Punjab

Rupnagar

CC/14/118

Bhajno - Complainant(s)

Versus

Sr. Branch Manager,Life Insurance Corporation of India - Opp.Party(s)

Smt.Neelu Bakshi, Adv

28 Apr 2015

ORDER

BEFORE THE DISTT. CONSUMER DISPUTES REDRESSAL FORUM, ROPAR

 

                               Consumer Complaint No. : 118 of 18.09.2014

                               Date of decision                 : 28.04.2015

 

Bhajno Wd/o Sh. Faqir Chand, resident of Village Kanchera, P.O. Partap Nagar, Nangal, Tehsil Nangal, District Rupnagar.

                                                                             ......Complainant

                                             Versus

1. Sr. Branch Manager, Life Insurance Corporation of India, Jeevan Jyoti

    Building, Nangal, Tehsil Nangal, District Rupnagar.

2. Zonal Head, Life Insurance Corporation of India, Jeevandeep Building,

   Unit-I, Sector 17-B, Chandigarh.

                                                                             ....Opposite Parties

 

                                       Complaint under Section 12 of the                                                           Consumer Protection Act, 1986

 

QUORUM

                             MRS. NEENA SANDHU, PRESIDENT

                             SMT. SHAVINDER KAUR, MEMBER

 

ARGUED BY

Smt. Neelu Bakshi, Advocate, counsel for complainant

Sh. H.C. Verma, Advocate, counsel for Opposite Parties

 

 

ORDER

                             MRS. NEENA SANDHU, PRESIDENT

                   Smt. Bhajno has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’ only) against the Opposite Parties (hereinafter referred to as ‘the O.Ps.’ only) praying therein that the O.Ps. be directed to pay her a sum of Rs.4,00,000/- along with other benefits, due under the impugned insurance policies, to pay interest on the said amount and also to pay litigation expenses of this complaint.

2.                In brief, the case of the complainant is that her husband, namely, Faquir Chand, since deceased, had obtained three insurance policies under “LIC Jeevan Saral”, from the O.Ps. i.e. i) policy bearing No. 164558088 dated 10.12.2010, for a sum of Rs.2,00,000/-, with date of maturity as 10.12.2020, ii) policy bearing No. 164558264 dated 28.12.2010, for a sum of Rs.2,00,000/-, with date of maturity as 10.12.2020, iii) policy bearing No. 163096217 dated 27.3.2006, for a sum of Rs.50,000/-, with date of maturity as 27.3.2016. He had paid the premiums due under the said policies regularly till his death, because the premium amounts were paid after deducting the same from his salary, as he was an employee of Horticulture Department, Nangal Unit. At the time of purchasing of above said policies, he had declared her as nominee in the said policies. Accordingly, after his death on 30.03.2012, she being the nominee under the said policies, submitted death claim with the O.Ps. in the month of April 2012 and completed all the formalities as per their  direction. However, the O.Ps. have paid a sum of Rs.50,000/- under the policy bearing  No.163096217, but have not paid the claim amount due under the remaining two other policies, inspite of her repeated visits & requests made to them, due to which she has suffered harassment & humiliation at the hands of the O.Ps. Hence, this complaint. 

 

 3.               On being put to notice, the O.Ps. filed a joint written statement in the shape of affidavit of Smt. Hem Lata, Manager (Legal), resisting the complaint taking preliminary objections; that the complainant has no cause of action & no locus standi to file the complaint against the O.Ps. and the same is not maintainable; that there is no deficiency in service on the part of the O.Ps.; that this Forum has no jurisdiction to entertain and try the complaint and accordingly, the same is liable to be dismissed. On merits, the factum of purchase of insurance policies by the Deceased Life Assured (hereinafter referred to as ‘the DLA’ only), payment of due premium amounts, under the said policies, by him regularly, lodging of claim by the complainant, in the capacity of nominee, under the said policies, is admitted. However, it is stated that intimation regarding the death of Sh. Faqir Chand, the DLA, was received on 21.05.2012 and an amount of Rs.60,192/- towards death claim under the policy bearing No. 163096217 was paid to the nominee i.e. complainant, Smt. Bhajno Devi, on 28.06.2012 vide cheque No. 0698030. The death claims under the policies bearing No.164558088 and 164558264 have been repudiated by the competent authority, as per the terms and conditions of the said policies and the complainant was duly informed of about the same through registered letters dated 23.11.2012 by the O.Ps. The claims under the said policies were repudiated on the ground that the DLA had withheld the correct information regarding his health, at the time of effecting assurance with the O.Ps., because in the proposal for insurance dated 08.12.2010/personal statement signed by him on 08.12.2010, at the time of his Medical Examination, he had answered the questions as under:-

QUESTION                                                                 ANSWER

Q. No. 11 a           During the last five years did you               No

                             consult a Medical Practitioner for

                             any ailment requiring treatment for

                             more than a week?

 

Q. No. 11 b                    Have you ever been admitted in any           No

hospital or Nursing Home for general

check up, observation, treatment or

operation?

                            

Q. No. 11 d                    Are you suffering from or have you           No

ever suffered from ailments pertaining to

Liver, Stomach, Heart, Lungs, Kidney,

Brain or Nervous System?

         

                   The above said answers given by the DLA have been found to be false as the O.Ps. have evidence and reason to believe that before the proposal for the above said policies, the DLA had suffered from Coronary Artery Disease, Triple Vessel Disease and Off Pump Coronary Bypass, was done on 04.01.2013 for which he had consulted a medical man and had taken treatment in a hospital, he did not disclose the said facts in the proposal form for insurance/personal statement, at the time of effecting the insurance policies in question and had made deliberate incorrect statements regarding his health, hence, in terms of the policy contract and the declaration contained in the forms of Proposal for Assurance and Personal Statement, the death claim under the said policy has been repudiated. The terms & conditions of the contract of insurance were violated by the proposer (DLA). The contract of assurance is one of the Ubberrima Fides of utmost good faith and is governed by the terms and conditions of the policy contract. The DLA at the time of proposal could not keep that good faith, intact, and inspite of it being very well in his knowledge that he suffered from serious disease, he had purchased the policies to pass on financial gains to his family after his death, but the LIC being the custodian of the public money, which it holds with utmost trust and safety, this money cannot be used for unlawful gains. Therefore, the claim under the policies in question has been rightly repudiated and nothing is payable as per the terms and conditions of the policies. Rest of the allegations made in the complaint have also been denied and a prayer has been made for dismissal thereof with costs, it being without any merit.

 

4.                On being called upon to do so, the complainant tendered her affidavit, Ex. C1, photocopies of documents Ex.C2 to Ex.C12 and closed the evidence. On the other hand, the learned counsel for the O.Ps. tendered affidavit of Smt. Hem Lata, Manager (Legal) as Ex.OP-1, photocopies of documents Ex.OP-2 to Ex.OP-20 and closed the evidence. In addition to that, the record keeper/dealing hand of BBC Heart Care and Pruthi Hospital, Jalandhar City alongwith requisite record was got summoned, accordingly, Sh. Gian Chand, Medical Record In-charge of the said hospital had appeared and he was examined/cross-examined by the learned counsel for the parties concerned.

 

5.                We have heard the learned counsel for the parties and gone through the record of the file carefully.

 

6.                The learned counsel for the complainant submitted that the husband of the complainant, who had died on 30.03.2012, had obtained three insurance policies from the O.Ps. After his death, she, being the nominee under the said policies, had filed the claim with the O.Ps. They have paid an amount of Rs.50,000/- alongwith interest for one policy bearing No.163096217, but without any reason, they have refused to pay the claim amount due under the two other policies bearing No. 164558088 dated 10.12.2010 & No. 164558264 dated 28.12.2010, for a sum of Rs.2,00,000/- each. Therefore, the O.Ps. are deficient in providing service and they be directed to pay the insured amount under aforesaid policies alongwith interest &  other benefits and litigation expenses. In rebuttal, the learned counsel for the O.Ps.  submitted that the death claim under the policies bearing No. 1645588088 and 164558264 has been rightly repudiated vide letters dated 23.12.2012 (Ex. OP-2 & OP-3 respectively), as per the terms & conditions of the said policies, on the ground that at the time of inception of the policies, the DLA had withheld the correct information regarding his health from the O.Ps. because in the proposal forms/personal statements dated 08.12.2010 (Ex.OP-5) & dated 29.12.2010 (Ex. OP-6), duly signed by him, he had given the wrong answers to the questions mentioned in the said proposal forms, whereas factually, he at the time of inception of the policy, was suffering from Coronary Artery Disease, Triple Vessel Disease and Off Pump Coronary Bypass x 3 was done on 04.01.2003 and this fact was not disclosed by the DLA in the proposal forms filled by him at the time of taking of the insurance policies in question from the O.Ps. Therefore, the complaint filed by the complainant being devoid of merit, is liable to be dismissed with cost.

7.                It is pertinent to mention here that in order to prove their stand that the DLA, prior to the  inception of the policy, was suffering from Coronary Artery Disease, Triple Vessel Disease and Off Pump Coronary Bypass x 3 was done on 04.01.2003, the O.Ps. have placed on record certain documents issued by BBC Heart Care/Pruthi Hospital, Jallandhar City and even on 02.02.2015, the learned counsel for the O.Ps. No.1 & 2 had filed Misc. Application for summoning the record keeper alongwith the record of the above said hospital and the said application was allowed vide order dated 13.2.2015. Accordingly, on 07.04.2015, Sh. Gian Chand, Medical Record Incharge of Paruthi Hospital, Jalanahdar had appeared and suffered a statement to the effect that the summoned record relating to the documents Ex.OP-7 to OP-9 has been destroyed by the hospital after elapse of six years, but the said documents seem to be of the said hospital. In his cross examination, by the learned counsel for the complainant, he stated that he had not brought any record on that day and could not produce the original record, as the record of the above said case, is not available, the same being more than six years old.

          In para No.8 of the written statement filed by the O.Ps., it is categorically mentioned that at the time of medical examination, the DLA had given wrong answers to the questions mentioned in the proposal form/personal statement. It means before issuance of the insurance policies in question to the DLA, the O.Ps. had got conducted his medical examination. Once the O.Ps. had got conducted the medical examination of the DLA from the Doctor on their panel, then this fact that the DLA had suffered from coronary artery disease, triple vessel disease and off pump coronary prior to inception of the said policies, should have been brought to their knowledge by the said doctor and now the O.Ps. cannot plead that the policies were issued by ignoring the said medical examination conducted by their own doctor, merely on the basis of the wrong answers given by the DLA. It may be stated that the O.Ps. have neither produced on record the medical examination report of the DLA, got conducted by them from their own doctor, before the inception of the policies in question nor the record of Paruthi Hospital, on the basis of which they have alleged that prior to the issuance of the insurance policies in question, the DLA was suffering from coronary artery disease, triple vessal disease and off pump coronary bypass was done in the year 2003, has been proved. Thus, in the absence of any cogent and convincing evidence, we are of the considered opinion that the O.Ps. were not justified in repudiating the claim of the complainant on the ground that the DLA had withheld the material information from them. In the case of ‘Life Insurance Corporation of India v. Smt. G.M. Channabasamma’ I (1991) ACC 411 (SC), the Hon’ble Apex court held that the burden of proving that the insured had made false representation and suppressed material facts is undoubtedly, on LIC of India. Furthermore, mere concealment of some facts will not amount to concealment of material facts and if there is fraudulent suppression of material facts in the proposal, the policy could be vitiated otherwise not. Further in the case of ‘National Insurance Co. Ltd. V. Bipul Kundu, II (2005) CPJ 12(NC), the Hon’ble National Commission has held that for repudiating a claim of an insured, it is for the insurer to show that a statement on a fact, which was material for the policy, had been suppressed by the insured and that statement was fraudulently made by him/her with the knowledge of the falsity of that statement. In ‘The Divisional Manager, LIC & Anr. vs. Smt. Savitri Devi’ 1999 JRC (H.P.) 175,  it has been held that it is incumbent upon the LIC to produce evidence that deceased insured was told that answers are intended, to be comprehensive and his slightest mis-statement would be fatal to the policy. It was further held that LIC cannot repudiate the claim merely on so called inaccurate statement in the proposal form. 

 

          Since the repudiation of the claims made by the O.Ps. in the instant case has been held to be unjustified, consequently, they have committed deficiency in rendering service, due to which they are also liable to pay compensation on account of mental agony & physical harassment suffered by the complainant and the litigation expenses incurred by her to get the relief to which she was otherwise entitled to, in addition to payment of the claim amounts alongwith benefits due under both the insurance policies alongwith interest.

 

8.                In view of the above discussion, the Misc. Application No. 23 of 2015 filed by the complainant for issuance of direction to the O.Ps. to produce on record the report/record regarding medical examination done by the medical examiner of the O.Ps. before issuance of the insurance policies in question in favour of the DLA, having become infructuous, is dismissed, and the complaint is allowed, directing the O.Ps. in the following manner:-

i)       To pay the sums assured alongwith benefits, due under both the impugned policies, alongwith interest @ 9% P.A.  w.e.f. the date  of repudiation i.e. 23.11.2012 till realization;

ii)      To pay Rs.3000/- as compensation;

iii)     To pay Rs.2000/- as litigation expenses.

 

The O.Ps. are further directed to comply with the above said directions within 45 days from the date of receipt of certified copy of this order.

9.                The certified copies of this order be supplied to the parties forthwith, free of costs, as permissible under the rules and the file be indexed and consigned to the Record Room.

 

ANNOUNCED                                                     (NEENA SANDHU)

Dated 28.04.2015                                       PRESIDENT

 

                             (SHAVINDER KAUR)

                                                                                     MEMBER.