BEFORE THE DISTRICT CONSUMER’S FORUM: KURNOOL
Present: Sri.Y.Reddappa Reddy, M.A., L.L.M., President,
And
Smt. S.Nazeerunnisa, B.A., B.L., Lady Member
Thursday the 26th day of March, 2015
C.C.No.115/2013
Between:
B.Sivamma,
W/o Late B.Shankar Reddy,
Aged about 40 Years,
H.No.1-150, Ponnapuram Village,
Nandyal Mandal-518 502,
Kurnool District. …Complainant
-Vs-
1. The Branch Manager,
Life Insurance Corporation of India,
Nandyal Branch, H.No.60-608, R.S. Road,
Nandyal-518 502, Kurnool District.
2. Life Insurance Corporation of India,
Represented by its Divisional Manager,
Post Box No.10, Jeevan Prakash Building
College Road, Kadapa-516 002. …OPPOSITE PARties
This complaint is coming on this day for orders in the presence of Sri.A.Prabhakara Reddy, Advocate for complainant and Sri.L.Hari Hara Natha Reddy, Advocates for opposite parties 1 and 2 and upon perusing the material papers on record, the Forum made the following.
ORDER
(As per Sri.Y.Reddappa Reddy, President,)
C.C. No.115/2013
1. This complaint is filed under section 12 of Consumer Protection Act, 1986 praying:-
- To direct the opposite parties 1 and 2 to pay Rs.15,18,500/- with bonus, all other benefits under the policies and compensation of Rs.50,000/- to the complainant.
- To grant future interest at the rate of 18% per annum from the date of filing of the complaint.
- To grant costs of the complaint.
- To grant such other reliefs as the Honourable District Consumer Forum deem fit and proper.
2. The facts of the complaint in brief run as follows:- The complainant is the wife of Late.B.Shankar Reddy, who insured his life with the opposite parties 1 and 2 under the policy bearing No.653287604 for Rs.2,00,000/- and policy commenced on 07.03.2007. He also insured his life under another policy bearing No.653288017 for Rs.1,00,000/- which commenced on 15.07.2008. Another policy bearing No.653288086 for Rs.50,000/- commenced on 12.11.2008. The last policy bearing No.653288741 covers the risk of Late.B.Shankar Reddy for Rs.3,00,000/- and it commenced on 28.03.2010. All the policies also cover accidental benefits assuring additional sum in case of accidental death as shown in the policy. Complainant is the nominee in all above mentioned four policies.
The insured B.Shankar Reddy died on 28.05.2012while driving the lorry bearing No.ADQ7540, when it met with an accident with another vehicle bearing No.AP04 TT 3381 near Govindapalli Village on NH-18, when the driver of the opposite vehicle drove it with high speed in rash and negligent manner and dashed against the vehicle which, the deceased was driving. Late.B.Shankar Reddy received grievous injuries in the said accident and died instantaneously at the accident place itself. All the policies mentioned in para 1 were in force on the date of accident. The death intimation was given to the opposite party No.1 and it gave claim form to the complainant. The complainant submitted duly filled claim forms to opposite party No.1. But opposite parties repudiated the claim by stating the insured made incorrect statement regarding his employment at the time of obtaining the assurance by stating that he was working as time scale worker instead of Junior Lorry Driver, which is hazardous employment. The complainant made a representation to Zonal Office of opposite parties at Hyderabad and they assured to review their decision after getting the records from the opposite parties by writing a letter dated 24.04.2013. But so far no communication is made from the opposite parties or their Zonal Office.
The allegation of the opposite parties that incorrect statement was given by Late.B.Shankar Reddy with regard to his employment is not correct. The repudiation is not based on facts and law. Late.B.Shankar Reddy insured his life under 10 policies out of it, 6 policies were settled by the opposite parties from 1995 onwards. They have record and knowledge to know the employment of Late.B.Shankar Reddy. The amount of premium had been realized from the salary of Late.B.Shankar Reddy and his employment was known to the opposite parties. Basing on the said information, the opposite parties did not make any effort to cancel the policies. Hence the opposite parties waived their right if any by collecting the premium from the salary of the deceased. Even if it is given by Late.B.Shankar Reddy, is not material information that affect the contractual obligations. The policy condition does not stipulate for repudiation in case of furnishing incorrect information relating to the employment. The repudiation of four policies is not based on facts or law. Therefore there is deficiency of service in repudiating the above mentioned policies. Hence she prays to allow the CC, to pass an order in favour of complainant and against the opposite parties, to pay the amount due to the complainant under 4 policies with interest at 18% per annum from the date of death till the date of realization and also to pay a sum of Rs.50,000/- towards mental agony and costs of the CC.
3. On service of notice opposite party No.2 filed written version the contents of which in brief run as follows. He denied all the allegations made in the complaint of the complainant in general. The complainant has to strictly prove about, her husband keeping the complainant, as nominee and about his died on 28.05.2012. It is not correct to say that the opposite party has knowledge about the nature of employment of Late.B.Shankar Reddy, and opposite parties did not made any effort to cancel the policies. Hence the opposite parties waived their right it any, by collecting the premium from the salary of the deceased etc., is not correct.
In para 4 of the written version they have admitted issue of 4 policies in favour of Late.B.Shankar Reddy under policies bearing Nos.653288086 for Rs.50,000/-, 653287604 for Rs.2,00,000/-, 653288071 for Rs.1,00,000/- and 653288741 for Rs.3,00,000/- respectively. Those policies came in force with effect from 12.11.2008, 07.03.2007, 15.07.2008 and 28 .03.2010 respectively. When the complainant submitted claim forms by stating her husband died on 28.05.2012 in the accident, the opposite party corporation repudiated the claim of the complainant under those polices on the ground that the deceased Late.B.Shankar Reddy with held correct information regarding his status with regard to his employment as Junior Driver at the time of obtaining the assurance with the corporation and died due to accident while driving the Milk Tankar, to which vehicle, he was the driver at the time of the accident. As per question No.4 (A) of proposals deceased furnished his occupation as time scale worker. In fact he was Junior Lorry Driver which is hazardous occupation. If the said fact was revealed the policies issued in favour of the deceased might have been with different premium amounts. The false information furnished by the deceased regarding the nature of the employment, mislead under writer to accept the proposal submitted by the deceased at normal rates and conditions.
The contract of insurance is a contract of utmost good faith and the deceased/life assured misled insurer by suppressing the material facts about his employment in his proposal. As such the policies were called on question under section 45 of Insurance Act, 1938 and the contract is declared as void. Therefore all the amounts paid were forfeited and no amount whatsoever is payable towards the policies contract. The deceased was working as driver even prior to the submission of the proposal for the policies. But he has not disclosed the same at the time of taking policies and taken the policies by suppressing material information. Hence the opposite parties corporation is not liable to pay any amount.
In the terms of the policy contract was declared null and the corporation repudiated the claims under the above policies by passing a speaking order on 15.10.2012 and also by giving an option to appeal to their Zonal Office, Hyderabad if she dissatisfied with their decision.
As the contract became null and void, nothing is payable under the above policies. As such there is no deficiency of service on the part of opposite parties corporation and the question of payment of damages, costs and interest does not arise. Hence he prays to dismiss the CC with costs.
4. In support of her contention, the complainant filed her sworn affidavit and marked as Ex.A1 to Ex.A9. As against the said evidence of the complainant, Manager (Legal and HPF) L.I.C., of India, Divisional Office, Kadapa by name G.Jaya Rami Reddy, S/o Late G.Konda Reddy, filed his sworn affidavit in support of the defence of the opposite parties and marked as Ex.B1 to Ex.B13. Both complainant and Manager (Legal and HPF) opposite party No.2 reiterated the contentions of the complainant in the complaint and the written version of opposite parties in their respective sworn affidavits.
5. After closure of evidence on behalf of the both parties, written arguments filed and also submitted oral arguments in support of their respective contentions.
The sum and substance of the arguments submitted on behalf of the complainant is that the deceased obtained the policies under dispute, while he was working in Milk Dairy and the premium amount was deducted from his salary account. As the deceased Late.B.Shankar Reddy was not new policy holder for the opposite parties, they knew very well about the quality of work, which the deceased was doing and his designation at the time when the insurance agent issued policies by obtaining premium amounts from him. Nothing prevented the person who filled proposal forms to explain the details of the designation of the person who was intending to take the policy and the premium that was payable to that particular policy. The deceased Late.B.Shankar Reddy was an illiterate. He had given consent to the proposal made by the person who approached him and who influenced him to take policies and who filled the contents of the proposal forms. The question of suppression of any material fact at the time of obtaining policies under Ex.A1 to Ex.A4 does not arise. If the insurance agents who obtained policies from the deceased and who filled proposal forms properly elicited the facts with regard to his employment and the premium that has to be paid for different avocations the deceased might have told about his designation at the point of time. In the absence of any such material on record it is not proper on the part of opposite party to repudiate the claim of complainant on the ground deceased suppressed information with regard to his employment at the time when he took those 4 policies.
There was no fault on the part of the deceased even in occurrence of the accident. The accident was had taken place due to rash and negligent driving of driver of the opposite vehicle only. Hence he prays to allow the CC and to pass an order in favour of the complainant and against the opposite parties as prayed in the complaint.
The learned counsel for the opposite parties submitted the deceased suppressed the promotion which he got from time scale worker to Junior Driver at the time when he took policies under Ex.A1 to Ex.A4, the Colum 4 (A) of the Ex.B1 to Ex.B4 meant the present occupation and exact duties of the person who intend to take policies. Under those 2 specified Columns he said his nature of work as time scale worker. If the deceased has revealed that he was a Junior Driver, the premium of the policies might have been different from that which he paid under Ex.A1 to Ex.A4. As the deceased suppressed material fact and obtained the policies by deceiving the opposite parties, the repudiation made by opposite parties under Ex.A8/Ex.B12 is proper and correct and there is no need either to interfere or to set aside the same. Hence he prays to dismiss the CC with costs.
6. Now the points that arise for consideration are:
- Whether there is deficiency of service on the part of opposite parties in repudiating the claim of the complaint?
- If so? To what amount the complainant is entitled?
7. POINT No.i:- There is no dispute with regard to issuing of polices by the opposite parties in favour of the deceased Late.B.Shankar Reddy which are covered under Ex.A1 to Ex.A4=Ex.B5 to Ex.B8. It is also admitted fact that the policy holder died on 28.05.2012 in the accident that had taken place on NH.18 near Govindapalli Village. The FIR which is registered as 115/2012 dated 28.05.2012 on the file of Sirivella P.S., is marked as Ex.A5, the Inquest Report is marked as Ex.A6 and Postmortem Report is marked as Ex.A7. A perusal of these documents clearly shows accident occurred due to rash and negligent driving of the driver of the vehicle bearing No.AP04 TT 3381. In the Inquest Report of Panchayatadar opined under Colum No.15 of Ex.A6, accident occurred when the driver of the vehicle bearing No.AP04 TT 3381 drove it in rash and negligent manner. Under Ex.A7 the doctor who conducted postmortem over dead body, opined the deceased would appear tp have died of hemorrhage and shock, due to injuries to vital organs i.e., brain and liver. Thus the oral arguments and documentary evidence placed before this Forum made it clear, the policies covered under Ex.A1 to Ex.A4=Ex.B5 to Ex.B8 were issued by the opposite parties and they were in force on the date of death of the deceased Late.B.Shankar Reddy. The only ground on which the opposite parties repudiated the claim of the complainant under Ex.A8=Ex.B12 is on the ground that the policy holder made incorrect information regarding his employment at the time of effecting assurance and hence in terms of the policy contract and declaration contained in the forms of proposal for assurance is here by repudiated the claim and accordingly we are not liable for any payment under the above policies and all moneys that have been under those policies are forfeited. Except furnishing of incorrect information with regard to his employment at the time of effecting assurance, there is no other ground basing on which the claim of the complainant was repudiated. Now it is necessary to look into proposal for insurance on one life which are marked as Ex.B1 to Ex.B4. There is no doubt true colum 4(A) is meant to show present occupation, and exact nature of the duties. Colum 4 discloses mode of payment as SSS. Service completed by the date of obtaining policy, 17 years. Under Colum No.5 of Ex.B1 to Ex.B4 annual income was mentioned at Rs.72,000/- and the source of income was by way of employment. Educational qualification is shown as 5th Class. The previous policies details are mentioned in page 3 of the proposal form. These documents contain the declaration by the proposer. The signature of the policy holder was obtained in these declaration forms by putting “X” marks in front of space which is prescribed for the signature of the person who life is propose to be assurance. Late.B.Shankar Reddy put his signatures in his declaration forms by declaring he is fully explained the above question to the proposer and he has truthfully recorded the answers given by the proposer. One M.Bhogi Reddy put his signature in the declaration forms under Ex.B2 and Ex.B3 and his code number is shown as 2749655. Under Ex.B4 S.N.Begum put her signature and her code No.2894655. In all the proposal forms the insurance agent who put their signatures below the signature of Late.B.Shankar Reddy, stated as it they explained the questions to the proposer and have truthfully recorded answers given by proposer. Though the policy holder is not available all the persons who filled the contents of Ex.B1 to Ex.B4 are alive. For the reasons best known opposite parties did not choose to examine any of those persons. If those persons who filled contents of Ex.B1 toEx.B4 were examined by the opposite parties, there was likelihood of getting an opportunity to the complainant to elicit the truth by cross examining them whether they have explained the deceased when they filled the proposal forms with regard to his nature of employment at that particular point of time, if explained whether the deceased asked them not to show has avocation/designation which he was holding at that particular point of time. As seen from Ex.B1 to Ex.B4 it is clear the deceased was only the person of 5th standard. He knew to put his signature in Telugu only and he did not know to read and write English. Ex.B1 to Ex.B4 are in English and Hindi languages only the gaps under Ex.B1 to Ex.B4 at relevant columns were filled by the agents in English language and obtained the signatures of the policy holder by putting “X” marks at the relevant places where he has to subscribe his signatures. As already discussed above there is little scope for the policy holder to read the contents of Ex.B1 to Ex.B4 before putting his signature, as all those documents both printed and hand written are in English language only. The persons who filled the contents are not coming forward to speak truth whether they explained each and every column of Ex.B1 to Ex.B4 and whether they have elicited the answers of policy holder before obtaining his signatures under those forms. If the agents who convinced the Late.B.Shankar Reddy to obtain the policies under Ex.A1 to Ex.A4 explained to him that he has to pay particular quantum of premium it his occupation was shown as Junior Driver and if the deceased asked these persons not to write his occupation as Junior Driver and it he has requested these persons to write his occupation as time scale worker under column No.4(A) of Ex.B1 to Ex.B4 in order to pay the less premium, then the contention of the opposite parties in repudiating the claims might have been sustainable. In the absence of any such material, which, the opposite parties failed to produce before this Forum which is well within their reach is a lacunae on the part of opposite parties and an adverse inference ought to have been drawn against the opposite parties for withholding the material information which is within their reach. The repudiation made by the opposite parties under Ex.A8=Ex.B12 on the ground that the deceased suppressed material fact about his employment to the agents at the time when he obtained policies under Ex.A1 to Ex.A4 is not proper and correct and is not tenable. Thus there is deficiency of service on the part of opposite parties. Hence we hold this point in favour of the complainant and against the opposite parties.
8. POINT No.ii:- While Answering point No1, we have made it clear that there is deficiency of service on the part of the opposite parties in repudiating the claims made by the complainant under Ex.A1 to Ex.A4. There is no dispute all the policies i.e., Ex.A1 to Ex.A4=Ex.B5 to Ex.B8 were in force on the date of accident i.e., 28.05.2012. There is no dispute with regard to the fact that the complainant is the nominee under all the policies. After receipt of the claim forms from the complainant the opposite parties ought to have been sanctioned amounts to which she was entitled accordingly to law under each policy. Instead of doing so they have repudiated the claim of the complainant on flimsy ground that the deceased made incorrect information with regard to his employment at the time of effecting assurance. We have elaborately discussed on this aspect, while answering point No.1, and held that there are no justifiable reasons for the opposite parties in repudiating the claim of the complainant. The opposite parties failed to produce the valuable evidence which is within their reach by not examining any of the agents, who convinced the deceased to obtain policies under Ex.B1 to Ex.B4 and who filled the gaps under those proposal forms. Hence we hold this point also in favour of the complainant and against the opposite parties.
9. In the result the complaint filed by the complainant is here by partly allowed and an award is hereby passed by directing the opposite parties jointly and severally to pay the amounts that are covered under each policy bearing Nos.653287604 for Rs.2,00,000/- commenced from 07.03.2007, 653288017 for Rs.1,00,000/- commenced from 15.07.2008, 653288086 for Rs.50,000/- commenced from 12.11.2008 and 653288741 for Rs.3,00,000/- commenced from 28.03.2010 along with benefit of accident for the same amounts. As the opposite parties repudiated the claim without justifiable ground they are also liable to pay interest at 9% per annum from the date of repudiation i.e., on 15.10.2012 till the date of payment whichever is earlier on the entire amount i.e., sum assured under each policy + accident benefit for equal sum.
Because of the wrongful decision of the opposite parties, the complainant not only suffered mental agony she is also forced to approach this Forum and filed this CC to get reliefs. Hence the opposite parties are liable to pay an amount of Rs.10,000/- by way of compensation for mental agony and Rs.2,000/- towards the costs of this CC.
We direct all the opposite parties to pay the amounts as directed above within one month from today failing which the complainant is at liberty to execute this order and realize the same by proceeding against opposite parties according to law .
Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 26th day of March, 2015.
Sd/- Sd/-
LADY MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses Examined
For the complainant:- Nil For the opposite parties:- Nil
List of exhibits marked for the complainant:-
Ex.A1 Photo copy of Policy bearing No.653287604 issued by opposite
parties.
Ex.A2 Photo copy of Policy bearing No.653288017 issued by opposite parties.
Ex.A3 Photo copy of Policy bearing No.653288086 issued by opposite parties.
Ex.A4 Photo copy of Policy bearing No.653288741 issued by opposite parties.
Ex.A5 Photo copy of F.I.R. in Crime No.115/2012 of Sirivella Police Station dated 28.05.2012.
Ex.A6 Photo copy of Inquest Report dated 28.05.2012.
Ex.A7 Photo copy of Post Mortem Certificate dated 28.05.2012 issued by Nandyal Hospital, Kurnool.
Ex.A8 Repudiation Letter dated 15.10.2012 issued by opposite party No.2 to complainant.
Ex.A9 Repudiation Letter dated 24.04.2013.
List of exhibits marked for the opposite parties:-
Ex.B1 Proposal Form dated 12.11.2008.
Ex.B2 Proposal Form dated 06.03.2007.
Ex.B3 Proposal Form dated 15.07.2008.
Ex.B4 Photo copy of Proposal Form dated 31.03.2010.
Ex.B5 Policy bearing No.653288086 issued by opposite parties.
Ex.B6 Policy bearing No.653287604 issued by opposite parties.
Ex.B7 Policy bearing No.653288017 issued by opposite parties.
Ex.B8 Policy bearing No.653288741 issued by opposite parties.
Ex.B9 General occupation questionnaire, in from No.L.I.C.-03-500.
Ex.B10 Proposal Clause No.85.
Ex.B11 Proposal Clause No.86.
Ex.B12 Repudiation Letter dated 15.10.2012
Ex.B13 Letter No.75/E2/MD/2010 dated 12.07.2012 addressed by Managing Director FAC, Milk Products Factory, Nandyal to Branch Manager, LIC of India (OP.No.1).
Sd/- Sd/-
LADY MEMBER PRESIDENT
// Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987//
Copy to:-
Complainant and Opposite parties :
Copy was made ready on :
Copy was dispatched on :
