BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PONDICHERRY

                                             C.C.No.99/2010

Dated this the 31^st day of January 2018

(Date of Institution: 12.10.2010)

D. Shanthi, rep. by her son Power of Attorney

Mariappan @ Mahesh Kumar     

No.20, Main Road, Melakasakudi and Post

Nedungadu Via, Karaikal – 609 603. 

 ….    Complainant

vs

1. SBI Life Insurance Company Limited

    Central Procession Centre           

    Kapas Bhavan, Sector No.10, CBD Belapur,

    Navi Mumbai – 400 614.

2. SBI Life Insurance Company Limited

    Baba Towers, No. 35, Thennur High Road

    Thennur, Trichirapallai – 620 017.

                                                ….     Opposite Parties

BEFORE:

          THIRU.A.ASOKAN, B.A., B.L.,

          PRESIDENT 

Thiru V.V. STEEPHEN, B.A., LL.B., 

MEMBER

Tmt. D. Kavitha, B.A., LL.B., 

MEMBER

FOR THE COMPLAINANT:  Thiru M. Ganapathy, Advocate                 

FOR THE OPPOSITE PARTIES: Thiru V. Krishnamoorthy, Advocate.

O R  D  E  R

(by Thiru V.V. STEEPHEN, Member)

          This Consumer Complaint  was remanded by the Hon'ble State Commission, Puducherry for disposal on merits as per order passed in F.A. No.24 / 2016 dated 27.04.2017 filed by the Complainant / Appellant against the order of dismissal of the Consumer Complaint in C.C. No.99/2010 by this Forum by order dated 25.10.2016.

              2. This is a complaint filed by the complainant u/s 14 (d) and (e) of Consumer Protection Act for directing the opposite parties to remove the deficient services rendered by them as far as the policy of the deceased Deivasigamani is concerned and to direct the opposite parties to pay a sum of Rs.5,00,000/- as compensation for the loss suffered by the complainant due to the negligent act of the opposite parties with 12% interest from the date of death of life assured Deivasigamani i.e. on 12.09.2008 till date of payment with costs.  

3.  The case of the complainant is as follows:

The Opposite parties have insured the life of the complainant’s husband Deivasigamani son of Kaliayaperumal @ Marudamuthu  for a sum of
Rs. 4,95,000/- under the policy No.24044744907.  The complainant’s husband attained a natural death on 12.09.2008 at his residence and after the death of her husband Deivasigamani, the complainant as nominee has forwarded the claim form to the opposite parties for settling the benefits in her favour.  But, she had received a letter under Reference No. OPS/09/Cl/D/60461, claim ID: 6,500/- dated 06.03.2009 from the opposite parties wherein it was informed that there was some  suppression of material information by the deceased Deivasigamani and therefore the complainant is entitled only for a claim of  Rs. 37,413/- towards the above said policy.  The complainant stated that there is no such suppression of material information as alleged by the opposite parties.  The complainant stated that the said Deivasigamany was medically examined by the opposite parties panel doctor before the commencement of the policy and the opposite parties were fully satisfied with medical report of the Doctor and then only the policy was made, now after the death of the life assured the opposite parties cannot content that there was suppression  of material information regarding the health condition of the life assured that too after his normal death.  Since the claim of the complainant was rejected by the opposite parties without any justification the complainant issued a lawyers notice on 15.06.2009 calling upon the opposite parties to pay the entire benefits due under the policy.  The opposite party has sent a reply stating that on 12.12.2007 the life assured had undergone a medical test with the opposite parties panel Doctor and on the basis of the medical test a proposal was made on 28.02.2008.  The first opposite party further replied that admitting the panel Doctor’s medical test dated 12.12.2007 the policy was issued in favour of deceased Deivasigamani with the date of commencement form 26.03.2008.   The complainant further submits that actually the opposite parties have collected the premium amount of Rs. 99,000/- on 27.02.2008 itself that is before the alleged proposal dated 28.02.2008.  The complainant further submits that according to the opposite parties the alleged suppression of material facts were made on 28.02.2008 as per the opposite parties rules and regulations the proposal should be filled up by the life assured in his own hand writing and if it is not so some precautions has to be done in filling the proposal form.   On perusal of the proposal form of the Deivasigamani is concerned the complainant came to know that admittedly the life assured has not filled the proposal form.  The precautionary measures were also not followed by the opposite parties in filling the proposal form.  The said Deivasigamani and this complainant are completely ignorant of the particulars mentioned in the proposal form.  The proposal form was filled up by somebody without getting proper information and instruction form the life assured or from this complainant.  The complainant further submits that even the simple  and formal factual details and relationships of the life assured family was wrongly mentioned in the proposal and this itself would got to show that the proposal form was recklessly filed up by some third parties at the instant of the opposite parties .  The complainant further submits that at the time of issuing the policy the opposite parties were keenly interested only in squeezing the money from the life assured at any cost without following the rules and regulation.    Under no circumstance the life assured have suppressed the material facts regarding his health conditions.  On the contrary the opposite parties have filled up the proposal form according to their whims and fancies in a hurried manner without the knowledge of the life assured and the complainant.  The complainant further submitted that for the wrong done by the opposite parties she cannot be penalized.  The complainant further submitted that virtually  the opposite parties are only suppressing the material facts in order to escape from the legal liability.  The complainant further submitted that the service rendered by the opposite parties regarding the policy of the life assured Deivasigamani is without any justification and the bonafide claim of the complainant has been rejected.  The complainant further submitted that she is entitled the balance policy amount of Rs. 4,57,587/- with 12% interest from the date of death of life assured that is form 12.09.2008 till date of payment.  The complainant further submitted that she being a widow is put into great mental agony and harassment by the opposite parties inspite  of repeated demands.  The opposite parties have caused a great mental agony and harassment to the complainant for about six months by illegally retaining huge money of the complainant without any just cause of reason.  In fact the complainant's entire family are very much affected both physically and mentally by the acts of the opposite parties which has to be properly compensated and mentally by the acts of the opposite parties.

4. The reply version filed by the first opposite party and adopted by second opposite parties briefly discloses the following:

That the life Insurance contract is a contract of “UTMOST GOOD FAITH”  where in the proponent is duty bound to disclose everything concerning his health, habits and other related matters which are 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  M. Deivasigamany committed a breach of the principle of Utmost good faith by suppressing the material fact that he was suffering from Diabetes prior to the date of commencement of risk.  At the time of signing the proposal form on 26.07.2007, he replied in negative to the Question No.8 (iii) - : During the last 10 years have you undergone or advised to undergo hospitalization an operation or any investigation or medical treatment?’’ and Question No.8 (x) – “Do you have High Blood Pressure/ Diabetes or ever suffered or treated for high blood pressure/ Diabetes?’’ It is clear from the records that the deceased life assured was suffering from Diabetes much prior to the date of signing the proposal form. He deliberately suppressed this material fact and obtained the insurance cover fraudulently.  Further, the proponent is duty bound to disclose every factual information in the proposal form whether he considers it as material or not.  The proposal form is the sole basis to decide the eligibility as to whether a member can be granted insurance cover.  Any suppression of material fact in the proposal form will constitute a breach of the DOCTRINE OF UTMOST GOOF FAITH.  The main allegation of the complainant is that if the Opposite parties had conducted medical examination in this case, and if there was Diabetes they would have come to know about the existence of the same at the time of medical examination.  In the medical examination form, deceased life assured has suppressed the same to the examining doctor also as it is evident that in the medical examination form, he has replied in negative to the relevant question.  The medical examination conducted was only a preliminary medical examination like height, weight, BP, etc.  If a person suffers from latent diseases like Diabetes, this will not get revealed at the time of a preliminary medical examination, more so if the person is under regular medication for the same, the latent diseases are either suppresses or temporarily brought under control. Only if the person being examined reveals about the diseases he is suffering from and the fact that he is under medication  for the same, the company doctor will come to know about it and a detailed clinical examination would then be called for to arrive at the correct prognosis of the case and assess the risk accurately.  If the deceased life assured has disclosed that he was suffering from diabetes from 2004 at the time of proposal the Opposite parties would have conducted special clinical tests or would have declined the proposal itself.            The opposite parties further stated that there is no negligence, carelessness or deficiency in service on the part of the Opposite parties the deceased life assured himself is guilty of suppressing and concealing the material and true facts regarding his pre existing illness at the time of taking the policy from the Opposite parties.   As the Opposite parties have duly discharged all the obligation, no deficiency can be alleged on the part of the Opposite parties.  That the said complainant has not been filed for real cause of justice but has been filed with the malafide intention to harass the Opposite parties as well as to pressurize the Opposite parties to sanction the claim filed by the complainant knowing fully well that the deceased life assured has concealed and suppressed the material facts at the time of procuring insurance policy from the Opposite parties, in a contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “ material fact’.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Further stated that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance.  The Opposite parties had received the death claim intimation from the complainant and as it was an early claim, i.e. the death of the deceased life assured occurred in just 5 months and 17 days,  SBI Life Insurance Co. Ltd. conducted an extensive investigation into the matter and found that the deceased life assured was suffering from Diabetes prior to the date of signing the proposal form hence as per the terms and conditions of the policy the claim was repudiated and the fund value was paid.   The opposite parties also stated that there is ample evidence on record to prove that the deceased life assured was suffering from Diabetes prior to the date of signing the proposal form.  This fact was deliberately suppressed by the deceased life assured 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 proposal form is the fundamental basis of assessment of risk and answer to each and every question asked for therein is vital for underwriter to decide whether the proposed life is to be insured or not.  Thus any incorrect information stated in the proposal form certainly vitiates the interests of the insurer and hence the insurer is well within their rights to repudiate the claim wherever materials facts are suppressed  by the life assured.  The medical examination was conducted in this case and in the medical examination form,
M. Deivasigamany has suppressed the fact that he was suffering from Diabetes to the examining doctor as it is evident that in the medical examination form he has replied in negative to the relevant question.  It is submitted by the opposite parties that the medical examination does not relieve the proposer from his duties of disclosure of material facts.  The opposite parties relied the judgment rendered by the Hon’ble Supreme Court in the case of Mithoolai Nayak Vs LIC of India, clearly held that even if the life to the assured is examined by a Doctor of the insurer the insured is not absolved form his responsibility of disclosure of material facts in a contract of insurance and the Hon’ble Apex court held the same view in the case of Chacko Chan Vs LIC of India.  Hence the mere fact that a normal medical examination of the life to be assured was conducted does not absolve him/her responsibility of full disclosure of material facts. The Opposite parties have received a legal notice dated 15.06.2009 and the same was replied by the Opposite parties on 02.07.2009.  The deceased life assured had submitted a proposal No. 246262773 dated 09.11.2007 and some requirements like income proof and moral hazard report were called for the said proposal.  Meanwhile, the deceased life assured has undergone general medical test on 12.12.2007.  But the proposal No. 246262773 was not taken up as the deceased life assured could not fulfill the requirements called for in the specified time.  Thereafter, the deceased life assured submitted another proposal No. 247343283 dated 28.02.2008 and requested to consider the same medical reports.  That on his request the same medical reports were accepted and on the basis of the proposal No 247343283 dated 28.02.2008 the policy No 24044744907 was issued with date of commencement i.e. on 26.03.2008.   However while submitting the proposal form dated 28.02.2008 the deceased life assured did not reveal any adverse features relating to his health and he claimed that he was not suffering from any diseases.

The proposal form is the basis for the assessment of risk and issuance of policy.  A person who signs a proposal form is totally responsible for the contents contained in the document and he cannot plead ignorance of the same.  They cannot take a plea saying that they were not aware of the contents and just signed the proposal without knowing the contents therein.  The opposite parties are not liable because what has transpired between the agent and the deceased life assured is not within the knowledge of the Opposite parties.  The allegation of the complainant that the proposal form was not filled by the deceased life assured is not a valid ground.  The insurer relies on the information furnished in the proposal form and accordingly issues the policy.  If any person is filling up the proposal form on behalf of the insured such person obviously is acting as the agent and aider of the insured and not of the insurer.  For such actions the person who signs the document alone is responsible and therefore the complaint is not sustainable.  Further, there is indisputable proof that the deceased life assured has suppressed the material fact that he was suffering from diabetes prior to the date of signing the proposal form.  Thus the action taken by the Opposite parties to repudiate the claim is just and legal and as per the terms and conditions of the policy which is the evidence of the contract.  It is specifically submitted that the complainant is not entitled to any policy amount or interest under the death claim of Mr. M.Deivasigamany.  Hence the complaint is not maintainable and deserves to be dismissed in limine.  It is denied that the complainant has suffered great mental agony and harassment by the Opposite parties.  The decision taken by the Opposite parties to repudiate the claim is just and legal in the fact and circumstances of the case.  The complainant is trying to mislead the Hon’ble Forum by distorting the facts of the case. There is no deficiency in service on the part of the Opposite parties.  Hence there is no mental agony and harassment to the complainant.  The complaint deserves to be dismissed in limine as the documentary evidence placed on record supports the repudiation of the claims.  The complainant is not entitled to any damages and compensation as there is no deficiency in service on the part of the Opposite parties.     The Opposite parties have relied on the proposal form and had granted the insurance cover.  The deceased life assured was not eligible prima facie for an insurance cover. If the proposal form has revealed the existence of pre existing illness or any adverse features, the Opposite parties would have either called for special clinical reports or would have straightaway declined the proposal form itself.  Thus the claim was declined as the deceased life assured has committed the breach of the doctrine of Utmost Good Faith.  As the claim was repudiated as per the terms and conditions of the policy no cause of action has arisen for the complainant to file this instant complaint and hence there is no jurisdiction for the Hon’ble Forum to entertain this complaint.  The complainant is trying to distort the facts of the case and thereby trying to mislead the Hon’ble Forum and thereby trying to abuse the process of law.  The complainant is not entitled to any of the amount claimed.  Hence, prayed for dismissal of the complaint.

5. The complainant was represented by her son Mariappan @ Mageshkumar as a Power of Attorney and examined as CW1 and Exs.C1 to C16 were marked through him, Thiru N. Rengadoss as examined as CW2.  On the side of the opposite party, Sandanakrishnan, Assistant Manager of the opposite parties concerned representing both the opposite parties was examined as RW1 and Exs.R1 to R13 were marked through him.     

6.       Points for determination are:

          1. Whether the complainant is a Consumer?

          2. Whether the complaint is within the jurisdiction of this Forum?

          3. Whether any deficiency of service is attributed by the OPs

          4. Whether the complainant is entitled for any relief?

7.  Both side records and evidence were carefully perused by this Forum and this Forum observes as follows:

8.       Point No.1:

          The complainant's husband Deivasigamany submitted proposal form vide Ex.C2 wherein, the complainant was referred as nominee by the complainant's husband and obtained a SBI Life Insurance Policy under the plan named as "SBI Life-Unit Plus Regular" vide Ex.R2 dated 26.03.2008 from the opposite parties on payment of Rs.99,000/- vide Ex.C1 towards annual premium amount.  On the death of the complainant's husband, the claim raised by the complainant was repudiated by the opposite parties and hence, this complaint was filed by the complainant.  The complainant being a nominee and beneficiary of life assured i.e. the complainant's husband Deivasigamany, the complainant is considered to be a consumer as per Sec. 2 (1) (d) (ii) of Consumer Protection Act and the complaint filed by the complainant is maintainable before this Forum and this point is answered accordingly.

9.       Point No.2:

          With regard to the jurisdiction point, the Hon'ble State Commission, Pondicherry already held in F.A. 24/ 2016 dated 27.04.2017 that the complaint is within the jurisdiction of this Forum on an appeal filed by the complainant against the earlier order passed by this Forum in this case in C.C. No. 99 / 2010 dated 25.10.2016 and as such, this Forum concedes to the decision held by the order of the Hon'ble State Commission, Pondicherry in F.A. No. 24 / 2016 dated 27.04.2017 and this point is answered accordingly. 

          10 Point No.3:

          It is submitted by the complainant that the complainant's husband Deivasigamani took an insurance policy from the opposite parties under the plan "SBI Life-Unit Plus Regular" vide Ex.R2 dated 26.03.2008 on payment of annual premium of Rs.99,000/- vide Ex.C1. 

          11. It was submitted by the complainant that only on medical examination by the OP's Panel doctors the policy was issued and there was no suppression of material facts and the repudiation of the claim of the complainant on the death of the complainant's husband for the reason invented by the opposite parties that there was suppression of material information regarding the health condition of the complainant's husband caused mental agony, monetary loss amounting to deficiency of service of the OPs.

          12. The OPs have countered the contention of the complainant on submission  before this Forum that the life assured i.e.,  the complainant's husband has obtained insurance policy by concealing the fact of complainant's husband being diabetic and was pre-existing at the time of entering into life insurance contract with the opposite parties.  It was contended by the opposite parties that further the investigation of the Opposite Parties vide report Ex.R3, it was found out the complainant's husband was suffering from pre-proposal illness i.e., diabetic and the non-disclosure of the pre-existing ailment by the complainant's husband in the proposal form Ex.C2     render the policy invalid as per the terms and conditions of the policy.  Hence, it was submitted by the opposite parties that the repudiation of the policy by the opposite parties for the reason of suppression of material facts by the complainant's husband in the proposal form (Ex.C2) will not amount to deficiency of service and the opposite parties is not liable to pay any compensation for the complainant.

          13. On perusal of the submission made by both sides, this Forum observes as follows:

          It is the contention of the opposite parties that the complainant's husband having known the fact that he is suffering from diabetic which was pre-existing at the time of taking the policy concealed it by not disclosing it in the proposal form Ex.C2, but the evidence of CW2 who is the agent of the opposite parties examined by the complainant refutes the allegation of the opposite parties wherein, CW2 states that except for the signature of the insured i.e. complainant's husband and of CW2, the proposal form Ex.C2 was blank and it was filled up only subsequently.  On further perusal of evidence of CW2, it was mentioned that the proposal form was filled by Mrs. Jayasri who was the Manager of the opposite parties concern Trichy Branch and further mentioned that neither CW2 nor the complainant's husband were present at the time of filling up the proposal form by Mrs. Jayasri and it was also affirmed by CW2 during the cross-examination of opposite parties by denying the suggestion that the proposal form was filled up by the proposer.  The evidence of CW2 who is the agent of opposite parties is as follows.

"I have signed in Ex.C2 as the agent of opposite party.  When I have signed in Ex.C2, it was a blank printed form and it was filled up subsequently.  The insured Deivasigamani had also signed in Ex.C2.  When the insured signed, the printed form was blank.  Ex.C2 was filled by one Mrs. Jayasri, who was the Manager of Opposite Party, Trichy Branch.  When the form was filled up by Mrs. Jayasri neither myself nor the insured was present". 

In the cross examination by opposite parties, the CW2 deposed as

          "I deny the suggestion that the proposal form was filled up by the proposer".

Hence, when the evidence clearly establishes that the proposal form was not filled up by the complainant's husband, the contention of the opposite parties that the life insurance policy was obtained by the complainant's husband by suppressing the material information, concealing the pre-proposal illness i.e. Diabetics in the proposal form Ex.C2 does not hold good  and cannot be taken into consideration.  The authority filed by the complainant reported in NCDRC in R.P. No. 558/97 M/s united India Insurance Company Vs. Gurdeep Singh Oberoi comes to the rescue of the complainant, wherein, it is observed  as follows -

          "In the context of an almost blank proposal form accepted by the insurance company, conclusion of concealment of fact cannot be drawn …..

          Further, on perusal of Ex.C2, it was observed that the proposal form was obtained by the opposite parties from the complainant on 28.02.2008, whereas the payment of premium amount was received from the complainant by way of D.D. vide Ex.C1 dated 27.02.2008, i.e. before the scrutinisation of the proposal form and this act of the opposite parties clearly reveals the commercialized attitude of the opposite parties.  It is further observed that the conditions stipulated in the proposal form was not adhered by the opposite parties where in it states that the proposal form has to be filled by the proposer and if it is filled by some other person other than the proposer,  the proposal form has to be signed by the person who filled it.  The evidence of CW2 who is the agent of opposite parties clearly reveals that the contents of  the proposal form was neither filled by the proposer i.e., the complainant's husband nor by the CW2 who has sign the proposal form EX C2 but was filled by one Mrs. Jayasri the Branch Manager of opposite parties, Trichy branch in the absence of the complainant.  Hence from the above facts and evidence this forum concludes that the proposal form EX C2 being not filled up by the complainant's husband, the contention of opposite parties that the complainant's husband has concealed the material information in the proposal form and obtained the policy is not  maintainable and the repudiation of the claim of the complainant on this reason clearly constitute deficiency of service by the opposite parties.  It is further observed that the complainant being dependent of the complainant's husband, the hardship that was undergone by the complainant for all these years due to the act of repudiation of the claim by the opposite parties could have caused mental agony and monetary loss to the complainant and it would be just and proper that the complainant has to be reasonably   compensated.

          14. The opposite parties contended that there was a breach of  "Doctrine of Utmost Good Faith"  by the complainant's husband referring to the judgments of Hon'ble Supreme  Court decided in

(1) Sealark Vs United India Insurance Company
(2)     Chachochan Vs LIC of India - 2007 in Civil Appeal No.5322/2007

 (3) K.D Mandappa & Another versus Metlige India Insurance co. Ltd & Another RP No.2830 /2012 

which emphasises that violation of "Doctrine of Utmost Good Faith" renders policy invalid cannot be considered in this case since the opposite parties have failed to prove that the complainant's husband has suppressed the material facts and concealed the material information in the proposal form EX C2 and in this context the documents purported to be the clinical records of the complainant obtained by the opposite parties marked as EX R4 to R10 cannot be taken into consideration.  Hence in view of the discussions made supra, it is held by this Forum that the opposite parties are liable for deficiency of service causing mental agony and monetary loss to the complainant.  This point is answered accordingly.

15. Point No.3

In the result the complaint is hereby allowed and the opposite parties are directed

1. To pay the complainant a sum  Rs.4,57,587/- being the balance amount to be paid towards the insurance claim of the complainant.
2. To pay a sum of Rs.50,000/- as compensation towards mental agony monetary loss suffered by the complainant due to the deficiency service by the opposite parties
3. To pay a sum of Rs. 5000/- towards the cost of the proceedings. 

          Dated this the 31^st day of January 2018.

1. ASOKAN)

PRESIDENT

(V.V. STEEPHEN)

MEMBER

(D. KAVITHA)

MEMBER

COMPLAINANTS' WITNESS:   

CW1           10.02.2014           Mariappan @ Magesh Kumar      

CW2           25.02.2014           N. Rangadass 

OPPOSITE PARTY'S WITNESS:

RW1           24.06.2015           Santhana Krishnan, Assistant Manager, SBI   

                                                Life Insurance Company.

COMPLAINANTS' EXHIBITS:

OPPOSITE PARTY'S EXHIBITS:   

LIST OF MATERIAL OBJECTS:  NIL

1. ASOKAN)

PRESIDENT

(V.V. STEEPHEN)

   MEMBER

(D. KAVITHA)

MEMBER