Date of filing:2.4.2014
Date of Disposal:27.10.2014
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II::
VIJAYAWADA, KRISHNA DISTRICT.
Present: SMT N. TRIPURA SUNDARI, B. COM., B. L., PRESIDENT (FAC)
SRI S.SREERAM, B.COM., B.A., B.L., MEMBER
MONDAY, THE 27TH DAY OF OCTOBER, 2014.
C.C.No.93 OF 2014
Between :
Nooka Bhaskara Rao, S/o China Subba Rao, Hindu, 58 years, R/o D.No.11-63-43, Brahmin Street, Kothapet, Vijayawada – 1.
….. Complainant.
And
1. The Andhra Bank, Rep., by its General Manager, Bazaar Branch, Vijayawada – 1.
2. India First Life Insurance Company Ltd., Rep., by its Branch Manager, 301, “B” Wing, The Qube, Infinity Park, Dindoshi – Filmcity Road, Malad (E), Mumbai – 400 097.
…....Opposite Parties.
This complaint is coming before us for final hearing on 14.10.2014 in the presence of Sri B.Karunendra Rao, Advocate for complainant and A.S.Rani, Advocate for opposite party No.1 and Sri L.Satyanarayana, Advocate for opposite party No.2 and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble President (FAC) Smt N. Tripura Sundari)
This complaint is filed under Section 12 of the Consumer Protection Act, 1986.
The averments of the complaint are in brief:
1. The wife of the complainant is having loan account in the 1st opposite party bank. The 1st opposite party assured to his account holders i.e, the wife of the complainant cover under a group credit life policy for a sum of Rs.10,00,000/-. The wife of the complainant also obtained another policy for Rs.2,36,250/- from the 2nd opposite party on 20.1.2011 through the 1st opposite party bank. The complainant herein is the nominee under both the policies. While so on 13.10.2011 the wife of the complainant expired. The complainant being the nominee under the said two policies made separate claims to the 2nd opposite party with a gap of four months i.e., on 6.6.2012. The 2nd opposite party settle the claim under the 2nd policy and repudiated the claim under the first policy on 16.8.2012 alleging that the deceased insured withheld the material information at the time of filing the proposal form relating to her health condition. The 2nd opposite party also stated in their repudiation letter that the complainant submitted claim forms under both the policies with a gap of four months and therefore without verifying the same the 2nd opposite party settle the claim of the complainant for Rs.2,36,250/- and with regard to the first claim they stated that the claim was within two years of commencement of policy. The 2nd opposite party got investigated the matter and came to know that the insured withheld material information regarding to her health. In the said letter the 2nd opposite party also demanding the complainant to refund the sum assured of Rs.2,36,250/- that was taken from them after wrongly representing the facts of the case. At the time of obtaining the policy the wife of the complainant submitted proposal form along with all details. After considering through the same only the 2nd opposite party issued policy bond. But at the time of settlement of claim the 2nd opposite party raised unnecessary objections and colluded with the 1st opposite party to avoid the claim of the complainant which causes mental agony and monetary loss to the complainant. Hence the complainant is constrained to file this complaint against the opposite parties praying the Forum to direct the opposite parties to pay the claim amount of Rs.10,00,000/- to the complainant, to pay Rs.50,000/- each towards compensation for deficiency in service, to pay interest at 12% per annum on Rs.10,00,000/- from 21.1.2011 till the date of realization and to pay costs.
2. The version of the 1st opposite party is in brief:
The 1st opposite party denied all the allegations of the complaint and submitted that an authorization form and simple declaration of good health given by borrower Nooka Vijaya Lakshmi on 1.3.2011 mentioning that she hereby authorized the 1st opposite party to include the premium as a part of loan amount and fix up equated monthly intalments. She further agree that in the event of her unfortunate demise during the pendency of the loan the 2nd opposite party will sole authority to consider the claim and the 2nd opposite party will settle the claim amount as per their rules to the extent of outstanding schedule of indebted as on the anniversary proceeding the debt infavour of Andhra Bank i.e., the 1st opposite party. These benefits will be utilized towards the liquidation on the loan amount and any other dues under the loan provided by the 1st opposite party. In the event of any surplus arising out of the benefits settle by the 2nd opposite party after liquidating the outstanding amount to her nominee. In the above case the 1st opposite party is only the facilitator in between the borrower and the 2nd opposite party for insurance purpose and there will be an agreement between the borrower and policy holder only. The 1st opposite party is no way concerned in respect of claim settlement as per the service agreement in between the 1st opposite party and the 2nd opposite party. Therefore there is no deficiency in service on the part of the 1st opposite party towards the complainant and prayed to dismiss the complaint with costs.
3. The version of the 2nd opposite party is in brief:
The 2nd opposite party denied all the allegations of the complaint and submitted that after understanding of the terms and conditions of the policy, the deceased/policy holder duly signed on proposal form on 1.3.2011 and gave all relevant details and information in the prescribed form. On the declaration of the good health in the proposal form the deceased/insured has given declaration that she had made true and accurate of all the facts and circumstances as may be relevant for the acceptability of the risk and had not withheld any information as may be relevant for the acceptability of the proposal form. Basing on the information on the declaration provided by the deceased/insured and on receipt of the premium the 2nd opposite party issued policy to the deceased/insured. The claim being an early claim and after perusal of the documents submitted by the complainant the 2nd opposite party conducted an investigation and during the course of investigation of the matter the 2nd opposite party have received the medical details of Care Hospital which released that the deceased/insured was diagnosed with hyper tension, type 2 diabetes and Osteoarthritis of both knee and she was admitted in the hospital on 6.12.2004 i.e., much prior to signing on the proposal form. The questions asked related to health conditions of deceased/life assured in proposal form were replied as ‘no’. Hence it is crystal clear that the deceased/insured was taking treatment of above mentioned disease prior to signing on the proposal form and these facts malafidely concealed by her at the time of issuance of the said policy. Thereafter the 2nd opposite party on the basis of medical record, certificate issued by Dr.N.Muralil Krishna and physician’s statement convinced that there was non-disclosure of earlier disease of the deceased/life assured. Thus by making mis-representation and concealment of above medical history the deceased policy holder got policy issued which would not have been issued if the correct fact i.e., medical history would have been disclosed. The contract of insurance being of utmost good faith, the deceased/policy holder was under an obligation to disclose the said material facts in the proposal form which was necessary for the decision of the 2nd opposite party. The opposite party rightly repudiated the claim of the complainant on the ground of suppression of material facts by the deceased/policy holder at the time of taking the policy. This amounts to serious mis-representation of material facts which was violation of terms and conditions of insurance policy. Insurance being a contract of ‘uberrimae fidae’, the policy holder was bound to reveal all relevant facts to the insurer to determine the policy holder’s eligibility for availing the insurance. The fact of repudiation was communicated to the complainant vide letter dated 23.3.2012. It is further submitted that the deceased/life insured obtained both policies by concealing material facts i.e., pre-medical history of deceased/life assured. Therefore the complainant is not entitled for any relief from this Hon’ble Forum as the opposite party repudiated the claim of the complainant as per the terms and conditions of the policy. The complainant is bound to refund the sum assured amount of Rs.2,36,250/- which he received by concealing the facts from opposite party. The complainant himself committed a wrong and get the sum assured amount of policy No.10156940 by misrepresentation of facts. The opposite party issued a policy proposal form dated 20.1.2011. The deceased/life assured again did not disclose her pre-medical history and questions related to her pre-medical history again answered in negative in the 2nd policy on 1.3.2011. After four months of the repudiation of the 2nd policy claim, the complainant filed a claim in the policy No.10156940 with a malafide intention the complainant did not intimated the opposite party at the time of lodging the claim that the claim under the 2nd policy under account No.003930100005640 had already been repudiated by the opposite party. On receipt of claim under policy No.10156940 the opposite party had assessed the claim but because it had no means to cross check the earlier claim filed by the complainant for the same deceased/life assured, the opposite party paid the claim on 27.6.2012 under an impression that it is a different and separate case and not interconnected or correlated to the earlier case of the same deceased/life assured. If the complainant had informed about the prior claim of same deceased/life assured being repudiated by the opposite party, the opposite party would have never paid the sum assured Rs.2,36,250/- to the complainant. Therefore opposite party vide its reply dated 16.8.2012 of legal notice called upon the complainant to return back the sum assured of Rs.2,36,250/- that he had been taken from the opposite party after wrongly representing the facts of the case. The opposite party had to get refund the paid amount of Rs.2,36,250/- from the complainant. Therefore there is no deficiency in service on the part of the opposite party and prayed to dismiss the complaint with costs.
4. On behalf of the complainant he gave his affidavit and got marked Ex.A.1 to Ex.A.3. On behalf of the 1st opposite party Sri K.Nagabhushanam, Senior Branch Manager gave his affidavit and got marked Ex.B.1 and on behalf of the 2nd opposite party Sri R.Viswanarayan, Head - Governance & C.S. of the 2nd opposite party gave his affidavit and got marked Ex.B.2 to Ex.B.8.
5. Heard and perused.
6. Now the points that arise for consideration in this complaint are;
1. Whether there is any deficiency in service on the part of the opposite parties
towards the complainant in repudiating the claim of the complainant?
2. If so is the complainant entitled for any relief?
3. To what relief the complainant is entitled?
POINTS 1 AND 2:-
7. On perusing the material on hand, the wife of the complainant had loan account with the 1st opposite party and she was issued coverage under a group credit life insurance policy for a sum of Rs.10,00,000/- by the 2nd opposite party for the said loan account dated 1.3.2011 “consent-cum-authorization form and simple declaration of good health. She also obtained another policy dated 20.1.2011 from the 2nd opposite party for Rs.2,36,250/- through the 1st opposite party. The complainant is the nominee under these two policies. While so on 13.10.2011 the wife of the complainant expired and the same is evidenced under Ex.A.2 dated 13.10.2011. The complainant being a nominee under the said two policies made separate claims with a gap of four months on 6.6.2012. The 2nd opposite party settled the claim under the 2nd policy and repudiated the claim under the 1st policy under Ex.A.3 = Ex.B.8 dated 16.8.2012 alleging that the deceased insured withheld the material information at the time of filing the proposal form relating to her health condition and demand the complainant to refund Rs.2,36,250/- which was taken from the 2nd opposite party under 2nd policy by wrongly representing the facts of the case.
8. The defence of the 1st opposite party is that an authorization form and simple declaration of good health given by borrower, the deceased insured on 1.3.2011 authori1zing the 1st opposite party to include the premium as a part of loan and fix up equated monthly instalments. She further agree that in the event of her death during the pendency of loan the 2nd opposite party will settle the loan due amount as per their rules which is outstanding of the debt of the 1st opposite party. These benefits will be utilized towards the liquidation on the loan amount and any other dues to the 1st opposite party. If any surplus arising out of the benefits settled by the 2nd opposite party after deducting the outstanding amount to her nominee. In this case the 1st opposite party is a facilitator in between the borrower and the 2nd opposite party. There was an agreement between the borrower and the 2nd opposite party. The 1st opposite party is no where concern in respect of this claim settlement. Ex.B.1 dated 8.1.2011 is loan particulars and terms and conditions.
9. The defence of the 2nd opposite party that after understanding the terms and conditions of the policy, the deceased insured signed on proposal form on 1.3.2011 and gave all relevant details and information. On the declaration of good health the deceased had given declaration Ex.B.3 that she had not withheld any information in the proposal form. Basing on the information given by the deceased insured under Ex.B.3 and on receipt of premium the 2nd opposite party issued policy to her. After death of the insured her nominee the husband made a claim under Ex.B.5 for the said policy amount Rs.10,00,000/-. The claim being an early claim the 2nd opposite party conducted an investigation of the matter and received the medical report from the Care Hospital under Ex.B.6 physician’s statement – death relating to the deceased insured that she was diagnosed with hyper tension, type 2 diabetes and osteoarthritis of both knee and she was treated for some days in 2004 and 2005 i.e., much prior to signing on the proposal form. For the questions asked relating to her health in proposal form were replied as “no”. It is crystal clear that the deceased/ insured was taking treatment for the above mentioned disease prior to signing on the proposal form and these facts were malafidely concealed by her at the time of issuance of the said policy. Thereafter the 2nd opposite party on the basis of medical record, certificate issued by Dr.N.Murali Krishna and physician’s statement, repudiated the claim of the complainant stating that there was non-disclosure of earlier disease of the deceased/insured and intimated the same to the 1st opposite party under Ex.B.7 = Ex.A.1 dated 23.3.2012 and to the complainant under Ex.B.8=Ex.A.3 dated 16.8.2012. Ex.B.2 is notarized copy of investigator affidavit. By making misrepresentation and concealment of above medical history the deceased got policy, from the 2nd opposite party if she disclosed the previous history of her medical treatment the 2nd opposite party would not issue the policy. The 2nd opposite party further stated that contract of insurance being utmost goof faith. The 2nd opposite party repudiated the claim of the complainant on the ground of suppression of material facts, which amounts to violation of terms and conditions of insurance policy. Insurance being a contract of ‘Uberrimae fidae’ the policy holder has bound to reveal all relevant facts to the insurer to determine the policy holder’s eligibility for issuance of policy. The deceased/insured obtained both policies by concealing material facts about her pre-medical history. The 2nd opposite party repudiated the claim of the complainant as per terms and conditions of the policy. The complainant is bound to refund the sum assured Rs.2,36,250/- under the 1st policy which he received by concealing the facts from the 2nd opposite party. After four months of repudiation of the 2nd policy for Rs.10,00,000/-, the complainant filed an another claim of the 1st policy with a malafide intention did not intimate about the claim of the 2nd policy which had already repudiated by the 2nd opposite party. On receiving the 1st policy claim the 2nd opposite party assessed the claim and paid the claim amount of Rs.2,36,250/- on 27.6.2012 under an impression that it is different and separate case and not interconnected or correlated to the earlier case of the same deceased/insured. The 2nd opposite party in its reply legal notice dated 16.8.2012 called upon the complainant to return back the sum of Rs.2,36,250/- which he got from the 2nd opposite party by wrongly representing the facts of the case.
10 On supporting of his arguments the counsel of the 2nd opposite party relied on the citations
1. Satwant Kaur Sandhu V. New India Assurance Company Ltd., IV (2009) CPJ 8(SC)
The complainant has no “locus standi” to claim any alleged sum assured, as the insurance policy was obtained by the DLI by mis-representation of material facts in order to defraud the opposite party. The contract of insurance is void, and not tenable in the eyes of law as it is entered by DLI to defraud the opposite party.
2. LIC of India V. Sampat Devi, III (2006) CPJ 32
In our concerned opinion, there are certain diseases such as kidney, heart and brain and they are connected with the life span of a person and if any mis-statement is made in respect of such type of diseases by the person seeking insurance, in such case it can be believed that knowlingly the person taking out the insurance has made mis-staement.
3. V.Nalini V. LIC of India & Anr.I (2008) CPJ 144
The suppression of a serious ailment pertaining to heart, brain or kidney make the repudiation of claim justified. 2nd and 3rd citations facts are not related to the present complaint.
4. Sapna Arora Vs. Life Insurance Corporation of India & Ors., I (2009) CPJ 588
The claim was repudiated on the ground of suppression of information on prior existence of diabetes mellitus.
The DLA passed away within a short span of signing of the proposal form and issuance of the policy, which itself is a strong ground to raise reasonable doubt over the correctness of the material representations made in the proposal form.
5. State of Punjab & Anr. V. Smt. Asha Rani . III (2003) CPJ 172 (NC)
6. LIC of India & Anr. V. Balbir Kaur I (2009) 212 (NC)
7. Life Insurance Corporation of India Vs. Smt Piari Devi & Others, II (2008) CPJ 156
8. LIC of India V. Radhika Devi, III (2008) CPJ 226
That the very fact of early claim is a good corroborative evidence to prove misrepresentation, material non-disclosure or contemplation of death.
11. The 2nd opposite party pointed some facts that suppression of pre-existing disease amounted to suppression of material facts and hence the contract of insurance (policy) is liable to be rescinded as per Section 45 of the Insurance Act, 1938. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected.
12. In view of the above facts and citations filed by the 2nd opposite party we hold that there is no deficiency in service on the part of the opposite party and is not liable to pay insured amount under the said two policies. The complainant is not entitled to any relief from the 2nd opposite party as he prayed.
POINT No.3:-
13. In the result, the complaint is dismissed without costs.
Typewritten by Stenographer, corrected by me and pronounced by us in the open Forum, this the 27th day of October, 2014.
PRESIDENT(FAC) MEMBER
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For the complainant: For the opposite parties:-
P.W.1 N.Bhaskara Rao D.W.1 K.Naga Bhushanam,
1st Complainant Sr., Branch Manager
(by affidavit) of the 1st opposite party
(by affidavit)
D.W.2 R.Viswa Narayana, Head Governance of CS of the 2nd opposite party
(by affidavit)
DOCUMENTS MARKED
On behalf of the Complainant:-
Ex.A.1 23.03.2012 Photocopy of letter from the 2nd opposite party to the 1st opposite party.
Ex.A.2 . . Photocopy of Brought Dead Certificate issued by HelpHospitals, Vijayawada along with photocopies of Cremation Notification Form and Ration Card.
Ex.A.3 16.08.2012 Photocopy of letter from 2nd opposite party to thecomplainant.
For the opposite parties:-
Ex.B.1 08.01.2011 Photocopy of letter from the 1st opposite party to the wife of the complainant.
Ex.B.2 20.06.2014 Affidavit.
Ex.B.3 01.03.2011 Photocopies of Consent – cum – Authorization Form and Simple Declaration of Good Health along with no objection form co-applicants and Member form – Group Credit Life Plan.
Ex.B.4 . . Photocopy of terms and conditions of the policy.
Ex.B.5 24.12.2011 Photocopy of claim intimation form – credit life.
Ex.B.6 . . Photocopies of Physician’s statement – Death along with certificate issued by Sri N.Murali Krishna on the letter head of the 2nd opposite party and reports and prescription slips of care hospital and Sri Vidya Clinic, Vijayawada.
Ex. B.7 23.03.2012 Photocopy of letter from the 2nd opposite party to the 1st opposite party.
Ex.B.8 16.08.2012 Photocopy of letter from the 2nd opposite party to the complainant.
PRESIDENT(FAC)
