PER SURESH CHANDRA, MEMBER This revision petition has been filed by the petitioners, who were opposite parties before the District Forum, against the order dated 16.11.2006 passed by the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (in short, ‘the State Commission’), by which, the State Commission set aside the order dated 28.07.2004 passed by the District Forum and allowed the appeal of the complainants, who are respondents herein. 2. The factual matrix of this case are that the first complainant is the wife and the others are children of the deceased-insured. The husband of the complainant No. 1 took a policy bearing No. 600542186 for Rs.50,000/- and another policy bearing No. 600542188 for Rs. 3 lakh on 14.11.1998. Both the policies are double accident benefit policies and the life assured mentioned his brother as nominee under the two policies. The life assured died in a motor vehicle accident on 25.11.1998. The nominee in the policies represented to the petitioners for payment of the policy money after the death of the life assured. Petitioner No. 2/opposite party No. 2 repudiated the claim of the nominee on 6.12.2000 stating that the deceased had withheld the material information regarding his income at the time of his insurance with the petitioner-company. After the repudiation, the nominee represented the matter to Zonal Manager of the petitioner-company on 29.12.2000, who also repudiated the claim on 22.2.2003 and informed the complainant that the petitioner-company had decided not to pay the policy money to the nominee or to the legal heirs of the deceased. Aggrieved by the repudiation of their claim by the petitioners, the complainants filed a complaint under the Consumer Protection Act, 1986 with the District Forum requesting it to direct the petitioners-opposite parties to pay the policy money (double accident benefit) of Rs. 7 lakh with all benefits alongwith interest from the date of proposal and compensation of Rs. 1 lakh to the complainants for the deficiency in service in not settling the claim. It was submitted by complainant No. 1 in the complaint that her parents had given land at the time of her marriage and her husband used to cultivate the said land alongwith other land taken on lease and they used to get more than Rs.40,000-50,000/- per annum. It was further stated that although the husband of the complainant No. 1 had showed his brother as nominee on the date of proposal as he was available on that day but the nominee is not entitled for the policy money and the same should be distributed to the legal heirs of the deceased. 3. The opposite parties filed their counter admitting that both the polices are in existence but they repudiated the claim on the ground that the deceased withheld material information regarding his income. In his proposal form, the life assured stated his income as Rs.40,000/- per annum but as per M.R.O. office, the life assured was an agricultural labour with an annual income of Rs.10,500/- per annum and was holding a white ration card. Later, the life assured died in a motor vehicle accident and an amount of Rs. 1 lakh was paid by the District Collector on 10.6.1999 under the ‘Apathbandhu Scheme’ of the State Government. The scheme is meant for poor people with an annual income of less than Rs.12,000/- holding a white ration card. Since the life assured misrepresented his income by claiming it to be Rs.40,000/- per annum to obtain his insurance for a heavy sum of Rs.3.5 lakh, the claim was repudiated. The opposite parties denied any deficiency in service on their part. 4. Based on the evidence adduced and the pleadings put forth, the District Forum dismissed the complaint vide its aforesaid order. On appeal filed by the respondent/complainant before the State Commission, the State Commission reversed the order of the District Forum and allowed the appeal vide its impugned order and directed the petitioners to pay the double accident sum assured of Rs. 7 lakh with cost of Rs.2,000/- and hence the present revision petition by the opposite parties/petitioners. 5. We have heard Mr. S. P. Mittal, learned counsel for the petitioners and Mrs. K. Radha, learned counsel for the respondents. 6. The only issue involved in the present case is in respect of the assessment/estimate of the annual income of the deceased-life assured. Copies of the proposals submitted for obtaining the two policies are placed on the paper book at page 14 to 17 and 18 to 21, respectively. Both the proposal forms have been filled up in English by the LIC agent himself, who has also signed as witness as well on the two proposal forms. The life assured has signed the forms in local Telugu language with a declaration by the LIC agent that the questions in the proposal forms have been fully explained by him to the life assured and that he has truthfully recorded answers given by life assured. The replies to certain questions, which are material to the issue in the present case, may be reproduced as under:- Q. No. | Questions | Answers recorded in the proposal form | 4A | Present Occupation | Agriculture & Lorry Cleaner | | Exact nature of duties | Agriculture and Lorry Cleaner | 4B | Nature of Present employer | Due to lorry cleaning job is temporary. There is no employer | 5 | Educational Qualification | 4th Class | | Annual Income | Rs.40,000/- | | Source of Income | Agriculture and Lorry Cleaning |
7. It would be seen from the information given in the proposal forms that the deceased-life assured had declared dual sources of income and the total income from them was stated to be Rs.40,000/- per annum. Although there is a statement by the wife of the life assured that her parents had given land at the time of her marriage and her husband used to cultivate the said land alongwith other land taken on lease from which they used to get more than Rs.40,000/- as income, there is nothing in the proposal form to show that the deceased person had made any declaration about having any agricultural land as such, which, his widow has tried to prove by her statement in her consumer complaint after the death of her husband. As far as the life assured is concerned, he has simply stated about his occupation being agriculture and lorry cleaner and the estimate of annual income is shown as Rs.40,000/- per annum. The State Commission vide its impugned order seems to have dealt with the issue at length while unsuiting the defence of the opposite parties and setting aside the order of the District Forum. It may be relevant and appropriate to reproduce the following reasons recorded by the State Commission in support of its impugned order:- “The main contention of the opposite parties in repudiating the claim of the complainants is that the life assured had suppressed material information with respect to his income and that he had falsely stated in the proposal form that he was earning Rs.40,000/- to 50,000/- per annum. The only evidence that the insurance company had relied on with respect to his annual income is that the complainants were the recipients of Rs. One lakh from ‘Apathbandu Scheme, which is given only to white ration card holders whose income is less than Rs.12,000/-. Having accepted the premiums and issued the policies the insurance company cannot absolve their liability without adducing any evidence to substantiate their contention that the insured had willfully and fraudulently suppressed the material facts which he ought to have disclosed. The life assured had clearly stated in his proposal form that his income is Rs.40,000/- to Rs.50,000/-. The Development Officer of the opposite parties ought to have verified at this juncture itself before the issuance of policy whether the income declared in the proposal form is true or not. MRO records ought to have been verified at that point of time. Having issued the policy and with the death of the deceased in a motor vehicle accident not in dispute, at this juncture the insurance company is not justified in repudiating the claim. Moreover the insured had stated that he was an agricultural labourer as well as lorry cleaner in his proposal form itself. There was no suppression by the insured with respect to his profession when he clearly stated in the proposal form that he was an agricultural labourer and lorry cleaner. It was upto the insurance company to have conducted an enquiry with respect to his earnings. The opposite parties have failed to establish that there was willful and fraudulent suppression of material facts which ought to have been disclosed by the complainant with respect to his income. We reiterate that any certificates to substantiate the income of the life assured ought to have been verified by opposite party before the issuance of policy. It is held by the National Commission in several judgment and also reported in 1999 (1) CLT 54 that when two interpretations possible, one beneficial to insured should be accepted. In the instant case, the nominee did not prefer to file a complaint. The opposite parties neither in their counter nor in their arguments raised the contention that the LRs preferred to file the complaint and not the nominee. Keeping the facts and circumstances in view and the material filed on record we are of the considered opinion that there is a deficiency of service on behalf of the opposite parties and we set aside the order of the District Forum and allowed this appeal directing the opposite parties to pay the double accident sum assured of Rs. 7 lakh with costs of Rs.2,000/- to the complainant who are Legal Heirs.” 8. It is the contention of the learned counsel for the petitioners that actual income of the life assured was only Rs.10,500/- and not Rs.40,000/- as falsely stated by him in the proposal forms. During the investigation that the petitioner-company carried out, it came to notice that the life assured was holding a white ration card and his family was also granted financial assistance of Rs. 1 lakh under ‘Apathbandhu Scheme’ of the State Government, which is meant for people having annual income below Rs.12,000/-. In such a situation, learned counsel contended that the State Commission committed grave mistake in rejecting this piece of evidence emanating from official records and passing on the onus of proof on the petitioner-company in regard to the false statement about the annual income made by the life assured. Keeping in view the certificate issued by the District Authorities regarding grant of assistance under ‘Apathbandhu Scheme’ which is not under dispute, the finding of the State Commission in favour of the complainants is perverse and hence cannot be sustained in the eye of law. In addition to this, since the death took place within two years of taking of the policies, as per the provisions of Section 45 of the Insurance Act, 1938, it is not necessary for the petitioners to prove that the suppressed facts in the proposal form were material and that this suppression was done fraudulently by the policy holder. 9. On the other hand, learned counsel for the respondent has submitted that there are contradictions in the estimate of income of the policy holder as have been relied upon by the petitioners. In their letter dated 30.11.2000, it has been stated that they have evidence to show that the annual income of the deceased-life assured is only Rs.15,000/- whereas at other place, they have stated that the annual income was Rs.10,500/-. There is no statement regarding the exact holding of land by the policy holder himself in the proposal form but there is no dispute about the life assured working as an agricultural labour and also a lorry cleaner without a regular paid employment as such. She submitted that the two certificates issued by the Village Administrative Authorities, copies of which are placed at page 43-45 of the paper book, confirm this fact. She further submitted that so far as the statement made by the complainants in the complaint before the District Forum regarding grant of agricultural land by the father of complainant No. 1 at the time of her marriage is concerned, she has not received any instructions nor has she received any document regarding the holding of land and as such she is not able to make any statement in that regard. Another contention raised by learned counsel for the respondents was in respect of table of maximum allowable risk cover (general) produced by the counsel for the petitioners. She pointed out that according to this table, in respect of self-employed people, the insurance cover can be five times of annual income maximum to Rs. 1 Lakh. She submitted that if income as such is an important consideration which would affect the position of the petitioners to either accept the proposal or reject it, the proposals would have been rejected because both of them with total amount of Rs. 3.5. lakhs were made on the same date and according to the criteria shown in the table, the cover would not exceed Rs. 2 lakh and yet the petitioners thought it proper to accept the proposals. Finally, she argued that it should not be forgotten that the life assured was a poor uneducated person who at best could assume his income on a rough and ready basis and the quantum of income was bound to variate because of the uncertain nature of both the sources of income declared by the life assured. If the petitioners were so particular about this information, specific and independent information should have been produced by them to prove that the information given by the life assured in the proposal forms is false. Grant of assistance under ‘Apathbandhu Scheme’, held by the State Commission cannot by itself be a sufficient proof to treat the declaration made by the deceased as false. Production of proof to show that the declaration is false in the present case, cannot be equated with the requirement laid down under Section 45 of the Insurance Act, 1938 where the burden of proof is in respect of fraudulent suppression of material fact and hence the plea taken by the learned counsel for the petitioners in this regard cannot be accepted. 10. Having considered the submissions made by counsel before us and after perusing the record, we are inclined to agree with the view taken by the State Commission in the impugned order, reasons for which have been reproduced above. In the present case, we do not find any suppression of any particular information as such. The present case, therefore, will not attract the provisions of Section 45 of the Insurance Act, 1938. Here, it is the petitioner-company, which claims that the statement in regard to the annual income made by the life assured was false. If that be so, it is for the petitioner-company to produce independent proof in respect of its claim. What the insurance company has done is to simply repudiate the claim based on the grant of assistance under the ‘Apathbandhu Scheme’ to the widow of the life assured. This by itself cannot be sufficient proof of declaring that the statement made by life assured was false and that too at a time when the life assured is no more to rebut any of the statements against the life assured in this regard. The two sources of income, which are not disputed, being uncertain and volatile sources of income by their very nature, at best it can be said that the amount of Rs.40,000/- to Rs.50,000/- declared as annual income might not have been the correct figure of the income of the life assured but in such cases, truly speaking, can anybody be really sure about the exact amount of his annual income? Besides this, in spite of our asking to do so, the policy guidelines regarding the importance of income governing the processing of the insurance proposals followed by the petitioner-company, have not been produced except a one-page table with the caption “Maximum Allowable Risk Cover (General)” which has added to the confusion rather than clarifying the issue. If the table is taken as the basis for accepting or rejecting a proposal with reference to the annual income criteria, as contended by the counsel for the petitioner insurance company, the proposals submitted by the deceased life assured on the same day for a total cover of Rs.3.5 lacs with an annual declared income of only Rs.40,000/- should have been rejected by the petitioner insurance company in accordance with the limit of “5 times of annual income, maximum Rs.1 lac” in case of self-employed people as per para 3(a) of the table. Rather than doing so, the petitioner company accepted the proposals and policies in question were issued. In view of this, we cannot accept the plea taken by the petitioner co. regarding the alleged false declaration in respect of the annual income declared by the deceased life as a valid ground for repudiation of the claim put forth by the complainants. 11. In view of the above and taking into consideration the totality of the facts and circumstances of this case, we agree with the view taken by the State Commission in its impugned order and do not see any reason or justification to interfere with it while exercising our revisional jurisdiction under Section 21(b) of the Consumer Protection Act, 1986. We also hold that in the given circumstances of this case, the ratio of the two cases referred to by counsel for the petitioners will not get attracted to the present case. Revision petition, therefore, stands dismissed with no order as to costs. |
