This C.C. is coming on before us for hearing in the presence of Sri.Chinnala Srinivasa Rao, Advocate for complainant and of Sri. M.M.G. Ranga Rao, Advocate for Opposite parties 1 & 2; upon perusing the material papers on record; upon hearing and having stood over for consideration, this Forum passed the following:-

O R D E R

(Per Sri R.Kiran Kumar, Member)

          This Complaint is filed u/s.12-A of Consumer Protection Act, 1986. 

2.       The averments made in the complaint are that the complainants are the parents of late Palleboina Madhu Babu, during his life time had taken SBI life insurance policy bearing No.49002707209, with receipt dt.07-01-2011, mode of payment is yearly once and the sum assured of Rs.14,98,500/- and said Madhu Babu had made first premium of installment on 31-10-2010 and the complainant No.1 is the nominee in the said policy.  The complainants further submitted that unfortunately said Madhu Babu was expired on 10-02-2011 due to “Jaundice”, the complainant No.1 being as nominee under the policy, he submitted claim form along with all relevant documents.  The complainants further submitted that the opposite parties repudiated the claim of complainants with baseless reasons to avoid lawful payment, the opposite parties are under legal obligations to pay the insurance amount, but the opposite parties turned deaf ear to the requests of the complainants and inspite of lapse of more than 1 ½ year the opposite parties failed to pay the assured amount and other benefits under the policy, for that the complainants got issued legal notice on 27-06-2012.  The opposite parties gave reply dt. 07-07-2012 in evasive manner stating that said Palleboina Madhu Babu has misstated the facts about his qualification occupation. The complainants further submitted that the opposite party No.2 Company being Government of India under taking company made huge propaganda to subscribe the members in the said scheme, the company cannot put any restrictions about the qualification and occupation of policy holders. The complainants also submitted that the deceased policy holder never stated that he was post graduate and employee of GVR infra, Khammam and the agent of opposite parties, reasons better known to him filled the application by making ticks thereby defrauding the policy holder.  The complainants further submitted that repudiating the claim of the complainants by opposite parties is without any justification is untenable and the opposite parties committed deficiency of service and the complainants are entitled an amount of Rs.14,98,500/- and damages.  As the opposite parties failed to pay the assured sum amount the complainants approached the Forum.

3.       On behalf of the complainant, the following documents were filed and marked as Exs.A.1 to A.8. 

4.       On receipt of notice, opposite parties appeared through their counsel and filed counter.  In their counter, opposite parties submitted that the deceased life assured, Palleboina Madhu Babu committed a breach of the principle utmost good faith by suppressing the material fact that he was a post graduate and he was doing service, he mentioned his annual income as Rs.3,00,000/- and the source of income was mentioned as private employee, in the exact nature of duties, he had mentioned Senior Accountant in GVR Infra, Khammam.  The opposite parties also submitted that during investigation, it was found that the DLA was a college dropout and he was not employed in GVR Infra, Khammam, and he obtained the policy by making the fraudulent misrepresentation intentionally and hence is void abinitio.   The opposite parties further submitted that the DLA had committed a breach of doctrine of utmost good faith by giving wrong details of qualification, occupation and income for availing huge insurance cover, the amount of insurance cover to be granted on the income profile and current standards of living of the insured and any disproportionate insurance will increase the moral hazard and a question arises with regard to the insurable interest.  The opposite parties further submitted that the qualification, income and occupation of the proper are the some of the vital factors for assessing risk and sum assured that can be granted under the insurance policy and the suppression of material facts which is crucial to the contract of the insurance, hence the complaint is not maintainable and deserves to be dismissed.

5.       The opposite parties to support their contention, they relied on the judgments of the Hon’ble National Commission, in LIC of India Vs. Kusum Patro,  the judgment of the Hon’ble Supreme court in Satwant Kumar Sandhu Vs. New India Assurance Co. Ltd., uphold the sanctity of principal of utmost good faith and reiterated that there need not be any nexus between the cause of death and the material facts suppressed. It has been further observed that the principle underlying the doctrine of disclosure and a rule of good faith oblige the proposer to answer every question put to him with complete honesty and the honesty implies truthfulness.

6.       On behalf of the opposite parties the following documents were filed and marked as Exhibits B.1 to B.7.

Ex.B.1:- Photocopy of Proposal Form.

Ex.B.2:- Photocopy of policy document bearing No.49002707209.

Ex.B.3:- Photocopy of the Investigation Report.

Ex.B.4:- Photocopy of Transfer Certificate for Intermediate Course.

Ex.B.5:- Photocopy of Employment Exchange Registration Form.

Ex.B.6:- Photocopy of Claim Repudiation Letter.

Ex.B.7:- Office copy of reply notice.

7.       Opposite parties filed their written arguments. 

8.       Upon perusing the material papers on record and upon hearing the arguments, now the point that arose for consideration is,

Whether the assured had suppressed the material facts pertaining to his occupation and qualification details at the time of submitting proposal form, consequently the complainant is entitled for the claim amount under the policy?

Point:-

9.       In this case the son of the complainants during his lifetime obtained insurance policy for a sum assured of Rs.14,98,500/- with receipt dt. 07-01-2011 vide bearing No.49002707209 from opposite parties and shown the name of complainant No.1 as nominee.  That on 10-02-2011 the son of the complainants died due to jaundice.  After death of their son, the complainant No.1 intimated the same to opposite parties and submitted all the relevant documents requesting to settle the death claim of his son.  But the opposite parties made investigation on the death of the insured.  On investigation the opposite parties came to know that the deceased/ life assured had intentionally suppressed the material facts about his occupation and education qualification and he had given wrong answers  to the question No.1 in the proposal form seeks the details viz. Date of Birth, Qualification, Occupation, Annual Income and source of Income etc., which is directly effect the issuance of policy on his life, as such the opposite parties repudiated the claim of the complainant, for that the complainants approached the Forum. 

10.     It is an undisputed fact that the son of the complainant died on 10-02-2011, while he had taken policy on 07-01-2011.  After taking the policy within 2 months from the date of policy, the son of the complainants died.  By virtue of insurance act, since the death was within two years, the opposite party insurance corporation made investigation.  During the course of investigation the opposite party corporation came to know that the son of the complainants / the deceased life assured was a college dropout and he was not employed in GVR Infra, Khammam, and he obtained the policy by making the fraudulent misrepresentation intentionally and hence is void abinitio and to support their case the opposite parties filed Exs.B.4 & B.5 Education certificates, the record shows that the deceased had suppressed the material fact.  From the above there is no reason to doubt about the educational certificates furnished by the opposite party corporation. 

          And also we observed that the opposite party company repudiated the claim of the complainant as it was found that DLA had misrepresented the facts while replying to the specific questions in the proposal Form bearing No.491374789 and the same has been intimated to the complainant No.1 vide letter dated 02-01-2012.  The opposite parties also intimated that investment value under the policy amount of Rs.85,137/- has been transferred to the saving account No.24990100004749 held in Bank of Baroda, Khammam A.P. Branch on 31-12-2011 as per the terms & conditions.

11.     The complainant failed to produce any evidence to disprove the case of opposite parties. Since the suppression is material, the repudiation of claim according to us was justified.  In these circumstances we cannot attribute any deficiency of service on the part of opposite parties as such this point is answered against the complainant.

          In the result, the complaint is dismissed.  There is no order as to costs.    

          Typed to dictation, corrected and pronounced by us in the open forum, on this the 23^rd day of February, 2015.

       Member                  FAC President             

District Consumer Forum, Khammam

APPENDIX OF EVIDENCE

WITNESSES EXAMINED:-

For Complainant:-                                                     For Opposite party:-   

       -None-                                                                           -None-

DOCUMENTS MARKED:-

For Complainant:-                                                     For Opposite party:-   

                Member                  FAC President             

District Consumer Forum, Khammam