KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAD, THIRUVANANTHAPURAM FIRST APPEAL.217/2008 JUDGMENT DATED: 10.6.2010 PRESENT SMT.VALSALA SARANGADHARAN : MEMBER SRI.M.V.VISWANATHAN : JUDICIAL MEMBER SRI.S.CHANDRAMOHAN NAIR : MEMBER 1. The Chief Postmaster General, : APPELLANTS Kerala Circle, Thiruvananthapuram. 2. The Deputy Divisional Manager(PLI), Office of the Chief Postmaster General, Kerala Circle, Thiruvananthapuram. (Sri.R.P.Sandeep, Authorised representative) Vs. Smt.Julie Susan George, : RESPONDENT Manakunnel House, Pandanad.P.O., Chengannur. (By Adv.B.Somanathakurup) JUDGMENT SRI.M.V.VISWANATHAN : JUDICIAL MEMBER The appellants were the opposite parties and respondent was the complainant in CC.33/07 on the file of CDRF, Alappuzha. The complaint therein was filed alleging deficiency in service on the part of the opposite parties 1 and 2 in repudiating the insurance claim made by the complainant with respect to the postal life insurance policy issued in the name of the complainant’s husband late Sri.C.D.Raju. The opposite parties entered appearance and filed written version denying the alleged deficiency in service. Then contended that the CDRF, Alappuzha has no territorial jurisdiction to entertain the complaint; that the postal life insurance policy was obtained by the insured Sri.C.D.Raju by suppressing the material fact regarding his disease of cerebral hemorrhage. The opposite parties justified their action in repudiating the insurance claim by allowing the ex-gratia payment of Rs.30,000/-. The opposite parties prayed for dismissal of the complaint in CC.33/07. 2. Before the forum below complainant was examined as PW1 and Exts.A1 to A6 documents on her side. A witness from the side of the opposite parties was examined as RW1 and Exts.B1 to B7 from the side of the opposite parties. On an appreciation of the evidence on record, the Forum below passed the impugned order dated 30th April, 2008 allowing the complaint and thereby directing the opposite parties to pay the insured amount of Rs.2,00,000/- with interest at the rate of 12% per annum from 26.6.04 onwards and also payment of compensation of Rs.5000/- and cost of Rs.2000/-. Hence the present appeal by the opposite parties therein. 3. When this appeal was taken for final hearing, there was no representation for the respondent/complainant. We heard the authorized representative for the appellants/opposite parties. He submitted his arguments based on the grounds urged in the memorandum of the present appeal. He much relied on Ext.B1 proposal submitted by the insured C.D.Raju for obtaining the postal life insurance policy for a sum of Rs.2,00,000/- and also Ext.B5 details of the medical leave particulars submitted by Assistant General Manager, State Bank of India, zonal office, Thiruvananthapuram and argued for the position that the policy holder had suppressed material facts regarding his health condition at the time of submitting the proposal for the postal life insurance policy. Thus, the appellants/opposite parties justified their action in repudiating the insurance claim for Rs.2,00,000/-. It is further submitted that the appellants considered the claim made by the complainant in a sympathetic way and granted ex-gratia payment of Rs.30,000/- Thus, the appellants prayed for setting aside the impugned order passed by the Forum below. 4. The points that arise for consideration are:- 1) Whether the Forum below had territorial jurisdiction to entertain the complaint in CC.33/2007? 2) Whether there was any suppression of material facts regarding the health condition of the insured C.D.Raju while submitting the proposal for the postal life insurance policy? 3) Is there anything on record to show that the insurer of the postal life insurance policy was induced to issue the policy by the non-disclosure of the fact regarding the health condition of the proposer by submitting B1 proposal dated 4.10.02? 4) Whether the case of the appellants/opposite parties that they issued postal life insurance policy in the name of the insured C.D.Raju by accepting B1 proposal dated 4.10.02 can be upheld? 5) Whether there was any deficiency in service on the part of the appellants/opposite parties in repudiating the insurance claim preferred by the respondent/complainant? 6) Is there any sustainable ground to interfere with the impugned order dated 30th April, 2008 passed by CDRF, Alappuzha in CC.33/07? 5. Point No. 1 There is no dispute that the complainant’s (respondent) husband C.D.Raju was a policy holder of the postal life insurance policy bearing No.KL/44592B for a sum of Rs.2,00,000/-. Ext.A1 is the letter dated 25th October, 2002 issued by the 2nd opposite party/ Deputy Divisional Manager, Postal Life Insurance, Thiruvananthapuram to the insured C.D.Raju, Deputy Manger, S.B.I, Venmony informing the insured about the acceptance of his proposal dated 4.10.02 and giving the details of the postal life insurance policy issued to the insured C.D.Raju. It can be seen that the proposal for the said postal life insurance policy was submitted by the insured C.D.Raju while working as Deputy Manager, SBI, Venmony branch in Alappuzha District and the said proposal was submitted from Venmony. It was accepted by the opposite parties on 24.10.02 at Thiruvananthapuram and acceptance of the proposal was communicated to the insured at Venmony, Alappuzha. Admittedly, the insured C.D.Raju opted to remit the monthly premium for the policy at the head post office, Chengannur in Alappuzha District. Ext.B3 premium pass book would make it clear that the insured C.D.Raju used to remit the monthly premium at the post office, Pandanad, Alappuzha district. The insured C.D.Raju died on 26.6.04 while he was working in Alappuzha district. It is also to be noted that appellants/opposite parties are having branch post offices in Alappuzha district and the insured had been remitting the premium in the post office situated in Alappuzha district. Thus, it can be concluded that the appellants/opposite parties were having branch office within the territorial limits of the CDRF, Alappuzha and that the appellants/opposite parties were carrying on business through the said branch offices in Alappuzha district. It can also be seen that payments of the insurance premium have been received by the opposite parties towards the postal life insurance policy through their branch post office situated within the territorial limits of CDRF, Alappuzha. The insured died on 26.6.04 while undergoing treatment in Pushpagiri Medical College hospital, Thiruvalla within territorial limits of CDRF, Aleppey. The complainant claimed benefits under the postal life insurance policy from Pandanad, Chengannur and the same was repudiated by the appellants/opposite parties and communicated the same to the complainant who residing at Pandanad in Alappuzha district. It can very safely be concluded that part of the cause of action for the complaint in CC.33/07 has arisen within the territorial jurisdiction of the CDRF, Alappuzha. It is also come out in evidence that the appellants/opposite parties have been carrying a business through their branch office(branch post office) situated within the territorial jurisdiction of the CDRF, Alappuzha. Thus, in all respects the complaint preferred by the complainant in CC.33/07 was maintainable and that the CDRF, Alappuzha was having the territorial jurisdiction to entertain the said complaint. This point is found accordingly. 6. Points 2 to 6 The respondent/complainant is the widow and nominee of the deceased C.D.Raju, the policy holder. Issuance of postal life insurance policy in the name of C.D.Raju is admitted and that C.D.Raju, the insured died on 26.6.04. There is no dispute that at the time of death of the insured the policy was in existence and it was effective. After the death of the insured, a claim was preferred by the respondent/complainant being the nominee and widow of the life assured. 7. The insurance claim preferred by the respondent/complainant was repudiated by the appellants/opposite parties on the ground that the insured suppressed material facts regarding his health condition while submitting the proposal for the postal life insurance policy. Ext.B1 is the proposal submitted by the insured C.D.Raju. B1 proposal is dated 4.10.02. The definite case of the appellants/opposite parties is that the insured suppressed material facts in Ext.B1 proposal with respect to his health condition. The appellants/opposite parties relied on para 16 of the B1 proposal with the heading personal history. There are four questions under the heading personal history numbered 16(a) to 16(d). Those questions are as follows:- 16. Personal History: (a) Are you at present in sound health (b) Have you suffered from any of the following? (i) Tuberculosis, (ii) Cancer, (iii) Paralysis,(iv) Insanity, (v)Any disease of heart, lungs, liver, stomach and nervous system, (vi) Kidney disease, (vii) any disease of the brain, (viii) diabetese, (ix) Hypertension, (x) Hypotension, (xi)Epilepsy, (xii) Hernia, (xiii) Hydrocele, (xiv) Leprosy, (xv) Any other serious disease, (xvi) Any physical deformity or handicap. (c ) During the last three years have you ever consulted a medical practitioner for any ailment regarding treatment for a week or more or has been admitted to any hospital or nursing home for long check up, observation treatment or operation. If yes, please give full details. (d) Have you remained absent from place of work on grounds of health during the last three years. If yes, please give full details. 8. Among the aforesaid four questions question ‘a’ was answered as Yes. It means that at the time of submitting B1 proposal the proponent was in sound health. There is nothing on record to show that on 4.10.02 the insured C.D.Raju had any health problem. On the other hand, the available documents would only show that the insured was in sound health. It is also to be noted that the postal life insurance policy was issued in the name of the insured after medical examination by the doctor and that the insured was found in sound health. It is only after medical examination, the postal life insurance policy was issued in the name of the insured C.D.Raju. It can very safely be concluded that the answer given to question 16(a) was true and correct and there was no suppression of material fact in giving the answer to the said question. 9. The other three querstions viz. 16(b), 16(c) and 16(d) have not been answered by the insured. In fact the proponent kept those questions unanswered. There is nothing on record to show that the proponent suppressed any answers or had given any false statements or misleading statements to those questions. The case of the appellants/opposite parties that the proposer suppressed material facts or gave misleading statements to the questions about his health condition can not be believed or accepted. 10. It is to be noted that B1 proposal was submitted by the proposer for getting the postal life insurance policy. It is only on acceptance of the aforesaid proposal submitted by the proposer, the appellants/opposite parties issued the postal life insurance policy. Ext.A1 letter dated 25.10.02 issued by the 2nd opposite party (2nd appellant) would make it crystal clear that the appellants/opposite parties were fully satisfied to accept the proposal dated 4.10.02 submitted by the proposer(insured C.D.Raju). If the appellants/opposite parties were not fully satisfied or convinced about the health condition of the proposer, as the proposer failed to give specific answers to three of the specific questions they could have very well rejected the proposal or they could have asked for answers to those questions. But, without getting answers to the aforesaid three questions, the appellants/ opposite parties were pleased to accept the proposal and issue the postal life insurance policy. So, it is too much on the part of the opposite parties to contend there after that by not giving answers to the questions the insured suppressed the material facts regarding his health condition. The only inference that can be drawn is that the appellants/opposite parties were satisfied with the answer given by the proposer to the question numbered as 16(a) and they issued the postal life insurance policy. Thus, there was a valid proposal and acceptance between the insured and the insurer. 11. The appellants/opposite parties much relied on condition No.10 of the postal life insurance. Ext.B2 is photo copy of the postal life insurance issued in the name of the insured C.D.Raju. The over leaf of the said policy contains the policy conditions. The relevant condition No.10 is as follows: 12. “Forfeiture in certain events: The policy shall be void and the payments made by the insurant shall be forfeited, if the statements contained in the proposal and declaration made therein are found to be untrue”. The aforesaid clause 10 of the policy condition would only empower the insurer to declare the policy as void and they can forfeit the payments made by the insurant only if it is found that the statements contained in the proposal and declaration made therein are untrue. But in the present case, the B1 proposal would not give any indication that the insurant had given any false statement in the said proposal or that the declaration therein contained any untrue statement. 13. Admittedly the proposer C.D.Raju had given declaration stating that at the time of submission of the proposal he was on good health and free from diseases and that no proposal submitted by him has been adversely treated. There is nothing on record to show that the aforesaid declaration given by the proposer C.D.Raju was not true or correct or that he gave false declaration. On the other hand, the facts, circumstances and the available evidence on record would show that the proposer was on good health at the time of submission of B1 proposal. He has given a affirmative answer to the question regarding the present health condition. So, the statement given in the proposal and the declaration therein was true and correct. There is no ground available for the appellants/opposite parties to declare the postal life insurance policy issued in the name of the insured C.D.Raju as void or to forfeit the payments made by the insured towards the said policy. 14. There can be no doubt about the proposition that the insurer of the policy can very well repudiate the insurance claim, it there was suppression of material fact or facts by the insured while submitting the proposal. But in the present case, the appellants/opposite parties(insurer) are not excepted to invoke the aforesaid proposition for repudiating the insurance claim because of the fact that there is nothing on record to show that there was suppression of material facts by the insured C.D.Raju while submitting B1 proposal. 15. B1 proposal would also show that the Development Officer of the postal life insurance had also given a declaration to the effect that the information including declaration of health has been furnished by the proposer in his presence and that he verified the documents with respect to the date of birth of the proposer and the same is found correct. This declaration given by the Development Officer, postal life insurance who is working under the appellants/opposite parties would make it clear that the appellants/opposite parties were fully aware of the fact that the proposer failed to give answers to all the questions regarding the health condition and that he has given statement and declaration regarding the present health condition of the proposer. Thus, the appellants/opposite parties (insurer) accepted the aforesaid proposal by fully knowing the answer given by the proposer with the declaration therein. And by accepting the same the insurer issued the policy. It is also to be noted that the proposer was also examined by the doctor(Civil Surgeon) attached to the Government hospital, Kochin. The certificate of the Medical Officer is also incorporated in B1 proposal. The medical certificate issued by the Medical Officer would also show that on the date of submission of the proposal, the proposer C.D.Raju was in sound health. 16. The questionnaire 16(c) deals with the ailment or treatment if any undergone by the proposer within 3 years of the proposal. It is to be noted that B1 proposal was given on 4.10.02. There is nothing on record to show that 3 years prior to 4.10.02, the proposer C.D.Raju had any ailment requiring treatment for a week or more. There is also nothing on record to show that in the said period of three years proposer C.D.Raju has been admitted in any hospital or nursing home for long check up, observation treatment or operation. The appellants/opposite parties relied on B5 leave particulars issued by State Bank of India, zonal office. B5 document would show that the proposer(insured C.D.Raju) had availed medical leave during the period from 10.6.99 to 8.9.99 in connection with the treatment of cerebral hemorrhage. Thereby the insured was on leave for 91 days on medical ground. Ext.A6 letter dated 23rd August 99 issued by the doctor, Mathew Cherian, MD(Medicine); DM (Velloore) would also show that the insured C.D.Raju had undergone treatment for intra cerebral hemorrhage from 10.6.99 at S.H.Medical Centre, Kottayam and he became fit for joining duty. Thus, it can be seen that the aforesaid medical leave was availed not within three years of the proposal; but it was beyond that period. The three years time prior to 4.10.02 will end by 4.10.99. It can be seen that the treatment for cerebral hemorrhage was even prior to 4.10.99. Thus, there was no suppression of material fact regarding the aforesaid treatment undergone by the insured. 17. Clause 16(d) is about the absence from the place of work on the ground of health during the last three years. To the said question the proposer did not give any answer,; but the same was kept blank. The evidence on record would show that the insured(proposer) had not availed any leave on medical ground during the last three years of the B1 proposal. There is also nothing on record to show that the insured was absent from the place of his work on account of ill health or on medical ground. So, even if any answer was given to the said question, it would not reflect any suppression of material facts. 18. The proposer/insured was asked about the illness if any he had suffered under question No.16(b). A number of diseases have been enumerated under the said clause 16(b). The space provided for the answer was kept blank. Ext.B5 document would show that during the period from 10.6.99 to 8.9.99 the proposer/insured C.D.Raju was on medical leave due to the disease of cerebral hemorrhage . There can be no doubt that cerebral hemorrhage is a disease affecting brain. But the proposer did not disclose that fat regarding cerebral hemorrhage. It is to be noted that the proposer did not give any answer to the said question. The proposer kept the space blank without giving any answer to the said question 16(b). We have already stated about the acceptance of the proposal by the appellants/opposite parties. It is to be noted that the appellants accepted the said proposal by satisfying with the details given in B1 proposal. It is to be noted that the proposer was not interested in giving answers to the aforesaid questions. It is too much to say that the proposer induced the appellants/opposite parties by suppressing any material facts. In fact, the proposer was not interested to give answers to those questions. In such a situation, the accepter had the option to accept the proposal or reject. But in the present case on hand, the B1 proposal as such was accepted by the appellants. By accepting the B1 proposal, the appellants issued the postal life insurance policy. Thus, in effect there is nothing on record to show that the proposer suppressed any material fact by giving false answers or false statements in the proposal. In other words, the appellants/opposite parties were not mislead or induced by giving any false statement or declaration in the proposal. If that be so, the case of the appellants/opposite parties that the proposer suppressed material facts by suppressing answers to any of the questions in the proposal form can not be upheld. Therefore, there was no ground available for the appellants/opposite parties to invoke the provisions of condition No.10 of the policy conditions. In all respects, the appellants/opposite parties could not be justified in repudiating the insurance claim. On the ground of suppression of material facts we have no hesitation to hold that proposer/insured did not give any answer to the questions in the proposal form by suppressing material facts regarding his health condition. The failure on the part of the proposer to give answers to any of the questions in the proposal form can not be taken as a ground to hold that the proposer suppressed material facts regarding his health condition. Not giving answer to any of the questions in the proposal form cannot be treated as suppression of material facts. In the present case on hand, the appellants/opposite parties had the option to insist the proposer to give answers to all the specific questions in the proposal form or to reject the proposal refusing to issue the life policy in the name of the proposer. 19. Ext.A2 certificate issued by the doctor attached Pushpagiri Medical College Hospital, Thiruvalla would make it abundantly clear that the insured C.D.Raju was admitted in that hospital on 26.6.04 at 8.30PM in a very critical condition and patient expired on the same day at 10.10PM due to coronary artery heart disease. It is also reported that the patient C.D.Raju expired due to natural disease process. There is also no dispute regarding the cause of death of the insured C.D.Raju on 26.6.04. There is nothing on record to show that the insured had any sort of heart ailment prior to 26.6.04 or prior to the submission of the proposal dated 4.10.02. It can be seen that the cause of death of the insured had nothing to do with the disease of cerebral hemorrhage which he suffered during the year 1999. It can also be seen that the alleged suppression of material fact was not having any connection with the cause of death. More over, the appellants/opposite parties have also failed to substantiate their case regarding suppression of material facts by the proposer with respect to his health condition while submitting answers to the questions contained in the proposal form. The appellants/opposite parties have also failed to substantiate their case that there was wilful suppression of material fact by the proposer while submitting the B1 proposal dated 4.10.02. 20. It is to be borne in mind that the contract of insurance was entered into between the insured and insurer based on the proposal and acceptance of the proposal. In the present case on hand, the proposal was submitted by the proposer C.D.Raju. Ext.B1 is the copy of the proposal submitted by the proposer C.D.Raju. The proposal form was supplied by the postal life insurance authority. In the said proposal form there were four questions related to the health condition of the proposer. The proposer C.D.Raju submitted answer to the first question and thereby he stated that he is having sound health at the time of presenting the B1 proposal dated 4.10.02. The remaining three questions were not answered by the proposer. Ext.B5 document would show that the proposer was affected by disease to brain during the year 1999. It would show the disease of the brain affected the proposer during the year 1999. But the proposer did not give any answer to the said question regarding the diseases which had affected the proposer. Thus the proposer did not give any false statement to the said question No.16(b). The proposer did not suppress any fact by giving answer to the said question. It is to be noted that there is vast difference in giving false statement or misleading answers or giving answers suppressing material facts and the failure on the part of the proposer to answer the question. The failure to answer any question would not amount to suppression of material fact. It would only indicate that the proposer was not interested to give answer to the said question. In that context, the other contracting party, the insurer had the option to reject the proposal for the policy or to ask the proposer to give all answers to the questions enumerated in the proposal form. In the present case, the insurer opted to accept the proposal as given in B1 and thereby the insurer issued the life policy. Thereafter the insurer will not be at liberty to dishonour the same on the ground that the proposer while submitting the proposal failed to give answers to all the questions enumerated in the proposal form which was supplied by the insurer. Therefore, the materials available on record would not show any suppression of material fact by the proposer by giving B1 proposal. The postal life insurance policy itself was issued based on B1 proposal submitted by the proposer/insured. The Forum below was justified in allowing the insurance claim made by the respondent/compl;ainant being the nominee of the life assured C.D.Raju. 21.The Forum below has also awarded interest at the rate of 12% per annum on the insured amount of Rs.2,00,000/- and that the interest is awarded from the date of death of the insured. Over and above allowing the insurance claim of Rs.2,00,000/- with interest at the rate of 12%, the Forum below has also awarded compensation of Rs. 5000/-. Considering the facts and circumstances of the case, we are of the view that the further compensation of Rs.5000/- awarded by the Forum below is unwarranted. Hence this State Commission is pleased to delete that portion of the order awarding further compensation of Rs.5000/- to the complainant. In all other respects, the impugned order passed by the Forum below is confirmed. These points are answered accordingly. In the result the appeal is allowed partly and thereby the impugned order dated 30th April 2008 passed by CDRF, Alappuzha in CC.33/07 is modified. Appellants/opposite parties are directed to pay the insured amount of Rs.2,00,000/- to the respondent/complainant with interest at the rate of 12% per annum from 26.6.04(the date of death of the insured C.D.Raju) till realisation with cost of Rs.2000/-. The order passed by the Forum below awarding further compensation of Rs.5000/- to the respondent/complainant is setaside. As far as the present appeal is concerned, the parties are directed to suffer their respective costs. SRI.M.V.VISWANATHAN : JUDICIAL MEMBER SMT.VALSALA SARANGADHARAN : MEMBER SRI.S.CHANDRAMOHAN NAIR : MEMBER ps | 
