PER MR SUBHASH CHANDRA

1.     This revision petition filed under section 21 (b) of the Consumer Protection Act, 1986 (in short, the ‘Act’) assails the order of the State Consumer Dispute Redressal Commission, Andhra Pradesh, Circuit Bench, Tirupati (in short, ‘State Commission’) in First Appeal No. 703 of 2013 dated 04.04.2014 emerging from order in consumer complaint no. 52 of 2012 of the District Consumer Disputes Redressal Commission, Kurnool (in short, ‘District Forum’) dated 05.06.2013.

2.     The brief facts of the case as stated by the petitioner are that it had issued a Jeevan Anand Policy bearing no. 655754342 with annual mode of premium of Rs 24,260/- in favour of the respondent’s brother, Sri P. Obulesu on 28.03.2010. The respondent who is the sister of the insured was the nominee. The premium of Rs 24,260/- was paid and the policy commenced from 28.03.2010. Sri Obulesu expired on 08.06.2010 due to a heart attack and the respondent filed a claim for insurance. The petitioner repudiated the same on 16.03.2012 on the ground that the policy was obtained on the basis of a false declaration of age of the insured as was revealed during investigations by the petitioner since the claim was preferred within 2 years of the policy being taken. It is stated that the Study Certificate issued by the Head Mistress, Mandal Parishath Primary School, Yerragudi (V), Kondapuram (M), Kapada district submitted by the insured along with the proposal form indicated the date of birth of the insured to be 01.07.1966 whereas the petitioner’s inquiries revealed that the date of birth as per the school records was 01.01.1960. As the age of the insured was 50 years at the time of taking the policy, and not 44 years as mentioned in the proposal form, the petitioner states that the policy was obtained by suppressing the material fact of the date of birth. It is submitted that there would have been requirements of special reports of ECG and FBS had the correct date of birth been disclosed. The claim is therefore considered to be a fraudulent claim by the respondent and accordingly repudiated. It is the petitioner’s case that a contract of insurance is one that is based on the principal of utmost good faith and the deceased played a fraud by producing a fabricated school certificate in order to obtain the policy. It is, therefore, contended that the repudiation is in order and the order of the State Commission be dismissed.

3.      On behalf of the respondent it has been contended that the deceased insured was an illiterate villager who had studied only till Class V and had obtained the policy with the help of an insurance agent. It is contended that the date of birth in the proposal form was based upon the certificate obtained from the school and that there was no mala fide or fraudulent intent in obtaining the policy. It is submitted that the order of the State Commission be upheld.

4.     A consumer complaint was filed by the respondent before the District Forum against the repudiation by the petitioner. The District Forum disallowed the complaint holding that:

9.       As seen from Ex.B3 and Ex. B5 and deposition of RW1 it is clear that the life assured suppressed the material fact regarding his age which was shown as 44 years in the proposal form and submitted the study certificate showing his wrong date of birth mentioned as 01.07.1966 under Admission No. 307. The contract of insurance is based on utmost good faith. The insured has intentionally shown his wrong age and thus suppressed the material fact regarding his age. There is no deficiency of service on the part of opposite parties. The complainant is not entitled for any assured amount or benefits under the above policy.

10.     In the result the complaint is dismissed without costs.

5.      An appeal was filed before the State Commission by the respondent which came to be allowed by way of the order impugned before us. The State Commission held that the insured was an uneducated villager who had attended school only up till Class 3. The policy had been obtained with the assistance of an insurance agent. It had noted that the Consumer Protection Act is a benevolent legislation and that unless the insurance company comes forward with cogent evidence, the consumer needs to be given the benefit with regard to the issue of age.

6.      I have heard the learned counsels for both the parties and perused the material on record carefully.

7.      From the records it is seen that the State Commission held that:

In fact when the policy is taken it is the normal practice of the insurance companies to refer the proposal in short to the empanelled doctor and based on the declaration made by the proposal, the insurance companies are accepting it. When the panel doctors certify that he is hale and healthy, the insurance companies at a later stage i.e. at the stage when the claim is made cannot turn round and say that he gave a false declaration.

The insurance companies are precluded from taking a different stand when the claim is made having accepted the policy and the information furnished by the insured/ deceased.

Accordingly, we are of the view that the district forum has not taken these aspects into consideration while dismissing the complaint. Accordingly, this appeal is allowed and the order of the District Forum is set aside.

In the result, the appeal is allowed directing the opposite parties to pay the complainant Rs 3,00,000/- with interest @ 9% per annum from the date of this appeal till the date of realization and costs of Rs 5000/-. Time for compliance 4 weeks.

8.     On behalf of the petitioner, it has been argued that the principle of ubberima fides was violated by the respondent since a wrong date of birth was provided in the proposal form. Reliance is placed on order of this Commission in LIC Vs. Yogendra Prasad Singh in RP 692 of 2006 which held that the deceased had knowingly mis-stated his date of birth which amounted to withholding of material information and therefore the petitioner was justified in repudiating the claim. Reliance has also been placed upon judgments of the Hon’ble Supreme Court of India in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., (2009) 8 SCC 316 wherein it was held that if the proposer has knowledge of facts, he is obliged to disclose them in the proposal form and inaccurate disclosure will entitle the insurer to repudiate his liability because there is clear presumption that the information is material for the contact of insurance and Reliance Life Insurance Co. Ltd. & Anr. Vs. Rekhaben Nareshbhai Rathod (SLP) (Civil) No. 14312 of 2015 which held that material misrepresentation or concealment would influence the decision of a prudent insurer aw to whether to accept the risk or not. It is the case of the petitioner that the deceased insured obtained the policy through deliberate concealment of material facts which entitles the petitioner to repudiate the claim in view of the law laid down by the Hon’ble Apex Court and as held by this Commission.

9.      The petitioner has alleged that the insured was not eligible for the contract of insurance since there was a deliberate concealment of facts by him with regard to his date of birth. From the records it is seen that the petitioner has filed the Study Certificate, while annexure P V indicates that the petitioner had studied till V in the school and his date of birth is 01.07.1966. The other Study Certificate indicates that he had studied upto class III and his date of birth is 01.01.1960. However, it seems that for the purpose of proposal form at the time of obtaining of policy, the certificate showing education upto class V and that date of birth is 01.07.1966 was submitted this certificate reads as under:

“This is to certify that Pendekanti Obulesu, son of P. Pedda Obulesu has studied in this school in the years from 1971-72 to 1975-76 from Class I to Class V vide admission no. 307. As per our school records his date of birth is 01.07.1966 (One July Nineteen Sixty Six).” 

10.   The insured was a villager who has studied only till Class V in a village school. He has based his declaration of date of birth on a certificate provided by the school. The conclusion of the petitioner that there was a violation of the principle of utmost good faith as held by the cases cited by it in support of his argument are distinguishable from the present case in that the respondent has based his declaration of date of birth on a certificate issued by his school. It cannot be construed that he deliberately declared a date that was known to him to be different which can be interpreted to be a concealment of a material fact when it is based upon a certificate issued by the school itself. It is not the case of the petitioner that this certificate is false or fabricated. The case law sited by the petitioner relates to concealment of facts when the proposer had the knowledge of correct facts. The present case is distinguishable since in the instant case, the petitioner being an illiterate villager relied upon the Study Certificate issued to him by the school and therefore, it cannot be construed that he had deliberately misrepresented his date of birth while obtaining the policy. Therefore, the conclusion that there was a willful concealment of a material fact is unjustifiable and cannot be sustained.  

11.    In view of the foregoing, I am of the view that the reason for the repudiation of the claim filed by the insured’s sister who was his nominee by the petitioner was incorrect and cannot be sustained. The order of the State Commission has rightly set aside the order of the District Forum and ordered the petitioner to pay the nominee a sum of Rs.3,00,000/- with interest at the rate of 9% per annum from the date of the appeal till the date of realization along with costs quantified as Rs.5000/- within 4 weeks. The revision petition is found to be in order and is accordingly allowed.