OFFICE OF THE DISTRICT CONSUMER FORUM :: WARANGAL Present : Sri D. Chiranjeevi Babu,
President.
And
Sri N.J. Mohan Rao,
Member.
Smt. V.J. Praveena,
Member. Monday, the 5th day of October, 2009. CONSUMER COMPLAINT NO.35/2009 Between: 1) K. Bharathi Devi, W/o Jayapal Reddy,
Age: 60 yrs, Occ: Household. 2) K. Jayapal Reddy, S/o Narsimha Reddy,
Age: 62 yrs, Occ: Retd. M.E.O., Both are R/o H.No.1-7-881/1,
Nandi Hills,
Behind Raj Hotel,
Hanamkonda,
Warangal District. … Complainant And 01. Head Claims, S.B.I. Life Insurance Co.Ltd.,
Central Processing Centre, Kapas Bhavan,
Plot No.3A, Sector No.10, CBD Balapur,
Navi, Mumbai-400614.
02. Ombudsmen, Flat No.101,
D.No.6-2-46, Main Court Lane,
Opp: Saleem Function Palace,
A.C. Guards, Lakdi-ka-pool,
Hyderabad – 500004.
… Opposite Parties
Counsel for the Complainants :: Sri T. Ramanakar Raju, Advocate.
Counsel for Opposite Party No.1 :: Sri Ch. Upender, Advocate.
Opposite Party No.2 :: Did not appear and has been set Exparte.
This complaint is coming for final hearing before this Forum, the Forum pronounced the following order. CC 35/2009 -- 2 --
ORDER
Sri D. Chiranjeevi Babu, President This complaint is filed by the complainants against the opposite parties under section 12 of Consumer Protection Act, 1986 for a direction to pay a sum of Rs.10,00,000/- to the complainants under policy No.16009057505, dt.19-04-08 with interest and costs. The brief averments contained in the complaint filed by the complainants are as follows: The case of the complainants is that they are the parents of their eldest son Ranjith Reddy who died on 03-09-2008. The deceased Ranjith Reddy insured his life with opposite parties under Policy NO.16009057505, the opposite party No.1 issued the policy commencing from 26-06-08. The mother of the deceased i.e, complainant No.1 is shown as nominee. As nominee the complainant No.1 lodged the claim petition before opposite party No.1 and opposite party NO.1 sent a letter on 04-11-2008 requiring to submit the documents. Accordingly the complainant NO.1 given reply dt.31-12-2008. The person of opposite parties came in first week of January, 2009 to the house of the complainants and advised to send the date of birth certificate and any other documents to the company. Hence, the complainant No.1 sent a letter dated 06-02-2009 to opposite party No.1 along with letter dated 31-12-2008 and Xerox copy of pan card and hospital treatment set. The opposite party No.1 sent a letter dated 16-03-09 to complainant No.1 stating that they have repudiated the claim on the ground that the life assured concealed the material facts. The opposite party No.1 further informed that they may write further details with opposite party No.2 who looks into the case regarding the claim settlement. On 02-04-2009 the complainant NO.1 got issued legal notice to both the opposite parties for which the opposite party No.1 given same reply with regard to concealment of material facts by the life assured. The deceased was hale and healthy at the time of obtaining policy. The repudiation made by opposite parties amounts to deficiency of service. Hence, filed this complaint praying to direct the opposite parties to pay Rs.10,00,000/- to the complainants under the above said policy with interest and costs. The opposite party No.1 filed the Written Version stating that the deceased life assured late Mr. Ranjeeth Reddy had submitted a proposal vide No.161706729 dated 19-06-2008. At the time signing of the proposal form he replied in negative to the Question NO.7 Do you have High Blood Pressure or were you ever diagnosed with the same. But the hospital treatment
CC 35/2009 -- 3 --
records proved that the DLA was suffering from Hypertension since July, 2006. This fact was deliberately suppressed by the DLA in the proposal form. Any false information or concealment of material information would severely prejudice the interests of the insurer. Non-disclosure of material information is fatal to the Doctrine of Utmost Good Faith and thus vitiates the contract of insurance. The DLA concealed the material fact that he was suffering from Hypertension. As per the terms of contract, the opposite party No.1 is justified in repudiating the claim. On the basis of proposal form submitted by DLA and believing the information to be true and accurate, the opposite party No.1 issued the policy with date of commencement as 26-06-2008 for the sum assured of Rs.10,00,000/- vide Policy NO.16009057505. The DLA died on 03-09-2008. The duration of the policy is 2 months 8 days only. The opposite party NO.1 enquired into the cause of death of DLA and his previous illness. In the investigation, it is found that the deceased life assured was suffering from Hypertension since July, 2006. Thus the suppression of material information is fatal to the contract of insurance, which is based on the principle of “UTMOST GOOD FAITH”. Thus any contract of insurance procured by breach of the principle of UTMOST GOOD FAITH is a nullity and void ab-initio. Hence he requested this Forum to dismiss this case. Inspite of service of opposite party No.2, the opposite party No. 2 did not appear before this forum, this Forum set it Exparte. The complainants in support of their claim, filed their Affidavits in the form of chief examination and also marked Exs.A-1 to A-8. On behalf of opposite parties Sri V. Srinivas filed his Affidavit in the form of chief examination and also marked Exs.B-1 to B-7. Now the point for consideration is:
1) Whether there is any deficiency of service on the part of the opposite parties?
2) If so, to what Relief?
Point NO.1:-
After arguments of both side counsels our reasons are like this: Now this Forum has to see whether Section 45 of the Insurance Act is applicable and the deceased cheated the insurance by way of not mentioning his previous disease in the proposal form. CC 35/2009 -- 4 -- For this our answer is that we have to see the documents filed by the complainants as well as the opposite parties. On behalf of complainants Ex.A-1 to A-8 are marked. Ex.A-1 is the letter from opposite party NO.1 to the complainant NO.1 requesting to send the documents, Ex.A-2 is the letter by the complainant NO.1 to opposite party NO.1, dated 31-12-08, Ex.A-3 is the letter from complainant NO.1 to opposite party NO.1 dt.06-02-09, Ex.A-4 is the repudiation letter from opposite party NO.1, dt.16-03-2009, Ex.A-5 is the office copy of legal notice issued to the opposite parties, dt.02-04-2009, Ex.A-6 is the reply from opposite party No.1, dt.13-04-2009, Ex.A-7 is the Acknowledgment, Ex.A-8 is the Death Certificate issued by Warangal Municipal Corporation, these shows that the insured by name Ranjith Reddy took the policy from the opposite parties and he died. The main version of the opposite parties is that the deceased without disclosing his disease in his proposal form he took the policy. The contract is a contract of UTMOST GOOD FAITH wherein the proponent is duty bound to disclose every thing concerning his health, habits and other related matters which is within his knowledge at the time of making the proposal, failing which the insurer has every right to repudiate the claim. In the instant case the deceased life assured committed breach of the principle of Utmost Good faith by suppression of the fact that he was suffering from Hypertension since July, 2006 i.e, prior to the commencement of risk. At the time of signing the proposal form he replied in negative to Question NO.7: Do you have High
Blood Pressure or were you ever diagnosed with the same.? It is clear from the records that DLA was suffering from Hypertension since July, 2006 prior to the date of signing the proposal form. So he deliberately suppressed the material facts and obtained the insurance cover fraudulenly, hence, the complaint is not maintainable and hence deserves to be dismissed. Further the version of the opposite parties is that suppression of material information is fatal to the contract of insurance, which is based on the principle by “UTMOST GOOD FAITH”. Thus any contract of insurance procured by breach of the principle of “UTMOST GOOD FAITH is a nullity and void abinitio. Hence, complaint is not maintainable and deserves to be dismissed. The counsel for the complainants argued that the doctor who gave certificates to the deceased by way of saying the cause of death is Hypertension and the deceased was examined by the same doctor and the same doctor is not a qualified doctor and not at all graduate in medicine and
CC 35/2009 -- 5 --
not specialized in Cardiology and he is only a Batchelor of Ayurvedic Medicine and surgery (BAMS) studied in Telugu medium in the BAMS. According to him late Ranjith Reddy was his patient since 20th July, 2006 till 26-08-2008. Further he argued that according to him the last day of consultation of deceased with him on 26-08-08 and the life assured died on 03-09-2008 and he did not maintain any record or register to show that the deceased was admitted as inpatient or out patient. Since Ex.B-6 shows the prescription of K.K. Arya Memorial Shivasree Hospital, Rangashaipet having the facility of maternity, General and plastic surgery operation, clinical laboratory, ECG, scanning special treatment Ayurveda Pancha Karma etc., In Ex.B-5 at page 3 of 3 in the beginning “The information is based on records maintained in the Register NO._____, Entry No._____ dated ______. Further he argued that the said doctor issued the said treatment letter under the influence of opposite party No.1 for the purpose of this case to nullify the claim of the complainants. Exs.B-4, B-5 and B-6 are false, bogus and manufactured documents as per the arguments of complainant’s counsel. After arguments of both the parties we are of the opinion that the deceased obtained the policy on 26-06-08 and he died on 03-09-2008. So after taking the policy by the deceased from the opposite parties he lived only 2 months 8 days. When the death occurred within short period i.e.,when the claim is premature certainly everybody can get doubt on the death of the deceased that is the reason only the opposite parties enquired into it. After enquiries made by the opposite parties, it came to the light that the deceased was having High Hypertension. For this the opposite parties filed Exs.B-1 to B-7. Ex.B-1 is the proposal form vide NO. 161706729, dated 19-06-08 assured by late Mr.Ranjith Reddy, and submitted the same proposal form. On the basis of proposal form submitted by the assured and believing the information to be true and correct the opposite party NO.1 issued the policy with the date of commencement on 26-06-08 for the sum assured Rs,.10,00,000/- vide policy No.160 09057 505 i.e, Ex.B-2. Ex.B-3 the duration of the policy is 2 months 8 days only. Ex.B-4 is the Medical Certificate issued by Dr.K. Chandrashekar Arya dated 28-01-09. It is an important document. It clearly goes to shows that the deceased life assured Ranjith Reddy, Age: 33 yrs is under their medical treatment. He is suffering from Hypertension since July 2006 now and then he used to consult the doctor for routine check up and he expired at his residence on 03-09-2008 at around 5.a.m. may be due to Myocardial Infraction. So this certificate clearly goes to show that the deceased cheated the insurance by way of not disclosing his state of health before the insurance in his proposal form. For
CC 35/2009 -- 6 --
Ex.B-4 the argument of complainant’s counsel is that it is a forged document and the doctor is a telugu medium and he was a Ayurvedic doctor. Whether he is telugu medium or Ayurvedic doctor, when the doctor is a recognized doctor and he himself completed his degree of BAMS and the deceased he himself went to the said doctor and the said doctor gave certificate by way of saying that the deceased was having Hypertension since July, 2006. So we accept Ex.B-4 it clearly goes to show that prior to taking policy the deceased Ranjith Reddy was having Hypertension. So we accept Ex.B-4 and come to the conclusion that the deceased was having Hypertension prior to taking the policy i.e, Ex.B-1 and B-2. When the counsel for complainants argued that the document i.e, Ex.B-4 is a forged one, he has got every right to call for the doctor and cross examine him i.e., who has given that Ex.B-4 to corroborate his plea but he has not done so. So we accept Ex.B-4 and rely upon it. Further Ex.B-5 it is Medical Attendant’s Certificate. It clearly goes to show that the deceased said Ranjith Reddy died on 03-09-2008 around 5.00 a.m at his residence and the cause of death was Myocardial infraction and the primary and secondary cause of death was Hypertension. Hypertension also leads to Myocardial infraction i.e, heart disease i.e, in other terms heart attack. It means hypertension leads to Heart Attack and it leads to death of a person. When Hypertension leads to death of a person the duty of the deceased is prior to taking of his policy he has to disclose the same information in his proposal form. When he has not disclosed the same information in his proposal form certainly he cheated the insurance. So we accept Ex.B-5 and come to the conclusion that the deceased intentionally has not disclosed the same disease in his proposal form. Further in Ex.B-5 since 2006 i.e, since 2 years he was having the same disease. The deceased took the policy on 26-06-08 and the deceased was having Hypertension from July, 2006. So nearly from 2 years the deceased was having the same Hypertension. Moreover Ex.B-5 clearly goes to show that the deceased died only due to Hypertension i.e, Miocardial infractrure i.e, due to Heart Attack. We accept Ex.B-4 and B-5 and come to the conclusion that the deceased cheated the insurance. Further Ex.B-6 it is the Xerox copy of the prescription from Dr.A. Chandrashekar Arya. It also clearly goes to show that the deceased took treatment from him only. He joined in the hospital on 16-02-08 and his BP was 140/100 so it is certainly high BP. Normal is 80/120. We already stated
CC 35/2009 -- 7 --
in supra with regard to Ex.B-4 and B-5 they clearly goes to show that the deceased died only due to Hypertension and Hypertension leads to Myocardial infraction i.e, Heart Attack. So we accept Ex.B-4 and B-5 and the deceased cheated the insurance. Further as per Ex.B-7 in Condition No.7 Question : Do you have High Blood Pressure or were you ever diagnosed with the same. The answer is NO. So at the time of taking policy, the deceased was already having Hypertension as per Ex.B-4, B-5 and Ex.B-6. When he himself gave answer No, so it certainly comes under suppression of material facts. So Section 45 of Insurance Act is applicable to this case. The DLA Ranjith Reddy failed in his duties towards full disclosure of the fact that he was suffering with Hypertension at the time of signing the proposal form and committed the breach of doctrine of UTMOST GOOD FAITH. A person suffering from Hypertension cannot be stated to be in sound health. The DLA also signed the proposal form stating that he has never suffered or have been suffering from Hypertension. Thus the DLA committed the breach of doctrine of Utmost good faith. The Apex Court Judgment in the case of Chackochan VS LIC of India (2007 X AD (S.C.) 429, Civil Appeal NO.5322 of 2007 ) has clearly held that the insurer is justified in repudiating a claim wherever there is a suppression of material fact. Further there is a citation in
P.C.Chaco Vs another .. Appellants
Vs
Life Insurance Corporation of India … Respondents
It is decided in Civil Appeal No.5322 of 2007.
S.L.P.No.23951/2005 This judgment is delivered on 20-11-2007. It is recent Apex Court Judgment on the point of suppression of material facts is a good ground for recession of the claim i.e, repudiation of claim of the deceased. The Apex
Court judgment elaborately discussed point to point with regard to suppression of material facts and also uberrima fides. The above cited judgment clearly goes to show when a person intentionally suppressed the material facts is not entitled to get any policy amount from the Insurance. As the deceased suppressed the material facts the above cited judgment is applicable to the case of the opposite parties and the insurance is not liable to pay anything to the complainant.
CC 35/2009 -- 8 --
In the present case facts also the deceased even though he was having Hypertension and he took treatment from the doctor as per Ex.B-6 and further Ex.B-4 and B-5 clearly goes to show that he was having Hypertension prior to obtaining his policy, so the deceased suppressed the material facts that he was having hypertension in the proposal form. So the above citation is applicable to the case of opposite parties against the complainant. He further mentioned in Written Version of the opposite party No.1 with regard to the judgment of Hon’ble National Commission in Panni Devi V/s LIC (III (2003) CPJ 15 (NC) wherein the Hon’ble National Commission held that “due weight should be given to the statement recorded in the normal course of discharge of one’s duties”. Hence, reliance can be placed on the Medical Certificate and the Medical Atendant’s Certificate issued by Dr.K. Chandrashekar Arya under whom the DLA had undergone treatment. We already stated in supra that we accept the certificate given by Dr.Chandrashakar Arya because he gave Medical Certificate i.e, Ex.B-4. Ex.B-5 and B-6 they clearly goes to show that the deceased died due to Hypertension which lead to Myocardial Infraction and also the deceased took treatment in his hospital as per Ex.B-6. We accept Exs.B-4 to B-6 and come
to the conclusion that the deceased took treatment and he died only due to Hypertension which lead to Heart Attack. As per Ex.B-7 it clearly goes to show that the deceased intentionally not disclosed about his state of health. Any false information or concealment of material information would severely prejudice the interests of the insurer. Non disclosure of material information is fatal to the Doctrine of Utmost Good Faith and thus vitiates the contract of insurance. In the instant case, the DLA concealed the fact that he was suffering from Hypertension which is very clear from the documents produced. As per the terms of contract, the opposite party No.1 is justified in repudiating the claim. The complainants are trying to distort the facts of the case and thereby trying to abuse the process of law. The insurance contract being a contract of UTMOST GOOD FAITH, the opposite party NO.1 has fully relied on the information furnished by the DLA in the proposal form and believing the information to be true and accurate, issued the policy. So the DLA is liable if the suppression of material facts is established at any point of time. The declaration signed at the end of the proposal is in the nature of a warranty and hence any breach of warranty makes the contract of insurance void ab-initio. The doctor who issued the certificate is a qualified doctor with a registration number. The complainants should prove that the doctor was not qualified. So the argument of complainants Advocate
CC 35/2009 -- 9 --
by way of saying that Ex.B-4 to B-6 are given by the doctor by the Compulsion of opposite parties, so it is not at all correct. What makes necessary for the doctor to give those certificates to opposite party No.1, so the argument of complainants advocate is baseless. We accept Ex.B-4 to B-6 and come to the conclusion that the deceased cheated the insurance and we accept the Apex court Judgment i.e PC Chacko Vs LIC and come to the
conclusion that the deceased cheated the opposite parties by way of not disclosing his state of health, it comes under suppression of material facts. He suppressed the material facts and section 45 of Insurance Act is attracted to this case. For the foregoing reasons given by us we come to the conclusion that the deceased suppressed the material facts i.e., Hypertension and the nominee i.e, complainant NO.1 is not entitled to get anything and we answered this point accordingly in favour of the opposite parties against the complainants. Point NO.2:- To what Relief:- The first point is decided in favour of the opposite parties against the complainants this point is also decided in favour of the opposite parties against the complainants. In the result, this complaint is dismissed without costs.
(Dictated to the Stenographer, transcribed by her, corrected and pronounced by us in the open Forum today, the 5th October, 2009).
President Lady Member Male Member
District Consumer Forum, Warangal.
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
On behalf of Complainant On behalf of Opposite parties Affidavits of complainants filed. Affidavit of opposite party No.1 filed. EXHIBITS MARKED
ON BEHALF OF COMPLAINANT 01. Ex.A-1 is the letter from opposite party No.1 to complainant No.1, dt.4-11-08.
02. Ex.A-2 is the letter from complainant No.1 to opposite party No.1, dt.31-12-08.
03. Ex.A-3 is the letter from complainant No.1 to opposite party No.1, dt.06-02-09.
04. .Ex.A-4 is the letter from opposite party No.1 to complainant No.1, dt.16-03-09. CC 35/2009 -- 10 --
05. Ex.A-5 is the Office copy of legal notice issued to opposite parties, dt.2-4-09.
06. Ex.A-6 is the reply, dt.13-04-09.
07. Ex.A-7 is the Acknowledgment.
08. Ex.A-8 is the Death Certificate.
ON BEHALF OF OPPOSITE PARTIES
1. Ex.B-1 is the Shield.
2. Ex.B-2 is the policy details of the deceased Ranjith Reddy.
3. Ex.B-3 is the Confidential Investigation report issued by Mrs.Dr.B.V. Bhaarathi.
4. Ex.B-4 is the Medical Certificate issued by Dr.K. Chandrashekar Arya, BAMS.
5. Ex.B-5 is the Medical Attendant’s Certificate.
6. Ex.B-6 is the prescription issued by Dr.K. Chandrashekar Arya, dt.16-02-08.
7. Ex.B-7 is the letter from opposite party No.1 to complainant No.1, dt.16-03-09. PRESIDENT
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