basis of the policy,  a claim of the assured amount was lodged with them. The Opposite Parties demanded the necessary documents from the Complainant and thereafter, after a passage of nearly 1½ year repudiated the claim on the ground that the Complainant had concealed the fact about the ailment suffered by the life assured, while subscribing for the policy.

5.                      The Opposite Parties have however remained silent and have not answered to this allegation of the Complainant; whereas, they have contested that the policy was originally subscribed by Sandeep Kumar in his own hand, and while filling up the proposal form no. 418190617 had actually concealed the material fact about his suffering of a disease, which was related to neurotic disorder, and same was finally revealed from the documents, which were submitted at the time of lodging of the claim.   The Opposite Parties have held their ground that the repudiation of the claim of the Complainant was just and as per the terms and conditions of the policy.

6.                      Interestingly the Complainant had raised this issue with the ld. ombudsman through his representation dated 3.12.2009. The Complainant in his this complaint had mentioned that his son Mr. Sandeep Kumar was suffering from a disease which rendered him incapable of writing anything as he was declared a 100% paraplegic and there was no question of his appending signatures on the proposal form purported to have been used by the Opposite Parties while issuing the policy bearing no. 418190617 and also that the late life assured was also not literate enough to append his signatures in English.   Ld. ombudsman while deciding this matter, had opined that as the very basis of the subscription of the policy has been rendered doubtful, the Complainant was entitled for the refund of the entire premium amount along with penal interest @8% from the date of issuance of policy till the date of actual payment. The ld. ombudsman has also directed the company to  inquiry as to why the policy was not issued on the basis of the proposal signed by the Complainant (father of the late deceased) as proposer.  The Opposite Parties have failed to answer as to what stopped them in giving back the premium along with interest, as per the award of the ld. ombudsman and also there is no disclosure about outcome, of the inquiry if conducted to unearth the reality about the change in the proposal form, as claimed by the Complainant, and as ordered by the Ld. ombudsman. It  is evident from this episode that the Opposite Parties have crass respect for the authority that they themselves have owned to be governing them.   This act of the Opposite Parties clearly amounts to deficiency in service as well as bad business practice.

7.                      The Opposite Parties though have claimed the present complaint to be time barred, and having been filed beyond the period of limitation, but to our mind, as the Opposite Parties failed to look into the matter, in a fair manner, the cause of action as well as the grievance of the Complainant has continued, to remain unaddressed, till date. The Opposite Parties on their part have failed to satisfy us that in what manner they have already gone into the issues of the Complaint, which were lodged with them by the Complainant, while claiming the present complaint being time barred.  Even the details about the payment of Rs.14,004.74P which the Opposite Parties had offered to the Complainant have also remained unexplained. 

8.                      While considering the claim of the Complainant about his right of claiming the insured amount of Rs.4,59,982/- along with interest, we are of the opinion that had if the Opposite Parties issued a policy to the Complainant on his original proposal form, in which the late Sandeep Kumar was life assured, even then this claim too would not have succeeded on the same objections on the basis of which this claim was denied by the Opposite Parties, as the medical status of the life assured was required to be disclose in that very proposal form, which was forwarded along with the premium amount by the Complainant. However, the issuance of wrong policy very much goes against the Opposite Parties, for which the insured amount of Rs.4,59,982/- cannot be awarded against them.

9.                      The Opposite Parties having failed in defending themselves against the averments of the complaint in a cogent manner, hence we feel that the Opposite Parties were deficient in rendering proper service to the Complainant by not issuing a policy on the basis of the proposal form submitted by him and having used the premium amount paid by him in raising another policy not proposed by him.    

10.                   In the light of above observations, we are of the concerted view that the Opposite Parties No.1 & 2 are found deficient in giving proper service to the complainant. Hence, the present complaint of the Complainant deserves to succeed against the Opposite Parties No.1 & 2, and the same is Allowed jointly and severally qua them. The Opposite Parties No.1 & 2 are directed, to:-

[a]         To refund the premium amount of Rs.30,000/- along with interest @8% p.a. from the date of deposit i.e. 31.12.2005, till it is actually paid (as already awarded by the Ld. Ombudsman).

[b]          To pay Rs.25,000/-on account of deficiency in service and causing mental and physical harassment to the Complainant; 

[c]          To pay Rs.10,000/- as cost of litigation;

11.                   The above said order shall be complied within 45 days of its receipt by the Opposite Parties; thereafter, they shall be liable for an interest @18% per annum on the amount mentioned in per sub-para [a] from the date of its deposit and the amount in sub-para [b] of para 10 above, too shall carry interest @18% p.a. from the date of this order, till it is paid, apart from cost of litigation of Rs.10,000/-.  

12.                   Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

18.03.2013.

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

 (MADHU MUTNEJA)

MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER