BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, VELLORE DISTRICT AT VELLORE. PRESENT:THIRU. A. SAMPATH, B.A., B.L., PRESIDENT TMT. G. MALARVIZHI, B.E. MEMBER – I THIRU. K. DHAYALAMURTHI,B.SC. MEMBER – II CC. 15 / 2001 MONDAY THE 28TH DAY OF JUNE 2010. N. Kirankumar, S/o. Late N. Prabhakar Rao, No.35, Auxilium College Road, Gandhi Nagar, Vellore – 6. . … Complainant. - Vs - Senior Divisional Manager, Life Insurance Corporation of India, Divisional Office, Jeevan Prakash, Arcot Road, P.B.No.423, Vellore – 4. … Opposite party. . . . . This petition coming on for final hearing before us on 9.6.2010, in the presence of Thiru. J. Venkataramani, Advocate for the complainant and Thiru. L. Pandurangan, Advocate for the opposite party, and having stood over for consideration till this day, the Forum made the following: O R D E R Pronounced by Thiru. A. Sampath, President of the District Consumer Disputes Redressal Forum, Vellore District. 1. The brief facts of the case of the complainant is as follows: The Complainant’s father Prabhakar Rao, took a Life Insurance Policy, vide policy no. 730980620 on 28.12.1997 under the agent by name Sheethala V.Kumar code No.3329/733 The policy amount is Rs.1,50,000/- and yearly premium of Rs.11,550/- every year to be paid for the said policy. The said deceased Prabhakar rao, has paid premium amount till his death. After the death of Prabhakar Rao his son N.Kirankumar the complainant herein being a nominee under the policy as per the proposal sent the particulars to the L.I.C of India for the settlement of the claim. On 14.3.2000 the Divisional Manager has sent a reply for the above claim stating that the L.I.C repudiate the claim and no payment can be made on the policy since material information were with held by the said deceased Prabhakr Rao while taking the policy. The letter dated 14.3.2000 states that the deceased has consulted 5 years before for the Diabetic Mellitus and Hypertension for which he had consulted a medical man and had taken treatment in Hospital and the same was not mentioned in 11(e) column. The repudiation letter is filled herewith and for reconsideration Zonal Manager address was given. The complainant has appealed to Zonal Office for reconsideration of the decision about repudiating the above death claim. For the appeal the Senior Divisional Manager has sent a reply dated 17.8.2000 that the L.I.C will not reconsider the decision and dismiss the appeal and no claim amount being paid. Policy was taken on 28.12.1997 and premium was paid for the year 1998, the premium amount was paid on 27.1.1999 a sum of Rs.1,550/-. The receipt for the premium paid is enclosed herewith. The next premium due by December 1999. The said policy holder N.Prabhakar Rao, died on 11.11.1999 at C.M.C. Hospital, Vellore and the death Certificate issued by the Vellore Municipality. The policy was taken on 28.12.1997 by the L.I.C agent and it was a complete medical Claim. He was taken to the Doctor by the L.IC agent who has a through Check-up and after the satisfaction of the health condition, the Manager attached to L.I.C office at Vellore after due verification the policy was taken. The deceased Prabhakar Rao, admitted in C.M.C Hospital and died on 7.11.1999. The repudiation dated 14.3.2000 with question and answer filed by the deceased Prabhakr Rao, is correct and he never admitted in any hospital for Diabetic Mellitus and Hypertension. He has not consulted any medical men. The repudiation must clearly state with whom he had the treatment with particulars. It is not a secret to maintain by the L.I.C. The complainant is eligible for the assured sum of Rs.1, 50,000/- together with bonus and also Two Lakhs as damages for the deficiency of services and also a sum of Rs.1,000/- as cost of proceedings. He has prayed for directing the opposite party to pay a sum of Rs.1,50,000/- together with the accrued bonus of Rs.10,000/- totaling Rs.1,60,000/- being the sum assured in the above policy with the opposite party and to pay interest at the rate of 24% per annum from January 2000 onwards entire amount are realized, and to pay a sum of Rs.2,00,000/- as damages for the deficiency of service on the party of the opposite party with Cost of this proceedings of Rs.1000/-. 2. The averment in the counter filed the by opposite party is as follows: The opposite party denies all allegations made in the complaint save those which are specifically admitted herein and puts the complainant to strict proof of the same. It is true that the deceased policy holder had taken the policy on his own life for the sum assured of Rs.1, 50,000/- under Endowment Assurance for 15 years with yearly premium of Rs.11,555/-. The policy was issued under number 730980620 with date of commencement 28.12.97. It is also true that the complainant was appointed as nominee under the policy by the deceased life assured. After the death of the life assured the complainant has submitted his claim for the policy moneys, and after perusal of the policy file and on enquiry, the opposite party has found out that the deceased policy holder had suppressed material facts regarding the pre-proposal ill health. The claim was repudiated on the ground that the deceased life assured had misguided the opposite party by with-holding the valuable information of his pre-proposal period health condition, which is necessary for any under-writer to decide about the acceptance of the risk. Insurance is a contract between the insured and the insurer. It is contract of utmost good faith (Ubberimafides) between insurer and insured. It is the proposer alone who is aware of the past and present history of the life to be assured and unless he answers all the questions in the proposal form correctly, the under-writer who accepts the risk on behalf of the corporation cannot properly assess and under-write the risk. Assessment of risk is based on information as given by the propose in the proposal form. In the claim the deceased life assured was a Diabetic mellitus for five years and Hypertensive for six years as on the date of admission into C.M.C Hospital, Vellore i.e. 30.8.1999, onset of these ailments was in the pre-proposal period. This apart, he was taken on regular medication of tablet Danoil 5mg twice a day, Tablet Rastinon 500 at bed time. Tablet Atenalol 100 mg once a day and Tablet Glyciphage 250mg once a day from October, 1992 as per the treatment particulars in the C.M.C Hospital case sheet itself. But these facts were withheld by the deceased policy holder at the time of giving the proposal for assurance by giving negative answers to the questions contained in the proposal with sole intention to defraud the corporation. All the repudiated claims at the Divisional level, will be reviewed by the committee consisting of a retired High Court Judge at the Zonal level. This case was also referred to them and they have upheld our decision and advised us to inform the same to the claimant on 17.8.2000. Therefore, no deficiency in service on the part of the opposite party as alleged can be observed. The Complaint is devoid of merits and as such deserves to be dismissed with costs in favour of opposite party. 3. Now the points for consideration are: a) Whether there is any deficiency in service, on the part of the opposite party b) Whether the complainant is entitled to the reliefs asked for?. 4. Ex.A1 to Ex.A6 were marked on the side of the complainant and Ex.B1 to Ex.B5 were marked on the side of the opposite party. Proof affidavit of the complainant and Proof affidavit of the opposite party have been filed. No oral evidence let in by either side. 5. POINT NO. (a): It is admitted case of the parties that the complainant’s father Thiru. Prabhakar Rao, had taken a insurance policy No.730980620 from the opposite party on 28.12.97 under the agent by name Sheethala V. Kumar and assured his life for a sum of Rs.1,50,000/-. After the death of P. Prabhakar Rao his son i.e. the complainant herein being a nominee under the policy. Pursuant to the nomination when a claim was lodged for the assured amount. The opposite party has repudiated the claim through the letter Ex.A5, dt. 14.3.2000. 6. The complainant contended that the policy holder N. Prabhakar Rao died on 11.11.99 at CMC Hospital, Vellore and the death certificate issued by the Vellore Municipality. The policy was taken on 28.12.97 by the LIC agent and it was taken to the Doctor b y the LIC agent who has a through check-up and after the satisfaction of the health condition, the manager attached to LIC office at Vellore after due verification the policy was taken. The deceased Prabhakar Rao, admitted in CMC, Hospital, and died on 7.11.99 and the repudiation dt. 14.3.00 with question and answer filled by the deceased Prabhakar Rao, is correct and he never admitted in any hospital for Diabetic Mellitus and Hypertension. He has not consulted any medical men. The complainant is eligible for the assured sum of Rs.1,50,000/- together with bonus. Therefore, the opposite party was under obligation to pay the sum assured by the complainant’s father in accordance with the terms of the policy. Having failed to pay the sum assured the opposite party having repudiated the policy has caused deficiency in service. Therefore, direct the opposite party to pay the assured sum with bonus and the compensation mentioned in the complaint. In this connection the learned counsel for the complainant relied upon the following judgment of Hon’ble High Court of Madras, 2010 (1) CTC 192 The Life Insurance Corporation of India rep. by its Branch Manager, Filter Bed Road, Vellore ..Vs.. S. Anusuya Bai Wherein the Hon’ble High Court of Madras is held that: “Insurance Act 1938 (4 of 1938), Section 45 – Evidence Act 1872 (1 of 1872), Sections 101 to 104 – Burden of Proof – applicability of – Payment of Policy amount – Deliberate suppression of material information – Ingredients of Section 45 would be attracted if (a) Policy holder suppresses material facts that he was required to disclose or statement made by policy holder is material matter; (b) Such suppression must be fraudulent; (c ) Policy Holder makes such statement knowing it to be false at time of making it or with knowledge of suppression – LIC being an established Corporation, burden is heavy upon it to escape from statutory obligation – LIC failed to discharge its burden and coupled with lack of evidence to show that insured was aware of consequences of making statement of good health in policy – unless same is material in nature – Evidence disclosed that insured did not know of Hepatitis which caused death at time of taking policy – No proof of deliberate suppression of ailments – Held, no deliberate wrong answer on part of insured to have bearing on contract of Insurance – Orders of lower Courts directing LIC to pay Policy amount along with interest confirmed.” 7. The opposite party contended that the claim was repudiated for non disclosure of certain material facts regarding the health condition of the life assured Thiru.Prabhakar Rao at the time of taking the policy. It is further contended that as per Section 45 of Insurance Act, the previty of contract between the parties purely on the pre – of ubirimafide on atmost good faith. Since any declaration made by the life assured found false the contract becomes null and void under section 45 of Insurance Act. From the perusal of Ex.B2 and Ex.B3 medical records of CMC Hospital, Vellore it is clearly proved that the life assured Thiru.N. Prabahar Rao had been suffering from diabetes for five years and hypertension for period of 7 years prior to the date of policy and he had also taken tablets for Hypertension & Diabetics, case history sheet dt. 30.9.99 also confirm that the deceased N. Prabakara Rao had been suffering from diabetic for the past five years and hypertension for the past 6 years. As these period falls under pre proposal period, the proposal ought to have disclosed the treatment particulars as called for in the proposal form. And he had given false and incorrect answers to all the above questions mentioned in the proposal form Ex.A1 dt. 28.12.97. The contact between the parties becomes null and void under section 45 of the Insurance Act. So, there is no deficiency in service on the part of the opposite parties. Therefore, the opposite parties are not liable to pay the amount claimed by the complainant in the complaint. In this connection learned counsel for the opposite party is relying upon the following Judgements of Hon’ble Supreme Court, I. AIR 2008 SUPREME COURT 424 P.J. Chacko and Anr. ..Vs.. Chairman, Life Insurance Corporation of India & Ors. Wherein the Hon’ble Supreme Court is held that ” The well settled law in the field of insurance is that contracts of insurance including the contracts of life assurance are contracts uberrima fides and every fact of materiality must be disclosed otherwise there is good ground for rescission. And this duty to disclose continues up to the conclusion of the contract and covers any material alteration in the character of the risk which may take place between proposal and acceptance. “ (A) Insurance Act (4 of 1938) S.45 – Insurance Policy – Repudiation – Deliberate wrong answer given by Insured having a great bearing on contract of insurance - Policy may be repudiated. Contract Act (9 of 1872) S.126. II 2009 (IV) CPJ 8 (SC) SATWANT KAUR SANDHU ..Vs.. NEW INDIA ASSURANCE COMPANY LTD. Wherein the Hon’ble Supreme Court is held that “Section 45 – Insurance Regulatory and Development Authority (Protection of Policy Holder’s Interests) Regulations, 2002 – Regulation 2(1)(d) – Insurance – Mediclaim Policy – Suppression of material facts – Policy holder suffering from chronic diabetes and renal failure not disclosed – Claim repudiated by insurer – Section 45, Insurance Act, applicable in life insurance policy, has no application in case related to mediclaim policy – Contract of insurance, contract of uberrimae fidei – Insured under obligation to make true and full disclosure of information, within his knowledge – Insured on regular haemodialysis, fully aware of state of health – Statement made in proposed form as to state of health palpably untrue to his knowledge - Suppression of material facts proved – Repudiation of claim justified. “ It is further contended that the decision cited by the learned counsel for the complainant is not applicable to the facts of this case. 10. The complainant’s father Thiru.Prabhakar Rao made proposal for insurance on own life Ex.A1 before the opposite party on 28.12.97 it is seen from the above document that the assured Thiru.Prabhakar Rao made a declaration before LIC penal doctor that during the last 5 years he has not consulting the medial practitioner for any ailment requiring treatment for more than a week and his health condition was good. From the perusal of Ex.B2 medical records dt. 3.12.90 Thiru.N.Prabhakara Rao issued by the CMC, Hospital, Vellore it is seen that the deceased Prabhaka rao was continuously taking treatment from 3.12.90 till 17.10.99 for diabetics Mellitus further it is seen that diabetics since 5 ½ years and he is taking early renal failure and also take in tablets. It is admitted fact that the life assured N.Prabhakara Rao taken a policy on 28.12.97. Therefore, it is clear that the disease N. Prabhakara Rao was suffering form diabetics Mellitus, hypertension disease 5 ½ years prior to obtained the policy. But when presenting the proposal for insurance in his own life before the opposite party the deceased Prabhakara Rao did not disclose the above disease before the LIC penal doctor. 8. Considering the effect of Sec.45 of the Insurance Act, the Insurance Policy is a contract falling in the category of utmost good faith on the part of the assured, and if the assured has not made full disclosure correctly or in other words, if the declaration so made found to be false to the knowledge of the declarant, then the insurance company is entitled to repudiate the claim. The Hon’ble Supreme Court has observed in above two cases cited by the learned counsel for the opposite party that under section 45 of Insurance Act deliberate wrong answer given or statement made in proposal form as to state of health condition and true to his knowledge he suppressed of material facts the Insurance Company can repudiate the claim. 9. In the present case, at the time of presenting the Ex.A1 proposal for insurance on his own life before the opposite party the life assured Thiru. Prabhakara Rao stated falsely that for the last five years, he was not consult with the medical practitioner for any disease and also he was a good health condition. The opposite party has proved through the Ex.B2, medical records of the life assured Thiru.N.Prabhakara Rao issued by the CMC, Hospital, Vellore that the deceased Thiru.N.Prabhakara Rao was taking treatment for diabetics Mellitus hypertension 5 ½ years prior to the taking the policy. Under Section 45 of the Insurance Act the insured Thriu.N. Prabhakara Rao under obligation to make true and full disclosure of information, within his knowledge. But he made false statement before the LIC penal doctor, on 28.12.97 regarding his health condition. Based on the suppression of material facts the opposite party of the Insurance Company repudiated the claim. Therefore, there is no deficiency in service on the part of the opposite party. The authorities cited by the learned counsel for the complainant is not applicable to this case. But the authorities cited by the learned counsel for the opposite party are squarely applicable for the facts and circumstances of the case. 10. Hence, taking all the above facts into consideration from the contention in the complaint and the counter, as well as proof affidavit of the both the parties, and from the documents Ex.A1 to A6 and Ex.B1 to B5, we have come to the conclusion that the complainant herein has not clearly proved the deficiency in service on the part of the opposite party herein. Hence we answer this point (a) as against the complainant herein. 11. POINT NO : (b) In view of our findings on point (a), since, we have come to the conclusion that the complainant herein has not clearly proved the deficiency in service on the part of the opposite party herein. We have also come to the conclusion that the complainant is not at all entitled to any relief asked for by him, in this complaint. Hence we answer this point (b) also as against the complainant herein. 12. In the result this complaint is dismissed. No costs. Dictated to the Steno-typist and transcribed by her, corrected and pronounced by the President, in Open Forum, this the 28th day of June, 2010. MEMBER-I MEMBER-II PRESIDENT. List of Documents: Complainant’s Exhibits: Ex.A1- 28.12.97 - X-copy of proposal for LIC on own life. Ex.A2- 31.12.97 - X-copy of 1st premium receipt. Ex.A3- 27.1.99 - X-copy of Premium receipt. Ex.A4- 16.11.99 - X-copy of Death Certificate. Ex.A5- 14.3.00 - X-copy of Repudiation letter by the Divisional Manger. Ex.A6- 17.8.00 - X-copy of Repudiation letter by the Senior Divisional Manger. Opposite party’s Exhibits: Ex.B1 – -- - Proposal Form. Ex.B2- -- - X-copy of medical records. Ex.B3- -- - Proposal Form. Ex.B4 – 14.3.00 - Repudiation Letter. Ex.B5- -- - Death Certificate. MEMBER-I MEMBER-II PRESIDENT. | 
