OF 2009 AGAINST C.C.NO.121 OF 2008 DISTRICT CONSUMER FORUM VIZIANAGARAM

Between

Medisetty Ramakrsihna S/o late Ramulu
Hindu, aged 52 years, R/o Revallapalem,
S.Kota Mandal, Vizianagaram District

Appellant/complainant

        A N D

1.     M/s SBI Life Insurance,
        rep. by its Zonal Manager, Flat No.101,
        D.No.6-2-46 Moin Court,
        Opp. Saleem Function Palace
        AC Guards, Lakdi-ka-pul,
        Hyderabad-004

2.     State Bank of Hyderabad
        rep. by its Branch Manager
        Kottam Branch Vizianagaram Dist.

                                                        Respondent/opposite parties

Counsel for the Appellant             Sri Ch.R.Vasantha Kumar

Counsel for the Respondent No.1   Sri G.Anand Kumar

Counsel for the Respondent No.2   Sri Ch.Siva Reddy

QUORUM:         SRI SYED ABDULLAH, HON’BLE MEMBER

&

                            SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER

                           THURSDAY THE SIXTEENTH DAY OF DECEMBER

                                            TWO THOUSAND TEN

Oral Order ( As per R.Lakshminarsimha Rao, Member)
                                      ***

1.     The unsuccessful complainant is the appellant.

2.     The facts of the case as reported by the complainant are that the complainant’s sister Smt Gedela Demudamma during her life time availed credit under crop loan with the opposite party no.2 on 28.9.2005 which facilitate the account holder for the benefit of Suraksha Group Insurance scheme for `1,00,000/- and the same was approved by the opposite party no.1 through the opposite party no.2 by way of issuance of the policy No.82002002208.  The complainant was the nominee for the policy.  The policyholder on 23.1.2006 at 3.00 p.m. suffered from heart pain and immediately she was shifted to Community Health Center, S.Kota Vizianagaram District where before treatment she died due to cardio respiratory arrest.  The complainant had intimated the death of the policyholder to the opposite party no.2 and submitted all the required documents to the opposite party no.2 through the opposite party no.1.  The opposite party no.2 seven months after receipt of the all documents on 13.12.2006 after addressed a letter stating that as per the records available with them the deceased policyholder was suffering from dilated cardiomyopathy prior to the date of enrolment of the policy and that the life assured had concealed material facts at the time of entry into the scheme and hence the claim was rejected.  The complainant’s sister has no pre-existing health problem by the time of obtaining policy and she never suppressed any fact regarding her health problem.  After due enquiry, the policy was issued by the opposite parties.  The death of the complainant’s sister was due to Cardio respiratory arrest and the same was confirmed by the Gram Panchayat and the Civil Assistant Surgeon, Community Health Centre.  The deceased had no pre-existing disease and there is no suppression of material facts.  The complainant filed the complaint seeking direction to the opposite parties to pay an amount of `1,00,000/- towards the death claim with interest, compensation, damages and costs.

3.     The opposite party no.1 filed the counter admitting the issuance of policy in favour of the complainant’s sister Gedela Demudamma under master policy No.82001002208 and contended that in the proposal form she had declared that she was in good health and not suffering from any physical deformity or critical illness requiring medical treatment.  Basing on the declaration,  the deceased policyholder was covered under the SBH depositors scheme for a sum of `50,000/-.  The deceased policyholder was suffering from dilated cardiomyopathy, PAH, Multiple Ventricular Ectopics, ischemic heart disease since 1994 and she suppressed these facts.  The suppression of material information is fatal as such the contract of insurance is a nullity and void ab-initio.  The enquiry made by the opposite party no.1 revealed, the deceased Demudamma had undergone treatment after her being subjected to several tests.  The repudiation of claim is fully justified and there is no deficiency of service.  The complaint is not maintainable.  Hence, prayed for dismissal of the complaint. 

4.     The opposite party no.2 resisted the case contending that the documents supplied by the complainant were sent to the opposite party no.1 by the opposite party no.1 and basing on the documents the opposite party no.1 repudiated the claims since the insured gave a false declaration about her state of health by suppressing the real facts.  There is no deficiency in service and hence prayed for dismissal of the complaint.

5.     The complainant has filed his affidavit and documents Exs.A1 to A7. The Legal In-charge of the opposite party no.1 Sri V.Srinivas has filed his affidavit and the documents Exs.B1 to B6.

6.     The District Forum has dismissed the complaint on the premise that the deceased insured suppressed fact of her suffering from ischemic cardiac disease at the time of giving consent-cum-authorization. 

7.     The point for consideration is whether there was any misappreciation of fact or law?

8.     The sister of the complainant was the account holder of the opposite party no.2 bank and availed crop loan from the opposite party no.2 bank for which the opposite party no.2 bank had obtained Surakshma Group Insurance policy from the opposite party no.1.  The case of the complainant is that his sister was hale and healthy at the time of obtaining the insurance policy whereas it is the contention of the opposite parties that the deceased suffered from dilated cardio myopathy prior to the date of enforcement of the insurance policy and as such she had concealed material facts. 

9.     The deceased had declared in the proposal-cum-consent-authorisation form dated 25.9.2005 that she was in good health and that she was not suffering from any physical deformity, mental disorder, critical illness etc.  Based on the proposal form, the opposite party no.1 issued the group insurance policy under the SBH Depositor’s scheme.  Any false information or concealment of material information would prejudice the interest of the insurance company.  As per the prescription of Dr.CSR Murthy the deceased was diagnosed with dilated cardio myotpathy moderate PAH with severe TR and ventricular ectopics.  The letter dated 23.12.1994 written by Dr.CSR Murthy to Dr.Tirumal Prasad shows that the deceased was suffering from cardio myopathy modereate mittral regurgitation with severe tricuspid regurgitation and ventricular ectopics.  In addition to these two documents Electrocardiogram report issued by Dr.Raos’ X-ray clinic and Nursing Home indicates entero lateral insufficiency.  The X-ray report goes to show that the deceased was suffering from cardiomegaly with congestion basis.  A conspectus of these documents would clearly establish that the deceased was suffering from cardiac ischemic disease at the time of filing the proposal with the opposite party no.2 bank and thus she has suppressed the material fact in regard to her health while obtaining the group insurance policy from the opposite party no.1.

10.    In LIC of India Vs Smt GM Chennabasamma reported in (1991) I SCC 357, the Hon’ble Supreme Court held “ it is well settled that a contract of insurance is contract ubberema fides and there must be complete good faith on the part of the assured.  The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not.  While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted.  Sec.45 of the Act has made special provisions for a life insurance policy if it is called in question by the insurer after the expiry of two years from the date on which it was effected”.  

11.    In Mithulal Nayak Vs LIC of India AIR 1962 SC 814, the position of law was stated as under:

12.    “The three conditions for the application of the second part of Sec.45 are:

a)                The statement must be on a material matter or must suppress facts which it has material to disclose

b)                The suppression must be fraudulently made by the policy holder and

c)                 The policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose

13.    It was held that judged by the standard laid down in Sec.17 of Contract Act the policy holder was guilty of a fraudulent suppression of a material fact when he made statement which he must have known were deliberately false and hence the policy issued to him relying on those statements was vitiated. 

14.    The principle laid down in the above decisions is squarely applicable to the facts of the case on hand.  The deceased was aware of the ischemic heart disease that she was suffering from, in the year 1994 and she had, deliberately suppressed the fact of her ailment at the time of filing of the proposal with the opposite party no.2 bank.  Therefore, we do not find any deficiency in service on the part of the opposite party no.1 in regard to the repudiation of the claim of the complainant on the premise of suppression of material fact.  The impugned order does not warrant any interference in the appeal. 

15.    In the result the appeal is dismissed confirming the order of the District Forum.  No costs.

                                                                                                           Sd/-

                                                                                                        MEMBER

                                                                                                            Sd/-

                                                                                                        MEMBER

                                                                                                  Dt.16.12.2010

KMK*