Complaints filed on: 13-10-2023

                                                      Disposed on: 09-08-2024

BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, TUMAKURU

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DATED THIS THE   9^th DAY OF AUGUST, 2024

::P R E S E N T::S

   SMT.G.T.VIJAYALAKSHMI, B.Com, L.L.M, ….....PRESIDENT         

  SMT.NIVEDITA RAVISH, B.A., L.L.B. (Spl).,.. .LADY MEMBER

CONSUMER COMPLAINT No. 145/2023

       Smt. Busheera 

       wife of late Mohammad Azmathulla,

       Aged about 35 years,

       R/o. Behind Bapuji School,

       Pavagada-561202.

……….Complainant

      (Sri. Radha Krishna, Advocate.,)

V/s

Life Insurance Corporation of

India, Pavagada Branch,

Tumkur District.……….. Opposite Party No.1

LIC of India, Claims Department

Divisional Office-1, 1^st floor,

Jeevan Prakash, P.B. No.6694

Jayachamarajendra road,

        (Opposite Party No.1 and 2: Smt.A.C.Mamatha, Advocate.)

                                          ::O R D E R ::

SMT.NIVEDITA RAVISH, LADY MEMBER

          This complaint filed by the complainant Under Section 35 of Consumer Protection Act, 2019 against the opposite parties, to direct them to pay the insured covered under the three policies with interest and to pay Rs.20,000-00 towards mental agony suffered by the complainant.

2.       The OP.No.1 is the Branch Manager, LIC of India, Pavagada Branch, Tumkur (herein after called as OP.No.1) and opposite party No.2 is the Senior Divisional Manager, LIC of India, claims Department, Divisional Office-1, Bangalore (herein after called as OP.No.2).

3.    It is the case of the complainant is that, the husband of the complainant by name Mohammed Azmathulla, S/o. Mohammed Sadiq was died on 3-12-2022 while going from Pavagada to Tumkur for taking treatment to his heart decease. The said husband of the complainant had obtained three insurance policies, bearing No.617017097, 617017096 and 658952203. The above said three policies obtained for sum assured of Rs.5,00,000-00 dated 9-12-2023, Rs.5,00,000-00 on 9-12-2023 and Rs.8,00,000-00 dated 13-10-2021 respectively. In connection with the

above said three policies, the complainant’s husband had paid the necessary insurance premium amounts regularly to OP.No.1 from the date of inception of the policies up to death of the complainant’s husband. Till the death the complainant’s husband, he was in good state of mind health and died on 3-12-2022 due to sudden heart attack. After the death of the husband, the complainant had approached OP.No.1 to claim insurance benefit amount on the above said policies, by submitting the application. But OP.No.2 has repudiated the claim by issuing the letter, bearing No.DO-1/claim/repud/46 dated:27-2-2023 by stating that the said policies are not completed 3 years and complainant’s husband was suffering with T2DM from 2014 and the said policies could not be  entertained and could not be settled the amounts under the  above said three policies. The complainant got issued legal notice on 6-9-2023. But OP.No.1 has replied evasively and not settled the claim of the complainant. Hence this complaint.  

4.   After issuing of notice by this Commission, the OP No.1 and 2 were appeared before this Commission through their common counsel and filed version.  

5.   In the version, the OP.No.1 and 2  are submitted that the complaint is frivolous, vexatious and unsustainable in law. Further denied all allegations made by the complainant as false and submitted that, the husband of the complainant had taken Policy No.617017096 date commencement was 9-12-2023 on life of his daughter by name Asraibtesam for sum assured Rs.5,00,000-00 under quarterly premium, of Rs.9,479-00 payable every quarter, which is called as Premium waiver benefit. Further complainant’s husband taken policy No.617017097 with date of commencement 9-12-2013 on his life under plan and term 149-25 for sum assured of Rs.5,00,000-00 under quarterly premium payment mode with premium of Rs.5,656 and complainant’s husband had taken another Policy No.658952203 with date of commencement 29-09-2021 on life of his daughter Kum.Ameer Eshal for sum assured of Rs.8,00,000-00 under yearly premium with premium of Rs.41,932-00, which is called premium waiver benefit. The policy No.617017096 and 617017097 were lapsed due to nonpayment of premiums from         March-2017. But on 21-9-2017 life assured has revived the policy by paying premium from March-2017 to September-2017 through loan cum revival scheme. At the time of revival, which is termed as fresh contract policy. After receiving the claim application opposite parties have examined the matter properly and correctly and after confirming that the life assured had suppressed the material information about his health, which forms the basis of contract they have repudiated the claims in term

 of the contract with valid reasons supported by valid documents of evidence. Though the life assured was suffering from type-2, Diabetes and Dyslipidamia during 2014, the life assured has mentioned as “No” in point No.9 of proposal form 300, in section III-personal and family details of health/habits and in form No.680. Hence OP.No.1 and 2 are prayed for dismissal of the complaint with cost against them.  

6.  The complainant filed his affidavit evidence with 37 (thirty seventeen) documents which are marked as Ex.C-1 to Ex.C-37. One Smt. Meenakshi, Administrative Officer, Legal Department of opposite parties has filed her affidavit evidence on behalf of OP.No.1 and 2 and filed as Ex.R-1 to Ex.R-14.

7.       We have heard the arguments of both counsels with written arguments filed by the OP.No.1 and 2 and points would arise for determination as follows:

1. Whether the complainant proves deficiency in service on the part of OP No.1 & OP No.2?

2. Is complainant is entitled to the relief sought for?

8.        Our findings on the aforesaid points are as under:

Point No.1: In the Partly Affirmative,    

Point No.2: As per final order for the below

:R E A S O N S:

9. Point No.1:-The counsel for the complainant has argued that, the deceased husband of the complainant has obtained three insurance policies bearing No.617017097, 617017096 and 658952203 and sum assured amount is Rs.5,00,000-00, Rs.8,00,000-00 and paid premium regularly up to death of complainant’s husband regularly. Ex.C-2/copy of Policy Bonds produced by the complainant revealing that, the deceased husband of the complainant obtained the insurance policies bearing No.617017097 and 617017096 in the name of himself and in the name of his daughter on 7-12-2013. Further Ex.C-3 and Ex.C-4/copy of Policy Bond produced by the complainant reflecting that the deceased husband of the complainant obtained policy No.658952203  in the name of his daughter, date of commencement of policy on 28-09-2021 and sum assured is Rs.8,00,000-00. Further counsel for the complainant has contended that, the husband of the complainant suddenly died on           3-12-2022 due to heart attack. While taking to treatment for heart problem. Ex.C-18/copy death certificate produced by the complainant establishing that the husband of the complainant died on 3-12-2022. Further Ex.C-34/original copy of OP receipt reflecting that, the complainant has diagnosed with heart problem at 12.05.p.m and

EX.C-35/copy of ECG report showing, he has under the treatment for heart attack on 3-12-2022. At 13.08 hours and Ex.C-18 revealing that, the complainant husband died on same day i.e., 3-12-2022. Further counsel for the complainant has argued that the deceased husband of the complainant has good health his life time and he never met with heart problem and never taken any treatment for the heart decease before         3-12-2022. To prove the same the complainant has produced            Ex.C-37/copy of issued by Senior Specialist, District Government Hospital, Tumkur. There is the “Yes” (√) mark for the question         “Any heart Diseases/Bypass surgery done” counsel for the complainant has submitted that, the above certificate was issued in the year 2018 and same Ex.C-37 reflecting the date 11-7-2018 in column of “ TRAINING CARD”. Therefore Ex.C-37 establishing that, the deceased husband of the complainant was not has any heart problem in 2018. Further counsel the complainant has argued that, after death of complainant’s husband, the complainant has applied the claim to get benefit of the above said policies. To prove the same the complainant produced  Ex.C-25/copy of request letter. Further counsel for the complainant has contended that the OP.No.2 has illegally and unlawfully issued the repudiation letter on    27-02-2023. Ex.C-23/copy of repudiation letter issued by the OP.No.2 and Ex.C-24/copy of letter issued by OP.No.1 establishing that, the OP.No.1 and 2 are repudiated the claim of the complainant.   

10.   Per contra, the counsel for the OP.No.1 and 2 has admitted about the policies which were obtained by the deceased husband of the complainant. But counsel for the OP.No.1 and 2 is contended that, Policy No.617017096 and Policy No.658952203 were obtained by deceased husband of the complainant on the life of his daughters.                    Ex.C-2/Ex.R-1/copy of policy bond bearing No.617017096 reflecting name of “ASRAIBTESAM” D/o. MOHAMMED AZAMITHULLA and       Ex.C-3/R-3/copy of policy bond bearing No.658952203 reflecting the name of “AMEER EXHAL (LA) D/o. MOHAMMED AZMATHULLA (LP)”. Further counsel for the OP.No.1 and 2 is argued that, Policy bearing No.617017096 is under the plan and Term 159-26-18, for sum assured Rs.5,00,000-00, under quarterly premium payment mode with premium of Rs.9,479-00 payable every quarter with an option to waive the payment of future premiums in the case of proposers death, which is called as premium wavier benefit. Ex.C-2 produced by the complainant itself reflecting Term Rider sum Assured Rs.5,00,000-00. Hence Ex.R-3 is clearly reflecting about Term Rider Benefit as –“if opted a Term Rider sum assured in the schedule will be paid as Term Rider Benefit in case of death of proposer before end of the policy anniversary immediately following the completion of age 18 years by the within Life Assured.  Guaranteed Additions, Loyalty Additions and Para 4 of conditions and Privileges does not apply to Term Rider Benefit”. Hence it is considered that, the complainant’s daughter is eligible to get benefit of the policy No.617077096 is by only waiving the premium up to her age of 18 years.   

11.   Further  counsel for the OP.No.1 and 2 has submitted that, the policy bearing No.658952203 is obtained by deceased husband of the complainant on the life of his daughter kum.Ameer Eshal, under plan and term 934-23-18, for sum assured  Rs.8,00,000-00 under yearly premium payment mode with premium of Rs.41,932-00 payable every years, with an option to waive the payment of future premiums in case of death of proposer, which is called as Premium waiver Benefit.          Ex.C-3  produced by the complainant and annexure of Ex.C-3 produced by the OP.No.1 and 2 are reflecting that, policy No.658952203, life assured Ameer Eshal, proposer of policy  - Mohammed Azmathulla, plan and term 934-23, date of commencement of policy 30-09-2021 and premium paying term is 18. Further Ex.R-7/copy of proposal form pertaining to policy No.658952203 produced by OP.No.1 and 2 is reflecting in Section II Proposal plan that, the deceased husband of the complainant opted LIC’s Premium waiver Benefit Rider by mentioning “Yes” (√) on the column. Therefore we have go through the 2^nd para Rider benefit in the Ex.R-3, which is explained as, “ If this rider is opted

 for on death of proposer, payment premiums in respect of base policy falling due after the date of death till the expiry of rider term shall          be waived”. The term of the policy is 18. Therefore the OP.No.1 and 2 shall waive the premium from 3-12-2022 i.e., death of proposer             till completion of term 18^th. Therefore it is considered that, the complainant’s daughter is eligible to get benefit of to waive the premium up to agreed tern.

12.  Further  counsel for the Op.No.1 and has submitted that, the policy No.617017097 was obtained by the deceased husband of the complainant in the year 2013, with date of commencement 9-12-2013, on his own life under plan and term 149-25, for sum assured of Rs.5,00,000-00, Ex.P-2/copy of policy bond revealing the same. Further counsel for the OP.No.1 and 2  is argued that, since there is no regular payment of premium the policy number 617017096 and 617017097   were lapsed due to non-payment of premiums from March-2017 and March 2018, respectively and on 21-9-2017, 27-9-2017, life assured has revived the policy by paying premium from March-2017 to September 2021 for policy number 617017096 and from March-2018 to     September-2021 for policy number 617017097 respectively, through loan cum revival scheme, in which adjusted to the premium. Ex.C-5 to

Ex.C-16/original receipt of the paid premiums produced by the complainant is showing the only dates from 9-6-2014 to 31-12-2016.     In the same time. Ex.R-4, Form No.680 establishing that, the deceased husband of the complainant revived the policy No.617017097 on 20^th September 2021. Ex.R-10 and Ex.R-12/copy of premium history report establishing that, the deceased husband has opted loan and OP.No.1 and 2 were deducted the premium from loan.  

13.    Further the counsel for the OP.No.1 and 2 has argued that the OP.No.1 and 2 were repudiated the claim of the complainant on the non discloser of health of the deceased husband of the complainant in the Form No.300 in Section III and in the Form No.680 and further submitted that, the complainant’s husband died within 3 years after revival of the policies bearing No.617017096 and 617017097. Therefore the OP.No.1 and 2 were enquired as per section 45 of the Insurance Act and it is found that the deceased husband was suffering from Type-2 Diabetes Mellitus since from 2014 and the same was not disclosed in the time of revival of the policies in 2021. Ex.R-4 produced by the OP.No.1 and 2 is reflecting as “No” in front of question 2 (c) Did you ever undergo ECG, X-ray, scanning, blood, urine or stool examination?” and Section III in Ex.R-7 reflecting as “No” in front of question under

 Diseases No.9 as “endocrine disorders such as Diabetes, Goitre, Thyroid etc, or have ever passed sugar, albumin, pus or blood in Urine”. Further Ex.R-5/copy of Patient file issued by Diacon Hospital and produced by the reflecting as fasting blood sugar of deceased husband of complainant was 236 and Post pyramidal Blood Sugar was 354 on 16-12-2014. Further Ex.R-13/certified copy of Diacon Hospital records is reflecting the deceased husband of the complainant got regular check                    up to 2019 for urine and blood sugar. Ex.R-14/copy of certificate issued by one Dr.S.R.Aravind of Diacon Hospital is reflecting that the deceased husband of the complainant was last treated with a diagnosis of T2DM/MOD NPDR-POST LASER/HYPERGENSION,/DYSLIPIDFMIA. The same Ex.R-14 also reflecting that “Patient was never admitted at Diacon Hospital at anytime”. Further counsel for the OP.No.1 and 2 has argued that as per Ex.R-14, the diseased husband of the complainant having decease Dyslipdfmia, can lead to Cardiovascular Disease with severe complication. Mere production of document is not enough to prove the same. Further OP.No.1 and 2 were not examined treating  doctor to prove that the Dyslipdfmia is leads to sever heart problem. Further counsel for the OP.No.1 and 2 has argued that, the main reason of the repudiation of claim of complainant is that the deceased husband of the complainant had not disclosed at the time of revival that he was suffering with T2DM from 2014. But Hon’ble National Commission, in Sunil Kumar Sharma V/s. TATA AIG Life Insurance Company and others, bearing case No.RPNo.3557/2013, decided on 01-03-2021 and in the case Reliance Life Insurance Company Ltd and Another V/s. Tarun Kumar Sudhir Halder held in 31^st May 2019, where in it was held that the common lifestyle diseases like diabetes and hypertension cannot be treated as pre existing diseases. When there is no direct nexus between T2DM and cause of death of deceased husband of the complainant, the repudiation of the claim done by the OP.No.1 and 2 amounts to deficiency in service on the part of the OP.No.1 and 2.

14.  Further counsel for OP.No.1 and 2 has argued that the insurance contract is governed by principles of utmost good faith and insured withheld material information regarding his health at the time of taking insurance policy and violated the basic principles of utmost good faith and counsel for OP.No.1 and 2 has relied upon citations, (1) Zonal Manager, Life Insurance Corporation of India and others V/s.             Smt. Rosamma Varkey as No.570/2002 dated 25-05-2023. (2) Reliance Life Insurance Co.Ltd and Others V/s. Rekhaben Navesh bai RAthod (2019) 6 SCC 175 of Apex Court (3) E.R.Hardy Ivany on General Principles of Insurance Law, Fourth Edition. (4) Satwant Kour Sandhu V/s. New India Assurance Co. Ltd., (2009) 8 SCC 316. (5) United India Insurance Co. Ltd, V/s. MKJ Corporation 1996 (6) SCC 428. (6) Modern Insulators Ltd V/s. Oriental Insurance  Co. Ltd, (7) Caster V/s. Bochim (1766) 3 Burn 1905 in Kings Bench decision. But the facts and circumstances of the above cases are different to the present case. Further counsel for the OP.No.1 and 2 has relied upon the citation of the Hon’ble State Commission, Bangalore in Appeal No.1874/2017 dated:05-01-2024 in which the Hon’ble State Commission, Bangalore has upheld the repudiation of claim by the Life Insurance Corporation. But we have gone through the judgment passed by the Hon’ble National Consumer Commission in First Appeal No.2145/2019 between Life Insurance Corporation of India V/s. Shubhalaxmi Sankar Shetty and 2 others, dated 8^th May 2024, it is opinioned that, “Since the alleged concealment was not of such a nature as would disentitle the deceased from getting his life insured, the repudiation of the claim was incorrect and not justified”. When there is no direct nexus between the concealment and cause of the death of life insured, the OP.No.1 and 2 are liable to pay the amount of sum assured to the claim of policy  No.6307017097  and to provide of premium waiver benefit towards policy No.617017096 and 658952203. The sum assured amount for policy No.617017097 is Rs.5,00,000-00. The deceased  husband of the complainant as  revived the policy with the loan. Therefore the complainant is eligible to get sum assured benefit after deducting loan

and its interest and as per Ex.R-9  the loan and interest is Rs.1,10,664-00 . Further the OP No.1 and 2 were paid Rs.1,81,800-00 to the complainant as per Ex.R-9. Therefore the OP No.1 and 2 are liable to pay the balance amount as,

Therefore OP No.1 and 2 are liable to pay  Rs.2,07,536-00 to the complainant with interest @ 8% p.a. from 27-02-2023 (i.e.,date of repudiation of claim). Further OP.No.1 and 2  are also liable to waive the premium amount pertaining to policy No.617017096 and 658952203 till the agreed terms of the respective policies. The complainant has not produced any document to show that, whether the complainant surrendered the policy No.617017096 and 658952203. Therefore the complainant has not eligible to get assured amount now. The complainant prayed for Rs.20,000-00 as compensation  towards the mental agony. But complainant has not produced any documents to show that she is eligible for compensation of Rs.20,000-00. But considering the mental agony caused to the complainant, the OP.No.1 and 2 were jointly and severally liable to pay compensation of Rs.10,000-00 to the

 complainant. Further the OP.No.1 and 2 were compelled the complainant to approach this Commission. Hence, OP.No.1 and 2 are jointly and severally liable to pay litigation cost of Rs.8,000-00 to the complainant. Accordingly, we produced to pass the following:-

                                                 :O R D E R:

The complaint filed by the complainant is allowed in part with cost against OP.No.1 and 2.

The OP.No.1 and 2 jointly and severally directed to pay Rs.2,07,536-00 to the complainant with interest @ 8% p.a. from 27-02-2023 till realization.

Further it is directed that the OP.No.1 and 2 shall waive the premium amount pertaining to policy No.617017096 and 658952203 till the agreed term of respective policies.

Further it is directed that the OP.No.1 and 2 shall pay Rs.10,000-00 towards compensation and Rs.8,000-00 towards litigation costto the complainant.

Further it is directed to comply the above order within the 45 days from the date of receipt/knowledge of this order.