DR. S. M. KANTIKAR, MEMBER

1.       This first appeal has been filed under Section 19 of the Consumer Protection Act, 1986 against the order dated 6.6.2016, passed in complaint Case No. 38 of 2009 by the Gujarat State Consumer Disputes Redressal Commission, Ahmedabad (in short, ‘the State Commission’), whereby the State Commission allowed the complaint and directed the OP to pay Rs.20,30,000/- alongwith interest @ 9% per annum from the date of repudiation till its realization. 

2.       The brief facts relevant for disposal of this appeal are that the Complainant, Mita B. Mehta’s husband, Bhupendrabhai Mehta  (since deceased- Insured) had taken “Dream Plan Policy” for a face value of Rs.43,500/- for 21 years i.e. from 9.6.2008 to 09.06.2029,  issued by Birla Sun Life Insurance Company Ltd. (OP).  The insurance included the policy amount of Rs.10,30,000/- and  ADD rider insurance of Rs. 10,00,000/-  on his own life.   During the subsistence of the policy, the insured died due to accidental drowning on 14.6.2008.  The complainant approached the OP and submitted  the death claim of her husband along with necessary documents, but, vide letter dated 29.8.2008, the OP repudiated the claim of the complainant with the reason that the insured/deceased had given false answers to the questions in the proposal form.  Thus, aggrieved by the unlawful repudiation and alleged deficiency in service, complainant filed complaint against OP before the State Commission for seeking award of Rs.20,30,000/- towards accident benefit along with interest,  compensation for mental agony and the costs.

3.       The OP resisted the complaint by filing a written version.  The preliminary objection of OP was that, the complainant was not a consumer.  The insured purposely had given wrong answers about his income, though he had signed the terms and conditions of the agreement in the proposal form after proper understanding.  As the insured died within five days after issuance of insurance policy, the claim was investigated by the OP.  As per the investigation report, the deceased had taken few other policies viz. one from LIC for Rs.2,50,000/-, also had applied on 15.03.2008 to ICICI prudential company and the policy was issued on 10.4.2008.  He had also applied to Bharati Axa on 31-03-2008, but Bharati Axa rejected to issue the insurance policy on 5.4.2008. The said fact was never disclosed by the complainant during filling of the proposal form. Therefore, the claim was rightly repudiated. 

4.       The State Commission after hearing the parties, allowed the complaint and directed the OP to pay Rs.20,30,000/- with 9% interest from the date of repudiation along with Rs.5,000/- towards mental agony and Rs.3,000/- towards costs.

5.       Being aggrieved by the impugned order, the OP filed this instant appeal.

6.       We have heard the learned counsel for both the parties. The counsel for the complainant, Mr. K. L. Dave argued that on 14.6.2008, the insured/ deceased  died due to  accidental drowning. He  brought our attention to the FIR, which revealed that the deceased got slipped in the deep water, while swimming in Country Club in the afternoon  on 14.6.2008. The cause of death as drowning was mentioned in the Death certificate and Post Mortem (PM) report.  The counsel further submitted that, the deceased had disclosed in the proposal form about the LIC policy for Rs.2.5 lakhs.  He further submitted that the proposal form for Bharati Axa was filled on 31.3.2008, i.e. after filling the proposal form with the OP/company on 29.3.2008; hence, it was not a concealment. 

7.       Ms. Meenakshi Midha, Learned Counsel for OP submitted that the life assured had accepted the terms and conditions in the proposal form; thereafter, signed the declaration. Also, he had consented to the declaration under Section 45 of the Insurance Act, 1938. The deceased had  disclosed about  having only one insurance policy of LIC for Rs.2.5 lakhs. The counsel further submitted that, the insured had not disclosed that he had applied to ICICI Prudential Life Insurance Co. Ltd. on 15.3.2008 and also applied for another policy from  Bharati Axa on 31.3.2008.  The said proposal was rejected by Bharati Axa in April, 2008.  Thus, it was a violation of Section 11 of the Insurance Act, 1938 and the Regulation 2(1)(d) of IRDA, which imposes a duty upon the proposer to disclose the material fact to the insurer to enable them to assist the risk to be undertaken.

8.       There is delay of 11 days in filing the present first appeal.  However, considering the points mentioned in the application for condonation of delay as well as arguments, the said delay is ordered to be condoned.

9.       We have perused the Proposal form, the policy along with relevant documents and gave our thoughtful consideration. The main issue is that whether the deceased had not disclosed certain information and whether it was a “material fact” in the eyes of law.

10.     The counsel for the OP relied upon number of judgments titled as under:

1.      Asha Garg & Ors. Vs. United India Insurance Co. Ltd. & Ors., 2006 (2) UC 869 

2.         ICICI Prudential Life Insurance Co. Ltd. Vs. Lalita Jain II (2015) CPJ 246 

3.         Life Insurance Corporation of India Vs. C. Venkataramudu II (2014) CPJ 190 (Para 8)

4.         Dilraj Singh Vs. Life Insurance Corporation of India & Ors. IV (2015) CPJ 665 (Para 6)

5.         Sahara India Life Insurance Co. Ltd. Vs. Rayani Ramanjaneyulu III (2014) CPJ 582 (Para 1)

6.         Komal Sharma & Ors. Vs. Life Insurance Corporation of India I (2013) CPJ 606 (Para 8)

7.         Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd.(2009) 8 SCC 316 (Paras 18,22 and 25)

8.         Life Insurance Corporation of India Vs. Neelam Sharma IV(2014) CPJ 658 (Paras 8 and 11).

11.     In the instant case, the deceased had already declared about the policy which was taken from the LIC.  It is pertinent to note that the complainant had submitted the proposal form to the OP/company on 29.3.2008, but thereafter on 31.3.2008, he had submitted the proposal form to Bharati Axa.  Therefore, it was not a concealment.   Now, the question remains about ICICI prudential insurance.  It is an admitted fact that the ICICI prudential life had issued insurance policy to deceased on 10.4.2008 for the basic sum assured of Rs. 10 lakhs and add on benefit rider of Rs. 10 lakhs.  For the said ICICI prudential Insurance, the complainant filed the proposal form on 15.3.2008 i.e. prior to the submission of application to the OP/insurance company.  In this context, we need to decide whether the non-disclosure of the said policy was a material fact.  Keeping in mind that the deceased had bonafide intention when he made a declaration of the LIC policy, which was already in existence and that he has not disclosed about the application/proposal submitted to ICICI; in our view, it appears to be an inadvertent error on the part of deceased.  Also, when the ICICI had not issued any policy; in that case, the complainant had not declared the same in the proposal form in question.  Thus, there was no mala fide intention on the part of the deceased.   Considering the facts of the case, we are of the view that simple non-disclosure in the proposal form submitted to ICICI, when the policy was not in existence, is not a material fact in the instant case.  In fact, the ICICI had issued policy in the month of April, 2008 only.  Therefore, the repudiation done by the OP was unjust and unlawful.

12.     On the basis of the foregoing discussion, we do not find any merit in the instant appeal; hence, it is dismissed.  There shall be no order as to costs.