Karnataka

Belgaum

CC/275/2015

Sri. Viraj Sadashiv Hiremath - Complainant(s)

Versus

Senior Divisional Manager, LIC of India, - Opp.Party(s)

P.S.Nesari

31 Jul 2017

ORDER

JUDGEMENT

 

By  Shri. A.G.Maldar, President.

 

 

1.      This is a Complaint filed by the complainants under Section 12 of the Consumer Protection Act, 1986 (herein after referred to as Act) against the Opposite Party (in short the “Op”) directed to pay an amount of Rs.1,95,000/- sum assured together with benefit alongwith interest @ 12 % p.a. from 04.02.2015 till the realization and Rs.50,000/- towards compensation for mental agony and any other reliefs.  

2.      The facts of the case in brief are that;

 

          The case of the complainants are that, the Compt.No.1 is the nominee to the said policy and the Compt.No.2 to 4 are the wife and children of deceased Suresh Hiremath, the deceased Suresh Appayya Hiremath had died on 07.12.2013 and further the deceased Suresh had obtained an insurance policy No.669441594 for sum of Rs.1,95,000/- with the OP/Insurance Company which commencing from 30.01.2013. The premium for the said policy was Rs.9,500/- yearly, the deceased Suresh had paid the initial premium amount of Rs.9,500/- as yearly premium alongwith proposal, the proposal was accepted and further the assured was hale and healthy at the time of taking/receiving the policy. Therefore the payment of premium was regular and policy was in force.

 

It is further case of the complainants that, the Compt.No.1 being the nominee had submitted the claim form along with all necessary documents to the Op. After verifying the claim form of the Compt.No.1, the OP has repudiated on the grounds that, the life assured had suppressed material facts and deliberately given misstatement and withheld the material information from the OP and further the OP contends that, the life assured suffering from Pulmonary Tuberculosis for which the life assured had taken treatment and visited the reputed hospital on 28.09.2011 for the treatment. The contention taken by the OP is totally false, baseless and it is not tenable in the eyes of law and further the complainants specifically submitted that, the deceased Suresh was hale and healthy at the time of taking the policy and he died due to Cardio-respiratory failure and also doctor has issued a certificate and further the repudiation made by the OP is against the principles of natural justice and these attitude of the Op, it amounts to deficiency of service on the part of the OP. Hence, the complainants have constrained to file this complaint.

 

 3.     After receipt of said notice, the OP has appeared through his counsel and resisted the claim of the complainants and denied all allegations made out in the complaint about deficiency of service on the part of the OP and further submitted that, the Compt.No.2 to 4 are not at all concerned with the policy in question. It is only the Compt.No.1 being the nominee of the policy can lodge the claim. The question of OP causing any trouble to the complainants does not arise, because the OP has to fulfil all the rules and regulations while settling or repudiating the policy claim.  

 

          It is further contended that, the life assured submitted the claim form for the policy on 30.01.2013. The policy was issued with effect from 28.01.2013, whereas the life assures expired on 07.12.2013 i.e. within one year from the date of commencement. As such the claim being Early Claim, it was mandatory on the part of the OP to investigate in to the cause of death to ascertain the genuineness of claim. During the investigation it is found by the OP that, the deceased life assured was admitted in Govt. Hospital, Hukkeri for treatment of Pulmonary Tuberculosis, from 20.09.2011 to 16.03.2012 for the Summary Sheet issued by KLE Hospital, Belgaum, it is evident that, the life assured was under treatment since 26.07.2012. Both the treatments are prior to the proposal form and date of commencement of the policy. However, while filling the proposal form, the life assured has given false information regarding his health, as follows; 

 

	QUESTION	ANSWER
a)	During the last 5 years did your consult a medical practitioner for any ailment requiring treatment for more than a week?	No
b)	Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation?	No
c)	Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Brain or Nervous System?	No
i)	What has been state of health	Good

 

          It is further case of the Op that, as per hospital records reveals that, the Life Assured was taking the treatment from the Govt. Hospital, Hukkeri from 20.09.2011 to 16.03.2012 and as per summary sheet of K.L.E Hospital, the treatment started from 26.07.2012. But while answering the above said questions he has answered the same as NO, it is clearly suggests that, the Life Assured knowing fully well his health conditions has purposely suppressed the same from OP and further the Contract of Insurance is based on the principles of Utmost Good Faith.

 

          It is further case of the Op that, the policy in question i.e. Policy No.669441594 was issued on 28.01.2013. Whereas, the Life assured was already taking medicate treatment since 26.07.2012 and ultimately expired on 07.12.2013 for the same disease, it is evident from the Summary Sheet issued by K.L.E. Hospital, Belgaum, wherein he was admitted on 08.07.2013 and discharged on 15.07.2013 on request of the patient. During the said period the Life Assured was treated for Pulmonary Tuberculosis. More over his death occurred immediately within one year from the date of commencement of the policy. When the Op investigated in to the genuineness of the cause of death they came to know about the illness suffered and the treatment taken by the Life assured since prior to issue of policy, from 20.09.2011 to 16.03.2012 as per the Revised NTCP, Hukkeri and the treatment from 26.07.2012 as per the summary sheet of K.L.E. Hospital. It means since prior to obtaining the said policy he was under medical treatment and even obtaining the policy he continued to take the medical treatment and further the life assured was fully aware about his health condition, but he did not disclose the same only with an intention to make wrongful gains to OP. As such no valid contract of insurance took place between the life assured and the Op and further the Op was not under contractual obligations to settle the policy claim. Therefore, the Op has repudiated the claim on 04.02.2015. Moreover, the repudiation done on the basis of non-disclosure of Material Facts is in consonance with provisions of Sec. 45 of the Insurance Act. Therefore, there is justification on the part of the OP to repudiate the claim of the complainants and there is no any deficiency of service on the part of the OP.  Hence, the OP has prayed for dismissed the complaint with compensatory costs. 

 

 

 

4.      Both the parties have filed their affidavits in support of their case, the Xerox copy of the documents produced on behalf of the complainants i.e. Claim repudiated policy form issued by the OP, Medical Certificate issued by Dr.Basawant A. Gardi, Xerox copy of Death Certificate, Xerox copy of Legal Heirship Certificate and Xerox copy of Adhar Card, which are marked as Ex.P-1 to Ex.P-5, as against this, the OP has produced 11 documents i.e. Integrated counseling & Testing Centre, Revised NTCP treatment Card, Hukkeri, Proposal form, Policy bond, Letter of repudiation, Summary Sheet issued by KLE Hospital, Sheet of Progress record & Treatment, Medication Sheet, Nurses Daily record, Admission & Discharge order and Death Certificate, which are marked as Ex.R-1 to Ex.R-11, for sake of our convenience, we have marked
P & R series. Both the parties have filed their written arguments. Heard the argument on both sides.           

 

Now, on the basis of these facts, the following points that would arise for our consideration:

 

01.Whether the complainants have proved that, there is deficiency of service on the part of Op in repudiation of claim of the complainants?

 

02.What order?

 

 

5.      Answer to the above Points:-

 

01. Negative.

 

02. As per final Order.

 

 

R E A S O N S:-

 

6.      Point No.1: After perusing the evidence of both parties and written version, the case of the complainants are that, the deceased Suresh had obtained an insurance policy No.669441594 for sum of Rs.1,95,000/- which commencing from 30.01.2013 and the said initial premium amount was paid Rs.9,500/-, the proposal was accepted. The deceased Suresh Appayya Hiremath had died on 07.12.2013. The assured was hale and healthy at the time of taking/receiving the policy. So, the initial premium was paid which is in force at the time of death.

 

          After the death of life assured, the Compt.No.1 who is a nominee had submitted the claim form along with all necessary documents to the Op and requested to settle the claim as alleged by the Compt.No.1, the complainants further contended that, after due enquiry and collecting the necessary detailed information from their agent, the Op has repudiated the claim by way of issuing letter vide dtd: 04.02.2015, this attitude of the Op and repudiation of the claim of the complainants tantamount to deficiency of service on the part of the OP.

 

          The complainants further also alleged that, mere production of medical certificate and patient summary sheet is not suffice to hold that, the deceased has suffering as contended by the Op in written version, unless a treating doctor has given evidence in support of  said document by the said doctor who has issued certificate and merely produced the discharge card of K.L.E. Hospital which is not said to be proved, except this allegation there is no any other contention of OP. In our consider view, even the complainants have not substantiate the same and also not proved by cogent reliable and acceptable evidence. So, the complainants have failed to substantiate that, there is negligence and deficiency in the service on the part of the Op as alleged in the complaint and as well as in affidavit evidence. Even, the complainants counsel have not convince this Forum or put-forth with a valid and good grounds to substantiate that, the complainants are entitled to claim the assured amount of the deceased life assured.

 

          The Counsel of the complainants have not make effort to substantiate the case and neither produce any authorities regarding the same as contended in complaint nor produce any supporting material documents in support of his case. The complainants mere contending that, the OP had produced the Hospital records which was not proved by leading evidence of treating doctor is not sufficient. Looking to the above observation, we find that, first of all, it is not fetal for the case of insurer towards not leading the evidence of treating doctor and it is obligatory and mandatory on the part of insured to give correct answers at the time of obtaining insurance policy and as insured suppressed material fact regarding decease and medical summary of decease and gave false answers as such it is clearly revels in proposal form  and the life assure history as has been issued in the Govt. Hospital, Hukkeri for treatment of Pulmonary Tuberculosis on dtd: 20.09.2011 and further deceased life assured had taken treatment at KLE Hospital on dtd: 08.07.2013 to 15.07.2013, it is evident from the Summary Sheet issued by KLE Hospital, Belgaum. The life assured was taking treatment since from 26.07.2012. Both the treatments are prior to the proposal form and date of commencement of the policy. The contention contended by the OP has been established as per the summary sheet which supports the same regarding the concealment of diseases, that deceased life assured at the time of obtaining the policy and filling in the proposal form concealed his above noted medial history and deliberately gave incorrect information against the following columns as under ;

 

a)During the last 5 years did your consult a medical practitioner for any ailment requiring for more than a week ?, Answer : No.

 

b)Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation ?, Answer: No.

 

 

c)Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Brain or Nervous System ?, Answer: No.

 

 

1. What has been state of health ? Answer: Good.

 

          With the light of above observations and pleadings of the parties, we would like to refer a decision of Hon’ble Suprem Court reported in III (2008) CPJ 78, wherein the Hon’ble Apex court has held that, there are three conditions for application of second part of Section 45 of the Insurance Act which are (a) the statement must be on a material matter or must suppress facts which it was material to disclose;  (b) the suppression must be fraudulently made by the policy-holder; and (c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Proposer can be repudiated if a fraudulent act is discovered, the proposer must show that his intention was bonafide. It must appear from the face of the record. In a case of this nature it was not necessary for the Insurer/OP to establish that, the suppression was fraudulently made by the policy-holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose.  Further in Ratan Lal and another V/s Metropolitan Insurance Co. Ltd. wherein a distinction was made between as to what is material and what is not material. In this regard to disclose of facts in that case itself, it was opined:

 “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”

 

  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 proposer to determine, whether the information sought for is material for the purpose of the policy or not. The obligation to disclose necessarily depends upon the knowledge one possesses.

 

Needless to emphasis that any inaccurate answer will entitle the insurer/OP to repudiate his liability because there is clear presumption that, any information sought for in the proposal form is material for the purpose of entering into a Contract of Insurance.     

 it discloses that, the deceased life assured himself suppressed material facts at the time of obtaining the insurance policy and filing of proposal form and the deceased having knowledge regarding the previous decease. In our consider view, the deceased life assured suppressed the material fact of Pulmonary Tuberculosis problem which is element pertaining to Lungs and in such circumstances, on account of suppression of material fact of disease, the OP has not committed any deficiency and life assured failed to provide the true and correct information about his health conditions in the proposal form.

 

 

          The case of the Op that, the death of the deceased life assured is within one years, so it requires detail investigation regarding the death of life assured and the genuineness of the claim. During the investigation it revealed that, the deceased life assured has taken treatment in the Govt. Hospital, Hukkeri for treatment of Pulmonary Tuberculosis on dtd: 20.09.2011 and further deceased life assured had taken treatment at KLE Hospital on dtd: 08.07.2013 to 15.07.2013. Further Op submitted that, prior to obtaining the said policy he has under medical treatment and even obtaining the policy he continued to take the medical treatment, the life assured was fully aware about his health condition, but he did not disclose the same only with an intention to make wrongful gains to OP. As such no valid contract of insurance took place between the life assured and the Op was not under contractual obligations to settle the policy claim. Therefore, the Op has repudiated the claim.

 

          In order to establish the above said contention of Op, the Op has lead the supporting affidavit evidence and producing a cogent and material document regarding medical treatment taken at Govt. Hospital, Hukkeri and K.L.E. Hospital, Belgaum regarding Pulmonary Tuberculosis, the said documents which are already marked as Ex.R-2, R-6 & R-7 and further the OP relied a provision of Life Insurance Act 1938, as per Sec.45 of the Insurance Act as non discloser of material fact is in consonance with provision of Insurance Act and repudiated the claim of the complainant, so in our firm consideration repudiation of the claim of the complainant is proper and justification, for the reason that, Life Assured well aware of his heath condition and having Pulmonary Tuberculosis disease, it is evident that, as per hospital records, the Life Assured was the known case of Pulmonary Tuberculosis and taking regular treatment in respect of said disease and while answering the question No. ‘ A & C’ he answered the same as NO,  despite life assured suppressed and mislead the Op at the time of filing the proposal form and intend to wrongful gain by giving false information to the Op. In order to establish the contention, the Counsel of OP/Insurance Company relied six decisions of Hon’ble National Commission reported in I (2016) CPJ 54 (NC), I (2016) CPJ 57 (NC), III (2011) CPJ 143 (NC), II (2006) CPJ 284 (NC), I (2015) CPJ 62 (NC) and also reported in IV (2016) CPJ 342 (NC). We have gone through in detailed scanned and analyzed the decisions of Op that, the Hon’ble National Commission held that, concealment of Medical History and deliberate wrong information by insured and insurance contract obtained by concealment of material fact is not a valid contract and already the Hon’ble Supreme Court has held in III (1996) CPJ 8 (SC) observe that, it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith for bits either party form non-disclosure of the facts which the party privately knows to draw the other in to a bargain from his ignorance of that fact and his believing the contrary. So under these circumstances, the repudiation of the claim is justifiable and there is no any negligence on the part of the Op.

 

         

          Therefore the OP has rightly repudiated the claim of the complainants, the claim repudiation by the OP, it will not amounts to deficiency in service on the part of the Op. Under such circumstances, we are of the opinion that, the complainants have failed to prove deficiency in service on the part of the Op. Accordingly we answer this point in the negative and proceed to pass the following:

 

           

 

 

O R D E R

 

For the reason discuss above, the complaint filed by the complainant U/s 12 of the C.P. Act – 1986 is here by dismissed.

 

No order as to costs. 

 

 

           

(This order is dictated to the Stenographer, transcript edited, corrected and then pronounced in the open forum on this 31^st day of June, 2017).

 

Sri. A.G.Maldar,     President.

Smt. J.S. Kajagar,    Lady Member.