BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD.
OF 2009 AGAINST C.C.NO.26 OF 2008 DISTRICT CONSUMER FORUM NALGONDA
Between
Nagireddy Sarojini W/o Bhadra Reddy
aged 53 years, Occ: Housewife
R/o 12-155-74/3, Srinivasa Colony
Kodad Town, Nalgonda District
Appellant/complainant
A N D
1. The Branch Manager, Bajaj Allianz,
Life Insurance Co., Ltd.,
Branch Office Nallala Bavi Road,
Suryapet Town of Nalgonda Dist.
2. The Branch Manager,
Bajaj Allianz, Life Insurance co., Ltd.,
Branch office, 508, 5th Floor
Navaketan Complex, S.D.Road,
Secunderabad
Respondent/opposite parties
Counsel for the Appellant Sri Vakkanti Narsimha Rao
Counsel for the Respondent Sri P.Narasimha Reddy
QUORUM: SRI SYED ABDULLAH, HON’BLE MEMBER
&
SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER
TUESDAY THE SIXTEENTH DAY OF NOVEMBER
TWO THOUSAND TEN
Oral Order ( As per R.Lakshminarsimha Rao, Member)
***
1. The unsuccessful complainant is the appellant. The facts leading to filing of the appeal are that the appellant’s son during his life time obtained insurance policy bearing number 0010425272 for the period commencing from 22nd August,2005 till 22nd August,,2030. The appellant’s son died due to heart attack on 16th December, 2005 at Komarabanda village of Kodad Mandal . After the death of her son, the appellant submitted claim for the benefits under the policy. The respondents repudiated the claim on 17th July,2005 on the premise that the appellant’s son misrepresented material facts that he had stated in the proposal that he is the owner of Lorry and his income was `2 lakh per annum. The appellant claimed a sum of `2 lakh with interest besides the amount of `1,50,000/- towards compensation.
2. The respondents contended that the appellant’s son furnished incorrect information at the time of submitting the proposal that he was the owner of the lorry and his income was `2 lakh. The investigation got conducted by the respondents revealed that the appellant’s son was a driver of lorry working in a Rice Mill on an annual income of `54,000/-. The claim was repudiated in terms of the insurance policy that misrepresentation of facts would disqualify a person to claim the benefits under the insurance policy.
3. The appellant had filed her affidavit. ExA1 toA5 were marked. Chandra Shekar, the branch manager of the respondent corporation had filed his affidavit and got marked ExB1 to B6.
4. Aggrieved by the order of the District Forum, the appeal is filed with the contention that ExB3, letter issued by the Accounts Manager of Raghavendra Rice Mill, Kommanabanda has no evidentiary value as it was fabricated subsequent to filing of the complaint and that the statement of the appellant’s son in the proposal does not amount to material suppression nor covered under the purview of Section 45 of Insurance Act as also it is not the root cause of his death. The learned counsel for the respondents supported the impugned order.
5. The point for consideration is whether the appellant’s son had misrepresented material facts in order to obtain the insurance policy?
6. The appellant’s son died on 16th December,2005 four months after the insurance policy was obtained from the respondent no1. The appellant has stated that her son had died of heart attack. The death of the appellant’s son and the cause of his death is not disputed. The respondents repudiated the appellant’s claim on the premise that her son misrepresented while submitting the proposal that he was the owner of Lorry and had annual income of `2 lakh. The respondents referred to the letter dated Ex B3 issued by Raghavendra Rice Mill,Kodada which shows that the appellant’s son worked as lorry driver in Raghavendra Rice Mill on an income of `4,500/- plus allowance of `1,500/- per month. The accounts manager has mentioned that pay slip or salary voucher was not maintained by the Rice Mill for the temporary employees of the Rice Mill. The appellant had not disputed the document. The appellant’s son had stated in the proposal that he is the owner of Lorry and his annual income is `2 lakh.
7. The respondents repudiated the claim on the ground that the son of the appellant suppressed and misrepresented material facts as to his occupation and income and that had the facts not been misrepresented the Company could not have covered the risk for the policy. The learned counsel for the appellant has submitted that the letter issued by Raghavendra Rice Mill cannot be believed; the statement of the deceased son of the appellant in the proposal does not amount to material suppression of facts and the cause of death of the deceased policy holder has no concern with the statement in the proposal.
8. The Insurance Company has addressed letter on 10th septmeber,2005 projecting the transparency it adopted in its transactions and offered Free Look Period for 15 days from the date of receipt of the policy document and during the Free Look Period the appellant’s son was given option to peruse the terms and conditions and return the policy in case he does not agree with any of the conditions. The copy of the proposal was enclosed to the policy reminding the policy holder that it is the basis of the contract of insurance. The appellant’s son even after receipt of the copy of the proposal submitted by him and having been reminded that the proposal is the basis of the contract, had not chosen to inform the insurance company that he had wrongly stated in the proposal his occupation and income. Most of the Insurance Companies do not send the information to the policy holder that the policy holder had the option to opt out of the contract within the stipulated period and in this case the insurance company had sent the letter to the appellant’s son who had two options at his end, to disclose the misrepresentation in regard to his occupation and income to the insurance company and secondly, he could opt out of the contract claiming for the refund of the premium paid for obtaining the insurance policy.
9. The letter addressed by the Rice Mill wherein it was stated that the appellant’s son worked as casual driver with it on a salary of `4,500/- in addition to the other emoluments of `1,500/- and the appellant had not challenged the document before the District Forum. Now at the appellate stage the learned counsel for the appellant submits that the document is fabricated for the purpose of the avoiding the claim. Such contention is devoid of any merit in the light of the appellant not challenging the documents before the District Forum and in the teeth of the contention of the appellant that the misrepresentation of her son is not the root cause of his death. The appellant should have filed the title documents of the Lorry of which her son claimed to have been the owner. Therefore, the contention does not hold water and the appellant has to proceed in terms of the conditions of the policy for the purpose of processing of her claim which disentitled her of the benefits for the misrepresentation of material facts by her son.
10. The appellant’s son died within 2 years of obtaining the insurance policy. As such exemption provided by Section 45 of the Insurance Act,1938 is not applicable to the facts of the case. The principle of ubberima fides provides for full and true disclosure of all material facts without there being any fraud, misrepresentation or concealment of any material facts such as age, occupation income, health etc., The material facts offer opportunity to the insurer to decide whether or not offer or accept such risk and in case the risk is acceptable, the terms and conditions for acceptance of such risk. The contention of the learned counsel for the appellant that Section 45 of the Insurance Act has no application to the facts is not sustainable. Section 45 provides for scope of the policy being called in question by the insurance company within two years of the issuing of the policy on the ground that the statement made in the proposal was inaccurate or false which was fraudulently made by the policy holder and he knew the same at the time of making it that such statement is false. The insurance company has rightly invoked the Section 45 of the Insurance Act.
11. The appellant’s son knew at the time of filling up of the proposal that he was giving false information regarding his income and occupation. The representation in regard to his annual income and occupation, Rs.2 lakh and owner of Lorry respectively was incorrect. The misrepresentation made by the appellant’s son in the proposal in regard to his income and occupation which are material for the insurance company to form an opinion whether or not to accept the risk, is proved even as admitted by the appellant. The Hon’ble National Commission held that age, occupation and income of the insured are the material facts which would influence the insurer whether or not to accept the risk .
12. In “Life Insurance Corporation of India Vs Shamim” reported in IV (2009)CPJ 217(NC), it was held that “In a contract of insurance, there is requirement of Uberrimae fide on the part of the insured and insured has duty to disclose accurately all the facts which would influence a reasonable insurer in accepting the risk”.
13. For the foregoing reasons and in the light of the decision of the National Commission, we are of the opinion that the appellant failed to establish any deficiency in service on the part of the respondents in repudiating her clalim. The impugned order does not suffer from any infirmity in appreciation of either fact or law.
13. In the result, the appeal is dismissed. The order of the District Forum is confirmed. There shall be no order as to costs.
MEMBER
MEMBER
Dt.16.11.2010
KMK*
