Date of filing: 15.04.2013.
Date of disposal: 29.01.2014.
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM - II:
VIJAYAWADA, KRISHNA DISTRICT
Present: Sri A. M. L. Narasimha Rao, B.Sc., B. L., President
Smt N. Tripura Sundari, B. Com., B. L., Member
Sri S. Sreeram, B.A., B.Com., B.L., Member
Wednesday, the 29th day of January, 2014
C.C.No.55 of 2013
Between:
Mangalagiri Ratna Jyothi, W/o late Billa Ramesh Babu, Hindu, Aged about 42 years, Service, Flat No.26, Vikram Apartments, Gayathri Nagar, Vijayawada – 10.
….. Complainant
And
M/s Birla Sun Life Insurance Company Ltd., Rep: by its Managing Director, Regd. Office: One India Bulls Centre, Tower – I, 15th & 16th Floor, Jupiter Mill Compound, 841, Senapthi Bapat Marg, Elphinstone Road, Mumbai – 400013.
. … Opposite Party.
This complaint coming on before the Forum for final hearing on 21.01.2014, in the presence Sri D. Ravi Kiran, advocate for complainant; Sri Ch. Suresh Kumar, advocate for opposite party and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble President Sri A. M. L. Narasimha Rao,)
1. The nominee of a life insurance policyholder files this complaint under Section 12 Consumer Protection Act, 1986 for a direction to opposite party insurance company to pay Rs.5,42,000/- the benefit under insurance policy, to pay Rs.50,000/- towards compensation for mental agony suffered and to pay Rs.5,000/- towards costs.
2. The averments of the complaint in brief are as follows:
Billa Rameshbabu the husband of the complainant had taken a life insurance policy of Dream Endowment plan offered by the opposite party. The policy commenced on 28.2.2010. The policy period is 30 years. The annual premium payable is Rs.10,983/- for the basic assured sum of Rs.3,00,000/- and enhanced assured sum of Rs.2,42,000/- totaling to Rs.5,42,000/-. In case of death of policy holder the benefits are payable to the nominee. The complainant’s husband Rameshbabu died on 3.9.2010 due to heart attack. Thereafter the complainant made a claim for the assured amount under policy. The opposite party had repudiated the claim on the ground that Rameshbabu was suffering from ‘Grade Chronic Renal Failure’ and had undergone haemodialysis prior to making application for policy. The repudiation is baseless and unfair as the policyholder died due to heart attack. There is deficiency of service on the part of the opposite party. Therefore this complaint is filed.
3. The opposite party filed its version admitting the policy and not disputing the death of policyholder and denying the liability. The case of the opposite party as stated in its version runs as follows:
Rameshbabu Billa the husband of the complainant had applied for insurance policy under ‘BSLI Dream Endowment plan’. He signed the application on 28.2.2010 proposing his son as nominee and proposing the complainant as appointee (guardian of minor). Rameshbabu had given the details and information in the prescribed form. He answered the questions relating to medical history in the application in the negative and declared them to be true. The opposite party had issued policy bearing No.003913502 dated 28.2.2010. Later the complainant sent death claim on 3.2.2012 stating that the life assured died on 3.9.2010 due to heart stroke. As it is an early claim, the opposite party got the claim investigated. It revealed that the life assured had taken treatment in Nagarjuna Hospital continuously from 28.6.2006 to 8.10.2006 as he was suffering from Chronic Renal Failure and he took treatment in Appollo Hospital, Hyderabad. He had also undergone bone marrow test and diagnosed to have mild reactive erythropoietin. He was on continuous dialysis from 28.6.2006 to 9.7.2008 and from 22.9.2009 to 9.10.2009. The life assured had suppressed all these facts while making application for policy. The opposite party had repudiated the claim and sent letter dated 3.9.2012 to the complainant. As the contract of insurance is based on good faith, the nondisclosure of material facts by the proposer in the proposal form vitiated the contract. There is no deficiency in service of the opposite party. The complainant is not entitled to any amount.
5. The complainant has not filed her affidavit as evidence on her side. However in view of the pleadings and proof affidavit initially filed by her, the documents she filed are marked as Exs.A1 and A2. Ex.A1 is the claim made for insurance amount and Ex.A2 is the letter of opposite party repudiating the claim. The opposite party filed affidavit of its authorized representative, Jaikumar Jothiramalingam. It is received as deposition of DW.1. Exs.B1 to B5 are marked for the opposite party. Ex.B1 is the photocopy of the application for insurance policy and papers related to policy. Ex.B2 is the set of copies of claimant’s statement with annexures. Ex.B3 is copy of case summary dated 4.9.2010 with summary medical records, Ex.B4 is the bunch of copies of dialysis record sheets of the life assured. Ex.B5 is copy of investigation report relating to the claim made by the complainant. Ex.B6 is the copy of Ex.A2.
6. Heard the arguments of the learned counsel for both the parties.
7. The points that arise for determination are:
- Whether the opposite party is justified in repudiating the claim of if there is deficiency on the part of the opposite party?
- Whether the complainant is entitled to the amount claimed?
Point No.1:
8. The life assured Ramesh Babu had taken a policy on 28.2.2010 from the opposite party. The total assured amount is Rs.5,42,000/-. The life assured was lastly admitted in Nagarjuna Hospital, Vijayawada on 26.8.2010 and he passed away on 4.9.2010. The complainant placed a claim with the opposite party for the insurance amount. The opposite party repudiated the claim and informed the complainant by a letter dated 30.9.2012. The parties are not in dispute on these facts.
9. The opposite party further states that the deceased life assured was suffering from Chronic Kidney disease and he was on dialysis even prior to making application for policy; that the life assured had given wrong information and suppressed material facts as to health conditions; and therefore the insurance contract is invalid and so the claim was repudiated. In Ex.A2 letter the opposite party has stated that the life assured has given negative answers to the relevant prints in the proposal form as follows:
“D. Medical Information
1. Are you on diet or any other medicine of any kind prescribed by a doctor? No
2. Within the past 5 years, have you:
(i) Consulted any doctor or other health practitioner except for common cold, influenza lasting less than 4 days? No.
(ii) Submitted to ECG, X-rays, blood test or other tests? No.
(iii) Attended to been admitted/advices to be admitted to any hospital or other medical facility? No.
3. Have you ever had or sought advice for the following?
(i) Urine, kidney, bladder, reproductive organ, or prostate disorders? No.”
As per the above given information, the life assured did not consult any doctor for any ailment lasting more than 4 days, did not submit to ECG,X-ray, blood test or tests and was not admitted in any hospital within 5 years before applying for policy and did not seek advice for urine, kidney, bladder, reproduction organ or prostate disorders. Basing on that information the insurance company had accepted to take risk and issued policy. The life assured is not illiterate. He was an officer in Animal Husbandry. Ex.B1 the copy of original application made by the life assured reveals his occupation and the answer he gave to the questions noted in the form as to medical information.
10. The opposite party got the claim of the complainant investigated. According to the investigation report Ex.B5 the life assured had kidney transplantation in the year 2002 and he underwent treatment in Nagarjuna Hospitals, Vijayawada and the investigater had obtained treatment record of life assured from the year, 2006 and the life assured was an haemodialysis from 28.6.2006 to 9.7.2008 and from 22.9.2009 to 9.10.2009 and he had chronic kidney disease. According to the complainant, the life assured had sudden death on 3.9.2010. The cause of death is noted in the claim form as ‘may be heart stroke’. The complainant has not filed any medical record. She does not come forward to file evidence affidavit.
11. On the otherhand the opposite party has filed copies of medical record obtained from Nagarjuna Hospital. They include the record for the past period of treatment from 26.8.2010 to 4.9.2010. At the time of admission he was diagnosed to have Hypertension, End stage Renal Disease and Bilateral Pneumonia. Ex.B3 to B5 show that the deceased was an continuous dialysis for long periods within five years before taking insurance policy. We see no reason to discard the documents filed by the opposite party, particularly when the complainant has not filed her evidence affidavit. It is also to be noted that she made claim for insurance amount, on 3.2.2012 (vide Ex.A1), about 1 ½ years after the death of the insured.
12. The opposite party relied upon a decision of Apex Court in United India Insurance Company Ltd., Vs MKJ Corporation (1996) 6 SCC 428 with the proposition that it is fundamental principle of insurance law that utmost faith must be observed by contracting parties and good faith forbids either party from non-disclosure of facts which the party privately knowns to draw the other into a bargain. To the same effect is the case in Modern Insulators Vs Oriental Insurance Company (2000) 2 SCC 734. The opposite party relies upon a ruling of National Commission in R.P. Nos. 3794 to 3796 of 2007 between Divisional Manager LIC of India Vs Smt Anupama and others decided on 17.4.2012 wherein it was observed that while repudiating the claim it is not mandatory for the insurance company to produce doctor’s affidavit and non-production of such affidavit cannot become a reason to allow the complaint. The opposite party also relies upon the following observation of Apex Court in LIC of India Vs Sampath Baby 2006 (3) CPJ 32.
“In our concerned opinion there are certain diseases such as kidney, heart and brain and they are connected with life span of a person an if any mis-statement is made in respect of such type by the person seeking insurance, in such case it can be believed that knowingly the person taking out the insurance has made mis-statement”
13. Since insurance contract is contract based on good faith and when the LIC was taking risk of paying huge amount as against the small amount of premium the policyholder is required to disclose all material facts particularly regarding health condition which has a core bearing on the life span of the insured. When such details are not disclosed and when the policyholder had given incorrect information which would lead the insurance company to accept the risk and issue policy and when the non-disclosure is noticed the insurance company has right to repudiate the claim because the contract of insurance has become vitiated by suppression of material facts by the life assured. Therefore in the present case the life assured had not disclosed the most important facts of undergoing treatment for Kidney a vital organ. The death claim cannot be accept. Therefore we are of the opinion that the opposite party is justified in repudiating the claim and there is no deficiency on the part of the opposite party.
Point No.2:
14. In view of the answer on point no.1 the complainant is not entitled to any amount.
15. In the result this complaint is dismissed but without costs.
Dictated to steno, N. Hazarathaiah, transcribed by him, corrected by me and pronounced by us in the open Forum, this the 29th day of January, 2014.
PRESIDENT MEMBER MEMBER
Appendix of evidence
Witnesses examined
For the complainant: For the opposite party:
None Managing Director, OP
(by affidavit).
Documents marked
On behalf of the complainant:
Ex.A1 Photocopy of claim made for insurance amount
Ex.A2 30.092012 Photocopy of letter of opposite party repudiation for claim.
On behalf of the opposite party:
Ex.B1 Photocopies of the application for insurance policy and papers related to policy.
Ex.B2 Photocopies of copies of claimant’s statement with annexures.
Ex.B3 04.09.2010 Photocopy copy of case summary with summary medical records.
Ex.B4 Photocopies of bunch of copies of dialysis record sheets of the life assured.
Ex.B5 06.09.2012 Photocopy of investigation report relating to the claim made by the complainant.
Ex.B6 30.09.2012 Photocopy of Ex.A2.
PRESIDENT
