F.A.No.681/2008 against C.C.No.1083/2007, District Forum-III, HYDERABAD.

Between:

1. M/s.BAJAJ ALLIANZ LIFE INSURANCE CO. LTD.,

    Rep. by its Branch Manager,

    508, 5^th floor, Navakethan Complex,

    S.D.Road, Secunderabad-3.

2. M/s.BAJAJ ALLIANZ LIFE INSURNACE CO. LTD.,

    Rep. by its Managing Director

    Registered & Head Office, GE Plaza,

    Airport Road, Yerawada, Pune-411 006                                                       Appellants/

                                                                                                                             Opp.parties

And

Mr.Ali Mohammed S/o.Syed Ather

Ali, age 24 years, Occ:Business,

R/o.22-2-606, Opp:Falkhan Hotel,

Balasetty Kheetha Grounds,

Noor Khan Bazar, Hyderabad.                                                                          Respondent/

                                                                                                                            Complainant.

Counsel for the Appellants: M/s.P.Narsimha Reddy

Counsel for the Respondent: Mr.D.Ramakrishna

QUORUM:   THE HON’BLE SRI JUSTICE D.APPA RAO, PRESIDENT

AND

SMT.M.SHREESHA,  MEMBER

.

THURSDAY, THE TWENTY EIGHTH DAY OF OCTOBER,

TWO THOUSAND TEN

Oral order:(Per Hon’ble Justice Sri D.Appa Rao, President)
***

        This is an appeal preferred by the insurance company against the order of the District Forum directing it to pay Rs.5,00,000/- together with compensation of Rs.1,00,000/- and costs of Rs.2,000/-.

        The case of the complainant in brief is that his mother, Mrs Narjis Fatima, obtained a policy for an amount of Rs.5,00,000/- commencing from 5-8-2006 by paying a yearly premium of Rs.50,000/-.  She died on 29-12-2006 due to heart failure and when a claim was made, it was repudiated on the ground that there was mis-representation of her occupation.  Assailing the said repudiation, the complainant filed the complaint claiming Rs.5,00,000/- together with interest at 18% p.a. and costs.

        The opposite party, insurance company, resisted the claim.  While admitting the issuance of the policy showing the complainant as the nominee, it alleged that the policy was issued based on the information provided by the assured.  She had given a declaration that she was a teacher.  After the claim was made an investigator was appointed, who in turn found that the assured was not a teacher and the nominee was not entitled to the assured amount as the information furnished by the assured was wrong.  Therefore, the claim was repudiated and prayed for dismissal of the complaint with costs.

        The complainant in proof of his case filed affidavit evidence and got marked Exs.A1 to A5.  The opposite parties filed affidavit evidence of Senior Area manager and filed Exs.B1 to B7. 

        The District Forum after considering the evidence on record, opined that there is no proof that she was unemployee and that the facts mentioned in her proposal form were false, directed the insurance company to pay Rs.5,00,000/- however awarded a compensation of Rs.1,00,000/- which was not prayed by the complainant together with costs of Rs.2,000/-.

        Aggrieved by the said order, the insurance company, preferred this appeal contending that the District Forum did not appreciate the facts in correct perspective or law.  It ought to have seen that the investigation report revealed that the policy holder was not working as a teacher and has pre-existing ailments and hence the repudiation was just.

        The point that arises for consideration is whether the order of the District Forum is vitiated by mis-appreciation of fact or law in that regard?

        It is an undisputed fact that the insurance company had issued Ex.A1 policy on the life of the mother of the complainant by name, Mrs.Narjis Fatima, for Rs.5,00,000/- commencing from 05-8-2006 on payment of Rs.50,000/- yearly premium.  It is not in dispute that the assured died on 29-12-2006.  When the nominee submitted his claim under Ex.B3, the appellant insurance company had appointed M/s Satyam Investigations, predictably, we may say so, surveyor, who picked up some lacunae recommended for repudiation.  He mentioned that one Mir Khasim Ali Rajvi, informed that the assured worked as a tuition teacher for hindi subject.  We may say so that it is not known who  Mir Khasim Ali Rajvi was.  It is equally not known from whom the insurance company recorded the statement with respect to the above facts.  Curiously, the surveyor did not visit Madina Islamic High School in order to find out whether the assured worked as a teacher or not as mentioned in the proposal.  He could have easily taken a certificate from the school authorities to prove that the information furnished by her was wrong so also the particulars of the salary mentioned in the proposal form.

        A perusal of the record would undoubtedly show that the record was fabricated in order to see that the claim is repudiated.  It had become a routine for these insurance companies, as we observe, case after case, not to settle the claims.  They received Rs.50,000/- towards yearly premium and now they intend to repudiate the claim and appropriate it as the claim was Rs.5,00,000/-.  In order to achieve this, they have appointed an investigator, who predictably as we have earlier stated recorded statement from some person who was also giving tuitions.  The insurance company could not prove that the particulars furnished by the assured in the proposal form were false or incorrect by filing documentary evidence. 

The learned counsel for the appellant relied on a decision reported in III (2002) CPJ 10 (NC) in LIFE INSURNACE CORPORATION OF INDIA v. SMT.MINU KALITA wherein it was held that:

“incorrect information regarding health, age and income would render

 the insurance contract in valid  ab initio”

We agree with the said proposition of law as laid down in the above judgement.  However, in this case, the insurance company could not prove that the assured furnished incorrect information in the proposal form submitted by her. 

        However, the District Forum went wrong in awarding compensation which was not even claimed by the complainant.  This is highly irregular.  Except the modification of disentitlement of compensation awarded by the District Forum, the rest of the order of the District Forum is confirmed.

        In the result this appeal is allowed in part setting aside the order of the District Forum with respect to compensation of Rs.1,00,000/- awarded by the District Forum while confirming the order of the District Forum with respect to the order of payment of Rs.5,00,000/- covered by the policy and Rs.2,000/- towards costs.  The respondent/complainant is also entitled to costs of Rs.5,000/- in this appeal.  Time for compliance four weeks.

Sd/-PRESIDENT.

Sd/-MEMBER.

JM                                                                                                                     Dt.28-10-2010