BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM; BHIWANI.
Complaint case No.91 of 2017. Date of Instt.: 13.07.2017. Date of Decision: 26.11.2019
Surjan Singh aged 41 years son of Sh.Raghubir resident of House No.639, Dhani Mehtab Dass Ki, Bhiwani District Bhiwani.
..Complainant.
Versus
1. TATA-AIA, Life Insurance Company Limited First Floor, M.K.Plaza, Plot No.810/x/2, near K.M.Public School Hansi Gate, Bhiwani Haryana, 127021, through its Branch Manager.
2.TATA-AIA, Life Insurance Company Limited, 14th Floor, Tower-A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai-400013 through its Managing Director.
..Opposite Parties.
Complaint U/S 12 of the CP Act,1986
Before: Sh. Nagender Singh, President.
Sh. Shriniwas Khundia, Member
Present: Sh.Satish Kumar Dhilayan, counsel for the complainant.
Sh.Ashish Goyal, counsel for the opposite parties.
ORDER
NAGENDER SINGH, PRESIDENT
Briefly stated the facts of the present complaint are that wife of the complainant namely Sushila Devi was insured with the opposite parties vide policy No.C197265240 with date of commencement as 08.12.2016 for a sum assured of Rs.8,06,459/- for a period of 15 years and the complainant is her nominee. Unfortunately said Sushila Devi wife of complainant died on 26.12.2016 during the subsistence of the policy and complainant being her nominee in the above said policy is entitled to a sum insured but despite completion of all formalities, the opposite parties have illegally, arbitrarily and against facts have repudiated the claim of the complainant vide repudiation letter dated 28.03.2017 with the remarks that the DLA had concealed her health status from the opposite parties despite that fact that the policy was obtained after complying with all legal formalities. The complainant has suffered mental agony and harassment at the hands of the opposite parties and he is also entitled for compensation. Hence, this complaint.
2. On notice, the opposite parties appeared and resisted the claim of the complainant by filing joint reply to the complaint wherein several preliminary objections such as maintainability, concealment of material facts from this Forum and cause of action etc. have been taken. It has been submitted that on receipt of proposal form from Sushila Devi, policy No.C197265240 with date of commencement 08.12.2016 was issued but during enquiry it came to the notice of the opposite parties that insured (Ram Niwas) was not in good health and the policy was obtained in order to cheat the company in connivance with agent Jyoti Rani, therefore, the policy in question was terminated vide letter dated 28.03.2017 on the ground of concealment of material facts. The company has also filed complaint against said Jyoti Rani, which is still pending. The insurance policy is a contract between the parties and both the parties are bound to supply the correct and true information but in the present case the DLA had misrepresented her health status. There is no deficiency in service and unfair trade practice on the part of opposite parties. Other contentions have been controverted and prayer for dismissal of the complaint has been made.
3 The parties have led their evidence in the form of affidavits and documents. The complainant has tendered in evidence affidavit Ex.CW1/A and documents Annexure C1 to Annexure C6. On the other hand, the opposite parties have tendered affidavit Ex.RW1/A and documents Ex.R1 to Ex.R5 on the case file. Thereafter, the evidence of both the parties have been closed.
4. Learned counsels for the parties have been heard and the material available on the case file including the written arguments submitted by learned counsel complainant has also been perused very carefully.
5. Learned counsel for the complainant has argued that wife of the complainant during her life time had obtained an insurance policy bearing No.C197265240 for a sum assured of Rs.8,06,459/- from opposite parties and the complainant has been appointed as nominee. The date of maturity of the said policy was 08.12.2013. The wife of the complainant suddenly died during the subsistence of the policy on 26.12.2016 and prior to it she was not suffering from any disease, therefore, due claim alongwith requisite documents were submitted to the insurance company but instead of settling the claim the opposite parties have refused to honour the claim vide letter dated 28.03.2017. The denail of the claim by the opposite parties is against law and facts because deceased life assured had not withheld any material information from the opposite parties rather she had disclosed all the real facts to them. It has been further argued that the proposal form was filled in by the agent by acting on behalf of his insurance company and now the insurance company cannot raise a plea that all the material facts were not disclosed to the agent/insurance company at the time of taking policy. In support of his contentions he has placed reliance of case laws titled as Life Insurance Corporation of India Vs. Smt.G.M.Channabasemma 1991 (70) Comp. Case, 635 (SC) and Tata Coffee Lted. Vs. mN.Sreenivasalu 2014 (2) CLT 93 (NC).
6. Per contra, learned counsel for the opposite parties has argued that insurance is totally based on utmost good faith but the policy was obtained by concealing the material facts from the insurance company despite the fact that deceased life assured was under obligation to disclose all the material facts within her knowledge about the state of her health at the time of taking up the policy. It has been argued that the deceased life assured was suffering from pre-existing disease such as Nasopharyngeal cancer since long and she was taking treatment from Jindal Hospital as well as Girdher Hospital, Hisar and the policy in question was obtained through Smt.Jyoti Rani, agent fraudulently and against her the opposite parties have moved an application under Section 156 (3) Cr.P.C and application to concerned police stations for taking necessary action for illegal acts done by her during the process of issuing the insurance policy to the deceased life assured. In support of his arguments he drew the attention of this Forum towards Ex.R5 i.e. application under Section 156 (3) Cr.P.C. moved to the Illaka Magistrate, Gurugram.
7. After hearing the arguments advanced on behalf of both the parties and going through written arguments submitted by complainant and the material available on the case file it transpires that the insurance company has wrongly and illegally repudiated the claim of the complainant. The fact that the deceased life assured had obtained a policy from the opposite parties is not disputed. It has also not been disputed that she had died during the subsistence of the policy. The plea taken on behalf of the opposite parties qua concealment of pre-existing disease is not survived because the opposite parties have not placed any document on record to show that she was suffering from any pre-existing disease before purchasing of said policy. There is no plea on behalf of the opposite parties that the agent was not acting on their behalf. Section 237 of Contract Act provides that when agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal the principal is bound by such acts or obligations if he has by his words or conduct induced such third persons to believe such acts and obligations were within the scope of agent’s authority. The principal is then stopped from denying that the agent had the authority which the third person who dealt with him in good faith believed he had. This is also known as ‘agency by estoppal’ But the agent’s own assertions cannot give him apparent authority or estop the principal. If a person employs another as an agent in a character which involves a particulars authority, he cannot by a secret reservation divest him of that authority. In the present case had the agent carried out her instructions properly then no complications could have taken place and therefore, the principal i.e. insurance company is bound by her acts, as if, it was her own act. Moreover, if the agent fails to conform to the instructions, the principal may seek to avoid to be bound by the acts of the agent. If the agent’s acts are within the scope of his authority, the principal is bound by those acts irrespective of the agent’s mistake and the prejudice caused to him by the acts. On this point reliance can be taken from case law titled as Rigid Global (India) vs. Iffco Tokio General Insurance Co.Limited & Ors. II (2008) CPJ 365 wherein it has been held by Rajasthan State Consumer Disputes Redressal Commission, Jaipur that Agent-Misrepresentation/ fraud-Principal liable for agent’s fraud/ misrepresentation, acting within the scope of his authority. In the present case in order to get business the insurance company had accepted the proposal form and issued the policy in question in favour of deceased life assured after taking huge premium but when life assured died and corresponding for settling the claim by the complainant had been made then the insurance company repudiated the claim of the complainant by taking a plea that the life assured had concealed the material information about the status of her health. In case Rigid Global (India) vs. Iffco Tokio General Insurance Co.Limited & Ors. (supra) Hon’ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur has further held A principal is liable for the agent’s fraud acting within the scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent. Though the opposite parties have brought on record copy of application under Section 156 (3) Cr.P.C. for taking action against Jyoti Rani, agent but the opposite parties have failed to produce on record the status of said application. Moreover, when the insurance company had issued the insurance policy on the basis of information given in the proposal form, then there was no scope to back out to honour the claim, which has been proved as genuine. In case titled as LIC of India & Ors. Vs. Laddu Lal Luhar III (2010) CPJ 227 Hon’ble Rajasthan State Consumer Disputes Redressal Commission, Jaipur has held that Consumer Protection act, 1986 Sections 2 (1) (g) 15 Contact Act section 182 Life Insurance-Agent where agent himself signs proposal form or fill it with untrue answers after insured signs it without his knowledge, insured not at fault and policy enforceable against the insurer-where proposer illiterate and free from blame in allowing incorrect answer to reach insurer, insurer cannot take advantage of any breach of warranty-Deceased was illiterate lady putting thumb impressions on papers-Could not be expected that she was aware of facts regarding health mentioned in declaration form-Claim entitled. However, learned counsel for the opposite parties has failed to explain whether any preliminary investigation has ever been made by the opposite parties at the time of issuance of policy to Sushila Devi. The insurance company and Agents are not suppose to get only premium/commission but it also liable to act fairly without taking the benefits of the weaknesses of the assured and it is also liable to indemnify all the responsibilities for which the premium has been received. In insurance practice generally the insurer’s agent approaches proposers for insurance and gets the proposal form filled in and got signed by them with a declaration that the answers are true and shall be the basis of the contract and when the agent himself/herself signs the proposal form or whether the agent fills up the proposal form with untrue answers after the insured signed it and without his/her knowledge the insured is not at fault and the policy is enforceable against the insurer. The act and conduct of the opposite parties reveals that they instead of acting fairly the insurance company is trying to befool their customers. In the present case in stead of acting fairly the insurance company is trying to avoid from its liability by making one pretext or the other, which cannot be allowed to do so. The wife of the complainant cannot be said to have withhold the material information about the status of her health from the insurance company. Therefore, the opposite parties have wrongly repudiated the claim of the complainant and same is not justified and the complaint deserves acceptance. Moreover, as per written statement filed by the opposite parties, the complainant was suffering from pre-existing disease such as Nasopharyngeal cancer since long and she was taking treatment from Jindal Hospital as well as Girdher Hospital, Hisar but they have failed to produce credible evidence on the case file to support this plea.
8. Though the opposite parties in their reply have stated that the deceased life assured was enrolled for a sum of Rs.5,39,000/- and in the proposal form the sum assured Rs.332230/- has been mentioned but the policy schedule placed on case file as Annexure R2 shows that the death benefit for the policy obtained by the deceased life assured is Rs.806459/-.
9. Keeping in view the facts and circumstances, we are of the opinion that there is deficiency in service on the part of opposite parties. Hence, we allow the present complaint and direct the opposite parties to pay claim/ insured amount of Rs.806459/- to the LRs of the deceased life assured after obtaining the list of LRs from complainant, if any, within 15 days from the date of order and thereafter to disburse the amount to the LRs in equal share within 30 days after receiving the documents from the complainant/LRs of the deceased life assured alongwith interest @ 9 % per annum from the date of order till its realization. The opposite parties are further to pay Rs.10,000/- as lump sum compensation on account of harassment, mental agony and costs of litigation charges. Compliance of the order be made within forty five thirty days from the date of passing of the order. Copy of this order be sent to the parties free of costs. File be consigned to the record room after due compliance.
Announced in open Forum.
Dated: - 26.11.2019.
(Shriniwas Khundia) (Nagender Singh)
Member President,
District Consumer Disputes
Redressal Forum, Bhiwani.
