Haryana

Karnal

CC/273/2021

Poonam - Complainant(s)

Versus

SBI Life Insurance Company Limited - Opp.Party(s)

Darshan Singh

14 Mar 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KARNAL.

 

                                                        Complaint No. 273 of 2021

                                                        Date of instt.09.06.2021

                                                        Date of Decision:14.03.2023

 

1.     Poonam wife of late Shri Parveen, resident of near Mallu Patti, VPO Salwan, Tehsil Assandh, District Karnal, Age 38 years, Aadhar no.868824038805.Mobile no.8950318000.

 

2.     Shannu Rana (minor) son of late Shri Parveen, resident of near Mallu Patti, VPO Salwan, Tehsil Assandh, District Karnal.

 

Minor Shanu Rana through his mother, next friend and guardian ad-litem Smt. Poonam-complainant no.1.

 

                                               …….Complainants.

                                              Versus

 

1.     SBI Life insurance Co. Ltd. SCO 144, 2^nd floor, near OPS Vidya Mandir School, Sector-13, Urban Estate, Karnal.

 

2.     SBI Life insurance Co. Ltd., registered office Natraj, MV Road, Western Express highway Junction, Andheri (East) Mumbai-400069.

 

3.     SBI Life Insurance Co. Ltd., 8^th Level, Seawoods Grand Central, Tower-2, plot no.R-1, Sector-40, Seawoods, Nerul Node, Navi Mumbai-400706 through its Head Claims.

                                                                      …..Opposite Parties.

 

Complaint Under Section 35 of Consumer Protection Act, 2019.

 

Before   Sh. Jaswant Singh……President.       

      Sh. Vineet Kaushik…….Member

      Dr. Rekha Chaudhary……Member

 

Argued by: Shri Darshan Singh, counsel for the complainants.

                   Shri N.K. Zak, counsel for the OPs.

 

                            (Jaswant Singh President)

ORDER:   

                

                The complainants have filed the present complaint Under Section 35 of Consumer Protection Act, 2019 against the opposite parties (hereinafter referred to as ‘OPs’) on the averments that Shri Parveen the husband of complainant no.1 was expired on 22.01.2020. During his life time, he had purchased a SBI Life-Smart Champ Insurance Plan, policy no.IP585504410 from the OPs at Karnal for a basic sum assured of Rs.6,50,000/- for a policy term of 16 years having premium paying term of 13 years and he had paid the installment/premium regarding the said policy. Shri Parveen appointed the complainant no.2 Shanu Rana, as his nominee under the said policy and also appointed the complainant no.1 as appointee under the said policy, being wife of Shri Parveen and mother of complainant no.2. Unfortunately, on 22.01.2020, Shri Parveen expired and after his death, the OPs were intimated about his death and the complainant no.1, being widow approached the OPs and requested to release the benefits of said policy in favour of the complainants and as per the directions of the OPs, complainants submitted all the required documents alongwith claim application etc. and OP no.1 assured to release all the benefits in favour of complainants but OPs transferred an amount of Rs.49,157/- only in the account of complainant no.1 on 30.12.2020 and OPs wrongly and illegally withheld the other benefits under the said policy and vide the said order dated 30.12.2020, OPs wrongly repudiated the claim of the complainants regarding the entire benefits under the said policy and despite repeated requests made by the complainants, the OPs have not released the payment of said policy. Then complainants sent a legal notice dated 06.04.2021 to the OPs but it also did not yield any result. In this way there is deficiency in service and unfair trade practice on the part of the OPs. Hence this complaint.

2.             On notice, OPs appeared and filed its written version, raising preliminary objections with regard to maintainability and concealment of true and material facts. On merits, it is pleaded that OPs have issued the policy based on the information provided in the proposal form which was duly signed by the proposer/DLA. However, in the proposal form the DLA misstated the facts about his income deliberately and obtained the insurance cover of Rs.6,50,000/- of basic sum assured and hence cheated the OPs an intention to get of higher amount. The policy obtained by making the fraudulent misrepresentation intentionally is void ab initio and the complainants are not entitled to receive any benefits out of a policy which is void ab initio. It is further pleaded that Life Insurance Contract a contract of “Utmost Good Faith” wherein the insured is duty bound to disclose everything concerning his health, habits, income, other life insurance policies and sources of income 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 present case the deceased life assured committed a breach of principle of utmost good faith. The deceased life assured, late Mr. Parveen had declared his occupation as self employed and stated his annual income as Rs.3,00,000/- whereas the annual income was only Rs.80,000/-. There is a suppression of material facts i.e. misstatement of income. It is further pleaded that as per the information furnished in the proposal form, the policy was issued with yearly premium of Rs.51,364/- paying term of 13 years. If the DLA had disclosed his correct/original income at the time of applying insurance cover, the DLA would have been ineligible for entering the Smart Champ Plan as the premium ratio is more than 50% of the original income of the DLA i.e. Rs.80,000/-.  Hence the claim of the complainants was rightly repudiated by the OPs on the ground of misstatement of income. On repudiation of claim, the premium amount of Rs.49,157/- was transferred to the complainant’s account. There is no deficiency in service and unfair trade practice on the part of the OPs. The other allegations made in the complaint have been denied and prayed for dismissal of the complaint.

3.             Parties then led their respective evidence.

4.             Complainant no.1 has tendered into evidence her affidavit Ex.CW1/A, copy of death certificate of Parveen Ex.C1, copy of Aadhar card of Parveen Ex.C2, copy of Aadhar card of complainant no.1 Ex.C3, copy of Aadhar card of Savitri Devi Ex.C4, copy of Aadhar card of Tannu Rana Ex.C5, copy of Aadhar card of Annu Ex.C6, copy of Aadhar card of Shanu Rana Ex.C7, postal receipt Ex.C8, copy of legal notice Ex.C9, copy of reply of legal notice Ex.C10, copy of insurance policy Ex.C11, copy of requirement letter dated 24.04.2020 of OP Ex.C12, copy of passbook of Poonam Ex.C13, copy of passbook of Parveen Ex.C14 and closed the evidence on 11.07.2022 by suffering separate statement.

5.             On the other hand, learned counsel for the OPs has tendered into evidence affidavit of Neelam Singh Ex.RW1/A, copy of key personal information letter Ex.R1, copy of insurance policy Ex.R2, copy of claimant statement-death claim dated 27.02.2020 Ex.R3, copy of investigation report Ex.R4, copy of letter from Gram Panchayat dated 18.03.2020 Ex.R5, copy of repudiation letter dated 30.12.2020 Ex.R6, copy of legal notice dated 06.04.2021 Ex.R7, copy of reply to legal notice dated 20.04.2021 Ex.R8, copy of legal notice dated 06.04.2021 and its reply Ex.R9 and Ex.R10 and closed the evidence on 24.08.2022 by suffering separate statement.

6.             We have heard the learned counsel for the parties and perused the case file carefully and have also gone through the evidence led by the parties.

7.             Learned counsel for complainants, while reiterating the contents of the complaint, has vehemently argued that life assured was expired on 22.01.2020. During his life time, he had purchased a SBI Life-Smart Champ insurance policy from the OPs for sum assured of Rs.6,50,000/-  and  policy term of 16 years having premium paying term of 13 years. OPs were intimated about the  death of Parveen and requested to release the benefits of said policy and also submitted all the required documents but OPs transferred an amount of Rs.49,157/- only in the account of complainant no.1 on 30.12.2020 and OPs wrongly and illegally withheld the other benefits under the said policy. The claim of the complainants has been wrongly repudiated by the OPs regarding the entire benefits under the said policy and lastly prayed for allowing the complaint.

8.             Per contra, learned counsel for the OPs, while reiterating the contents of written version, has vehemently argued that OPs have issued the policy based on the information provided in the proposal form. In the proposal form the deceased life assured misstated the facts about his income and obtained the insurance cover of Rs.6,50,000/-. The deceased life assured had declared his occupation as self employed and stated his annual income as Rs.3,00,000/- whereas the annual income was only Rs.80,000/-. There is a suppression of material facts i.e. misstatement of income.   Hence the claim of the complainants was rightly repudiated by the OPs. The premium amount of Rs.49,157/- was transferred in the account of complainant no.1 and lastly prayed for dismissal of the complaint.

9.             We have duly considered the rival contentions of the parties.

10.           Admittedly, the life assured Parveen had expired during the subsistence of the insurance policy It is also admitted the sum insured under the policy in question is Rs.6,50,000/-. It is also admitted that the amount of Rs.49,157/- has been transferred by the OP in the account of complainant no.1.

11.           The  claim of the complainant has been repudiated by the OPs, vide repudiation letter Ex.R6 dated 30.12.2020 on the grounds which reproduced as under:-

“On scrutiny of claim documents, we have noted that in the proposal for insurance dated 11.04.2019, late Parveen had answered the questions in the proposal form as follows:

Question no.                   Question                                  Answer

   6.                       Details of prosper/life to be

                             Assured/HUF Karta

                             Annual Income                         3,00,000/-

Life Insurance contract is a contract of utmost good faith. This policy was issued on the basis of the above information disclosed in the proposal form believing the information to be true. However, as per the document available with us, late Parveen had mis-stated his income while taking the policy from SBI Life. The total cover opted does not match with the income of late Parveen.

However, these material facts were not disclosed in the proposal form. The claim is hereby repudiated on the grounds of suppression of material facts.

Please note that an amount of Rs.49,157/- has been transferred to your saving account towards refund of premium as per amended insurance laws”.

 

12.           The claim of the complainants has been repudiated by the OPs on the ground of misstatement of income. The onus to prove its version was relied upon the OPs but OPs have miserably failed to prove the same by leading any cogent and convincing evidence. OPs have only relied upon the document Ex.R5 i.e. photocopy of certificate issued by Sarpanch Gram Panchyat Salwan, Tehsil Assandh (Karnal). To prove its version, OPs have neither examined the said Sarpanch nor tendered his affidavit during the course of evidence. Moreover, Sarpanch of the village is not competent to issue the income certificate as the life assured was an agriculturist by profession, Revenue Authority is only competent to issue the income certificate. Hence, the said certificate has no weightage in the eyes of law.

13.           It is upon the insured who had to see from where he has to deposit the premium amount of the policy in question. It is not the case of the OPs that the insured was in default for making the premium amount. Moreover, it was the duty of the OPs to investigate the case of the insured with regard to income at the time of issuing the insurance policy. Furthermore, now a days it has become a trend of insurance companies, they issue the policies by giving false assurances and while giving claim amount, they make such type of excuses. It appears that OPs have repudiated the claim of the complainants on the presumption and assumption, which is not permissible in the eyes of law.  Thus, the repudiation of the claim of complainants is arbitrary and unjustified.

 14.            Further,  Hon’ble Punjab and Haryana High Court in case titled as New India Assurance Company Ltd. Versus Smt. Usha Yadav & others 2008 (3) RCR (Civil) 111, has held as under:-

                “It seems that the Insurance Companies are only interested in earning the premiums which are rather too stiff now a days, but are not keen and are found to be evasive to discharge their liability. In large number of cases, the Insurance companies make the effected people to fight for getting their genuine claims. The Insurance Companies in such cases rely upon clauses of the agreements, which a person is generally made to sign on dotted lines at the time of obtaining policy. This is, thus pressed into service to either repudiate the claim or to reject the same. The Insurance Companies normally build their case on such clauses of the policy, but would adopt methods which would not be governed by the strict conditions contained in the policy”.

15.           Keeping in view that the ratio of the law laid down in aforesaid judgments, facts and circumstances of the present complaint, we are of the considered view that act of the OPs while repudiating the claim of complainants amounts to deficiency in service and unfair trade practice, which is otherwise proved genuine one.

16.           It is evident from the copies of Aadhar card Ex.C3 to Ex.C7 the following members are legal heirs of life assured (Parveen):-

1.     Poonam (wife)

2.     Savitri Devi (mother)

 3.    Tannu Rana (daughter)

4.     Annu (daughter)

5.     Shanu Rana (son).

 

17.           As per insurance policy Ex.R2, the sum insured is Rs.6,50,000/-. OPs have already transferred Rs.49,157/- in the account of complainant no.1.  Hence, all the legal heirs are entitled for remaining amount of Rs.6,00,543/- (Rs.6,50,000-Rs.49,157) alongwith interest, compensation for mental harassment and litigation expenses etc.

18.           Thus, as a sequel to abovesaid discussion, we allow the present complaint and direct the OPs to pay Rs.6,00,543/-( Rs.six lakhs five hundred forty three only) to the complainants and to other legal heirs of Parveen in equal share alongwith interest @ 9% per annum from the date of repudiation of claim till its realization. We further direct the OPs to pay Rs.25,000/- to the complainants on account of mental agony and harassment and Rs.11,000/- towards the litigation expenses. This order shall be complied with within 45 days from the receipt of copy of this order. It is made clear the share of the minors be deposited in the shape of FDR in Nationalized Bank during the period of minority. Interest on the amount during the period of minority of minors shall be paid to his mother i.e. complainant no.1 at quarterly intervals of a year for their maintenance and support.  The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated: 14.03.2023

                                                                President,

                                                      District Consumer Disputes

                                                      Redressal Commission, Karnal.

 

             (Vineet Kaushik)     (Dr. Rekha Chaudhary) 

                   Member                  Member