BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, FATEHABAD.

Complaint Case No.220/ 2017.

Date of Instt.06.09.2017.

Date of Decision:14.05.2018

Inderjeet Singh  son of Gurcharan Singh, resident of village Bhirdana, Tehsil and Distt. Fatehabad

                                                                                                                ... Complainant.

                                                            Versus

1.SBI Life Insurance Company Limited, SCO 109-110, Ist Floor, Sector -47, Chandigarh-160071 through its Regional Director.

2.SBI Life Insurance Company Limited, inside State Bank of Patiala, G.T.Road, Fatehabad, Tehsil and District Fatehabad through its Branch Manager.                        

                                                                                                                ...Respondents/Ops.

                      Complaint U/s 12 of the Consumer Protection Act, 1986.

Before:  Sh.Raghbir Singh, President.

                                Sh.M.K.Khurana, Member.

Present: Sh.Sukhbir Dhaka, Counsel for the complainant.

                                Sh. Rohtash Bishnoi, Counsel for the Ops.

ORDER:

                                The present complaint under Section 12 of Consumer Protection Act, 1986 has been filed by the complainant against the opposite parties (hereinafter referred as Ops) with the averments that Sh. Gurcharan Singh father of the complainant got himself insured with the Ops vide insurance policy No.1K023965502 valid from 31.07.2015 to 19.08.2025 for a sum assured of Rs.5 lacs. The life assured also made the payment of insurance premium to the Ops and the complainant was nominee of the life assured in the above said insurance policy. Therefore Sh.Gurcharan Singh during his lifetime and after his death, the complainant is consumer of Ops as defined in The Consumer Protection Act, 1986.

2.                             It is further submitted the Sh.Gurcharan Singh life assured had died on 07.11.2015 and an intimation was given to the Ops by the complainant regarding his death.  The complainant also completed all the requisite formalities as directed by the Ops for settlement of the claim. Thereafter the complainant was assured by the Ops that the insurance benefits will be released to him very soon. However the insurance benefits were not released to the complainant by the Ops despite of many visits made by the complainant in the office of Ops. Therefore a legal notice dated 12.07.2017 was issued by the complainant to the Ops through his counsel for release of the insurance benefits, but all in vain.

3.                             It is further submitted that the above said act on the part of Ops amounts to deficiency in service. The complainant further prayed that the direction may be given to Ops for making a payment of Rs.5 lacs alongwith interest @ 12% p.a. to the complainant alongwith compensation and litigation charges. Hence, the present complaint.

4.                             On being served Ops appeared through their counsel and resisted the complaint by filing a joint written statement wherein various preliminary objections with regard to cause of action, maintainability, jurisdiction, concealment of correct facts etc., have been raised.

5.                             In reply on merits, it is averred that the life assured submitted a proposal-form dated 31.07.2015 for SBI Life Smart Wealth Builder Plan. Under point No.11 in the above said proposal-form the life assured replied in the negative to the specific question i.e. “Do you have any other individual life insurance policy or have you applied for one?”.

6.                             It is further submitted that based on the facts provided in the proposal-form and believing the same to be true and correct and in good faith, the Ops issued the policy in question to the life assured. It is further submitted that in the preamble of the policy it is stated that “The information you have given in your proposal-form, personal statement together with any reports or other documents and declarations form part of this contract of insurance with us. Your policy document, comprising this policy schedule along-with the policy booklet and any endorsements, is evidence of the contract”.

7.                             It is further submitted that the life assured died on 07.11.2015 i.e. within 2 months and 19 days from the date of commencement of the policy and the same resulted in a very early claim. During the assessment of claim, it was found that the life assured had applied for or was holding insurance policies with other insurance companies which have not been disclosed in the proposal-form. The list of such insurance policies is as under:-

8.                             The life assured was required to provide the details of the insurance policies held/ proposed by him in reply to question No.11 of the proposal-form. However the proposer/ life assured did not disclose the details of policies and concealed this material fact.

9.                             It is further submitted that from the perusal of above list it is revealed that the life assured had proposed for an insurance cover of 39.8 lacs from various insurance companies in a span of about 3 months. That by not disclosing the details of insurance cover the answering Ops were deprived of a chance to properly assess the risk. Moreover the insurance cover taken by the life assured was quite disproportionate to his known sources of income as the life assured was an Agriculturist and his annual income is just Rs. 6 lac 80 thousand. It is also further submitted that the DLA had taken insurance cover of almost Rs. 21.39 lacs prior to proposing for insurance cover from the Ops. It is further submitted that if the answering Ops were aware of the fact that the DLA had taken insurance cover of Rs.21.39 lacs prior to the proposal then the Ops would not have granted the insurance cover to the life assured on the same terms. Thus, it is clear that the life assured had committed a breach of doctrine of utmost good faith by giving false details regarding the proposed insurance cover and thereby availing the insurance policy fraudulently from the Ops.

10.                          It is further submitted that the repudiation of the insurance claim of the complainant by the Ops is perfectly in accordance with the terms and conditions of the insurance policy and the same is sustainable in the eyes of law. The Ops have further prayed for dismissal of the complaint being devoid of any merits.

11.                          The learned counsel for the complainant tendered in evidence affidavit of the complainant as Annexure CW1/A and the documents as Ex.C1 to C5 and Annexure C1 and closed the evidence. On the other hand, the learned counsel for the Ops tendered in evidence affidavit of Neelam Singh as Ex.R1 on behalf of Ops alongwith documents as Annexures A to F and closed the evidence.

12.                          The learned counsel for the complainant in his arguments reiterated the averments made in the complaint and further contended that a genuine claim of the complainant has been declined by the Ops on illegal and baseless ground.  It is further contended that no material/information was concealed by the life assured at the time of filing the proposal form.  It is also further contended that it is a settled principle of law that non-disclosure of previous policies by the life assured is not suppression of material facts and an insurance claim cannot be repudiated on this ground.  In support of his contention the learned counsel placed reliance on the judgment dated 2.11.2017 rendered by Hon’ble High Court of Punjab and Haryana in case titled as Bajaj Allianz Life Insurance Company Vs. Santosh and another, judgment dated 4.11.2016 rendered by Hon’ble National Commission in case titled as IDBI Federal Life Insurance Co. Ltd. &  another Vs. Rameshwar Prasad Jain, judgment dated 16.3.2017 rendered by National Commission in case titled as Baleshwas Singh Vs. Life Insurance Co. & Ors., judgment dated 12.4.2017 rendered by National Commission in case titled as Aviva Life Insurance Company Vs. Rekhaben Ramjibhai Parmar and the case titled as Life Insurance Corporation of India Vs. Shahida Begum and cited as III (2011) CPJ 373 (NC).

13.                          Learned counsel for the Ops rebutted the arguments advanced by learned counsel for the complainant and reiterated the averments made in the written statement filed by the Ops.  It is further contended by the learned counsel for the Ops that the life assured had committed a breach of doctrine of utmost good faith by giving false statement, mis-representation regarding the previous insurance policies obtained by him.  In the proposal form dated 31.7.2015, the life assured had replied in negative to a specific question no. 11 “Do you have any other individual life insurance policy or have you applied for one?”  However, during assessment of the claim, it was found that the life assured was holding various insurance policies or he had applied for insurance policies before 31.7.2015.  It is further contended that in the proposal form the life assured wilfully and fraudulently did not disclose the material fact of previous policies obtained by him.  Therefore repudiation of the insurance claim of the complainant by the Ops is perfectly in accordance  with the terms and conditions of the insurance policy and the same is sustainable in the eyes of law.  There is no deficiency on the part of Ops in rendering service to the complainant and as such the present complaint is liable to be dismissed.  In support of his contentions, the learned counsel for the Ops placed reliance on the judgments cited as 2016 (2) CLT page 196 (NC) and 2012 (III) CPJ Page 288 (NC).

14.                          We have duly considered the arguments advanced by learned counsel for both the parties and have also examined all the material placed on the record of the present case.  It is not disputed that Shri Gurcharan Singh father of the complainant for purchasing an insurance policy from the Ops had filed a proposal form dated 31.7.2015 (Annexure A).  It is also not disputed that at the time of submitting the proposal form Shri Gurcharan Singh made a payment of insurance premium and the complainant was nominated as nominee in respect of the said policy.  It is also not disputed that under point No. 11 of the proposal form the life assured had replied in negative to the specific question “Do you have any other individual life insurance policy or have you applied for one”.  It is also not disputed that after acceptance  of the proposal an insurance policy of Rs. 5 lakhs was issued to the life assured.

15.                          It is also an admitted fact that the life assured Shri Gurcharan Singh died on 7.11.2015 i.e. within a period of two months and 19 days from the date of issuance of the insurance policy.  The insurance claim of the complainant was repudiated by the Ops vide letter dated 4.4.2017 (Annexure D) on the ground that the life assured had not disclosed details of other life insurance policies applied and held by him at the time of submission of proposal form.  Therefore, the life assured intentionally and fraudulently did not disclose the material information with regard to insurance policies held or applied by him.   The Ops issued the abovesaid repudiation letter on the basis of information received through email from the other insurance companies vide Annexure C-1 to Annexure C-5.  According to these emails i.e. Annexure C-1 to Annexure C-5, it is evident that the DLA had proposed for an insurance cover of Rs. 39.8 lacs from various insurance companies in a span of about 3 months.  The life assured had taken insurance cover of Rs. 21.39 lacs prior to the filing of the proposal in the present case.  The life assured did not disclose the particulars of those policies in the proposal form filed by him for obtaining the present policy.  The information Annexure C-1 to Annexure C-5 obtained by the OPs through email are admissible in evidence in view of provisions of Section 4 of Information Technology Act 2000 and the law laid down by the Hon’ble High Court of Punjab and Haryana in case titled as Nidhi Kakkar Vs. Munish Kakkar, cited as 2011 (2) Civil Court cases page 538 (Punjab and Haryana High Court).  Moreover the complainant in his pleadings or in the affidavit filed by him in evidence has not rebutted the fact of holding/applied for the other policies.

16.                          We are of the opinion that the information with regard to holding of or applied for insurance policies amounting to Rs. 21.39 lakhs by the life assured prior to filing of proposal was a material information, since the decision of the petitioner company whether to accept the proposal or not was dependent inter alia on the amount of insurance cover already taken or applied by the life assured.  On account of the concealment of the aforesaid material information by the life assured the petitioner company was deprived of an opportunity to consider the proposal in the light of all the relevant facts.  It was clearly and specifically agreed by the insured himself by way of declaration contained in the proposal form that in case of any mis-statement or suppression of material information, the company had the right to repudiate the claim.  The information with regard to other insurance policies held or applied by the proposer cannot be said to be inconsequential or trivial information and the said information had a material bearing on the decision of the insurance company.  The concealment of material fact by the life assured is fatal to him in view of the law laid down by the Hon’ble Supreme Court in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., 2009 Vol. IV CPJ Page 8 and by Hon’ble National Disputes Redressal Commission, New Delhi in Life Insurance Corporation of India Versus Shahida Khatoon and another, IV (2013) CPJ 370.  In both these authorities it has been held that the fact which goes to the root of contract of insurance and has a bearing on risk involved would be material.  The term  ‘material fact’ is not defined in Life Insurance Act and, therefore, it has been understood and explained in General Terms to mean as any fact which influences judgment of prudent Insurer in fixing premium or determining whether he would like to accept the risk.  In both these authorities, repudiation of the claim on the ground of suppression of the material fact by the Insured while submitting the proposal form, has been held valid.  These authorities are fully applicable in the present case.  Life assured had the knowledge that he had also purchased various policies from other insurance company.  Therefore, if he would have been bona-fide, he would have mentioned the particulars of those policies in Col. No. 11 of the proposal forms filled by him for purchasing the policies in question.  At that time the respondent had no knowledge about the purchase of policies of other Companies by life assured.  In IV (2009) CPJ 8 (supra) Hon’ble Supreme Court has held as under:-

“Nonetheless, it is a contract of insurance falling in the category of contract ubdrrinae fide, meaning a contract of utmost good faith on the part of the Assured.  Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an Assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge.  It is not for the purpose to determine whether the information sought for is material for the purpose of the policy or not.  Of course, obligation to disclose extense only to facts which are known to the applicant and not to what he ought to have known.  The obligation to disclose necessarily depends upon the knowledge one possesses.  His opinion of the materiality of that knowledge is of no moment.”

10                           It was further held as under:

“The Team Material Fact is not defined in the Act and, therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent Insurer in fixing the premium or determining whether he would like to accept the risk.  Any fact which goes to the root of the contract of insurance has a bearing on the risk involved would be ‘Material’.

As stated in Col. Pollock and Mullah’s Indian Contract and Specific Relief Acts, any fact the knowledge or ignorance of which would materially influence an Insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is not a material fact.”

17.                          It is also pertinent to discuss here that the life assured was 54 years old at the time of filing proposal and he died within a period of just 2 months and 19 days from the date of issuance of the policy.  He has shown his annual income as Rs. 6,80,000/- which is disproportionate to the insurance policies of 39.80 lacs obtained by him in a period of just 3 months.  So from the above inference can be drawn that the life assured intentionally and fraudulently did not disclose the policies obtained by him.

18.             Therefore, in view of the law laid down in the aforesaid authorities and facts discussed above, we have no hesitation to hold that the respondent rightly repudiated the claims of the petitioner on the ground of concealment of the material fact in the proposal forms submitted by the father of the petitioner while obtaining the policies in question.  The facts of the case laws relied upon by the learned counsel for the complainant are different and distinguishable from the facts of the present case and as such the same are not applicable in the case in hand.  Resultantly, the present complaint is hereby dismissed with no order as to costs.   Copy of this order be supplied to the parties free of costs. File be consigned to record room after due compliance.

Announced in open Forum:             

Dt.14.05.2018.                                                   

                                  (M.K. Khurana)                                                  (Raghbir Singh)

                                      Member                                                                           President                                                                                                                                                                                    DCDRF, Fatehabad.