Andhra Pradesh

Chittoor-II at triputi

CC/5/2017

S.Nagarathnamma, W/o Late S.Rama Raju - Complainant(s)

Versus

The Branch Manager, Life Insurance Corporation of India - Opp.Party(s)

N.Prabhakar

26 Jul 2018

ORDER

Filing Date: 06.01.2017

Order Date:26.07.2018

 

 

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

CHITTOOR AT TIRUPATI

 

 

      PRESENT: Sri.T.Anand, President (FAC)

               Smt. T.Anitha, Member

 

 

 

THURSDAY THE TWENTY SIXTH DAY OF JULY, TWO THOUSAND AND EIGHTEEN

 

 

 

C.C.No.05/2017

 

 

Between

 

 

Smt. S.Nagarathnamma,

W/o. late. S.Rama Raju,

Hindu, aged about 40 years,

D.No.41, Padma Nagar,

Kurakalva village,

Renigunta Mandal,

Chittoor District.                                                                              … Complainant.

 

And

 

 

The Branch Manager,

Life Insurance Corporation of India,

Srikalahasti.                                                                                      …  Opposite party.

 

 

 

 

            This complaint coming on before us for final hearing on 06.07.18 and upon perusing the complaint and other relevant material papers on record and on hearing Sri.N.Prabhakar, counsel for complainant, and Sri.A.Sudarsana Babu, counsel for the opposite party, and having stood over till this day for consideration, this Forum makes the following:-

ORDER

DELIVERED BY SRI. T.ANAND, PRESIDENT (FAC)

ON BEHALF OF THE BENCH

           

            This complaint is filed under Sections –12 and 14 of C.P.Act 1986, praying for direction to the opposite party to pay Rs.4,00,000/- being the policy amount payable to complainant with further interest at 24% p.a. from the date of complaint till realization, to pay a sum of Rs.25,000/- as compensation towards mental agony and damages caused to the complainant besides litigation expenses.

            2. The facts in brief are as follows:-  The deceased S.Rama Raju, who is  policy holder of the opposite party, vide policy No.844443821 dt:28.03.2013, is husband of the complainant, and he died on 26.06.2013 while the policy was in force. He left behind the complainant and his children S.Chandra Sekhar Varma and S.Hari Varma, as legal heirs to succeed his estate.

            3.  The complainant submitted relevant original documents to the opposite party for claiming the insurance amount, but the complainant failed to settle the claim inspite of repeated demands made by her. A legal notice was issued to the opposite party on 04.04.2015, calling upon them to pay the death claim of the deceased S.Rama Raju, but inspite of receipt of the notice, they have failed to settle the claim. The deceased is a consumer within the meaning of the C.P.Act. Therefore, the Forum has got power and jurisdiction to entertain this complaint. Due to inaction on the part of the opposite party in settling the claim, the complainant suffered mental agony, for which she claimed Rs.25,000/- towards damages. Hence, it is prayed to allow this complaint.

            4.  The opposite party filed the written version denying the allegations made in the complaint. It is admitted that the deceased was policy holder of opposite party and he died on 26.06.2013 during the validity period of the policy. It is also admitted that the complainant is the nominee to the policy. It is also admitted that complainant submitted original documents to the opposite party to claim the insurance amount, but it is denied that opposite party has not settled the claim inspite of repeated demands and has been postponing the same on one pretext or the other for the reasons best known to them. The allegations that opposite party willfully defaulted in payment of policy amount and failed to discharge their duties is false.

5.  The opposite party came to know that the deceased had taken treatment at SVIMS hospital, Tirupati, and could not secure relevant records and obtained Haematology report dt:14.08.2012 and also one test report dt:14.08.2012, as per which the deceased was suffering from Hypochronic Anaemia with occasional acanthocytes. Further, the opposite party came to know that the complainant made similar claim before Shriram Life Insurance and they also repudiated the claim dt:25.11.2013 stating that the proposer intentionally suppressed the material facts regarding the habits of deceased life insured. It is stated that as per the norms of LIC, the insured while submitting the proposal for insurance should make a personal declaration about his health, and in the proposal for insurance dt:28.03.2013 in column No.11(a) and (b) for particular information regarding his health, the insured categorically stated as “No”. But as per the clinical reports of SVIMS, Tirupati, and also repudiation of claim dt:25.11.2013 by Shriram Life Insurance, the deceased had taken treatment at C.K.S. Teja Institute of Dental Sciences and Research, Chadalawada Nagar, Tirupati dt:15.02.2011, before submitting the proposal form pertaining to this policy. Since the deceased insured gave false statement by suppressing the previous treatment taken at SVIMS, Tirupati, the claim is repudiated by the opposite party, and the same was intimated to the complainant with a direction to send any of her representation to the Zonal Manager within one month for re-consideration of her claim. While submitting proposal, correct answers must be given to the questions in the proposal form relating to column No.11(a) to (j). The complainant also willfully suppressed the material facts and thereby invited repudiation of claim on 25.11.2013 by Shriram Life Insurance. Hence, the complainant is not entitled to claim any relief against this opposite party. It is stated that deceased will be questioned by the Medical Officer with regard to column No.4 only. With regard to column No.5, questionnaire will be given to him and the answers will be ascertained only and to that extent the medical examiner will certify that the answers to question No.5 were ascertained. The question No.5 relates to past hospitalization, operation, accident and any bio-chemical, radiological, cardiological or any other tests that the proposer undergone, but the deceased has given reply to all these questions as “No”. Infact he had undergone tests / treatment at SVIMS, Tirupati, and also at C.K.S. Teja Dental College, Renigunta. Further, the policy holder deliberately made false statements at the time of filing proposal form and also in his personal statement regarding health condition dt:24.01.2011 at the time of revival of the lapsed policy. The policy holder answered as “Good” to question No.4 i.e. “are you in sound health at present” in the personal statement regarding health dt:28.03.2013. The death of the policy holder occurred within a duration of 2 months and 28 days thereafter, and as such it is an early claim. It is therefore prayed to dismiss the complaint with exemplary costs.

6.  The complainant filed chief affidavit as PW-1 and got marked Exs.A1 to A12. On behalf of opposite party RW-1 and RW-2 have filed chief affidavits, and Exs.B1 to B5 are marked. Through 3^rd party Exs.X1 and X2 are marked.

7.  The point that arise for consideration is:- Whether there is suppression of pre-existing disease on the part of the deceased life assured? If so, whether there is deficiency of service on the part of opposite party? and to what extent the complainant is entitled for the reliefs sought for?

8.Point:-  The affidavit of PW-1 disclose that her deceased husband (hereinafter called DLA) obtained policy from the opposite party vide LIC Policy No.844443821 on 28.03.2013 vide Ex.A1, and at the time of issuing Ex.A1 he was examined before the qualified doctor and in the last page of medical statement it is noted “ material shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the corporation”. It further discloses that the deceased left behind her and two children as his legal heirs, and she was the nominee to receive the death claim, which is Rs.4,00,000/-.

9.  The affidavit further disclose that after receipt of claim on 11.12.2013, the opposite party failed to settle the death claim inspite of repeated demands and finally repudiated the claim, for which she got issued legal notice dt:04.04.2015 and the same was received by opposite party, but no reply was issued to Ex.A2 which is office copy of legal notice. Ex.A3 shows that the original of Ex.A2 was received by the opposite party. Ex.A4 is death certificate relating to DLA. Ex.A5 is inland letter addressed to deceased policy holder for payment of installments due. Ex.A6 is representation duly signed and submitted by PW-1 to opposite party branch manager stating that she is sending claim form along with original death certificate. Ex.A7 is similar representation submitted by the complainant to opposite party stating that even before reaching the hospital for treatment, her husband died and as such she is unable to submit Form-13, Annexure-II (Form No.3784) and Claim Form No.B1 (Form No.3816). Ex.A8 is requirement letter addressed by branch manager of opposite party to PW-1 asking her to produce certain documents. Ex.A9 is repudiation letter dt:06.04.2015 rejecting her claim. Ex.A10 is letter addressed by Senior Divisional Manager of opposite party dt:30.03.2015 to PW-1 informing about repudiation of their liability under the policy in dispute with reasons. As per Ex.A10, the opposite party has taken stand that in the proposal form dt:28.03.2013, the deceased had given false answers to question No.11 and that they have reason to believe that the DLA was suffering from hypochronic anaemia since 14.08.2012 as per lab reports of SVMS, Tirupati, and as such there is suppression of material facts relating to earlier treatment taken by DLA and as such the claim is repudiated. Ex.A11 is office copy of letter addressed to opposite party seeking information under RTI Act 2005. Ex.A12 is the postal acknowledgement card dt:16.02.2016 for receipt of original of Ex.A11.

10.  The contention of the complainant counsel is that the burden is on the opposite party to show that the deceased had suppressed the earlier treatment pertaining to pre-existing disease prior to taking policy under Ex.A1. Further it is contended that the opposite party with an intention to deprive the complainant of claiming LIC policy amount, had taken false plea that the deceased intentionally suppressed the fact of pre-existing disease and treatment relating to that disease.

11.  The opposite party marked Ex.B1 which is equivalent to Ex.A1 policy. Thus there is no dispute about deceased taking policy from opposite party. Ex.B2 is attested copy of duly filled proposal form dt:28.03.2013. Ex.B3 is attested copy of haemetology report  dt:14.08.2012 issued by SVIMS. Ex.B4 is attested copy of peripheral smear report dt:14.08.2012. Ex.B5 is attested copy of letter by Senior Divisional Manager, LIC, Nellore, dt:30.03.2015 repudiating the claim of complainant.

12.  During hearing of the case, the opposite party asked for production of certain documents, which are marked as Ex. X1 and Ex.X2. Ex.X1 is attested true copy of repudiation of claim dt:25.11.2013 and duly filled proposal form for traditional plan . Ex.X2 is attested true copy of case sheet bearing No.7624, OP No.173806 dt:15.02.2011.

13.  On the basis of above documents, the counsel for opposite party contended that the opposite party discharged burden placed on it by marking the above documents and proving that the deceased suppressed the fact of pre-existing disease and treatment related to the said disease before taking policy under Ex.B1 and as such the opposite party is justified in repudiating the claim of the complainant, who is the nominee of the deceased. He submitted the following citations in support of his contention that the repudiation is justified. (i) RP No.1296 of 2011 rendered by NCDRC, New Delhi, in the case between LIF of India Vs. Smt.Radha Bai Dnyanoba Malve – it is held that “insurance is a contract of speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the assured only, the underwriter trusts his representation, and proceeds upon confidence that he does not keep back any circumstance in his knowledge to mislead the underwriter into a belief that the circumstance does not exist. The keeping back of such circumstances is a fraud, and therefore the policy is void. Although the suppression should happen through mistake, without any fraudulent intention, yet still the underwriter is deceived, and the policy is void, because the risqué run is really different from the risqué understood and intended to be run at the time of the agreement ….. The policy would be equally void against the underwriter if he concealed …. God faith forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of the fact, and his believing the contrary”. (ii). In RP No.602 of 2009 rendered by NCDRC, New Delhi, in the case between LIC of India Vs. Murala Siva Parvathi – it is held that, It is bounden duty of the proposer to explain facts truthfully while filling the form and that such matters cannot be decided on the basis of the medical certificate issued by the panel doctor as they are not aware of proposer’s pas history. The mere fact that LA was alright and a long time had elapsed since the disease occurred, has no bearing on this case.  The Satwant Kaur Sandhu Judgement is cited as also of LIC Vs. Kishan Chandar Sharma, as per which the ultimate cause of death has no relevance to the disclosing of information related to health. It is the contention of the opposite party counsel that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject, which is within his knowledge and it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not as laid down in IV 2009 CPJ (SC) between Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd.

14.  It is pointed out by the complainant counsel that the documents pertaining to SVIMS hospital which are marked as Exs.B3 and B4 did not bear the signature of either patient or doctor of SVIMS with his designation and seal and there is no explanation offered by opposite party as to how they could lay their hand on these documents. The ‘X’ series documents were obtained by opposite party in collusion with Shriram Life Insurance to evade paying death claim benefits to the complainant. Further it is argued that the documents filed by the opposite party lacks authenticity and cannot be given much credence. 

15.  The un-disputed facts are that the deceased had taken policy from opposite party and later died and that the claim submitted by the complainant was repudiated. The main reason for repudiating the claim of the complainant by the opposite party is that the deceased was suffering from hypochronic anaemia since 14.08.2012 as per the lab reports of SVIMS, Tirupati, which are marked Exs.B3 and B4 and that he failed to disclose those facts in the proposal form while obtaining the policy in question. It is specifically contended by the opposite party counsel that the deceased deliberately gave false answers in the proposal form in relevant columns and for the questions; answers mentioned by the deceased are mentioned in Ex.A10. No doubt the deceased had given answers to all the questions as ‘No’. Ex.A10 shows that the deceased answered “Good” for the question what has been your usual state of health? Similarly, he answered ‘No’ to a question Whether during the last five years did he consult a medical practitioner for any ailment requiring treatment for more than a week?, and for another question Whether he was suffering from or have ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidneys, brain or nervous system?, the deceased answered ‘No’. For another question Did he suffered or suffering from any disease like Diabetes, Tuberculosis, High B.P., Low B.P., Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?, the deceased answered ‘No’. The opposite party counsel pointed out that the answers given by the deceased in the proposal form are absolutely false in view of ‘X’ series documents coupled with Exs.B3 and B4.

16.  It is the contention of the opposite party counsel that the deceased had also taken similar policy from Shriram Life Insurance and after his death, the complainant herein submitted claim form to Shriram Life Insurance for claiming death claim benefits and the said claim was repudiated by Shriram Life Insurance on the ground of suppression of material facts by the deceased in the proposal form submitted to them and that in order to prove this case, the said repudiation letter issued by Shriram Life Insurance and the case sheet pertaining to treatment taken by the deceased in C.K.S.Theja Institute of Dental Sciences, Tirupati, are marked as Exs.X1 and X2.

17.  As seen from the documentary evidence produced by the opposite party, they are banking on Exs.B3, B4, X1 and X2 documents, in order to show that the deceased life assured, having taken treatment prior to taking this policy, had suppressed the said fact and as such the opposite party is justified in repudiating the claim of the complainant. Ex.B3 is haematology report but it does not bear the signature of the consultant. Ex.B4 is another report said to have been issued by SVIMS, Tirupati, wherein it is stated that the patient is suffering from hypochronic anaemia with occasional acanthocytes. But in order to prove the authenticity of the document, the opposite party did not examine the doctor who issued Ex.B4. Coming to Ex.X1, it is a record pertaining to Shriram Life Insurance, with which the deceased also had taken policy. No doubt Shriram Life Insurance had repudiated the claim of the complainant under Ex.X1 on the ground that the deceased had taken treatment in C.K.S.Theja Institute of Dental Sciences, Tirupati. In Ex.X2 it is stated that the patient had taken treatment with regard to missing tooth and dental extraction on 15.02.2011. Moreover the signature of the patient kept blank at the last page of Ex.X2. It is not known whether the patient (deceased) had given consent or not and whether he is in the knowledge of what has been written in Ex.X2. Simply filing Ex.X2 will not discharge the burden of opposite party in proving that the deceased suppressed material facts pertaining to previous treatment taken before obtaining the policy in question. The questionnaire mentioned in Ex.B5 pertaining to treatment in respect of certain essential parts of the body like liver, stomach, heart, lungs, kidneys, brain or nervous system. There is no mention in the said questionnaire about the dental problem. It is not the case of the opposite party that the deceased had died of Hypochronic Anaemia with occasional acanthocytes. We are of the view that the patient earlier had taken treatment pertaining to dental extraction which cannot be termed as disease, and said dental extraction has nothing to do with the cause of death of the deceased, who died of heart attack as per record.

18.  The principles of law laid down in the above citations relied on by opposite party counsel are well settled and cannot be disputed. But the fact remains that the opposite party failed to discharge burden of showing that the deceased suppressed material facts pertaining to any treatment relating to disease. It may be true that Shriram Life Insurance has repudiated the claim of the complainant on some ground, but the same is not binding on this Forum. It is for the opposite party to legally prove that the repudiation is justified, but on the facts of the case and after perusing the documentary proof, we are of the view that there is no justification for opposite party to repudiate the claim of the complainant on the ground that the deceased suppressed any pre-existing disease and any earlier treatment taken before obtaining the policy. Hence, this point is answered in favour of the complainant holding that there is deficiency in service on the part of the opposite party in not settling the claim and as such the complainant is entitled for the reliefs sought for in the complaint.

19.  In the result, complaint is partly allowed directing the opposite party to pay Rs.4,00,000/- (Rupees four lakhs only) policy amount payable to the complainant with interest at 9% p.a. from the date of complaint, till realization and further directed to pay Rs.5,000/- (Rupees five thousand only) as compensation towards mental agony suffered by the complainant and a sum of Rs.2,000/- (Rupees two thousand only) towards litigation expenses. The time for compliance of the order is 8 weeks. Failing to comply, the compensation amount of Rs.5,000/- shall also carry interest at 9% p.a. from the date of this order, till realization.                                                            

Dictated to the stenographer, transcribed and typed by him, corrected and pronounced by me in the Open Forum this the 26^th day of July, 2018.

 

       Sd/-                                                                                                                      Sd/-                                      

Lady Member                                                                                               President (FAC)

 

 

APPENDIX OF EVIDENCE

 

Witnesses Examined on behalf of Complainant/s.

 

PW-1: S. Nagarathnamma (Chief Affidavit filed).

 

Witnesses Examined on behalf of Opposite PartY/S.

 

RW-1: A. Rama Kumar  (Chief Affidavit filed).

RW-2: S. Raghunath       (Chief Affidavit filed).

 

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/s

 

Exhibits (Ex.A)	Description of Documents
	Notarized attested copy of Policy issued by the opposite party in the name of deceased S.Rama Raju. Dt: 28.03.2013.
	Office copy of the legal notice with receipt. Dt: 04.04.2015.
	Postal acknowledgement. Dt: 07.04.2015.
	Notarized attested copy of Death Certificate of Policy holder S.Rama Raju. Date of Issue: 22.11.2013.
	Inland letter card addressed to the deceased policy holder S. Rama Raju, for payment of installment due. (Original Copy).
	Office copy of requisition letter addressed to the Branch Manager, LIC of India, Sri Kalahasthi with postal receipt. Dt: 11.12.2013.
	Office copy of requisition letter addressed to the Branch Manager, LIC of India, Sri Kalahasthi.
	Requirement letter addressed to the complainant dated 02.01.2014 issued by the Branch Manager, LIC of India, Sri Kalahasthi in original.
	Rejection of claim letter addressed to the complainant counsel. Dt: 06.04.2015 in original.
	Letter addressed to the complainant by the Senior Divisional Manager, Nellore Dt: 30.03.2015.
	Office copy of letter addressed to the opposite party for sending particulars of Policy details with postal receipt and postal order receipts 2 in number under Right Information Act. Dt: 15.02.2016.
	Postal Acknowledgement Card. Dt: 17.02.2016.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/s

 

Exhibits (Ex.B)	Description of Documents
	Attested copy of Jeevan Anand LIC Policy. Dt: 29.03.2013.
	Attested copy of filled in Proposal form. Dt: 28.03.2013.
	Attested copy of Hematology Report. Dt: 14.08.2012 by SVIMS.
	Attested copy of Peripheral Smear Report. Dt: 14.08.2012.
	Attested copy of Letter by Senior Divisional Manager, Dargamitta, Nellore. Dt: 30.03.2015.

 

EXHIBITS MARKED ON BEHALF OF THE  THIRD PARTY

 

Exhibits (Ex.X)	Description of Documents
	Attested true copy of repudiation of claim Dt: 25.11.2013 filled in Proposal form for Traditional Plan of S. Rama Raju. T.R.Date: 20.10.2012.
	Attested true copy of Case Sheet. Case Sheet Bearing No.7624. OP No.173806.  Dt: 15.02.2011.

 

 

                                                                                                                                    Sd/-

                                                                                                                      President

    

     // TRUE COPY //

// BY ORDER //

 

Head Clerk/Sheristadar,

          Dist. Consumer Forum-II, Tirupati.

       

    

   Copies to:- 1.  The complainant.

                        2.  The opposite party.