1. There are seven complaints arising out of insurance claims made by one Shardaben Ashokbhai Lathiya, widow of late Ashokbhai Manjibhai Lathiya. These are CC No. 200, 201, 211, 212, 213, 214 of 2013, and 113 of 2015.
2.  One claim has been made by M/s Labh Marketing through the heirs of late Ashokbhai Manjibhai Lathiya including Shardaben, contending that they are entitled to receive the indemnification arising out of the insurance policy involved in that case, as they are the rightful heirs and claimants in respect thereof. This is CC No. 223 of 2013.
3.  There is another complaint filed by Smt. Harshaben Kishorbhai Mangukiya, CC No. 258 of 2013, where the claim of reimbursement is against the insured life of late Kishorbhai Dahyabhai Mangukiya, the husband of the complainant.
4. These complaints regarding insurance claims are founded on somewhat similar facts and therefore they have been grouped together and were finally heard on 27^th July 2024, the date whereof was fixed with the consent of the learned Counsel for the Parties. Mr. Joshi has argued all the seven complaints on behalf of Shardaben Ashokbhai Lathiya as also the complaint filed on behalf of M/s Labh Marketing whereas Mr. Madan has argued CC No. 258 of 2013 filed on behalf of Smt. Harshaben Kishorbhai Mangukiya.
5. Mr. D. Varadarajan has appeared for the HDFC in CC No. 213 of 2013 and on behalf of M/s Max New York Life Insurance in CC No. 214 of 2013. Ms. Anjali Bansal has appeared for the Tata AIG Insurance Company in CC No. 212 of 2013 and in CC No. 258 of 2013. Learned counsel for the other Insurance Companies have also been heard. The background of all these insurance claims, which have been either repudiated or denied, is primarily based on certain common grounds. One of the most prominent ground is that the insured had failed to disclose several pre-existing policies, and therefore such non-disclosure amounts to suppression of material facts that were sufficient to repudiate the claim.
6. Another important contest which has been raised by all the learned Counsel for the Insurance Companies is that the coverage in the life insurance policies was for accidental death, whereas in fact both the insured, namely, late Ashokbhai Manjibhai Lathiya and Kishorbhai Dahyabhai Mangukiya, had been actually murdered. The contention, therefore, and one of the grounds of repudiation of the claim, is that since the death of both the insured were not accidental, therefore, the claim was not indemnifiable. In this regard, various documents of the criminal case have been referred to by the learned Counsel for the Parties. On the one hand, learned Counsel for the Complainants have urged that this was a pure case of accident and not of murder, and there is no evidence to establish that the death of both the insured were the outcome of an offence of murder.
7.  In some of the policies, the ground taken for repudiation is non-disclosure of the pre-existing diseases from which the insured was suffering, and therefore this was also taken to be a ground for repudiating the claim.
8. It has also been argued in some of the cases that the disclosure of income was misrepresented inasmuch as the insured had a different income, whereas the documents regarding their actual income were contrary to the disclosure.
9. It is on these broad contentions that the arguments have been advanced by the learned Counsel for the Parties and are being dealt with accordingly.
10. The allegations leading to the incident of the death of both the insured on 15.08.2012, are that Jasvantbhai Valijibhai Savani, Kishorbhai Dahyabhai Mangukiya and Ashokbhai Manjibhai Lathiya, were partners in a firm, M/s Labh Marketing, in which 10% of the shares was of Mr. Savani, 20% share was of Mr. Mangukia and the balance 70% share was that of Mr. Lathiya. The allegations are that Mr. Savani was the brainchild behind their business and it is he who had procured all the insurance policies through various brokers and managed the payment of the premiums by operating accounts through the other partners as well as through the firm. The suspicion was that it was Mr. Savani who planned the murder of his other two partners and was therefore named as an accused in the criminal case that was lodged and tried after the death of Mr. Llathiya and Mr. Mangukiya. It was alleged that the story of these two partners having fallen from a twelve-storey building was a false story represented, and the Police also found on investigation, that the nature of injuries, which included ante-mortem injuries, reflected as if both deceased had been done to death and their bodies were thrown thereafter from the twelve-storey building.
11. The case proceeded after investigation and a charge sheet was submitted, where two accused were arraigned. One of them was Mr. Savani, the partner, and the other was one Mr. Raju alias Ravi Pandit Nagorav Shinde. The charges framed were under Sections 302, 201, 203, 120(B), read with Section 114 of IPC thereof. Mr. Savani, the main accused, is stated to have committed suicide by jumping over from the 6^th floor of the court building where he was being tried. Consequently, the criminal case abated against Mr. Savani and it proceeded against Mr. Raju alias Ravi Pandit Nagorav Shinde, against whom the allegation was that he had accompanied Mr. Savani while pushing over the two deceased from the twelve-storey building. The Trial Court in Sessions Case number 450 of 2012, ultimately acquitted Mr. Raju alias Ravi Pandit Nagorav Shinde on 04.10.2017 holding that the prosecution witnesses had failed to support the allegation of the presence of Mr. Raju alias Ravi Pandit Nagorav Shinde at the time of the occurrence of the incident, and therefore his involvement could not be proved beyond reasonable doubt.
12.  All these complaints were filed after Mr. Savani had allegedly committed suicide on 02.11.2012. Thus, the complaints came to be filed in this background, alleging that the repudiation by the Insurance Companies or otherwise denial of their claim is vitiated as murder has not been proved, and the death having been caused due to accident, the claim was indemnifiable.
13.  The complainants have denied the allegations of non-disclosure by contending that all the policies were accompanied by a list of the existing policies and there was no evidence to establish the allegation of any pre-existing disease. The allegation of not having the capacity to pay the premium was also denied by the complainants. Therefore, it was urged that, since the claims have been rejected on erroneous grounds, the complaints deserve to be allowed.
14. In order to appreciate each of the cases individually, the Commission proposes to dispose of the matter under three categories. Accordingly, CC No. 223 of 2013 is taken up first.
15.  
15. This complaint has been filed by the marketing company, M/s Labh Marketing, through Shardaben Ashokbhai Lathiya, Hitesh Ashokbhai Lathiya, Darshana Ashokbhai Lathiya and Lalji Hardik Ashokbhai Lathiya. The complaints allege that they are partners of the firm, being the legal heirs of late Ashokbhai Manjibhai Lathiya, the deceased insured. The contention is that the Complainant No.1, is the widow and a partner in Labh Marketing. This is stated in paragraph 2 of the complaint, and it is also alleged that she is the nominee in respect of the policy that is involved in this case. A copy of the said policy is on record and seems to have been negotiated through a broker and acquired in the name of M/s Labh Marketing. The name of the life insured is Mr. Ashokbhai Lathiya, aged about 44 years. The nature of the policy is life protection (Non-participating Term Insurance Plan). The insured had declared himself to be a partner in the proposal form of M/s Labh Marketing. The contention of the learned Counsel for the Insurance Company is that since the insurance is in the name of the firm, namely M/s Labh Marketing, the claimants who have come up, have failed to demonstrate that they are partners of the firm. It is submitted that merely because they are legal heirs, they do not automatically become partners of the firm. This objection has been taken in the written version, contending that this is a Key person insurance policy in order to indemnify the firm for the loss resulting from the death of a valuable employee, which is also conditional to the extent that it should be in the absence of any immediate and suitable replacement of a trained person to perform his functions. This is therefore known as a keyman insurance policy, and therefore the claim can be paid to the beneficiary, which is the firm M/s Labh Marketing.
16. It has also been stated in the written version that there is no document or any new partnership deed which may indicate that the widow and children are now the partners of the firm. It has already been noticed above that two of the partners Mr. Lathiya and Mr. Mangukia died under suspicious circumstances on 15.08.2012, and the third partner, Mr. Savani, also allegedly committed suicide on 02.11.2012. Learned Counsel for the Insurance Company has vehemently urged that there is no indication of reconstitution of the partnership through the legal heirs of any of these three partners, and therefore the claim through the legal heirs of one of the partners is not maintainable.
17. Arguments have also been advanced that the incident was not an accident and therefore the claim is otherwise also not indemnifiable as it was a felonious act of murder. It has also been argued that the principle of uberrimae fide has been violated inasmuch as the insured had not disclosed the investments in other policies that were to be mandatorily disclosed at the time of proposal. The insured, in the proposal form, had categorically stated that he had no other policies except those disclosed in the attached page. It is submitted that, over and above the disclosed policies, the complainant had several other policies from before which he failed to disclose and consequently, for this reason as well, the claim was not indemnifiable.
18. The first hurdle has to be crossed, namely the maintainability of the complaint by the legal heirs of late Mr. Ashokbhai Lathiya, who was admittedly one of the partners of the firm. The fact remains that there is no evidence relating to the reconstitution of the firm where the legal heirs have been declared to be admitted as partners of M/s Labh Marketing. In the absence of any such evidence, the present complaint would not be maintainable simply because the legal heirs have set up a claim regarding the insurance in favour of a partnership firm. Learned Counsel for the Insurance Company has relied on the judgment of the Bombay High Court in Letters Patent Appeal No. 510 of 2009, Shri Arun Kumar Vs. State of Maharashtra & Ors. decided on 02 December 2022, where the following observations have been made in paragraph 34 and 35:-

“34. Thus, it is clear that on the dissolution of firm every partner or his representative is entitled to have the property of the firm applied in payment the debts and liabilities of the firm and to have the surplus distributed among the partners or their representatives according to their rights. Thus, there is no dispute that respondent no.3 has right to claim the settlement of the accounts in respect of the partnership firm. Here in the present case, respondent no.3 had claimed the right of inclusion of her name in the licence. Whether she is entitled for such right is the question. It is well settled that a partnership is a contract between the partners. Said partnership agreement is accepted and agreed by all the partners and there cannot be any contract unilaterally without the acceptance by the other partners. It is well settled that every contract/agreement is to be considered with reference to its object and the whole of its terms. The contents of the agreement must be considered in endeavouring to see the intention of the parties. The intention can be gathered from expressions expressed in the agreement.

35. It is held by the Hon'ble Apex Court in the case of Mohd. Laiquiddin and anr. Vs. Kamala Devi Misra (Dead) by Lrs. And ors. 2010(2) ALL MR 490 that partnership is not a matter of heritable status but purely one of contract which is also clear from the definition of partnership under Section 4 of the Act.”

19. There is yet another legal angle that deserves to be noticed, namely, that even assuming that Shardaben is a nominee under the policy, the claim payable is to the firm. A nominee at the best is a trustee who may not be entitled to exclusively claim the sum insured as settled by the ratio of a long line of decisions rendered by the Apex Court in the case of Sarbati Devi and anr. Vs. Smt. Usha Devi 1984 (1) SCC 424, Indrani Wahi vs. Registrar Cooperative Society 2016 (6) SCC 440, etc. These facts relating to entitlement, therefore, require a declaration for succession from a competent Court after sifting of evidence that cannot be tried or be a subject matter in a complaint before summary jurisdiction of a Consumer Forum.
20.  Learned Counsel for the complainant, Mr. Joshi, could not contradict the aforesaid position of law and on these established facts that there is no document regarding the reconstitution of the firm or the complainants taking over the firm as its partners or any evidence to support a lawful succession or inheritance, this complaint cannot proceed and is accordingly rejected.

CC/200, 201, 211, 212, 213, 214 and 114/2013

22.     It has been pointed out by the Learned Counsel for the Insurance Company that the complaint was originally filed arraying Reliance Life Insurance Company Ltd., which had issued the policy in question. The said company has now been renamed as Reliance Nippon Life Insurance Company Limited. The intimation was given, and the complainant was allowed to submit an amended memo of parties, which was done on 20.07.2023. The Office is directed to carry out the necessary corrections in the title of this complaint so that the error may not be reflected in the cause title when orders are issued.

23.     This complaint relates to an insurance cover for a sum of Rs.1 Crore with a premium of Rs.1,16,645.90/- acquired by Ashokbhai Lathiya through M/s Beacon Insurance Brokers Pvt. Ltd., for which the policy was issued on 30.06.2010.  The term of the policy was 22 years, and the complainant is stated to be the nominee. The premium amounts are stated to have been paid from 2010 onwards, and as already narrated in the opening paragraphs, Mr. Ashokbhai Lathiya died in an incident of alleged murder on 15.08.2012. The FIR was registered on 19.08.2012, and a claim form was submitted before the Insurance Company by the complainant for indemnification.

24.     The contention of the complainant is that the death of the insured was an accident, but an FIR was registered, which was investigated, and a charge sheet was submitted alleging the commission of an offence of murder, for which one of the business partners of the deceased, Jasvantbhai Valjibhai Savani, was named as an accused along with Mr. Raju alias Ravi Pandit Nagorav Shinde. The complainant has filed a copy of the charge sheet and it is urged that this charge sheet was based on mere suspicions and doubts. Ultimately, the criminal case has ended in the acquittal of the co-accused, as the main accused had allegedly committed suicide on 02.11.2012, during the pendency of the trial. The contention, therefore, is that the claim was erroneously denied by the Insurance Company and is being contested on erroneous considerations.

“Investigation In this matter P.M. Note of deceased received, from that (1) injuries on dead body of Ashokbhai Manjibhai Lathiya (P.M. Note No. 938) are as under.

(1). Confusion of size 5x3 cm present on left frontal region, red in colour, 4 cm above left eyebrow & 6 cm from midline.

(2). Abrasion of size 2 * 0.5 cm resent at left angle of mandible red in colour.

(3). Multiple abrasion 4 in nos. Present over front of left side of chest in an area of 3 * 1.5 cm of size 0.5 * 0,5 cm 7 from midline & 9 cm below clavicle red in colour.

(4). Graze abrasion (oblique) present over left lateral posterior aspect of chest in an area of 15 * 10 cm red colour.

(5). Multiple pressure abrasion present at lower part of body of abdomen mere on left side in an area of 30 * 21 cm varying in size extending from 3 * 1 cm to 0.5 * 0.5 cm pale in appearance.

(6). Multiple pressure of radian present at left gluteal region in an area of 18 * 7 cm varying in size extending from 4 * 1 cm to 0.5 * 0.5 cm pale in appearance.

(7). Abrasion of size 3 * 2 cm present over lower part of lateral maillots of left leg pale in appearance.

(8). Laceration of size 5x2 cm x bone deep present at right leg at sale 12 cm back to tip of 2nd toe margin are irregular & pale underlying bone is exposed.

(9). Laceration of size 1x1 cm x bourn deep present at right leg at sale 1 cm posterior to injury no. (8) Bone projecting from wound margins are irregular & pale.

10). Palpable fracture of right & left side of chest ribs.

11). Palpable fracture of upper 1/3^rd of right femur present no discoloration of skin of fractured area.

(12). Palpable fracture of right lower limb bone 0 cm above ankle no discolouration of skin of fractured area.

(13). Palpable fracture of left lower limb bone 7 cm above ankle no discolouration skin of fractured area.

From the above injuries, it is stated that, injury No. 1 to 4 are before death, where injury No. 5 to 13 are after death. Where reason of death is "Shock as a result of intra-cranial haemorrhage", due to that death happened.”

27.     The charge sheet further evaluates on investigation as follows:-

“As looking to the injuries before death and after death, reason of death and position of dead body laid at location of scene, In fact this incident was not happened due to sudden fall of (1) Kishorbhai Dahyabhai Mangukiya and (2) Ashokbhai Manjibhai Lathiya from the twelfth floor of the building, but first deadly attack was made on them and after killing them, their dead bodies were thrown from the twelfth floor of building and try to prove that that their death was occurred due to falling from building.

As per the fact revealed in this investigation Jasvant Valjibhai Savani and Deceased Kishorbhai Dahyabhai Mangukiya, were partner for Iron business since 2009. And in additions to this iron business they were also doing sell and purchase of land/house, with this partnership some insurance policy were taken in the name of Kishorbhai Manukiya, and the details of the said policies are only with Jasvantbhai, the financial investment in the said policy was only made by Jasvantbhai Savani, moreover the other deceased Ashokbhai Mavjibhai Lathiya, was in employment with Jasvantbhai Savani as a petty worker, since 2009, at a monthly drawing at Rs. 8,000/- and some life Insurance Policy were taken in the name of said Ashok Mavjibhai Lathiya and the financial investment in the said policy were also made by Mr. Jasvantbhai Savani.

On the day at this offence dated 15/08/12 Kishorbhai Mangukiya was left his house on about 13/00 Hours by saying that "going to hospital" keeping mobile No. 9824351644 will him, then after was gone to the Labh Marketing, office of Jasvantbhai Savani, at A/202, Swapna Srusti Complex, At Dumbhal, and from there on about 13/45 hours Jasvantbhai Savani and the other two deceased person were gone to Abhishek Heights to see the flats by the Cruise car No. GJ-5-CE- 9225, and they were arrived at the site of offence within 10 Minutes, and at that time after meeting Naresh Tapubhai Gajera, who is a supervisor, were went to the 12th Floor, so that according to the fact and declaration by Jasvantbhai Valjibhai Savani, at the time of offence only Jasvantbhai Valjibhai Savani was present there with other two deceased at the spot and no any other person were present at that time, de facto he declared that he was alone present there, in fact the death of two deceased were not occurred due to accidently falling from 12 floor after chewing tobacco and effort for spitting, but for some criminal intention, death of Kishorbhai Dahyabhai Mangukiya was happened from some sharp weapons and death of Ashok Manjibhai Lathiya was happened from injury on his head, after killing them their dead bodies were thrown from twelfth floor. From the site of offence or from clothes of dead body of Kishorbhai Manukiya, mobile having SIM No. 9824351644 was not found. This criminal offence is not done by only a person, but primarily it looks it is done by more than one persons with pre planned conspiracy, In this incident primarily Involvement of Jasvanthai Valjibhai Savani is appeared from the beginning as he conceal crime of murder and tried to prove fact of crime of murder as an accidental death and misguided investigation.

This offence was planned on extremely calculated method for some criminal intention to construct conspiracy of murder and offence of murder converts into accident, in which for revealing truth and find out the persons involved in it, my complain is under section 302, 201, 203, 120(b) of IPC for legally investigation. My witnesses are above mentioned persons and come out in the further investigation.

That above fact of my complain is true and correct and it is according to which I told, after reading and understanding I have signed hereunder.

(H.L. AHIR)

Police inspector

Puna Police Station,

Surat City,”

28.     With the aforesaid allegations in the charge sheet, the matter had to be examined by the Trial Court, but as noted above, the main accused, Mr. Savani, committed suicide on 02.11.2012, and the case abated against him. However, the case proceeded against the other accused Raju and with regard to the nature of the injuries, as noted above, the two doctors who conducted the post-mortem on the bodies of the two deceased were examined. The Trial Court judgment dated 04.10.2017, in paragraph 27, recorded as under:-

“27. Dr. shyam Rameshchandra Patel via index 112 and Dr. Jigyesh Arvindbhai Brahambhatt via index no. 114 were examined on an oath. These both of the doctors who have conducted the Post mortem of these two deceased persons via index 112 the doctor said that he was on duty dated on 16-8-12, PSI gajera handed over the body of Manjibhai lathiya for examination, his post mortem initiated by him and the panel doctor Shelesh Javeri at 9.15 hrs in the morning and finished at 11 am in the morning. Describing the injuries, he produced the PM note via index no. 108 and police list, via index no. 113. As per it, the concerned injuries may cause due to fall… from the fall down from the solid and heighted place. And during the cross examination, this statement is true that this kind of injuries may cause if any person falls down from the heighted place.

1. in that same via index no.114, the doctor has been doing the work as tutor in the Ismimer hospital for the last 8 years in the forensic medicine and technology department. And he was on the work dated on 16-8-12 and that time Pl Gajera through his list and constable Yasud bhai bearing bakkal no. 239, one death body of named kishorbhai dahyabhai was sent. The post mortem there of initialed with the senior doctor named M.I.shekh and doctor vijaykumar at 9.15 am in the morning and finished it at 11.10.during the post mortem, the injuries were found on the death body which stated during the testimony which produced via index 107 of PM Note. As per the opinion of all three doctor of the panel, the external injury no. 1 to 7 land 13 to 15 were of pre death. And the injuries from 8 to 12 were of post death. And the injuries of intestine and, liver were of post death. The examination of death has been done before 24 hrs of its starting. It was reported that the injury caused to the neck may occur through the attack by the acute weapon and others may cause due to fall down from the heighted place.

27.2 Both of the doctors were cross examined from the side of the accused. But no fact arises which may support the complainant side.”

32.     This question, therefore, needs to be further examined in the light of the judgments of the Apex Court on this issue. The judgment cited at the bar is that of Rita Devi and others Vs. New India Assurance Company Limited and Anr. (2000) 5 SCC page 113. This was a decision in relation to a claim arising out of a motor vehicle accident adjudication before the Motor Vehicle Claims Tribunal. While examining this issue in the light of the provisions of the Motor Vehicles Act, where a claim can be entertained if death is caused due to an accident arising out of the use of a motor vehicle, this distinction regarding murder being or not being an accident was dealt with in the said case in paragraphs 10 to 18, that are extracted hereinunder:-

1.  The question, therefore is, can a murder be an accident in any given case? There is no doubt that “murder”, as it is understood, in the common parlance is a felonious act where death is caused with intent and the perpetrators of that act normally have a motive against the victim for such killing. But there are also instances where murder can be by accident on a given set of facts. The difference between a “murder” which is not an accident and a “murder” which is an accident, depends on the proximity of the cause of such murder. In our opinion, if the dominant intention of the Act of felony is to kill any particular person then such killing is not an accidental murder but is a murder simpliciter, while if the cause of murder or act of murder was originally not intended and the same was caused in furtherance of any other felonious act then such murder is an accidental murder.

11. In Challis v. London and South Western Rly. Co. [(1905) 2 KB 154 : 74 LJKB 569 : 93 LT 330 (CA)] the Court of Appeal held where an engine driver while driving a train under a bridge was killed by a stone wilfully dropped on the train by a boy from the bridge, that his injuries were caused by an accident. In the said case, the Court rejecting an argument that the said incident cannot be treated as an accident held:

“The accident which befell the deceased was, as it appears to me, one which was incidental to his employment as an engine driver, in other words it arose out of his employment. The argument for the respondents really involves the reading into the Act of a proviso to the effect that an accident shall not be deemed to be within the Act, if it arose from the mischievous act of a person not in the service of the employer. I see no reason to suppose that the legislature intended so to limit the operation of the Act. The result is the same to the engine driver, from whatever cause the accident happened; and it does not appear to me to be any answer to the claim for indemnification under the Act to say that the accident was caused by some person who acted mischievously.”

12. In the case of Nisbet v. Rayne & Burn [(1910) 2 KB 689 : 80 LJKB 84 : 103 LT 178 (CA)] where a cashier, while travelling in a railway to a colliery with a large sum of money for the payment of his employers' workmen, was robbed and murdered. The Court of Appeal held:

“That the murder was an ‘accident’ from the standpoint of the person who suffered from it and that it arose ‘out of’ an employment which involved more than the ordinary risk, and consequently that the widow was entitled to compensation under the Workmen's Compensation Act, 1906. In this case the Court followed its earlier judgment in the case of Challis [(1905) 2 KB 154 : 74 LJKB 569 : 93 LT 330 (CA)] . In the case of Nisbet [(1910) 2 KB 689 : 80 LJKB 84 : 103 LT 178 (CA)] the Court also observed that ‘it is contended by the employer that this was not an “accident” within the meaning of the Act, because it was an intentional felonious act which caused the death, and that the word “accident” negatives the idea of intention’. In my opinion, this contention ought not to prevail. I think it was an accident from the point of view of Nisbet, and that it makes no difference whether the pistol shot was deliberately fired at Nisbet or whether it was intended for somebody else and not for Nisbet.”

13. The judgment of the Court of Appeal in Nisbet case [(1910) 2 KB 689 : 80 LJKB 84 : 103 LT 178 (CA)] was followed by the majority judgment by the House of Lords in the case of Board of Management of Trim Joint District School v. Kelly⁴.

14.  Applying the principles laid down in the above cases to the facts of the case in hand, we find that the deceased, a driver of the autorickshaw, was dutybound to have accepted the demand of fare-paying passengers to transport them to the place of their destination. During the course of this duty, if the passengers had decided to commit an act of felony of stealing the autorickshaw and in the course of achieving the said object of stealing the autorickshaw, they had to eliminate the driver of the autorickshaw then it cannot but be said that the death so caused to the driver of the autorickshaw was an accidental murder. The stealing of the autorickshaw was the object of the felony and the murder that was caused in the said process of stealing the autorickshaw is only incidental to the act of stealing of the autorickshaw. Therefore, it has to be said that on the facts and circumstances of this case the death of the deceased (Dasarath Singh) was caused accidentally in the process of committing theft of the autorickshaw.

15. Learned counsel for the respondents contended before us that since the Motor Vehicles Act has not defined the word “death” and the legal interpretations relied upon by us are with reference to the definition of the word “death” in the Workmen's Compensation Act the same will not be applicable while interpreting the word “death” in the Motor Vehicles Act because according to her, the objects of the two Acts are entirely different. She also contends that on the facts of this case no proximity could be presumed between the murder of the driver and the stealing of the autorickshaw. We are unable to accept this contention advanced on behalf of the respondents. We do not see how the object of the two Acts, namely, the Motor Vehicles Act and the Workmen's Compensation Act are in any way different. In our opinion, the relevant object of both the Acts is to provide compensation to the victims of accidents. The only difference between the two enactments is that so far as the Workmen's Compensation Act is concerned, it is confined to workmen as defined under that Act while the relief provided under Chapter X to XII of the Motor Vehicles Act is available to all the victims of accidents involving a motor vehicle. In this conclusion of ours we are supported by Section 167 of the Motor Vehicles Act as per which provision, it is open to the claimants either to proceed to claim compensation under the Workmen's Compensation Act or under the Motor Vehicles Act. A perusal of the objects of the two enactments clearly establishes that both the enactments are beneficial enactments operating in the same field, hence the judicially accepted interpretation of the word “death” in the Workmen's Compensation Act is, in our opinion, applicable to the interpretation of the word “death” in the Motor Vehicles Act also.

16. In the case of Shivaji Dayanu Patil v. Vatschala Uttam this Court while pronouncing on the interpretation of Section 92-A of the Motor Vehicles Act, 1939 held as follows : (SCC p. 532, para 12)

“… Section 92-A was in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment of a limited amount by way of compensation to the victims of an accident arising out of the use of a motor vehicle on the basis of no-fault liability. In the matter of interpretation of a beneficial legislation the approach of the courts is to adopt a construction which advances the beneficent purpose underlying the enactment in preference to a construction which tends to defeat that purpose.”

17. In that case in regard to the contention of proximity between the accident and the explosion that took place this Court held : (SCC pp. 549-50, para 36)

“36. This would show that as compared to the expression ‘caused by’, the expression ‘arising out of’ has a wider connotation. The expression ‘caused by’ was used in Sections 95(1)(b)(i) and (ii) and 96(2)(b)(ii) of the Act. In Section 92-A, Parliament, however, chose to use the expression ‘arising out of’ which indicates that for the purpose of awarding compensation under Section 92-A, the causal relationship between the use of the motor vehicle and the accident resulting in death or permanent disablement is not required to be direct and proximate and it can be less immediate. This would imply that accident should be connected with the use of the motor vehicle but the said connection need not be direct and immediate. This construction of the expression ‘arising out of the use of a motor vehicle’ in Section 92-A enlarges the field of protection made available to the victims of an accident and is in consonance with the beneficial object underlying the enactment.”

18. In the instant case, as we have noticed the facts, we have no hesitation in coming to the conclusion that the murder of the deceased (Dasarath Singh) was due to an accident arising out of the use of motor vehicle. Therefore, the trial court rightly came to the conclusion that the claimants were entitled for compensation as claimed by them and the High Court was wrong in coming to the conclusion that the death of Dasarath Singh was not caused by an accident involving the use of motor vehicle.”

“There is no doubt in this case that Ganga Reddy did not die of natural causes. He was done to death in a violent manner. The premature termination of life of Ganga Reddy took place because of the injuries inflicted upon him by a group of persons. The scope and meaning of the word 'accident' used in a policy of insurance was examined in England as early as in 1893 in the case of Hamlyn v. The Crown Accidental Insurance Co. Ltd., 1983 L.R. 751 (C.A.). In that case the insurance company was to pay compensation to the assured for 'any bodily injury caused by violent, accidental, external and visible means'. In that case the plaintiff was a tradesman. A customer came into the shop with a child. The child dropped a marble which the plaintiff shopped forward to pick up. In doing so he wrenched his knee and could not get it straight again. He was disabled for nine weeks, the injury which he suffered was described as a dislocation of the internal cartilage of the knee-joint. The question before the Court of Appeal was whether this injury could be treated as accidental. Lord Esher, M.R. observed that in trying to pick up the marble, the plaintiff wrenched his knee which did the mischief and the wrench was the cause of the injury. Lord Esher, M.R., observed

"That that was accidental I cannot doubt. He did not mean to wrench his knee, and that would not be the ordinary result of such an action."

Lord Lopes, L.J., in his concurring Judgment observed:

"The cause of the injury was accidental in the sense that the injury was a casualty and unforeseen and unexpected."

In this case it cannot be said that the death resulted from natural consequences of events in the life of the deceased. He was dragged out of the house and the injuries inflicted upon him lead to his death.”

36.     There is one decision cited by Mr. Joshi in the case of “Kamla Devi & Anr. Vs. Tata AIG Life Insurance Corporation, FA No. 280 of 2013, decided on 10.6.2021”.  The contention is that in the present case also the circumstances indicate an accidental death and not a case of murder.  The decision in the case of “Kamla Devi & Anr.” (supra) reveals that the Insurance Company by taking the help of a private Investigating Agency had pleaded that the Medico-Legal Report given by them indicates that the injuries on the deceased were possible only in cases of suicidal death. As against this, the Claimant had taken a plea that the death of the Insured in that case had occurred due to a railway accident while the Insured was crossing a railway line.  The GRP Police Station Report Inquest as well as the Post Mortem Report and the Inquiry Report were also considered by the National Commission and it was ultimately held that the Police Report was more reliable as the possibility of the injuries in the railway accident could not be ruled out.

37.     In the instant case, the documents of the Criminal Case as discussed above, including the Final Order of the Trial Court nowhere gives any indication that the death of the deceased was on account of an accident but at the same time also does not conclude it to be an outcome of the anti-mortem injuries causing murder.  The Complainant has not led any further evidence or any additional material to establish the death having been caused due to an accidental fall.

38.     Learned Counsel for the Complainant, apart from other decisions that have been referred to above, has cited the order passed by this Commission in the case of “Royal Sundaram Alliance Insurance Co. Ltd.  Vs. Pawan Balram Mulchandani, F.A.No. 1357 of 2016” decided on 25.09.2018”, reported in 2018 Vol. IV CPJ Page 405”.  In this case, the issue again was as to whether the murder that took place was an accident or not. The Commission went on to deliberate and hold that the cause of injury had to be assessed to gather as to whether it was a result of any deliberate or wilful act or not so as to conclude that the alleged murder was an accident or not an accident.  It was further disclosed therein that unless the immediate cause of injury was a deliberate or wilful act of the Insured himself, it was difficult to hold that the murder was not an accident.  The other Hon’ble Member who penned his separate Order went on to hold that murder was not excepted in the Policy.  It was, therefore, held that in the absence of murder under the exception Clause explicitly mentioned in the Policy, it can be concluded that murder is an accident within the terms of the Policy.  Learned Counsel submitted that the Bench further went on to direct the Insurance Company to discontinue any unfair trade practice resulting in such a situation and to issue instructions in this regard.  It has been pointed out that the aforesaid Order of the Commission went in a challenge raised by the Insurance Company in Special Leave to Appeal (C) No(s). 29490 of 2018 and the said SLP was dismissed on 19.11.2018, the Order whereof is extracted herein as under –

“We are not inclined to entertain this petition under Article 136 of the Constitution of India.

                   The Special Leave Petition is, accordingly, dismissed.

                   Pending application(s), if any, shall stand disposed of.”

Recently a very informative and well researched article has been published that enumerates the ratio of almost all the relevant judgments and orders delivered on this issue upto the date that gives a bird’s eyeview of the development of the law on the subject matter with valuable recommendations that seem to be well informed and logically inclined to favour beneficiaries while ironing out the resistance put forth by insurance companies. The same is gainfully extracted hereinunder: -

Introduction

Accidental death is an insurable event. Accidental death coverage is sold either as a standalone product or as a rider in term life insurance policies, which, in both cases, entitles the insured to an extra payout in case of death due to an accident.

An “accident” is typically defined by policy terms as a sudden, unexpected, and involuntary incident caused by external, visible, and forceful means. This definition is generically worded and can encompass a wide range of occurrences. Generally, policy terms do not exhaustively outline every scenario that would constitute an accident, though certain exclusions are specified to define the scope of coverage. These exclusions include death by suicide but usually not death by homicide. Many consumers knocked on the doors of the Consumer Forum seeking accidental death benefits in cases of death by homicide. This article shall examine, from the angle of consumer protection, whether a murder constitutes an accident.

Difference between “accidental murder” and “murder simpliciter”

In the year 2000, the Supreme Court in Rita Devi v. New India Assurance Co. Ltd. , created a distinction between an “accidental murder” and a “murder simpliciter” as follows:

 1. It is an accidental murder if the act of murder was originally not intended but was caused in the furtherance of any other felonious act.

2. It is a murder simpliciter if the dominant intention of the act was to kill a person.

Thus, the motive and intention of the perpetrator were the deciding factors in concluding whether a murder was accidental or not. The distinction between accidental murder and murder simpliciter was not a definite position of law, rather it warranted an examination of the specific facts of each case. Consequently, this approach resulted in varied rulings based on subjective judgment. In certain cases, it was held that the murder of an insured with criminal antecedents, the murder of the deceased insured for being involved in a faction fight between two groups of his village, and the killing of an insured due to political rivalry, would not constitute accidental murders as they are pre-planned, intentional killings. Conversely, the murder of a kidnapping victim was deemed an accidental death.

Reviewing the aforementioned rulings would reveal numerous contrasting opinions based on individual judgment. In one matter, it was held that even if the murder accused was acquitted by the trial court, the murder would still be classified as a murder simpliciter. In another matter, the insurance company was directed to await the ruling of the criminal court on the charge of murder before adjudicating the claim. In a third instance, findings of murder in the charge-sheet were considered insufficient to classify the killing as murder simpliciter. Thus, different Benches of the National Consumer Disputes Redressal Commission (NCDRC) rendered equivocal rulings leading to multiple interpretations of the same legal issue. This necessitated a more precise criterion to distinguish accidental murder from a non-accidental one.

Test of proximate cause

The ratio in Rita Devi case overlooked the perspective that regardless of the intentions of the offender, every murder is an accident from the viewpoint of the victim. No person can expect or contemplate his homicide. The distinction between accidental murder and murder simpliciter primarily focused on the perpetrator’s motive while it ought to have considered the victim’s perspective.

This stance was discussed by a three-member Bench of the NCDRC in Maya Devi v. LIC , wherein the insured was murdered by the shopkeeper’s brother with whom he had had an altercation a day before. Whilst holding such a murder to be an accident, the NCDRC observed that even wilful murder would be an unforeseen event from the standpoint of the victim , unless the immediate cause of injury is the deliberate and wilful action of the insured himself.

With a similar observation, the principle established in Rita Devi case was also rejected by the High Court of Andhra Pradesh which remarked that determining the true intention of the perpetrator would be exceedingly challenging and would fall within the purview of criminal jurisdiction. Additionally, it was noted that for contractual matters, a murder must be regarded as an accident.

The aforementioned rulings introduced the test of proximate cause as a new criterion to determine which murder would constitute an accident. In the author’s opinion, this test provided a better standard of assessment as it aligns with the definition of an accident. An accident postulates a mishap or an untoward happening, devoid of any design on part of the victim. Therefore, for an incident to qualify as an accident, it has to satisfy three ingredients i.e. it has to be sudden, unforeseen and involuntary. According to Maya Devi case , a murder will not be an accident if the immediate cause of the same is an act on part of the victim himself, as in that eventuality, the murder would neither be involuntary nor unforeseen.

Incorporation of exclusion clause in insurance policies

An exclusion clause in a contract of insurance limits or exempts the liability of the insurer. Particularly in policies covering accidental death benefits, common exclusions consist of death resulting from suicide or self-harm, military service, involvement in war or rebellion, intoxication from alcohol or drugs, participation in attempted felonies, and operating an aircraft, among others.

These activities/situations are excluded from coverage because the occurrence of a death in the undertaking of the same would ordinarily be expected and hence, would not constitute an accidental death. The element of foreseeability of death in such situations excludes such death from the purview of an accident.

When the issue of murder as an accident was considered by the NCDRC from the angle of exclusion clauses, it was observed that if an exclusion clause does not exempt liability in case of homicide, the contra proferentem rule of interpretation would apply and insurance companies will be not be allowed to evade liability.

This view was recently reiterated by the NCDRC to hold that when an insurance policy does not exclude murder but explicitly excludes self-inflicted injuries, and by no stretch of imagination can murder be self-inflicted, a homicide shall constitute an accident under the policy.

Thus, the position of law on the issue has been settled as unless the terms of an insurance policy specifically exclude homicide from the scope of coverage, beneficiaries of such policies are entitled to payout unless it can be demonstrated that the murder was directly caused by the actions of the deceased victim himself.

 Conclusion

Under the realm of consumer protection law, the consumer fora are not only equipped with the judicial power to adjudicate and decide consumer disputes but also wield the power to issue directives to the service providers to effect policy alterations or cease unfair trade practices.

 While this prerogative is much underutilised, in the present context, the NCDRC has censured insurance companies for continuing the arbitrary adjudication of accidental death claims of such nature whilst failing to amend the wordings of the policy concerned despite being involved in numerous litigations on the same issue. Such cognizance by the NCDRC has significantly contributed towards securing the rights of consumers and fostering their confidence in the consumer protection system.

Senior Associate at Magnus Legal Services LLP. Author can be reached at:

1. (2000) 5 SCC 113.

2. Prithvi Raj Bhandari v. LIC, III (2006) CPJ 213 (NC).

3. K. Sarojamma v. LIC, Revision Petition Nos. 865-866 of 2011, decided on 13-7-2011.

4. LIC v. Chinthareddy Vijayamma, 2016 SCC OnLine NCDRC 734.

5. Ganga Ram Rai v. LIC, 2015 SCC OnLine NCDRC 562.

6. N. Kabilan v. New India Assurance Co. Ltd., 2015 SCC OnLine NCDRC 164.

7. Sanrakshita Kumari v. LIC, 2018 SCC OnLine NCDRC 1675.

8. LIC v. Penti Aruna, 2017 SCC OnLine NCDRC 677.

9. (2000) 5 SCC 113.

10. Nisbet v. Rayen & Burn, (1910) 2 KB 689.

11. III (2008) CPJ 120 (NC).

12. Halsbury’s Laws of England, Vol. 25 (4th Edn., 2003 reissue) p. 307, para 569. See also, Pawan Kumari v. LIC, First Appeal No. 535 of 2015.

13. Halsbury’s Laws of England, Vol. 25 (4th Edn., 2003 reissue) p. 311, para 575.

14. (2000) 5 SCC 113.

15. United India Insurance Co. Ltd. v. Ummadi Shakunthala, 2004 SCC OnLine AP 604.

16. Alka Shukla v. LIC, (2019) 6 SCC 64.

17. ESI Corpn. v. Francis De Costa, 1993 Supp (4) SCC 100.

18. III (2008) CPJ 120 (NC).

19. Union of India v. Sunil Kumar Ghosh, (1984) 4 SCC 246.

20. Royal Sundaram Alliance Insurance Co. Ltd. v. Pawan Balram Mulchandani, 2018 SCC OnLine NCDRC 377.

21. LIC v. Gaurav Verma, Revision Petition No. 716 of 2020. case can’t be traced- author to be consulted.

22. Consumer Protection Act, 2019, S. 39(1)(g).

23. 2018 SCC OnLine NCDRC 377.”

41.     Learned Counsel for the Insurance Company has urged that the Complainant has taken a stand that there was a list of pre-existing Policies attached with the proposal.  The said disclosure of the Policies acquired by the Insured was only partial and therefore this was a case where there was concealment of all the Policies that were existing and had not been disclosed in its entirety.  This non-disclosure therefore, according to the Learned Counsel for the Insurance Company is fatal and reliance has been placed on the decision of the Apex Court in the case of “Reliance Life Insurance Company Limited and Anr. Vs. Rekhaben Nareshbhai Rathod, (2019) 6SCC 175, Paras 12 to 21 and Paras 23 to 35”.

42.     The contention on behalf of the Complainant that it was also known to the Agent who had filled-up the Declaration Form, is also incorrect in as much as, even assuming though not admitting, that the Insured had intimated the Agent about all the pre-existing Policies, yet the fact remains that all the Policies had not been disclosed and the excuse of information having been given to the Agent, stands negatived by the Apex Court in Para 36 of the judgment in the case of “Reliance Life Insurance Company Limited and Anr. Vs. Rekhaben Nareshbhai Rathod” (supra).

43.     The list of disclosure of 11 Policies alongwith the Proposal Form is Annexure- OP3.  The Policies which the Insurance Company alleges to have not been disclosed, are as follows –

44.     Learned Counsel for the Complainant urges that out of these 04 Policies, one of the Policies acquired from Tata AIG was proposed on 13.7.2010 and was issued on 14.8.2010 whereas the Policies presently in question was issued on 30.6.2010 which is before the issuance of the said Policy.  Consequently, the Policy issued afterwards cannot be a matter of wrong disclosure and therefore the contention on behalf of the Opposite Party to that extent is unsustainable.

45.     This fact has been replied to in the Rejoinder Affidavit in Para 5 where the Complainant states that there is no suppression, nonetheless the information with regard to all the Policies had been given to the Agent who had full and complete knowledge of the other Insurance Policies.  It has been submitted that it is the Agent who had filled-up the Form and chose “not to mention all the Policies held by the Insured and therefore for the fault, if any, on the part of the Agent, the Insured cannot be made liable”.

46.     The aforesaid assertion in the Rejoinder therefore leaves no room for doubt that the Complainant admits having given all information to the Agent and has consciously appended a list which contains the details of only 11 Policies.  This list omits 3 Policies out of the 4 that have been indicated by the Insurance Company and recorded herein above.  Thus, there is no denial of this omission.  There is also no denial of the existence of these 3 Policies or their details.  There is, therefore, no vagueness or un-clarity about the existence of the 3 Policies that were acquired prior to the present Policy and were consciously not mentioned by the Insured.  It is this omission which is sought to be explained in the Rejoinder by shifting the fault on the shoulders of the Agent.

47.     Consequently, it stands established that 3 Policies as alleged by the Insurance Company were existing and were not disclosed by the Insured while taking the Policy presently in question.

48.     It is at this juncture, that the Learned Counsel for the Complainant has cited several decisions to contend that the fault of the Agent cannot deprive the Complainant of the entitlement to the indemnification and the Insurance Company cannot take any cover under the same.

49.     This issue as noted above stands squarely answered by Para 36 of the decision in the case of “Reliance Life Insurance Company Limited and Anr. Vs. Rekhaben Nareshbhai Rathod” (supra) which is extracted herein as under:-

36.    Finally, the argument of the respondent that the signatures of the assured on the form were taken without explaining the details cannot be accepted. A similar argument was correctly rejected in a decision of a Division Bench of the Mysore High Court in V.K. Srinivasa Setty v Messers Premier Life and General Insurance Co Ltd. where it was held: (SCC OnLine Kar paras 80-81) –

“80.  Now it is clear that a person who affixes his signature to a proposal which contains a statement which is not true, cannot ordinarily escape from the consequence arising therefrom by pleading that he chose to sign the proposal containing such statement without either reading or understanding it. That is because, in filling up the proposal form, the agent normally, ceases to act as agent of the insurer but becomes the agent of the insured and no agent can be assumed to have authority from the insurer to write the answers in the proposal form.

81.    If an agent nevertheless does that, he becomes merely the amanuensis of the insured, and his knowledge of the untruth or inaccuracy of any statement contained in the form of proposal does not become the knowledge of the insurer. Further, apart from any question of imputed knowledge, the insured by signing that proposal adopts those answers and makes them his own and that would clearly be so, whether the insured signed the proposal without reading or understanding it, it being irrelevant to consider how the inaccuracy arose if he has contracted, as the plaintiff has done in this case that his written answers shall be accurate.”

50.     The word “amanuensis” means a person employed to write what another dictates, like a Secretary or a short-hand typist or a scribe engaged for the said purpose.  The said ratio, therefore, leaves no room for doubt that the Insured who has affixed the signatures on the Proposal Form, is answerable and the Agent is merely a representative of the Insured.  The aforesaid judgment still holds the field and has neither been over-ruled nor the ratio thereof has been diluted.  Consequently, the plea taken by the Complainant of attempting to put the blame on the Agent, therefore, is unsustainable and this argument is accordingly rejected.

51.     Learned Counsel, Mr. Joshi vehemently argued that the aforesaid judgement of the Apex Court has been later on in a recent decision explained by the Apex Court itself in the case of “Mahakali Sujatha  Vs. The Branch Manager, Future Generali India Life Insurance Company Limited & Anr., Civil Appeal No.3821 of 2021, decided on 10.4.2024”.

52.     Learned Counsel has urged that no material fact had been withheld by the Complainant and the Insurance Company has not led any evidence to prove the existence of 3 of the Policies and its non-disclosure by the Complainant.  It is pointed out that the decision in the case of “Mahakali Sujatha  Vs. The Branch Manager, Future Generali India Life Insurance Company Limited & Anr.” (supra) holds that the entire burden is on the Insurance Company to prove the factum of existence of the Policies in order to establish that they had not been disclosed by the Complainant.  Learned Counsel further submits that this burden has not been discharged and therefore in the absence of any such details regarding the existence of such Policies or its impact on non-disclosure cannot be a ground to deny the legitimate claim of the Complainant.

53.     Before delving into the facts of this case on record, the ratio of the above quoted judgment needs to be considered in order to appreciate the contention of the Learned Counsel for applying it on the facts of the present case.  The said judgment has taken notice of the earlier judgment in the case of “Reliance Life Insurance Company Limited and Anr. Vs. Rekhaben Nareshbhai Rathod” (supra) and has arrived at the conclusion that in that case, the Insured therein had admitted the non-disclosure of the earlier cover for Life Insurance held by him and it  had been argued that such a non-disclosure was not a material fact.  The Apex Court, therefore, distinguished the said judgment of “Rekhaben Nareshbhai Rathod”(supra) while pronouncing further in Para 35, 36, 37, 38, 39 & 40 to come to the conclusion that there was no admission by the Claimant in Mahakali Sujatha’s case (supra) as against that in the case of “Reliance Life Insurance Company Limited and Anr. Vs. Rekhaben Nareshbhai Rathod” (supra).  It was also found on facts that there were discrepancies with regard to the details, in as much as, the Table did not indicate as to in whose name the Policies were issued and it was also not clear as to whose dates of birth were stated therein.  In the absence of such details, there was further no corroboration of the fact by producing the copies of the Policies in order to prove material suppression.  Consequently, the Apex Court came to the conclusion that with these half-baked details, the Insurance Company had failed to prove the suppression of a material fact.

54.     Ld. Counsel, Mr. Joshi has very vehemently relied on the other Paras namely Para 41 onwards to Para 47 to contend that the Insurance Company in terms of the ratio of the said decision, has not been able to prove the suppression and non-disclosure in accordance with the provisions of the Indian Evidence Act, 1872 as dilated in that judgment.

55.     The applicability of the provisions of the Indian Evidence Act has been dealt with in a couple of cases.  In the case of Malay Kumar Ganguly vs Dr Sukumar Mukherjee and Others (2009) Vol 9 SCC page 221. Paragraph 42 and 43 are extracted herein under:

          42.     Sub Section (3) of Section 13 reads:

          13 (3) No proceedings complying with the procedure laid down in sub-sections (1) an (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with.

43.     Apart from the procedures laid down in Sections 12 and 13 as also the Rules made under the Act, the Commission is not bound by any other prescribed procedure. The provisions of the Evidence Act are not applicable. The Commission is merely to comply with the principles of natural justice, save and except the ones laid down under sub-section (4) of Section 13 of the 1986 Act. The proceedings before the National Commission are although judicial proceedings, but at the same time it is not a civil court within the meaning of the provision of the Code of Civil Procedure. It may have all the trappings of the civil court but yet it cannot be called a civil court.

56.     This issue was also reaffirmed by the Apex Court in the case of V Kishan Rao vs Nikhil Super Speciality Hospital and Another (2010) Vol 5 SCC 513. Paragraph 13 is extracted herein under:-

13.     Before the District Forum, on behalf of Respondent no.1 it was argued that the complainant sought to prove Yashoda Hospital record without following the provisions o Sections 61, 64, 74 and 75 the Evidence Act, 1872. The Forum overruled the objection, and in our view rightly, that complaints before the Consumer Fora are tried summarily and the Evidence Act in terms does not apply. This Court held in Malay Kumar Ganguly vs Dr Sukumar Mukherjee that provisions of the Evidence Act are not applicable and the Fora under the Act are to follow the principles of natural justice.

57.     The said judgments therefore, do hold that the provisions of the Indian Evidence Act 1872 per se may not been applicable to the summary proceedings before the Consumer Forums and it iss the principles of natural justice that have to be complied with.

58.     The Consumer Forum has a summary jurisdiction, even though inquisitorial in nature, and therefore the facts of this case will have to be examined in order to apply the ratio of the judgment in the case of “Mahakali Sujatha Vs. The Branch Manager, Future Generali India Life Insurance Company Limited & Anr.” (supra).  For this, the first evidence on record is the Proposal Form which was filled-up by the Insured and has been filed alongwith the Complaint itself.  Column 17 requires the aforesaid disclosure of all existing current Insurance Policies/covers in respect of any insurance benefits covered or otherwise, and according to the said Declaration, full details have to be given for the acceptance of the Policy.  The said Column has been filled-up by the insured by endorsing the following words, “as per list attached”.  The list duly signed by the Insured is Annexure- OP3 to the Reply filed by the Insurance Company which document has not been denied by the Complainant and has been extracted herein above.  The said list nowhere discloses 3 of the Policies as referred to above which existed prior to the acquisition of the present Policy.  The details of the 3 Policies which have been categorically stated in Para 6 of the Reply have been affirmed by way of evidence through the Evidence Affidavit of the Insurance Company in Paras 7, 8 & 9 thereof which is extracted herein as under –

“7.     I say and admit that in the span of three years, multiple insurance policies were taken on the life of the Deceased and KM, which included Individual, Group, Credit Life and Keyman covers.  That at present 42 policies are existing in the name of the Deceased, with total insurance amount of Rs. 18,48,88,293/-, involving 20 insurance companies.  Further there are 13 insurance policies on the life of KM, with the total insurance amount of Rs. 9,47,12,212/-, involving 8 insurance companies.

          A list of insurance policies taken on the life of the Deceased is herewith marked as Exhibit OPW-1.

          A list of insurance policies taken on the life of the Deceased is herewith marked as Exhibit OPW-2.

8.      I say and submit that the policy was applied for on the life of the Deceased and the Complainant was made the nominee.  At the time of applying for the policy, the Deceased, was required to disclose the existing/ applied for insurance covers availed by the Deceased, under clause 17 of the application form.  The Deceased only mentioned the policies, under a list attached with the application form.

          The list attached with the application form is herewith marked as Exhibit OPW-3.

          However, the deceased did not mention the existence of the following policies which were taken against the life of the Deceased, and thereby breached the terms and conditions of the policy :

9.      I say and submit that several policy applications were also declined.  A list showing the declined policies is herewith marked as Exhibit OPW-4.

          Further a list showing the Rated-up policies is herewith marked as Exhibit OPW-5.  Rated up policy means policies wherein premium is increased due to medicals, age, occupation of the Life Assured since it imposes an extra risk over and above the base mortality.

          A list showing the Person ITS’s of the said three partners is herewith marked as Exhibit OPW-6.

          A list of the ITR’s of Labh Marketing is herewith marked as Exhibit OPW-7.

ITR is to check financial risk. Only if the customer is financially eligible for the cover a policy is issued.”

59.     This is further substantiated by the documents brought on record through IA No. 3952 of 2014 filed by the Insurance Company seeking amendments in the Written Statement that has been accepted on records and Para 4 & 5 of the said application are extracted herein as under –

“4.     That subsequently the Applicant has also received the mail confirmation from respective companies i.e. Yaya AIA, Birla and Kotak, confirming that policies have been issued by them which was not disclosed to the Applicant.  The copies of the said mails are enclosed herewith as Annexure A.

5.      It is further submitted that various litigations are also going on qua the policies given by the other insurance companies against the Complainant are as follows –

          1.      Kotak Life – policy no. 1995086- CC No. 54/2013 filed before State Commission, Gujarat.

          2.      TATA AIA- policy no. DGML000020- CC No. 780/2013 filed before District Forum, Surat.

3.      TATA AIA- policy no. C190279181- CC No. 57/2013 filed before State Commission, Gujarat.”

60.     The aforesaid disclosure therefore establishes that not only the details of the Policy, but the Policies themselves were on record in the other Complaints which were filed at different Forums as stated therein. These facts have also not been disputed by the Complainant nor the documents filed in support thereof, have been rebutted by any cogent evidence.  It is, thus, clear from the facts of the present case that existence of the 3 Policies which have not been disclosed by the Complainant, have neither been denied nor has the contention been  controverted or rebutted. 

61.     In the wake of these facts, the Insurance Company has fully discharged its burden of bringing on record those facts which were material and had been deliberately suppressed by the Insured.  The judgment therefore in the case of “Mahakali Sujatha  Vs. The Branch Manager, Future Generali India Life Insurance Company Limited & Anr.” (supra), in the present case does not in any way come to the aid of the Complainants as whatever material was required, which has not been denied or rebutted by the Complaint, has been adduced by the Insurance Company.

62.     As indicated above, the Complainant has attempted to shift the responsibility and liability as a fault of the Agent as disclosed herein above and has been stated in the Rejoinder Affidavit.  This, as already concluded, is contrary to the law laid down in Reliance Life Insurance Company Limited and Anr. Vs. Rekhaben Nareshbhai Rathod” (supra) and hence the Complainant has failed to dislodge the evidence adduced by the Insurance Company.

63.     The issue of the Insured not being possessed of the financial capacity to acquire the Policies is also reflected in the pleadings.  Nonetheless, these issues have been more particularly raised in the other Complaints which are to follow suit.

64.     So far as the present Complaint is concerned, the fact that there is non-disclosure of the 3 Policies stands established and therefore the terms and conditions of the Policy have been clearly breached which essentially is based on the principle of Uberrima fides (utmost good faith).  The Insurance Company was fully justified in declining to admit the claim of the Complainant and therefore the Complaint deserves to be dismissed.

65.     Accordingly, CC No. 200 of 2013 for all the reasons stated herein above is rejected.

CC/201/2013

66.     This complaint is in respect of a death claim arising out of a policy acquired by the insured from M/s Birla Sunlife Insurance.  The policy documents disclose the name of the insured as Ashok Bhai Manji Bhai Lathiya.  The coverage details indicate the name as Dream Endowment Plan Policy.  The facts leading to the claim are similar as narrated in CC/200/2013 but in the instant case, the case has been repudiated on 31.01.2013.  The letter of repudiation is extracted hereinunder:-

“31 January 2013

Ms. Shardaben Ashokbhai Lathia 3/3,

Kavita Row House,

Near Sarthana Jakat Naka,

Surat-395 006 Gujarat

Dear Ms. Lathia,

Re: Death Claim under Policy No. 004200582 on the life of Late Mr. Ashokbhai Manjibhai Lathia. 

This has reference to your claim dated 29th September 2012 for the benefits under the above Policy. We have carefully considered the same; but have decided to repudiate the claim under the Policy vide no. 004200582 on the following grounds and reasons:

The above said Policy was issued on the basis of an application for insurance dated 5th June 2010 submitted by Mr. Ashokbhai Manjibhai Lathia (the "Life  Assured") on his own life. In the said application signed and submitted by the Life Assured, he had replied in negative to the questions on "Insurance History of the Life to be Insured" categorically asked in the proposal application dated 5th June 2010.

For your ready reference, we reproduce herein below the aforesaid questions and the reply thereto mentioned in the application for insurance:

INSURANCE HISTORY OF THE LIFE TO BE INSURED

2. Have you ever had an application for life, accident, medical or health-related insurance refused, withdrawn, declined, postponed or offered with restricted benefits or with an increased premium or made any claim under any such policy of insurance with BSLI or any other insurer in india or abroad?...... No

However, our investigations have established that prior to the applications for insurance submitted to Birla Sun Life Insurance Company Limited, the Life Assured had applied for insurance to several other insurance companies and Policies have been declined and rated up on medical as well as personal habit and hence the aforesaid reply in the applications for insurance is false.

Without prejudice to what is stated above, we may state that we have incontrovertible proof to show that Mr. Ashokbhai Manjibhai Lathia was a smoker and had treatment for Hepatitis before the application for insurance allegedly submitted by him. In the said application, Q. Nos. XII A (6) and D 3 (e) had been replied in the negative. For your reference, we are reproducing below the aforesaid questions and the replies thereto in the applications for insurance:

XII MEDICAL AND PERSONAL HISTORY OF THE LIFE to be INSURED

A. LIFESTYLE INFORMATION

6. Do you smoke cigarettes/bidis or use any other form of tobacco like paan, gutkha etc...No

D. MEDICAL INFORMATION

3 Have you ever had or sought advice for the following:

(e) Ulcer, colitis, chronic diarrhoea, hepatitis or jaundice or other liver or digestive disorders?.. ....No

Similarly, in his statement to the Medical Examiner's Report (MER) on 3rd June 2010 as a part of his application for insurance, the Life Assured had replied in negative to questions numbered 3 (e) and Part II 6 of the MER. For your reference, we are reproducing below the aforesaid questions and the replies thereto in the MER:

3. Within the past five years, have you:

e) Ulcer, colitis, chronic diarrhoea, hepatitis or jaundice or other liver or digestive disorders?. ....No

PART II

6. Is the applicant presently a smoker?.

No

If the true and correct facts and information pertaining to Life Assured's existing Insurance details, Personal and Medical history were disclosed at the proposal stage, the Company would not have issued the Insurance Policy at all.

Further, there has been a gross failure to act in good faith as the Policy was obtained with the malafide intention to defraud the Company.

Since there has been material non-disclosure, suppression of facts and failure to act in good faith, the Company has been misled to issue the Policy and therefore we hereby repudiate your claim under the said Policy.

However, if you feel that your case deserves further consideration you, may register you dissatisfaction regarding the same, justifying the grounds for reconsideration, with the "Claims Redressal Machinery" at the following address:

Birla Sun Life Insurance Co. Ltd., Claims Department, G Corp, Tech Park, 6th floor, Kasar Vadavali, Ghodbunder Road, Thane West - 400 601”

67.     The non-disclosure of material particulars is in respect of two policies that were acquired from Tata AIG.  However, the ground of repudiation also appears to be the personal habits of the insured being a smoker which was not disclosed and the second is the suppression of a previous ailment of Hepatitis having not been disclosed in the proposal form. The proposal form has been filed by the opposite parties as Annexure R-2 in the reply and in paragraph-12, of the form, the medical and personal history of the life insured is required to be disclosed.  The contention is that under clause A of sub-heading of ‘life style information’ all the questions have been answered in negative inspite of the fact that he was a smoker and he was in the habit of eating gutka.  Under clause-D of the medical information, question no. 3 calls upon the proposer to answer specific questions in respect of previous ailments.  Question no.3 is reproduced hereunder:-

“3. Have you ever had or sought advice for the following (Please circle whichever applicable:

(a) Chest Pain, high blood pressure, stroke, heart attack, heart murmur or other heart disorders                                                                  No

(b) Asthama, chronic cough, pneumonia, shortness of breath, T.B. or other respiratory or lung disorders;                                                        No

(c)Diabetes or sugar in the urine (If “Yes”, complete the diabetes questionnaire.                                                                        No

(d) Protein (Albumin), blood or pus in the urine, sexually transmitted diseases or venereal disease?                                                        No

(e) Ulcer, colitis, chronic diarrhoea, hepatitis or jaundice or other liver or digestive disorders (If “Yes”, complete the digestive questionnaire). No”

68.     The answer given by the insured to the said question is ‘No’.  The stand taken in the letter of repudiation is that the insured was suffering from Hepatitis which has not been disclosed.  In the reply, the opposite party has raised this plea in paragraph-6 in detail.  It has also been stated that during investigation, this material non-disclosure was found to have been revealed and therefore, the suppression was a material suppression.  The rejoinder filed by the complainant has nowhere denied the specific fact of sufferance from Hepatitis.  Alongwith IA No.12300, counsel for the insurance company has brought on record the reply received from M/s Kotak Life & Tata AIA Life indicating that the policies that were taken by the insured were over and above this policy.  It has also been stated in paragraph-7 of the evidence affidavit of the insurance company that during the process of investigation, the information regarding the health status of the insured was gathered.  The insurance company has also filed written arguments that have been received on record on 05.08.2021.  Learned counsel for the opposite party has emphasized on the following submissions contained in the written arguments.

WHETHER THE POLICY IN QUESTION WAS OUTCOME OF DELIBERATE SUPRESSION OF MATERIAL FACT AND WHETHER THE CLAIM WAS RIGHTLY REJECTED BY THE RESPONDENT INSURANCE COMPANY?

          “The DLA had obtained the policy form the humble Respondent on the basis of deliberate suppression of material fact with regard to insurance policies with other companies viz. Kotak Mahindra and Tata AIG for Sum assured of Rs. 25,00000/- and Rs. 7,73,453/- respectively. It was the sole duty of the DLA to declare the correct facts under the policy proposal form. It detailing of existing policy, details of declined proposal forms etc. were explicitly asked under Q.No. XI of the Proposal Form. The DLA intentionally did not reveal the higher amount policies obtained from Kotak Mahindra and Tata AIG, further the facts of proposal declined by insurance companies were also concealed while taking the subjected policy whereas the proposal for insurance was declined by the Insurance Company(ies) on the ground of financial position of the DLA and habits of smoking/chewing tobacco. The DLA had suffered from HBsag positive in the past had a sever habit of smoking. The DLA concealed that eight policies with an assured sum of Rs. 2.42 Crore were rated up in v/o HBSag +ve and in vlo personal habit of smoking which was not disclosed at the time of submitting the proposal form. At the claim stage and investigation it was also revealed that the DLA had no source of earning and was added in Labh Marketing as a partner whereas the DLA was not capable to take higher amount sum assured policies. The claim of the Complainant was rightly repudiated by the Respondent Insurance Company vide its letter dated 31.01.2013 and the reasons for repudiation were explicitly stated under the said rejection letter.

          Under the Proposal form the DLA had furnished the declaration that he has furnished the desired information and nothing has been mis-stated or concealed under the Proposal Form. The underwriter team of the Respondent Insurance Company relying upon the information provided and declaration furnished under the Proposal Form decided to issue the subjected policy, if the DLA could have revealed the correct facts than the Respondent Insurance Company would have issued the policy on the existing terms. The DLA had played fraud with the Insurance Company by furnishing wrong declaration under the Proposal Form.”

69.     The complainant, therefore, was unable to demolish the allegations regarding the suppression which has been categorically made based on evidence and stands uncontroverted by any cogent evidence. 

The complaint therefore, deserves rejection and is accordingly, rejected.   CC/211/2013

70.     This complaint concerns a policy where once again, the allegation was about pre-existing policies obtained and acquired by the insured from 14 different insurance companies complete information whereof had not been disclosed in the proposal form. 

71.     The policy was an Aviva Life Shield Policy for 22 years and the sum assured was Rs.10 lacs. The claim was made in the circumstances as indicated in CC/200/2013 dealt with hereinabove and it was repudiated on 25.01.2013 on the ground of not having disclosed the correct status of the previous policies with other insurance companies that were declined on the ground of financial inability and some of the insurance policies were rated up or were accepted at special rates or counter offers.  The information, therefore, about the same was not disclosed correctly and his health conditions were also not disclosed where material particulars were withheld.  Thus, the financial and health grounds including the previous sufferance from Hepatitis B was the ground taken for repudiation.  The repudiation letter is extracted hereinunder:

“January 25, 2013

Mrs. Shardaben A Lathiya 313, Kavita Row House Sarthana Jakatnaka, st:-Surat, Gujarat Pin-395006

UIN No: 122N081V01

Contact no-9329590098

Dear Mrs. Shardaben A Lathiya,

Ref: Policy number ALA3081854 on the life of Mr. Ashokbhai M Lathiya

With reference to the above mentioned policy, we wish to inform you that the same was issued on Jun 15th 2011 basis the information-provided by Mr. Ashokbhai M Lathiya (hereinafter referred to as "the Life Assured").

We wish to state that disclosure of other Insurance policies worth 6.19 crore issued at Standard rates was made in our proposal form for insurance. However after careful evaluation of records obtained by us during the claim processing, it was known that the Life Assured had not disclosed insurance worth Rs. 1.36 crore which was over and above the insurance stated in the said Proposal form. This information provided was incomplete at the proposal stage. The said question has been reiterated below for your reference:

Our investigation reveals that out of insurance policies worth Rs. 6.19 crore which were disclosed to be issued at standard rate in our proposal form, insurance policies worth Rs. 4.23 crore were rated up or were accepted at special rates or counter offers for Health, Habits or financial reasons. Further, investigation also reveals that insurance policies amounting to Rs. 2.1 crore were applied with other insurance Companies which were declined on the grounds of financial ineligibility before signing the proposal for insurance with Aviva Life. This information was answered in negative to 8.1 D of the proposal form. The said question has been reiterated below for your reference:

We also note that Life Assured was a smoker and had been rated up by other Insurance companies.  This Information was answered in negative to 6.2 C of the proposal form. The said question has been reiterated below for your reference:  

Life Assured during his medical examination had not provided the correct health conditions to the medical examiner. Life Assured was a Hepatitis 8 carrier and was rated up by 6 insurance companies and was a smoker for which he was offered special terms/ rated up under 4 policies before issuance of the policy with Aviva Life. This information answered in negative to Q1, Q6 and Q10b of the medical examination report. The said question has been reiterated below for your reference. 

Further investigation reveals that the policies applied for Ashok Lathiya was to a tune of approx. Rs. 25 crore between Jun 2009 to Apr 2012 of which approx. Rs.7 crore were denied on either financial and/or health grounds.

During the same period, 26-policies for approx. Rs. 11 crore on the life of Ashok bhai were rated-up, offered special terms or accepted with counter offers for positive Hepatitis B, habits or financial in- eligibility.

As per available evidences it is established that the policy was purchased with a malafide intent to cause wrongful loss to the Company.

It is pertinent to state that the Life Assured had duly signed the proposal form where he had agreed to the declaration (Q10) that read as below:

"I further declare that the answers given by me to all the questions in the proposal form and the information given to the medical examiner of the company as to the states of Health and Habits of the life to be insured are true and complete in every respect and has not withheld any material information or suppressed any material fact. The declaration also states that he also understand that on misrepresentation or misstatement of material fact, company has right to repudiate the claim under the policy and in reference to page 1, point 6 under heading "Notes" of the proposal form states that "if the proposer omits to give full and accurate information as required or misrepresents any information, the policy contract could be declared Null and Void"

All above questions are importance from underwriting risk assessment perspective and the Life Assured was required to provide us with the correct details. The Company was led to issue the policy due to suppression of the above said material facts. There is material non-disclosure at the time of taking the Policy. Had the material facts been disclosed in the proposal for insurance by the Life Assured the Company would not have issued the policy.

Since the Company is led to issue the policy basis suppression of material facts by the Life Assured and for reasons as stated above, we are unable to accept the claim and hereby repudiate your claim for the above policy and all monies that have been paid there under stands forfeited.

In case you are not satisfied with the above decision and feel that we have not considered any particular facts/circumstances in support of your claim, you may send us your representation of your claim to our Claims Review Committee addressed to:

Claims Review Committee

Aviva Tower, Sector Road, Opp. Golf course DLF-Phase V, Sector-43, Gurgaon-122003, Haryana”

72.     The averment made in paragraph-10 to 13 of the complaint was denied by the insurance company in their reply and additionally, paragraph-8 states as under:

“8.     The investigation report of Sharp Eagle Investigation Pvt. Ltd. (Investigator), also submitted their Final Report on 26.12.2012, along with certain documents procured by them during the course of investigation. It is specifically stated in said Investigation Report that the accused Mr. Jaswant Bhai hatched a conspiracy to cheat his partners and also Insurance Companies and as a part of said plan he got the present insurance policy issued in the name of the deceased husband of the Complainant. Also, it was mentioned in said report that the Life Assured had also obtained policies from different companies. Copy of the Investigation report is annexed herewith as Annexure R-5.”

73.     The said report categorically stated about information received and the documents relied upon.  There is no denial of these specific facts as also contained in the investigation report and the same stand has been taken in the complaint that it was the fault of the agent to have not disclosed the correct facts which cannot be the basis of repudiation.  This fact has been stated in paragraph-10 of rejoinder affidavit which again stands answered by the ratio of the judgment in the case of Rekha Ben (supra) in paragraph-36 thereof as discussed hereinabove. 

74.     Apart from this, it has also been urged by the learned counsel for the insurance company that the insured had no income proportionate for paying the premiums and the premium seems to have been paid from the accounts of the company. 

75.     None the less, the fact remains that out of almost 33 policies that had been acquired by the insured, only 16 had been disclosed and in such circumstances, this material non-disclosure has been rightly assessed for repudiating the claim. 

76.     The details of such material information regarding the previous policies have been categorically stated in paragraph-10 & 13 of the reply that remain unchallenged.

77.     The opposite parties have also relied upon Annexure R-6 which is a medical report indicating that the insured was suffering from Hepatitis-B.  Even though there is a bald denial in paragraph-12 & 13 of the rejoinder, it has been stated therein that the cause of death had no relation to the alleged diseases and therefore, the stand taken by the opposite party to repudiate the claim deserves to be rejected.  The aforesaid contention is misconceived inasmuch as the status of health having not been disclosed correctly, is material and so are the details of the pre-existing policies. It is non-disclosure which is the breach and the cause of death has no connect with it.  

78.     As already noted above, since the evidence has been brought forth by the insurance company to substantiate their contentions, that have not been specifically refuted or dislodged by the complainant except for bald denials, the complaint deserves to be rejected and is accordingly, rejected. 

CC/212/2013

79.     This complaint is in respect of an insurance claim under the accident guard policy sought to have been acquired by the insurance company from Tata AIG.  The insured is the same Mr. Lathiya as in the previous cases.  The claim was processed and was repudiated by the insurance company by a detailed letter where the issue of accident and murder were taken into account to conclude that it was not accidental.  Hence, the claim was beyond the scope of the policy.  It was further stated that the premium payment ability of the insured was not supported from the income tax returns and therefore, the policy had been obtained fraudulently.  It was also alleged that the funds for premium were sourced from the company of which he was a partner and it was designed by Mr. Savani who was a co-partner with malafide intentions. 

80.     The details of 42 policies were given in the repudiation letter to conclude that the huge sum insured in all these policies does not justify the earning capacity of the deceased and therefore, there was a material suppression for correct disclosure.  Hence, the policy was being repudiated.  The repudiation letter dated 31.01.2013 is extracted hereinunder:-

“11^th January, 2013

Ms. Shardaben Lathiya

Plot No.313, Kavita Row House VI-1,

Sarthana, Surat-395001

Gujarat

Dear Lathiya,

Sub: Claim under Accident Guard Policy No.02500029155, Claim No.576292

We rever to your earlier intimation in respect of the above. We also refer to personal visit by our representative and our earlier communication requesting for relevant claim documents/details.

We regret to note that the following details/documents are still awaited from our side.

*        Chemical Analysis Report

*        Details of claim status under other insurance policies as declared by you.

With respect to the claim lodged under the policy, we are in receipt of charge sheet filed by the police authorities which confirms as under:

*        Mr. Savani had taken Mr. Ashok Lathiya & Mr. Kishorbhai Mangukiya as business partners in 2009, in sptie of knowing that their economic condition was not good.

*        Mr. Jasavant Savani had taken various insuranc policies with malafide intention and without knowledge of the family members of the deceased persons with the fund of marketing company operated by him.

*        The  funds were sourced from the co. with the intention of usurping the big sum of the said insurance policies.

*        As per the charge sheet filed by the police Mr. Savani is accused of ‘With the intention of usurp the big sum of the said insurance policies, he has been trying extremely calculated and welll planned manner from 2009 for killing of his both partners 1) Ashokbhai Lathiya & 2) Kishorbhai Mangukiya with intention of the offence of murder as accidental death.’

*        For that purpose, he entered into criminal conspiracy with Pandit Magoray Shinde and as per the plan on 15^th August, 2012 accused Jasvanthbhai Savani took Mr. Ashokbhai Lathiya & Kishorbhai Mangukiya to Abishek Residency (Heights), Surat on the pretext of seeing the flat on 12^th Floor, As per the plan, he made them stand near the open window on the guise of taking photographs and thereafter, when they were standing near the open window for the purpose of photo pushed both of them & thrown Mr. Lathiya & Mr. Mangukiya down with the help of accomplice.

*        During the verifications conducted by our representative & as recorded in charge sheet as well as it was noted that multiple policies were taken in the name of Late Ashok Lathiya. The huge sum insured under all these policies noted during the verification & listed below along with premium details does not justify with the earning capacity of the deceased:

Hence, it is evident from the facts & circumstances, duly corroborated and contained in the charge sheet filed by the police authorities that:

• Mr. Jasavant Savani had taken various policies in the name of Late Ashok Lathiya, with a malafide intention of usurping the big sum of the insurance policies.
• The ITR copies submitted do not support the premium payment ability of Mr. Ashok Lathiya for various insurance policies as declared and as per the charge sheet the funds were sourced from the co.
• The murder was pre-designed and executed in a well-planned manner with the assistance of Mr. Savani’s accomplice. The intentional act of killing was pre-medicated and by no means accidental but a case of ‘Murder Simplicitor’ and hence beyond the scope of the [policy.

Considering the above, we are unable to process the claim further as per the terms and conditions of the policy.

We regret, therefore, that we are unable to entertain this claim. We look at this as an opportunity lost to serve you. Should you believe that we have overlooked any material fact or circumstance, or should you wish to present an alternative interpretation of any relevant policy provision, please draw the same to our attention for our further consideration.

The foregoing declaration of insurer liability is issued on the facts as presently known. We reserve the right to extend or modify this declaration should additional facts and circumstances become known to us. None of the foregoing shall be taken as a waiver of, nor to create an estoppel to invoke, any right, defence or limitation available to the insurer under the policy of insurance, at law or otherwise, all of which are expressly reserved hereby.

With best regards,

Sd/-

Manager Claims”

81.     The arguments of the learned counsel for the complainant is similar as that has been advanced in respect of the other complaints dealt with hereinabove.

82.     Learned counsel for the insurance company, on the issue that the incident was a murder, has urged that it has clearly been spelt out in the application moved by the complainant herself before the insurance company, copy whereof has been placed on record of the response. Learned counsel has emphasized on the following paragraph of the said letter to substantiate the contentions:-

“There are a huge properties valued at Crores rupees in the name of Ashokbhai and Kishorbhai, and Jaswantbhai was aware about this fact. Jaswant was doing the work of loan and advances in the company and to keep the details of insurance. He was aware that if he commits murder of Ashokbhai and Kishorbhai then they will get the the insurance and other amount from properties and ultimately the loan of the Bank will be repaid. Without intimation of Ashokbhai and Kishorbhai, he has sold out property and thereafter by taking a chance, he has committed murder of both these persons, she has such doubt.”

83.     It has then been urged that the gross annual income as disclosed in the proposal form is Rs.5 lacs which does not match with the income tax return which discloses Rs.2,98,448/- for the assessment year 2009-2010.  The same is reflected in the year 2010-2011 as Rs.4,24,760/-.  In these circumstances, this statement does not match with the disclosure in the proposal form, which according to the learned counsel was an incorrect depiction and which has now been proved on record.  This, according to the learned counsel, violates the principal of uberrimae fide.  It is also submitted that an investigation was carried out in detail and statements were recorded that revealed that it was Mr. Savani who managed and controlled the affairs of the partnership of M/s Labh Marketing and the real estate business and insurance company. Mr. Lathiya, and the other partner Mr. Mangukia, were simple persons who were just signing the  documents  on  the instructions of

Mr. Savani.  The investigation concluded that the insured was from a very poor economic background and they were not capable of acquiring the insurance policy which they acquired by dubious means with a motive to illegally obtain insurance benefits.  This investigation report dated 10.12.2012 has been filed as Annexure R-7 that is on record.  The details of the said investigation, do reflect upon the nature of the dubious activities and the acquisition of 43 insurance policies as indicated in the reply. 

84.     Except for bald denials, the complainant has been unable to dislodge the factual evidence that has been brought on record through the investigation report. 

85.     Having considered the submissions raised, wrong income disclosure is evident and the capacity of the insured was seriously doubtful keeping in view the facts that were investigated and found.  The declaration in the proposal form is also incorrect and the pre-existing diseases have also been established. In these circumstances, there is a material suppression of facts and also the deficiencies and lapses regarding furnishing of correct information about pre-existing policies and status of income.  The complainant therefore, has been rightly denied the claim. 

86.     Learned counsel for the insurance company urged that this was a clear case where the incident was not an accident and therefore, the claim was not indemnifiable. The circumstances and the criminal investigation indicated that it was murder which was also alleged by the complainant in her statement extracted hereinabove. Learned counsel for the Insurance Company had reservations about the correctness of the order of this Commission in the case of Royal Sundaram Insurance Company (supra). Nonetheless, this issue has already been discussed in detail while deciding CC/200/2013. The conclusion therein would also be applicable on the facts of the present case as such no further deliberation is warranted.

87.     For all the aforesaid reasons, this complaint also cannot succeed on the basis of the evidence that is on record.  The complainant has failed to dislodge the conclusions drawn in the repudiation letter. There is no deficiency as alleged, hence the complaint is dismissed.

CC/214/2013

88.     This complaint relates to a policy taken from M/s Max New York Life Insurance Company Ltd.  It was a life term plan policy.  In this case, the arguments of the complainant are the same regarding the non-disclosure of the other policies but the response by the insurance company is slightly different.  It is urged that the nature of material suppression here is that the complainant has taken three policies in quick succession out of which, two are ULIP policies dated 16.04.2009 and 16.06.2009.  The third policy is a term policy dated 28.06.2009.  Mr. Varadarajan has described this approach of the insured of taking a decoy policy in quick succession from the sources without disclosing the policies in the subsequent policies.  It is therefore, submitted that in the first policy, fund value was disbursed but the other two policies were obtained by suppression and consequently, the said claims have been denied.  The death claim upon receipt was processed and on 27^th, the fund value of Rs.307481.19p in respect of the first policy were disbursed.  With regard to the other claims, an investigation was carried out through a claim consultant Mr. Sanjay Bhatt who submitted an investigation report dated 22.11.2012.  Learned counsel has also relied upon the investigation report that is on record and the chargesheet in the criminal case.  The claim was repudiated on 13.03.2013 which is extracted hereunder:-

“13th March 2013

Ms. Shardaben Ashokbhai Lathiya-313,

Kavita Raw House Vibhag 1

Surat 395006,

Gujarat

Dear Ms. Shardaben Ashokbhai Lathiya,

Subject: Claim Reference Number (201227001003), Policy number(s) (738028026, 702350950 & 801773193).

This is with reference to the captioned death claim. The proposal form for Policy no 738028026 was received by us 31st March 2009 and the policy was issued on 16th April 2009, for Policy no 702350950 was received by us 25th May 2009 and the policy was issued on 09th June 2009 and Policy no 801773193 was received by us 8th June 2009 and the policy was issued on 28th June 2009.

During the claim assessment and evaluation process, it has come to our knowledge that the aforesaid policies were taken in pursuance to a well knitted and planned criminal conspiracy to usurp big sum of insurance money of various insurance companies including Max Life.

In view thereof, we are declining the claim for the reason that the policies were illegally taken with criminal intention to usurp big sum of insurance money of various insurance policies.

For any further clarification or assistance, you may write at below mentioned address:

Customer Services Unit, Max Life Insurance Company Ltd, Operations Centre - 2nd Floor 90 A, Sector-18, Udyog Vihar, Gurgaon 122002, Haryana

Our endeavour is to always be fair in our settlement of claim. The Insurance Regulatory and Development Authority (IRDA) has appointed Insurance Ombudsman at different locations in India.”

89.     The aforesaid repudiation is therefore, based on a thorough investigation carried out by the insurance company which establishes that the same was acquired dubiously under a well knitted planned conspiracy. 

90.     In this case as well, except for a bald reply, in the rejoinder, there is a specific averment in paragraph-14 thereof which needs mention.  The blame is sought to be put on the agent of the insurance company and then it is stated that it is a matter of record that initially, different policy no. was issued in the name of Mr. Ashok B. Lathiya and thereafter, it was changed as it was an error apparent on the part of the insurance company.  Mr. Varadarajan has invited the attention of the Bench to the averments made and the record and it is evident that there were three separate policies taken and there is no change or any error as alleged in the rejoinder.  The aforesaid statement made in the rejoinder is therefore, misleading and incorrect. No evidence has been led by the complainant to counter the fact finding investigation report.

Having considered the submissions raised, it is more than evident that the stand taken by the insurance company is justified and correct and the evidence adduced by them clearly establishes that the repudiation was founded on correct reasons. The claim was inadmissible and has been rightly repudiated. The complaint therefore, has no merits and is accordingly rejected. 

CC/113/2015

91.     This is a complaint regarding the repudiation of an insurance claim in respect of the same insured Mr. Lathiya as dealt with in the previous cases where again, the repudiation is on the ground of having supressed material information in respect of pre-existing policies and also about the status of health of the insured who was suffering from pre-existing diseases that were not disclosed. 

92.     This was also an SBI Life Insurance Policy and after examination, the insurance company repudiated the claim on 03.04.2013 by the following letter:-

93.     There is however, a peculiar fact in this case that notices were issued to the insurance company for filing the written version which was not filed within the statutory period.  On 02.11.2015, the following order was passed: 

“Learned counsel for opposite parties requests for extension of time to file written statement. Though the statutory period for filing written statement has already expired, counsel for the complainant in all fairness has submitted that complainant has no objection of in interest of justice the time for filing written statement is extended. In view of the above, we grant two weeks’ time to the opposite parties to file written statement with advance copy to learned counsel for the complainant. Complainant to file rejoinder, if any, within six weeks thereafter.

List on 25.4.2016.”

94.     The rejoinder to the said written version which was filed on behalf of the opposite party, was filed by the complainant alongwith a delay condonation application which was allowed on 25.04.2016.  The order is extracted herein below:

“Heard. Delay in filing of rejoinder is condoned. Pleadings in this case are completed. Complainant to file affidavit evidence, within six weeks with advance copy to counsel for the opposite parties. Opposite parties to file its affidavit evidence, within six weeks, thereafter.

List on 18.11.2016.”

95.     It is therefore, evident that the law which has been declared in the case of New India Assurance Co. Ltd. Vs. Hilli Multipurpose Cold Storage Pvt. Ltd. (2020) 5 SCC 757, the written version could not have been accepted as it was certainly beyond the statutory period and even beyond the grace period of 15 days.  Nonetheless, this declaration of law was made later on and the written version had already been replied to by the complainant. The written version was filed with a delay condonation application to which a rejoinder was filed. It may be mentioned that the prospective application of the judgment in the case of New India Assurance Co. (supra) was subsequently dealt with in the case of Dr. A. Suresh Kumar & Ors. vs. Amit Agarwal, Civil Appeal No.988 of 2011 by the Apex Court as follows: -

“In our view, since the application for condonation of delay was filed prior to the judgment of the Constitution Bench, which was delivered on 04.03.2020, the said application for condonation of delay ought to have been considered on merits and should not have been dismissed on the basis of the Constitution Bench judgment in the case of New India Assurance Company Limited (supra) because the said judgment was to operate prospectively and the written statement as well as the application for condonation of delay had been filed much prior to the said judgment.

Accordingly, the impugned order of the NCDRC deserves to be, and is, hereby set aside.

At this stage, learned counsel for the parties have submitted that this Court may consider the matter with regard to the condonation of delay of 7 days, which has been rejected by the NCDRC.

Having heard learned counsel for the parties and after going through the record and for the reasons given in the application for condonation of delay filed before the NCDRC and also considering the fact that the delay was only for 7 days for which valid explanation has been given and with the consent of learned counsel for the parties, we condone the delay of 7 days in filing the reply by the appellants before NCDRC, but on payment of cost of Rs.25,000/- (Rupees twenty five thousand only).”

96.     The issue again cropped up for consideration by a Larger Bench in the case of Diamond Exports & Anr. Vs. United India Insurance Company Ltd. & Ors., Civil Appeal No.7546 of 2021 where the law was explained as follows: -

“The discretion for condonation of delay under Section 13 of the Consumer Protection Act 1986 is specifically circumscribed by the statute. Similar statutory provisions exist in the Arbitration and Conciliation Act 2015 and the Insolvency and Bankruptcy Code 2016 though in a different statutory context – facilitating the sanctity of the arbitral process in the former and the legislative intent of ensuring timely disposal and corporate rehabilitation in the latter. The Consumer protection Act 1986 and its successor are social welfare legislations designed to protect the interests of consumers. The Constitution Bench had thus noted:

   “28. It is true that “justice hurried is justice buried”. But in the same breath it is also said that “justice delayed is justice denied”. The legislature has chosen the latter, and for a good reason. It goes with the objective sought to be achieved by the Consumer Protection Act, which is to provide speedy justice to the consumer. It is not that sufficient time to file a response to the complaint has been denied to the opposite party. It is just that discretion of extension of time beyond 15 days (after the 30 days' period) has been curtailed and consequences for the same have been provided under Section 13(2)(b)(ii) of the Consumer Protection Act. It may be that in some cases the opposite party could face hardship because of such provision, yet for achieving the object of the Act, which is speedy and simple redressal of consumer disputes, hardship which may be caused to a party has to be ignored.”

This was owing to the social welfare intention of the consumer protection legislation, which essentially seeks to protect the rights of consumers who avail of myriad goods and services. The welfare of litigating consumers has been the guiding principle for interpreting several procedural and substantive questions arising out of the Consumer Protection Act 1986. Recently, a two-judge Bench considered the effect of the Consumer Protection Act 2019 which amended the pecuniary jurisdiction of consumer fora, on pending proceedings. In arriving at its decision, the Court noted:

“82. It would be difficult to attribute to Parliament, whose purpose in enacting the Act of 2019 was to protect and support consumers with an intent that would lead to financial hardship, uncertainty and expense in the conduct of consumer litigation….”

A similar principle is inherent in the decision of the Constitution Bench in New India Assurance Company Ltd. (supra). However, given the conflicting decisions concerning the nature of such discretion, the Constitution Bench considered it appropriate to give prospective effect to the decision. It did not make a distinction between applications for condonation which had been decided and those which were pending on the date of the decision. Thus, the decision in Daddy’s Builders (supra) would not affect applications that were pending or decided before 4 March 2020. Such applications for condonation would be entitled to the benefit of the position in Reliance General Insurance Company Limited (supra) which directed consumer fora to render a decision on merits. We have expounded on the above principles in order to adopt a bright-line standard which obviates uncertainty on the legal position before the consumer fora and obviates further litigation.”

97.     In the peculiar facts of the present case, even though the delay condonation application was to condone delay beyond 45 days, yet the rejoinder by the complainant was accepted allowing the delay in filing of it by order dated 25.04.2016 quoted above. In such a unique situation where the delay in filing the rejoinder has been condoned to the delayed written version, then in that event the Opposite Party Insurance Company cannot be denied the benefit of pressing into service the contents of their written version subject to the reply of the complainant in the rejoinder which is on record. I.A. No.8997/2015 filed with an affidavit dated 04.12.2015 does not seem to have been disposed off. This IA filed by the Opposite Party Insurance Company prays for condoning the delay in filing of written statement. From the facts as recorded above, it is evident that the written statement as well as the delay condonation application have been filed way back in 2015 long before the judgment in the case of New India Assurance Co. (supra) and remained pending in the peculiar circumstance of the delay having been condoned for filing the rejoinder. Accordingly as per the law explained in the two subsequent decisions in the cases of New India Assurance Co. Ltd. and Diamond Exports & Anr., I.A. No.8997/2015 is allowed and the written statement is taken on record.

98.     Accordingly, the claim is being assessed on the basis of the written statement and submissions filed on behalf of the opposite parties and the contentions raised by the complainant in respect of the repudiation which is on record.  It may be further pointed out that the complainant had previously filed the complaint before the State Commission that was withdrawn on 28.11.2014 and the complaint was subsequently preferred in 2015 before this Commission.  The said order of the State Commission passed in CC/75/2013 has been placed on record. 

The complainant, while questioning the correctness of the repudiation, in paragraph-4(g), has stated as follows:

“(g) In September 2012, the complainant thereafter approached the opponent company and filled up the death claim form of Rs. 50,00,000/- as per the company norms and procedures. However, the claim has not been approved by the opponent and on basis of flimsy and hypothecated assumptions, by letter dated 03-04-2013, has repudiated the claim of the complainant. True copy of the letter of repudiation dated 03-04-2013 of the opponent is annexed herewith and marked as ANNEXURE P-6 at pages 63 to 64.”

99.     Except for the said allegations, there is no material to support the claim for deficiency in service as alleged.  However, statements were made in paragraph-D & F of the complaint, as follows:

“D. That the husband of the complainant had completed all the medical examinations and he was found in complete fitness and thereupon the insurance cover was issued to deceased Ashokbhai Lathiya. Therefore no medical ground is made out to repudiate the claim. That there is another deficiency of service as the original insurance policy has been kept by the opponent without giving it to the policy holder.

F. That the policy was issued by the opponent looking into the total business and annual earnings of deceased Ashokbhai Lathiya, as the husband of complainant had produced all the necessary documents for the grant of insurance. The husband of complainant had also given full and complete disclosures of other life insurance policies existing on the date of issuance of policy and therefore no question of suppression or non-disclosure arises in the present case and therefore the repudiation is merely harassment to the complainant.”

100.   There is no doubt that the insured had taken a large number of policies and the details whereof have been brought on record by the insurance company.  Learned counsel for the complainant submits that the opposite party herein has been unable to dislodge the said evidence.  The contention raised by the learned counsel cannot be accepted. In this regard, it may be pointed out that even though the written version of the opposite party had been filed belatedly, they have also filed their written arguments and synopsis which is extracted hereunder:

“1. The present case is one of insurance fraud. The Opposite Parties is the Respondent. The Complainant has in a malafide manner approached this Hon'ble Commission on the ground of repudiation of insurance claim by the Opposite Parties. The Complainant alleges that the DLA had provided full and complete disclosure of other life insurance policies existing on the date of issuance of the policy and therefore there was no suppression; the Opposite Parties is relying upon an incomplete police investigation; the police report and police documents which conclude that the DLA was murdered, cannot be considered; there was no mens rea while taking the policy from the Opposite Parties and other detailed factual events.

2. Each of the Complainant's contentions are being disputed and denied in entirety by the Opposite Parties. As detailed hereinbelow for consideration of this Hon'ble Commission, the complaint is ex-facie not maintainable and ought to be dismissed with heavy costs. The Opposite Parties crave leave to rely on the Reply and accompanying documents and the present Written Submission may be read in addition to the Reply and documents already on record.

3. The case as made out by the Complainant is not maintainable and ought to be dismissed and is to be sent to the Civil Court for redressal after paying of the requisite court fees inter alia on the following grounds :-

Conclusion by the Police in its Investigation report FIR and Charge Sheet clearly reveal that the case is full of Fraud, conspiracy, Planned Murder to gain from the death benefit under various insurance policies.

Prima Facie the instant case is misrepresentation of facts and non- disclosure of material facts vis a vis previous insurance details of high Sum Assured

• The Deceased Life Assured ("DLA") failed to furnish the correct details of his financial status and capacity to pay the premium under the policies obtained from various insurers.

• The DLA made a gross misstatement of the number of insurance policies he had availed as well as his income/source of income in the proposal form. The DLA was not eligible for such high insurance covers vis a vis his financial capacity and did not reveal the possession of 26 High Sum Assured Life Insurance policies amounting to Rs. 11 crs.

The insurance contract was vitiated by fraud

A. CASE OF INSURANCE FRAUD

4. The present case is one of insurance fraud. Mr. Jaswant Valjibhai Savani (accused) was aware of the poor financial condition of the DLA and had intentionally offered the partnership to the DLA with a view to commit a large-scale insurance fraud. The wide scale insurance fraud has of such a magnitude that it has been reported by newspaper agencies. (See @Exhibit OP 1/4, Pg.22 of Evidence by way of Affidavit on behalf of opposite Parties).

5. The Police Investigation Reports (@ Annexure B, Pg.45 of Reply) reveals that Mr. Jaswant Valjibhai Savani had murdered the DLA by pushing him from 12th floor of an Apartment. The intention of the accused was to prove the incident to be an accident and make monetary gain out of the death benefits payable under the various policies on the life the DLA. The Police Reports also reveal that the DLA was in employment of the accused as a petty worker since 2009 and drawing INR 8000 from him and life insurance policies as well as financial investments were made by the accused for the DLA.

6. In such circumstances, considering the case to be one of insurance fraud, complaint should be dismissed to ensure that the interests of the general public are safeguarded and to serve as a stern warning to unscrupulous elements who intend to commit insurance frauds.

7. The present complaint cannot be entertained as the proceedings before this commission are summary in nature. It is prayed that the case be recommended for a full fledged civil and criminal trial and to dismiss the complaint to ensure that the interests of the general public are safeguarded and to serve as a stern warning to unscrupulous elements who intend to commit insurance frauds.

Case laws relied on:

i. Oriental Bank of Commerce v M/s. Shankar Chawal Udyog, Prop. Ravi Kumar Agarwal and State Bank of India through Branch Manager, Revision Petition No. 4315 of 2012, III (2014) CP) 38 (NC) Decided On: 20.05.2014 - Where a criminal case was pending before the Court, the Hon'ble National Commission held that the District Forum should have dismissed complaint and directed the complainant to approach to the Civil Court for redressal of his grievances.

ii. Paresh Mohanlal Parmar Proprietor, Smart Group us. The Divisional Manager, The Regional Manager and The Chairman-Cum-Managing Director, The New India Assurance Company Ltd, III(2011)CPJ146(NC)

Decided On: 19.07.2011 - Though the judgment of a criminal court may not be binding on the Civil Court yet when the issue is to be determined by quasi-judicial forum like the State Commission, Judgment of the Criminal Court could not be ignored in toto while deciding the Complaint.

iii. Goel Jewellers (2011)14SCC606 US. National Insurance Company Ltd, Decided On: 09.09.2011- Here this Hon'ble Commission dismissed the Appellant's application due to the fact that the case sought to be made out by the Appellant was not supported by the contents of the first information report. The Hon'ble Supreme Court held that the finding recorded by the National Commission that repudiation of the Appellant's claim by the Insurance Company was justified did not suffer from any legal infirmity.

iv. Maya Pandey vs. Oriental Insurance Co. Ltd. and Ors.,

III(2016)CPJ678(NC)

Decided On: 28.04.2016 Here this Hon'ble Commission took the report filed by the Investigator into account (I.O. Report) stating that the cause of death was due to the DLA's own intoxication, was not an accident and was hence not entitled to the insurance claim. This Hon'ble Commission upheld the concurrent findings of the State Commission and the District Forum and the consumer complaint was accordingly dismissed. There is no illegality, irregularity or jurisdictional error, orders upheld.

B. DLA committed a breach of the principle of Utmost Good Faith

8. In life insurance business, the risk as well as Sum Assured covered under the policy is always assessed on the basis of the information furnished in the proposal form duly signed by the proposer/DLA. In the present case as the sum assured was very high, the OPs raised the requirement of Income Proof, Audited Balance sheet and profit and loss account and medical etc. The DLA had not revealed any adverse features in the proposal form particularly regarding his source of income and amount of annual income and exact details of previous Insurance policies. The Respondents, believing in good faith that the information provided by DLA in the proposal form is true and correct, issued a policy bearing no. 35008334708 with date of commencement as 15/02/2011 for basic sum assured of Rs. 50 Lacs (See Life Insurance Policy Annexure D, Pg.70 of Reply). However, the request for Term Rider was declined by the OPs.

The policy in dispute was obtained by making the fraudulent misrepresentation and suppression of material facts and hence is void ab initio.

9. The proposal form is the basis for assessment of risk. A proposer will be admitted into the scheme based on the details in the proposal form. Suppression of material information is fatal to the contract of insurance, which is based on the principle of "utmost good faith".

10. The DLA did not disclose material information on the proposal form submitted to the Opposite Parties including source of income, occupation and previous insurance policies:

10.1 Question no.6 in the proposal form (@Annexure D, Pg.70 of Reply) seeks the various details of the insurance policies of the assured. The DLA had furnished the details of his 13 insurance policies with various insurers amounting to Rs 4.94 crs (@Annexure C, Pg. 68 of Reply).

10.2 However, upon investigation, it was found that the DLA was insured under 13 more policies worth Rs. 7,94,16,286/- from various insurers, the details of which were not mentioned in the proposal form submitted by the DLA (See @Annexure C1, Pg.69 of Reply) (also see @Annexure 1 - Email from re-insurer with its report on the claim of life insurance, Pg.149 of Reply). The DLA had declared insurance policies worth Rs.4.94 crs in the proposal form and had failed to furnish details of the remaining 13 policies which tantamounts to insurance shopping and renders the policy in dispute bearing no. 35008334708 as null and void. The Police Investigation Reports (See @Annexure B, Pg.45 of Reply) as well as the post mortem report (see @Annexure H, Pg.143 of Reply) reveal that this was a case of murder and the accused had bad intention of availing the benefits under various polices on the life of the DLA amounting to Rs.7,94,16,286/ and other assets worth Rs.2,95,95,723/-. This clearly reveals that the DLA was insured for a High Sum Assured policies with various Insurers which were disproportionate to the actual income of the DLA. It is evident that the DLA had not disclosed this vital fact while availing the insurance cover under policy no. 35008334708.

10.3 As requested by the Opposite Parties, the DLA had submitted a partnership deed and tax audit reports to the Opposite Parties (see @Annexure A, Pg.28 of Reply and @Annexure G, Pg.90 of Reply respectively). The DLA had mentioned in the proposal form that he was the "Proprietor" of 'Labh Sales' and 'Labh Marketing (See @Annexure D, Pg.70 of Reply. His annual income was stated as Rs.24, 83,357/- and source of income was stated as Profit earned from the said firm. However, the Tax Audit Repost of 'Labh Marketing' for the year ended 31/03/2010 comprising of the Profit & Loss sheet and various other financial documents reveal that the net profit of the firm for the financial year was around 29 lacs. The DLA was 70% stake holder of the Firm i.e. (29 lacs*0.7 20.30 lacs). However, he had misstated his income in the proposal form as 24.83 lacs. The Police reports show that the DLA was a petty worker earning Rs 8000 per month from the accused, who was given partnership just to avail the death benefits under the life policy.

11. Information such as the details of existing policies, source of income etc are vital for proper assessment of the risk. The sum assured to be granted under any insurance policy is based on the human life value of a person whose life to be assured. The Sum Assured cannot be more than the human life value. The insurer is required to check the desirable levels of insurance cover for any individual vis-à-vis his income profile, his status and standard of living etc. Any disproportionate and over insurance cover would pose a great moral hazard to the insurer and such proposals will involve a very high risk and will result in adverse selection against the insurer. Excessive insurance cover without commensurate insurable interest would amount to wager and wager agreements are void ab initio. In the instant case, the DLA deliberately suppressed his existing insurance cover with other insurers and thus deprived SBI life of a chance to properly assess the risk. Had the opposite parties been aware of the total insurance holding of the DLA at the time of assessing the risk on the life of the DLA, SBI life would not have granted the insurance. (See Repudiation Letter issued by Opposite Parties dated 03.04.2013@Exhibit C-6, Pg.47 of Complainant's affidavit by way of Examination-in-chief).

Case Laws relied on:

i. Monica Jain Vs. Life Insurance Corporation of India First Appeal No. 260 of 2008, IV (2015)CPJ 16 (NC) Decided On: 28.05.2015 Here the Hon'ble national commission based on settled law and considering that the insured had failed to disclose fully and truly all "material facts" relating to his health condition as also information about his previous policy at the time of obtaining the policy in question held that the Insurance Company was justified in repudiating the claim, preferred by the Complainant.

ii. Satwant Kaur Sandhu vs New India Assurance Company 2009 8 SCC 316 - The Hon'ble Supreme Court held - "a contract of insurance falling in the category of contract uberrimae fidei, meaning a contract of utmost good faith on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not." Further, on what would constitute a "material fact" in the context of an insurance policy, the Court ruled that " The term "material fact" is not defined in the Act and, therefore, it has been understood and explained by the courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the contract of insurance and has a bearing on the risk would be "material".

iii. The Hon'ble National Commission while disposing of FIRST APPEAL No. 242 of 2006, in Dineshbhai Chandarana & Others Vs. LIC of India, in their order dated 27.07.10 also relied on the judgment of Satwant Kumar. The facts of the case squarely apply to the present complaint. The Hon'ble National Commission upheld the repudiation holding that the non-disclosure of Previous Insurance Policies would amount to suppression of material facts.

C. FRAUD

12. As explained in the sections above, the whole process of taking the policy was vitiated by fraud and it is settled law that fraud vitiates all. Mr. Jaswant Valjibhai Savani (accused) was aware of the poor financial condition of the DLA and had intentionally offered the partnership to the DLA with a view to commit a large scale insurance fraud. Further, the policy in dispute on the life of the DLA was obtained by making the fraudulent misrepresentation and suppression of material facts and hence is void ab initio. (See Partnership Deed dated 13.07.2009 @Annexure A, Pg.28 of Reply and Police Investigation Report @Annexure B, Pg.45 of Reply)

13. It is pertinent to note that the DLA did not apply for accidental death benefit initially but subsequently applied for it as a rider and the attempts of the Complainant to make the death of the insured appear as one of an accident in ample testimony to the fraudulently intentions of the late accused (Mr. Jasvant Savani) as well as the DLA to cheat the Opposite Parties and the insurance policy. (See request letter dated 10.03.2011 @ Annexure E, Pg.87 of Reply) (Acceptance letter dated 11.04.2011 @Annexure F, Pg.89 of Reply)

14. Considering his income, it is clear that the DLA could not afford to pay the premium under all the insurance policies he had taken from various insurers. His actual position vis-à-vis the Partnership firm in which he was enrolled as a major stakeholder raises serious suspicions about the all the transactions under various policies and it is prima facie clear that the DLA was just made a partner to commit a large scale insurance fraud, a fact which is highlighted even in the police reports. (See undeclared list of policies @Annexure C1, Pg.69 of Reply). Further, and opinion was sought from the Swiss Reinsurance Co. Ltd., Singapore which after careful deliberation confirmed fraud, misrepresentation and non-disclosure committed by the DLA. (Email dated 11.03.2013 from the Reinsurer - @Annexure I, Pg.149 of Reply). Hence, the policy issued by the Opposite Parties is void ab initio and rightfully repudiated by the Opposite Party.

Case Laws relied on:

i. Sealark vs. United India Insurance Co. Ltd., (2008)4SCC131 - Decided On: 30.01.2008: Hon'ble Supreme Court held- "Where there has been a suppression of fact, acceptance of the (insurance) policy by an officer of the insurance company would not be binding upon it." Since the terms of the contract of insurance are being governed by the provisions of a statute, non-disclosure of such material facts would render the policy repudiable".

101.   A perusal of the written statement and the written submissions leaves no room for doubt that the said facts supported by evidence could not be refuted by the learned counsel for the complainant by any cogent material on record.  Thus, in the opinion of this Commission, the defence of the Insurance Company is sufficient to uphold the repudiation letter dated 03.04.2013 as the policy had been obtained dubiously as was done in respect of the other claim petitions referred to hereinabove.  This complaint therefore, also cannot succeed and is accordingly rejected.

CC/258/2013

102.   This complaint has been argued by Mr. Madaan, learned counsel for the complainant, in respect of the insured Mr. Kishore Bhai Mangukia whose death had occurred in the same mysterious circumstances as that of Mr. Lathiya whose claims were repudiated and the complaints regarding the same have been dismissed after recording the findings hereinabove. 

103.   In the instant case, the policy is in the name of the insured Mr. Mangukia and the repudiation is on similar grounds as that of Mr. Lathiya in respect of the insurance policies taken from Tata AIG.  The letter of repudiation dated 31.01.2013 is extracted herein under:-

 104.  The contentions raised in this case by the learned counsel for the insurance company are that Mr. Mangukia was shown to have working in some firm Labhadi Sales and was receiving salary which does not match with the income as shown in the income tax returns. The submission is that the proposal indicates a gross income of Rs.8 lacs + Rs.2 lacs from property income whereas the IT return for 2009-2010 indicates Rs.8,00,663/- and in the year 2010, a huge drop was seen to Rs.5,32,275/-.  Thus, the disclosure of income by the insured himself evidences serious doubts. Even otherwise, the heavy premium paid by Mr. Mangukia does not match with the balance sheet that was filed by him for the financial year ending 31.03.2009.  Investments in insurance premium is Rs.14,20,130/-.  The contention is that the income tax returns and the amount of investments in insurance premium shown are incompatible and consequently, the claim was rightly repudiated. 

105.   Having heard the learned counsel for the parties and perused the record, the contention of the learned counsel for the respondent in respect of the mismatch of the payment of insurance premium with the income, is a clear indication of inconsistent facts regarding the payment ability and the source of payment from the company which fact could not be dislodged by the learned counsel for the complainant.  The issue with regard to the other contentions raised including the nature of the incident, have already been answered while disposing of CC No.200 of 2013 and CC No.2012 of 2013.  For the same reasons, this complaint is also rejected. All other pending applications in this complaint are disposed off.

Accordingly, for all the reasons and the finding recorded hereinabove, all the complaints are dismissed with no order as to costs.