Delhi

North

CC/257/2017

PATNI JYOTSNABEN ARVIND BHAI - Complainant(s)

Versus

SBI LIFE INSURANCE CO. - Opp.Party(s)

22 Aug 2023

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

 

CC No.257/2017

In the matter of

Mrs. Patni Jyotsnaben Arvindbhai

W/o Late Sh. Patni Arvindbhai Mangabhai,

H. No.41, Babupurana Chhapra,

Asarvana, Opp. Vishv Vidayale,

Ahmedabad-, Gujarat.-380016.                                                                              …       Complainant

 

Vs.

M/s SBI Life Insurance Co. Ltd.

112, First Floor, Dayanand Road,

Opp. Golcha Cinema, Daryaganj.

Delhi-110002.                                                                                                         …     Opposite Party

         

 

22.08.2023

ORDER

(Divya Jyoti Jaipuriar)

1. By way of this complaint, the Complainant herein has pleaded that the M/s SBI Life Insurance Company Limited (OP herein) has not processed the death claim on the life of Late Shri Patani Arvindbhai Mangabhai, husband of the Complainant herein when the claim was filed on 06.07.2015. It is alleged by the Complainant that the OP herein has not processed the claim till the filing of the complaint.

2. We issued notice on the complaint and the OP has filed its reply. In the reply, it has been stated that the OP herein has already repudiated the claim vide its letter dated 09.10.2015. The Complainant has not filed its rejoinder, and has also not challenged the said repudiation letter either in the complaint or in the subsequent filings before this Commission. In the evidence filed by the Complainant, the Complainant has also not stated about the repudiation letter. However, during final argument, and also in the Written Arguments so filed by Ld. Advocate for the Complainant, it has been stated for the first time that the Complainant has not received the repudiation letter and she is also not aware about the transfer of the premium upon cancelation of the policy by the OP. During arguments, Ld. Advocate for the Complainant has argued mainly on the ground that how the grounds of repudiation in the repudiation letter are not correct.

3. The OP, in its reply has stated that the claim of the Complainant was already repudiated on 09.10.2015 and the policy was also cancelled by the same repudiation letter. Accordingly a sum of Rs. 29,660/- was also transferred in the bank account of the insured. The OP has argued that the death claim on the life of Late Shri Patani Arvindbhai Mangabhai, husband of the Claimant/ Complainant herein was repudiated on the ground that the insured has not disclose the material fact pertaining to having other life insurance policy held by him at the time of submission of proposal form. The repudiation letter has been filed on record by the OP. In the repudiation letter it has also been quoted by that in reply to the question no.11 in the proposal form, where the Complainant was required to answer the question that whether the insured has “obtained any other individual life insurance policies or have applied for one”, the insured has given the reply as “No”.

4. The copy of the proposal form has been annexed by the Complainant in the complaint and also by the OP in its reply. The same is an admitted document. We have perused the same and it is indeed a fact that while signing the proposal form the Complainant has given a declaration that he has not obtained any other individual life insurance policy or has applied for the one. However the Complainant has purchased one more individual life insurance policy from M/s HDFC Life Insurance Co. Ltd on 19.08.2013 (Policy connected on 28.08.2013).

5. The OP also states that as non-disclosure of the purchase of individual life insurance policy is concealment of material fact and the same is a valid ground for repudiation. At this stage, we also record that OP in its reply, has referred to other discrepancies in the proposal form, which are also concealment of material facts and are grounds for repudiation of the claim. But as the new grounds of repudiation pleaded in the reply filed by the OP before this Commission were not part of the repudiation letter and were not communicated to the Complainant earlier, we are not examining such other alleged grounds of repudiation. In this context, reliance is placed on the judgment of Hon’ble Supreme Court in the matter of JSK Industries Pvt Ltd vs Oriental Insurance Company Limited [2022:INSC:1104] in which it has been held that the insurance company cannot take a new defence which did not form the basis of repudiation of the claim. This Commission, in view of the above judgment, cannot go beyond the grounds of repudiation as communicated in the repudiation letter dated 09.10.2015.

6. As the Complainant has not filed any rejoinder and even in the evidence filed by her, she has not denied the receipt of the repudiation letter prior to filing of this complaint, we are of the opinion that the averment made in the Written Arguments filed by the Ld. Advocate for the Complainant herein that the Complainant never received the repudiation letter and has no idea about transfer of the premium of Rs. 29,660/- in the bank account of the insured by the OP upon cancellation of the policy, is an afterthought and same cannot be accepted. We, believe that the Complainant did receive the repudiation letter and has the knowledge of the transfer of the premium of Rs. 29,660/- in the bank account of the insured by the OP, but the same was concealed by her while filing this complaint. The repudiation letter has also not been challenged by the Complainant in the complaint or in subsequent pleading. It is for the first time at the time of final arguments, that the repudiation letter was challenged by the Ld. Advocate representing the Complainant. This also raises a doubt about the conduct of the Complainant. Therefore, we are of the opinion that there was concealment of material facts by the Complainant while filing this complaint.

7. Ld. Advocate for the OP has argued during the argument that non-disclosure of having any previous individual life insurance policy is concealment of material fact which is a valid ground for repudiating the claim and also for cancellation of the policy. It has also been argued that while repudiating the claim the OP has also cancelled the policy and the policy premium so paid by the Complainant was duly transferred in the bank account of the Complainant. The same is also apparent from the repudiation letter which is on record which also suggest that an amount or Rs.29,660/- (Rupees Twenty Nine Thousand Six Hundred and Sixty Only) was refunded to the bank account of the Complainant.

8. During the arguments, while challenging the repudiation letter, Ld. Advocate for the Complainant has relied on the judgment of Hon’ble National Commission in the matter of Aviva Life Insurance Co. Ltd. Vs. Rekhaben Ramjibhai Parmar [II (2017) CPJ 463 (NC)] in which the Hon’ble National Commission, on identical facts of the case, has rejected the repudiation by the insurance company. Ld. Advocate for the Complainant has also relied on the judgment of Hon’ble National Commission in the matter of Sahara India Life Insurance Co. Ltd. & Anr. Vs. Rayani Ramanjaneyulu [III (2014) CPJ 582 (NC)] which is also on identical facts.

9. On the issue of concealment of details of existing individual life insurance policies in the proposal form, the judgments referred to by Ld. Advocate for the Complainant are not applicable to this case in hand as this issue has already been settled by Hon’ble Supreme Court in the matter of Reliance Life Insurance Company Limited vs Rekhaben Nareshbhai Rathod [(2019) 6 SCC 175]. In the Reliance life Insurance case (supra), the issue was identical to the facts in the case in hand and Hon’ble Supreme Court has held that non-disclosure of existing individual life insurance policy by the insured is concealment of material fact and the Insurance Company is justified in repudiating the claim on such ground. In this context, Hon’ble Supreme Court has also referred to its earlier judgment in the matter of Satwant Kaur Sandhu vs New India Assurance [(2009) 8 SCC 316] in which it has been held that information sought in the proposal form is material for the purpose of entering into contract of insurance. In Reliance case (Supra), Hon’ble Supreme Court held as under:

“30. It is standard practice for the insurer to set out in the application a series of specific questions regarding the applicant's health history and other matters relevant to insurability. The object of the proposal form is to gather information about a potential client, allowing the insurer to get all information which is material to the insurer to know in order to assess the risk and fix the premium for each potential client. Proposal forms are a significant part of the disclosure procedure and warrant accuracy of statements. Utmost care must be exercised in filling the proposal form. In a proposal form the applicant declares that she/he warrants truth. The contractual duty so imposed is such that any suppression, untruth or inaccuracy in the statement in the proposal form will be considered as a breach of the duty of good faith and will render the policy voidable by the insurer. The system of adequate disclosure helps buyers and sellers of insurance policies to meet at a common point and narrow down the gap of information asymmetries. This allows the parties to serve their interests better and understand the true extent of the contractual agreement.

31. The finding of a material misrepresentation or concealment in insurance has a significant effect upon both the insured and the insurer in the event of a dispute. The fact it would influence the decision of a prudent insurer in deciding as to whether or not to accept a risk is a material fact. As this Court held in Satwant Kaur [Satwant Kaur Sandhu v. New India Assurance Co. Ltd., (2009) 8 SCC 316 : (2009) 3 SCC (Civ) 366] “there is a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance”. Each representation or statement may be material to the risk. The insurance company may still offer insurance protection on altered terms.

32. In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued a life insurance cover despite the earlier cover of insurance is a decision which was required to be taken by the insurer after duly considering all relevant facts and circumstances. The disclosure of the earlier cover was material to an assessment of the risk which was being undertaken by the insurer. Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured had in such a short span of time obtained two different life insurance policies. Such a fact is sufficient to put the insurer to enquiry.”                              (underlining by us)

10. Ld. Advocate for the OP has also relied on another judgment of Hon’ble Supreme Court in the matter of Oriental Insurance Company v. Mahendra Construction [2019 INSC 444: (2019) 18 SCC 209]. In Mahendra Construction case (supra), Hon’ble Supreme Court has reiterated that the insured is under obligation to disclose all relevant information including previous insurance and claims, if any while applying for a new insurance policy. Such non- disclosure is concealment of material fact and is a valid ground for repudiation of the claim. In Mahendra Construction (supra), Hon’ble Supreme Court held as under:

“11 … Insurance is governed by the principle of utmost good faith, which imposes a duty of disclosure on the insured with regard to material facts.

…

12 The burden cannot be cast upon the insurer to follow up on an inadequate disclosure by conducting a line of enquiry with the previous insurer in regard to the nature of the claims, if any, that were made under the earlier insurance policy. On the contrary, it was the plain duty of the respondent [insured] while making the proposal to make a clear and specific disclosure.

15. … This suppression goes to the very root of the contract of insurance which would validate the grounds on which the claim was repudiated by the insurer.”

11. It is clear from the judgment of Hon’ble Supreme Court in Reliance case (supra) and Mahindra Construction case (supra) that the when the insured purchased the policy in question, his non-disclosure of the existing policy in the proposal form was clearly a case of suppression, untruth or inaccuracy in the statement of the insured and the same is a valid ground for repudiating the death claim filed by the Complainant herein. Therefore, we do not find any infirmity in the repudiation letter dated 09.10.2015. Further as the Complainant, in the complaint has only pleaded non-processing of the claim of the Complainant herein by the OP and not challenged the repudiation letter, we do not find any deficiency of service on part of the OP. Hence, we are of the opinion that this complaint is liable to be dismissed. Accordingly, for the reasons explained above, this complaint is dismissed.

12. In this order, we have also concluded that there has been material concealment in the complaint filed by the Complainant before this Commission. However, considering the fact that the Complainant herein is a widow and also an illiterate lady, we are refraining ourselves from imposing any cost on her.

13. Office is directed to supply the copy of this order to the Complainant as per rules. Office is also directed to return all original documents filed by the Complainant, if any, after keeping copies of the same in the record. Thereafter, file be consigned to the record room.

14. Order pronounced in open court.

 

 

___________________________

Divya Jyoti Jaipuriar, President

 

 

 

___________________________

Ashwani Kumar Mehta, Member

 

 

 

___________________________

Harpreet Kaur Charya, Member