Delhi

StateCommission

A/284/2017

LIFE INSURANCE CORPORATION OF INDIA - Complainant(s)

Versus

REENA AGGARWAL - Opp.Party(s)

AMRENDRA KUMAR JHA

27 Jan 2020

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments : 27.01.2020

Date of Decision : 03.02.2020

First Appeal No.284/2017

(Arising out of the order dated 23.03.2017 passed in Complaint Case No. 471/2005 by the

District Consumer Redressal Forum-West)

In the matter of :-

 

Life Insurance Corporation of India,

Through its Manager (L & HPF)

Jeevan Prakash Building,

25, K.G. Marg, New Delhi-110001.                                    

 

Having its Central Office at:

 

Yogakshema,

Jeevan Bima Marg,

Mumbai-400021.

 

Having its one of Divisional Office:

 

Jeevan Pravah,

District  Centre,

Janakpuri, New Delhi-110058.                                          …..........Appellant

 

Versus

 

Smt. Reena Agarwal,

W/o Shri Prem Prakash,

M-86, Chankya Place Part-II,

New  Delhi-1100059.                                                       ….....Respondent

                                                                

CORAM

 

Sh. O. P. Gupta, Member (Judicial)

 

1.     Whether reporters of local newspaper be allowed to see the judgment?                                       Yes/No

2.      To be referred to the reporter or not?                                                                                                     Yes/No

 

Sh. O.P. Gupta, Member (Judicial)

Judgement

1. Aggrieved by order dated 23.07.2017 passed by District Forum, the OP has come in present appeal. District Forum allowed the complaint and directed appellant to pay assured sum of Rs.2 lacs of both the policies with interest @9% per annum from11.11.2001 till the date of actual realisation and compensation of Rs.50,000/- for mental and physical, financial suffering, deficiency in service and expenses born by complainant.

 

2. The case of the complainant was that her husband Sh. Prem Prakash took two Life Insurance Policies No.330725353 and 330728319 with assured sum of Rs.3 lacs each.  The policies commenced from 28.02.2008 and 28.03.2008 respectively. Her minor daughters Aaryan and Mehak were nominees.  Information given by the her husband to the agent was noted on blank paper and later on incorporated in the proposal form in his own way. OP-3 got full medical examination done of the insured from Senior Medical Examiner of OP-3 at the time of issuance of policies.  Unfortunately insured died on 22.10.2001 at the young age of 33 years because of acute abdominal pain. The complainant sent intimation of death to OP-3 who called for certain forms to be completed.  She submitted duly completed forms alongwith death certificate and original policies.  Insured was a law graduate and worked as an advocate for some time in Tis Hazari Courts.  But not finding it a paying profession, shifted to the profession  of property dealership.  

 

3. OPs informed that policies were under ‘Marriage” plan and assured sum would be payable after expiry of period of policies in the year 2021 when both the nominees would be of marriageable age.  She did not follow the matter. But to utter shock, surprise and horror of the complainant after elapse of about three years from the date of submission of claim papers, she received letter dated 22.05.2004 informing that OPs repudiated liability on account of deceased having withheld information regarding his health and habits at the time of taking policies.  The moneys been paid in consequence of insurance police stood forfeited. The deceased has given false answers and OP had indisputable evidence to show that assured was suffering alcoholic necrotizing pancreatitis, septicaemia, multi organ failure and was a chronic alcoholic which has direct nexus with cause of death.

 

4. Hence, complainant filed a case for directing OPs to pay assured sum, Rs.2 lacs as compensation for harassment and mental agony, Rs.3680/- for litigation expenses and Rs.11,000/- as counsel fees.

 

5. The OPs filed WS raising preliminary objections that insured wilfully withheld material information about his health and incorporated wrong answers to relevant question in proposal forms, had correct informations been given, OPs would not have issued the policies.  The deceased had been suffering from alcoholic necrotizing pancreatitis, septicaemia, multi organ failure and was a chronic alcoholic which he concealed. The contract of insurance is uberri-malfide based on utmost faith.  There is no deficiency in service.

 

6. The complainant filed rejoinder and own affidavit in evidence.  She also filed affidavit of Sh. Jai Kishan Jindal stating that deceased was highly qualified and a disciplined man, having very good habits.  He had very pleasant behaviour and was very social and helping He was caring father.  He was neither smoker nor drinker and was enjoying perfect health.

 

7. OPs filed affidavit of Sh. D.S. Dharam Shaktu who relied upon the proposal form  Ex.OPW2/1 and OPW-2/2.  It also relied upon the medical history from Sir Ganga Ram Hospital which Ex.OPW2/3 and medical certificate Ex.OPW-2/4.

 

8. Both parties filed their written arguments. After going through the material on record and hearing the arguments the District Forum found that appellant repudiated the claim after lapse of more than two years and six months.  Regulation 8(3) of IRDA Regulation, 2002 provides that claim would be paid or disputed giving all relevant reasons, within 30 days from the date of receipt of relevant papers. Where the circumstances of a claim warrant and investigation in the opinion of the insurance company, it shall initiate and complete investigation at the earliest, in any case not later than six months from the date lodging claim.

 

9. In other words, six months is the outer limit within which investigation has to be completed and claim has to be accepted, or repudiated.  In LIC of India Vs. Mohinderjit Kaur 1998 (I) CPJ 159, Punjab State Commission held that if claim is not decided within 3-4 months from lodging the same, the delay per-se is sufficient enough to saddle the charge of deficiency of service against the corporation. Similar view was taken by West Bengal State Commission in Life Insurance Corporation of India Vs. Mahabir Prasad Hansaria 2003 (III) CPJ 419.

 

10. OPs before issuing the policies got the deceased examined from Senior Medical Examiner who could not trace any ailment on person. Thus, OP failed to prove that insured gave wrong information in the proposal form.  In LIC of India Vs. Smt. G.M. Channabasemma AIR 1991 SC 392 it was held that burden of proving that insured had made false representations is on the corporation. Similar view was taken by National Commission in LIC of India Vs. Smt. Chandra Baghrecha 2003 (IV) CPJ 16.  Hence, District Forum concluded that there was deficiency in service on the part of appellant.

 

11. Respondent was served by registered RAD on 26.11.2018 but did not appear.  She was proceeded exparte.

 

12. I have gone through the material on record and heard the arguments.  Firstly, there is delay of 20 days in filing the appeal for which application for condonation of delay has been moved. The plea of the appellant is that Divisional Officer sent copy of order to Manager (L& HPF) for getting information.  The legal department opined in favour of filing appeal after which it was directed to file an appeal. On 11.05.2017 the counsel was given papers to file appeal.  On 22.05.2017 counsel prepared the draft of the appeal, sent it to appellant for vetting.  For the reasons mentioned in the application, the delay is condoned.

 

13. On merits counsel for appellant drew my attention towards history sheet of Sir Ganga Ram Hospital which at page-73.  The same shows that Sh. Prem Prakash Aggarwal, 33 years male was non diabetic, chronic alcoholic who complained of pain in abdominal and recurrent vomiting for two days. CT scan of abdominal reveals AC pancreatitis, extension changes.  On the basis of this OPs wanted me to hold that deceased was habitual drinker.  I am unable to agree.  It was so, medical officer of appellant should have reported the same at the time of examination before issuance of policies. Medical examination was done hardly eight month before death.

 

14. Moreover, initially the appellant informed the respondent that polices were under “Marriage” plan and assured sum would be payable after expiry of period of policy in the year 2021 when both the nominees will be of marriageable age.  It is not clear as to what made OP to change its mind after two years for repudiation of the claim. Thus, repudiation cannot be explained on any hypothesis other than that of malafide.

 

15. Repudiation is in violation Regulation 8(3) of IRDA 2002.  Repudiation could be made at the most within six months from the date of filing claim.  As has been held by State Commission Punjab, State Commission of West Bengal in the case referred to supra, non repudiation within the period six months is per-se sufficient to show the deficiency in service. I do not find any infirmity in the impugned order.  The appeal fails and is dismissed.

 

16. Copy of the order be sent to both the parties free of cost.

 

17. One copy of the order be sent to District Forum for information.

 

18. File be consigned to Record Room.

 

(O.P. Gupta)

Member (Judicial)

Bench-2

245.