BEFORE THE DISTRICT FORUM (UNDER CONSUMER PROTECTION ACT, 1986) SANGAREDDY, MEDAK DISTRICT.
Present: Sri P.V.Subrahmanayma, B.A.B.L., PRESIDENT
Smt U.Sunita, M.A., Lady Member
Sri Mekala Narsimha Reddy, M.A.,LL.B.,
P.G.D.C.P.L. Male Member
Monday, the 13th day of July, 2009
CC.No. 43 of 2008
Between:
Smt. D. Savithri W/o late D. Pentaiah,
R/o H.No. 5-31,
Prabhu Road, Jogipet post & Town,
Medak District.
….. Complainant
And
1. The Branch Manager, LIC of India, Sangareddy.
2. The Branch Manager, LIC of India, Medak Branch.
3. The Senior Divisional Manager, LIC of India,
Sounth Central Zone Office, Secretariat Road,
Hyderabad.
….Opposite parties
This case came up for final hearing before us on 25.06.2009 in the presence of Sri. Subhash Chander, advocate for complainant and Sri. M. Prabhakar Gupta, advocate for the opposite parties No. 1 to 3, upon hearing arguments of both sides, on perusing the record and having stood over for consideration till this day, this forum delivered the following:
O R D E R
(Per Sri. P.V. Subrahmanyam, President)
This complaint is filed Under Section 12 of Consumer Protection Act, 1986 to direct the opposite parties to pay policy amounts of Rs.50,000/- , Rs. 1,00,000/- and Rs. 1,15,134/-.
The averments in the complaint in brief are as follows:
1. The complainant’s husband D. Pentaiah obtained the following three life insurance policies from opposite parties No. 1 and 2 under different schemes:
i). The policy bearing No. 601713091 for a sum of Rs. 50,000/- under Jeevan Sathi Scheme, Payment of premium is every half year since 28.01.2006 i.e., Rs. 2,187/- taken from the respondent No. 2.
ii). The policy bearing No. 602252939 for a sum of Rs. 1,00,000/- under Bheema Gold, payment of premium is yearly since 15.03.2006, first premium paid on 15.03.2006 i.e., Rs. 6298/- taken from the respondent No. 1.
iii) The policy bearing No. 602251771 for a sum of Rs. 2,00,000/- under Bheema Bachath scheme, under single premium mode i.e. Rs. 1.34.708/- taken from the respondent No. 1.
2. Opposite party No. 3 carries on business with opposite parties No. 1 and 2 therefore opposite party No.3 is also liable to pay the claim amounts.
3. The life assured D. Pentaiah fell sick on 29.05.2006 therefore he was shifted to Gandhi Hospital where he died on 31.05.2006. After his death the complainant approached the opposite parties for payment of policy amounts. The opposite parties repudiated the claim through their letter dt. 31.03.2007 so far as the policies 1 and 2 are concerned by stating that the deceased deliberately suppressed his health condition and gave false answerers at the time of proposals, as such they are not liable to pay any amount under the said two policies. For the third policy mentioned in serial No.3 above, on the claim of the complainant the opposite parties issued a cheque for Rs. 84,866/-, though the deceased paid Rs.1,34,708/-. They have not accepted the request of the complainant to pay at least the amount paid. At the time of taking the policies D. Pentaiah was hale and healthy and was never admitted in any hospital as in patient. Due to sudden development of ill health unfortunately he died. Without making proper enquiry the claim in respect of first two policies was repudiated and as regards the third policy they have paid Rs. 84,866/- only as against Rs. 2,00,000/- therefore the balance of Rs. 1,15,134/- has to be paid. As the claim of the complainant was intentionally repudiated it amounts to deficiency in service, hence the complaint to direct the opposite parties to pay the policy amounts of Rs.50,000/- and Rs.1,00,000/- under the 1 and 2nd policies and balance of Rs. 1,15,134/- under the third policy.
4. The complaint is resisted by the opposite parties by filing a counter to the following effect:
The claims under the three policies were repudiated on the ground of suppression of material facts regarding health of the life assured. In the proposals for insurance, the life assured answered all questions under question No. 11 of the proposal dt. 31.01.2006, 20.02.2006 and 24.02.2006 which resulted the policy numbers in question in negative. The said answers were false. The opposite parties have evidence to believe that the life assured was known patient of hypertension and diabetes milletus since 8 years and was on insulin since 4 months prior to his admission to Gandhi hospital. The life assured also suffered from haemiplegia and seizures six months back, for which he has taken treatment in the hospital. He was admitted in Gandhi hospital on 08.5.2006. His case sheet shows that he was a known patient of diabetes milletus and he was smoker too. He was admitted in Gandhi hospital for the second time on 29.05.2006 and died on 31.05.2006. The sufferings from hypertension and diabetic milletus have lead to cardio vascular accident and haemiplegia resulting the death of life assured. The fact that he was a patient of diabetec milletus type 2 was not disclosed by the life assured in the above three proposal forms for insurance. Thus the life assured had misled the opposite parties by gives false answers about his health and habits to consider life insurance risk cover. The life insurance contract is a contract of utmost good faith where the opposite parties solely relied upon the information given by the proposer regarding his health, habits and income and on the declaration made by the proposer to assess the risk being under taken. The assured was under a solemn obligation to tell all facts about his health, habits and income as required in the proposal form at the time of proposal. He had given a declaration that the answers he gives in the proposal form is the basis for the contract and un true averments render the insurance contract void. As the very basis for acceptance of his proposals for insurance is found false, the opposite parties repudiated the claim under the three policy numbers. The fact that the life assured died within three months of the date of proposal under all the policies and the life assured had chosen to obtain insurance cover all in a span of 2 months elaborately speaks of his fraudulent intention to defraud the Corporation. Therefore the opposite parties are justified in repudiating the claim under all the three policies because the life assured had failed to perform his obligation of giving factual and correct answers to the questions put to him, to enter into a valid insurance contract. Opposite party company’s repudiation action under similar circumstances has been upheld by Hon’ble NCDRC in 2002(3) CPR 24 (NC) & III 2002 CPJ 56 (NC) in the case Sr. Divisional Manager, LIC vs Smt. Gangamma & ors. And also in case No. III (2002) CPJ 10 (NC) pertaining to LIC of India vs. Smt. Minu Kalita, wherein it was held the suppression by the deceased that he had malignancy and obtained treatment, proved by documents on record and therefore claim set aside.
5. The third plicy No. 602251771 was taken under “Beema Bachat Plan” (of Plan No. 175) by paying a single premium. The claim under this policy is also repudiated on the ground of suppression of material fact about his health and habits. While repudiating all claims the competent authority had however considered payment of 90% of surrender value under the third policy No. 602251771 on “EXGRATIA” amounting to Rs. 84,666/- and the said amount was paid to the claimant., Who had given consent for receiving the said amount. It is not true that the life assured was healthy at the time of taking the three policies and “suddenly fell ill” after taking them and dead. The opposite party came to know the entire personal history of the life assured in question as the life assured died immediately after taking the policies giving rise to suspicion of suppression of material facts by the life assured at the time of the proposals. As the opposite parties have rightly repudiated the claims of the complainant for suppression of material information about the health and habits of the life assured there is no deficiency in service and hence the complaint may be dismissed.
6. An additional counter was filed on behalf of the opposite parties stating that after payment of 90% of surrendered value under the third policy on exgratia, the authorities considered to pay even the balance 10% i.e an amount of Rs. 36,371/- to the nominee/complainant. The amount will be paid to the nominee after the case is decided in this forum. The opposite parties addressed a letter to that effect to their counsel.
7. Both parties filed their evidence affidavits in order to prove the averments in their respective pleadings. On behalf of the complainant Exs. A1 to A3 are marked and on behalf of the opposite parties Exs. B1 to B8 are marked.
8. Written arguments on behalf of the complainant filed. Counsel for the opposite parties filed a memo to treat the evidence affidavit of the opposite parties as written arguments. No oral arguments are advanced on either side. Perused the record.
9. The point for consideration is whether the repudiation of claims of the complainant under the three policies by the opposite parties is unjust and whether the complainant is entitled for the policy amounts?
Point:
10. The case of the complainant is that her husband Pentaiah obtained a life insurance policy from opposite party No.2 for Rs.50,000/ vide policy No. 601713091, through his proposal form dt. 31.01.2006 (Ex.B3), for which Ex.B4 policy was issued. He obtained another policy for Rs. 2,00,000/ under single premium mode from opposite party No.1 through proposal form dt.24-02-2006 vide policy No. 602251771. He also obtained another life insurance policy from opposite party No. 1 for Rs. 1,00,000/- vide policy No. 602252939 through his proposal form dt. 28.02.2006( Ex. B1) for which Ex. B2 policy was issued. According to the complainant, suddenly her husband Pentaiah fell sick on 29.05.2006 and he was shifted to Gandhi Hospital, Secunderabad, where he died on 31.05.2006. It is the further case of the complainant that when she made claim for payment of the amounts due under the above mentioned three policies, the opposite parties repudiated her claims on the ground of suppression of material facts by her husband Pentaiah, regarding his health. In order to prove the case, the documents marked by the complainant are repudiation letters Exs. A1 and A2 and exgratia payment letter Ex.A3.
11. The main contentions of the opposite parties in their counter and in their evidence affidavit are :
a) The deceased Pentaiah was a known patient of Hypertension and diabetes milletus type 2 since 8 years and was on insulin since 4 months prior to admission in the Gandhi Hospital.
b) He also suffered from haemiplegia and seizures 6 months prior to his taking the policies, for which he had taken treatment in the hospital.
c) Pentaiah was admitted in the Gandhi hospital on 08.05.2006 and his case sheet states that he was a known patient of diabetes milletus and he was a smoker too.
d) His admission in the Gandhi hospital on 29.05.2006 was for the second time.
e) The sufferings from hypertension and diabetes milletus have lead to cardio vascular accident and heamiplegia resulting in the death of the life assured viz. Pentaiah.
12. To prove the ill health of the deceased the Pentaiah the opposite parties have marked Exs. B6 and B7 xerox copies of case sheets. Ex. B6 relates to the admission of Pentaiah in Gandhi Hospital on 29.05.2006 and it shows that he was declared dead at 10.00 p.m. on 31.05.2006. Ex. B7 shows that Pentaiah was admitted in hospital on 08.05.2006 on the complaint of weakness in left side of the body since 4 days prior there to, etc.. It also shows that Pentaiah was having previous history of same complaints 4 months back and he was known diabetic for 8 years and was on regular insulin treatment and he was also known HT on regular treatment. Ex. B7 shows that Pentaiah was discharged from Gandhi hospital on 11.05.2006.
13. It is to be noted that none of the above allegations of the opposite parties regarding the health of Pentaiah, the life assured, and his taking treatment in Gandhi Hospital, Secunderabad in two spells, is denied by the complainant which leads to an inference that all the said allegations of the opposite parties are true and correct. For question No. 11 in the proposal forms Exs. B1 and B3 the answers are all in the negative which goes to show that the deceased Pentaiah suppressed his ill health at the time of obtaining insurance policies.
14. The Hon’ble National Commission had an occasion to decide a similar case between Life Insurance Corporation of India vs. Smt. Ayesha in Revision Petition No. 3362/2004 decided on 25.10.2005 reported in 1986 -2006 CONSUMER 10483(NS). In that case claim was repudiated by the Life Insurance Corporation on the ground of suppression of material fact of ill ness. Medical Certificate and leave application show that the insured was suffering from hepatitis which was suppressed in the proposal form. It is held in that case that the ultimate cause of death has no relevance as regards disclosing of information regarding state of health and hence repudiation of the claim was up held. Similar view has been expressed by the Hon’ble National Commission in the three decision referred by the opposite parties in paragraph No. 3 of their counter.
15. Therefore in view of the ratio in the above decisions and as the complainant has not denied any of the allegations of the opposite parties regarding the ill health of her husband and his taking treatment for the same and as the complainant has not disputed any of the documents marked on behalf of the opposite parties, especially Exs. B6 and B7, which show the ill health of the deceased Pentaiah, it is held that repudiation of the claims of the complainant by the opposite parties under the policies covered by Exs.B2 and B4 is held to be proper and hence the complainant is not entitled for the policy amounts under the said two policies.
16. So far as the other policy bearing No. 602251771 for Rs.2,00,000/- under Bheema Bachath Scheme under single premium mode for which the deceased Pentaiah paid Rs. 1,34,708/- is concerned according to the complainant the opposite parties paid Rs. 84,866/- to her and the same is not disputed by the opposite parties. When the matter has come up for arguments the learned counsel for the opposite parties filed a letter dt. 02.03.2009 of the opposite parties addressed to him that an amount of Rs.36,371/- is still payable to the nominee i.e. the complainant herein under policy No,. 602251771 towards the death claim under the above said policy and the amount will be paid to the nominee on hearing from this forum or as per direction of this forum. The same is mentioned in the additional counter filed on 02.06.2009. When the opposite parties are of the opinion that still they have to pay an amount of Rs. 36,371/- under policy No. 602251771 in addition to the amount of Rs.84,866/- which was already paid, they should have paid to the complainant or deposited in this forum immediately after taking such a decision. There is no need for them to wait for any order or direction from this forum in that regard. Under the circumstances it is held that the opposite parties have to pay the said amount of Rs. 36,371/- with interest and costs. The point is answered accordingly.
17. In the result the claim of the complainant regarding the policy bearing Nos. 601713091 for Rs. 50,000/- and policy NO, 602252939 for Rs. 1,00,000/- is dismissed.
18. The claim of the complainant regarding other policy bearing No. 602251771 for Rs.2,00,000/- is partly allowed. Directing the opposite parties to pay to the complainant the sum of Rs.36,371/- (in addition to the amount of Rs.84,866/- which was already paid) with interest at 9% p.a. from the date of death of the complainant’s husband Pentaiah i.e. from 31.05.2006 till payment. The opposite parties are further directed to pay a sum of Rs.2,000/- towards costs. Rest of the claim under this policy is dismissed. One month time is granted for payment.
Typed to dictation, corrected and pronounced by us in the open forum this 13th day of July, 2009.
Sd/- **** ****
PRESIDENT LADY MEMBER MALE MEMBER
APPENDIX OF EVIDENCE
Witness examined
For the complainant : For the opposite parties:
-Nil- -Nil-
DOCUMENTS MARKED
For the complainant : For the opposite parties:
Ex.A1/dt.31.03.2007 - Repudiation Letter Ex.B1/dt.Proposal Form
Ex.A2/dt. 31.03.2007 - Repudiation Letter Ex.B2/dt.17.03.2006 - BIMA GOLD policy.
Ex.A3/dt.28.03.2007 - Exgratia payment Ex. B3/dt31.01.2006 - Letter Proposal form.
Ex. B4/dt. 02.03.2006 – Jeevan Saathi Policy
Ex. B5/dt 22.07.2006 – Certificate of Hospital Treatment.
Ex. B6 & B7 /dt. – Xerox copies of Case Sheets.
Ex. B8/dt.31.03.2007 – copy of Ex.A1.
Sd/-
PRESIDENT
CC. 43 of 2008
After going through the order prepared by the Hon’ble President and on perusing the material part of the record, I am not in agreement with the view expressed there in and hence the following:
Dissent Order
(Per Sri. Mekala Narsimha Reddy, Male Member)
On careful perusal of the records and various documents we have observed that it is an admitted fact. The opposite party has issued three policies i.e. the policies bearing No. 601713091 of Rs. 50,000/- under Jeevan Sathi on 28.01.2006, second one policy bearing No. 60225239 to Rs.1,00,000/- under Bheema Gold on 15.03.2006 third one is bearing No. 602251771 for Rs. 2,00,000/- under Bheema Bachath on 24.02.2006 which have been any interrupt up to the death of deceased. Being no repudiation on laps of the policies in which only Bheema Bachat Plan No. 602251771 policy has Excepted by the competent authority on consideration of 90% to the exgratia an amounting to Rs. 84,866/- and the said amount was paid to the claimant on 23.07.2007 whereas another two two policies repudiated on the ground that opposite party came to know the entire personal history of the life assured heath at the time of taking the three policies subsequently suddenly fell ill and dead. Which giving rise to suspicion of suppression of material facts by the life assured at the time of the proposal. The allegation of the opposite party the life assured did not disclose in the above dated proposal forms for insurance except filed Ex. B5 and B7.
As such above view of circumstance of facts, no evidence to prove insured suffered from any decease or received treatment before purchase of policies. Misinterpreted and mis constrained by holding Hypertension. DM/illness the learned counsel for the opposite party has filed a case sheet of Gandhi Hospital. Which indicates that the deceased was suffering with Hypertension and DM since 8 years. The opposite party failed to adduce any conclusive evidence to substantiate the allegation of the preexisting disease. Oblivious the family has no knowledge at the time of taking out the policies. The opposite party has not discharge its burden by examining doctor to establish that suffering the said diseases. Who had certified the good health of the insured at the time of taking the insurance policy. It was the duty of the administration officer of the corporation who were incharge of the investigation of the death the LIC has failed to produce on record the certificate given by the doctor who examined the insurance and failed to bring on record any documentary evidence to indicate that the insured had taken the treatment moreover filing of complaint opposite party has filed a document regarding the policy No. 602251771 from agreed to pay the Rs. 36,371/- towards full payment to the death claim said document filed on dated 2nd March, 2009 no nexus between alleged suppression of material fact ground of repudiation of claim amounts to deficiency in service Relying on Judgment 1(2004) CPJ 91(NC). Hence the prayer of the complainant is liable to be allowed with costs.
In the result the complaint is allowed, directing the opposite party’s to pay entire three policies amount excluding Rs. 84,866/- with interest 6% and also pay Rs. 2,000/- in cost of litigation. The order shall be comply within one month from the date of receipt of order copy.
Typed to dictation, corrected and pronounced by us in the open forum this 13th day of July, 2009.
**** Sd/- Sd/-
PRESIDENT LADY MEMBER MALE MEMBER
Copy to:
1. The complainant
2. The opposite parties
3. Spare copy Copy delivered to the complainant/
opposite parties On .________
Dis. No. /2009, dt. . .2009
