Karnataka

Chitradurga

CC/293/2019

Asha Bi, W/o Honnur Sab, - Complainant(s)

Versus

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

Sri.C.Thimanna

17 Dec 2019

ORDER

COMPLAINT FILED ON:18/03/2019

DISPOSED      ON:17/12/2019

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHITRADURGA.

CC.NO:293/2019

DATED: 17^th December 2019

PRESENT :-     Smt. C.M.Chanchala.                           . President

                                B.A.L.,,LL.B.,            

                            

                        SRI. SHIVAKUMAR.K.N    :              MEMBER

                     M.Com., LL.B.,

 

……COMPLAINANT/S	1. Smt. Asha Bi W/o Honnur Sab, Aged about 41 years, House wife, R/o Guddadarangavvanahalli, Chitradurga Taluk and District. (Rep., by Sri. C. Thimmanna,Advocate)
V/S
…..OPPOSITE PARTY	The Branch Manager, Life Insurance Corporation of India, Chitradurga Brach Office, P.B. Road, Chitradurga. The Divisional Manager, Life Insurance Corporation of India, Divisional Office, KSSIDC Complex, Sagar Road Shimoga.

 

Pronounced on 17^th December  2019.

Written by C.M.Chanchala, President.

ORDERS

. This is a complaint filed under section 12 of the Consumer Protection Act 1986 by Smt. Asha.Bi- the complainant, against Opposite party/parties (for short ‘OPs’ ) Life Insurance Company  prayed assured amount of two policies with interest pertaining to deceased H.Honnur Sab and Rs.25,000/- as compensation for deficiency of service and agony suffered by the complainant etc,.

 

The Complaint:

2.       The brief facts of the case of the complaint are that, her husband Honnur Sab, during his life time obtained Jeevan Anand Policy bearing in No. 629652348 for Rs. 1,00,000/- and another policy LICs Jeevan Labh policy bearing in No. 669019467  for Rs. 10,00,000/- from OP-1 and he was regularly paying premium, but on 17-04-2018 Honnur Sab was died due to his illhealth.

3.      After the death of the policyholder, the complainant as a nominee has approached the OPs with claim and fairly submitted all the relevant documents, seeking settlement of his insurance claim. After receiving the required information, the  OPs have illegally repudiated the complainant’s claim by its letter dated: 19-12-2018, on the false ground that the policyholder while applying for policies had signed  ‘Declaration  of Good Health’ which mentions that he was of sound health and was not suffering or had never suffered from any illness or any condition requiring medical treatment for illness, as on date of proposal, but as the deceased Life assured had given a false Good health Declaration and had not disclosed material fact at the time of entry into the proposal, the claim has been repudiated’.  The complainant further stated that the policyholder was in good state of health at the time of making the proposal, therefore, insurer has committed a serious lapse in repudiating the claim based of ill heath , which amounts to deficiency in service on the part of the insurer.

4.      After hearing on admission the complaint was admitted and  notices were ordered to be issued to the opponents to file their written versions under section 13(2) of the Consumer Protection Act,1986 (in short “the Act). The OPs 1 and 2 entered appearance through their advocates and denied the allegations of deficiency in service.

Defense:

5.   OP No.1 contended that  the LIC is a contract of Utmost Good Faith where in the proponent is duty bound to disclose everything concerning his/her health, habits and other related matters which are within his/her knowledge at the time of making the proposal for insurance cover, failing which the Insurer has every right to repudiate the claim. In the instant case, the deceased Life Assured committed a breach of the principle of Utmost Good faith by suppressing the material fact that he was treated for CVA-Posterior circulation stroke, Bilateral cerebella ischemic infarct, Brain stem infarct upper pons, Type 2 DM/hypertension. Further it is recorded in the hospital case sheet that the history of DM and HTN, chronic smoker 5/6 per day, hence there is nexus between the habits and the cause of death. Hence OPs justification for the repudiated the claim of the complainant. OP further taken the contention that the deceased policy holder was not having sufficient income for payment of premium amount, he has provided false information regarding his business and income and further he was discontinued the policy No.629652348 and the said policy was lapsed due to non payment of premium and later he got revival of the policy after payment of applicable charges and premium, as the death of life assured is within 3 years from the date of revival the policy it attract section 45 of the insurance act, hence the claim was repudiated on the basis of the suppression of material facts. The suppression of material information is fatal to the contract of insurance, which is based on the principle of Utmost Good Faith. Thus, any contract of insurance procured by breach of the principle of Utmost Good Faith is a nullity and void ab-initio. Therefore the complaint is not maintainable and hence deserves to be dismissed.

Evidence:

6.   Respective parties have filed their affidavits of evidence and examined themselves. The complainant got herself examined as AW-1 by filing her affidavit as a part of examination in chief and also got Ex.A-1 to A8 marked and closed the case.

7.      On behalf of the OPs one Manjunath. M.Raikar, Manager legal, got himself examined as RW-1 by filing his affidavit as a part of his examination in chief and no documents have been marked.

Arguments:

8.      We have heard the learned advocates for both the sides.

          The points that arise for our determination are:

1. Whether the complainant  proves that there is any deficiency in service on the part the opponents?

 

2. Whether the complainant is entitled for the reliefs sought?

 

3. What order?

9.  Our findings on the above points are:-

          Point No.1: In the Affirmative.

 

          Point No.2: In the Affirmative.

 

          Point No.3: As per the final order.

 

For the following ;

Discussion and Reasoning:

Point No.1:-.

10.  The grievance of the complainant is that her husband Honnur Sab, during his life time obtained Jeevan Anand Policy bearing in No. 629652348 for Rs. 1,00,000/- and another policy LICs Jeevan Labh policy bearing in No. 669019467  for Rs. 10,00,000/- from OP-1 and he was regularly paying premium, but on 17-04-2018 Honnur Sab was died due to his ill health, later when she submitted the claim form with relevant documents to opponents, they illegally repudiated her claim on 19-12-2018 on the ground of pre-existence disease.

11. The onus to prove that there was materials concealment of any disease, which directly proved fatal was on the OP No.1 insurance company. In addition to above the OP No.1 was supposed to prove that at the time of submitting proposal the person who gave the information, know about such a disease and he withhold it with an intention to defraud the insurance company. In LIC and others v/s Asha God    I (2001)SLT 89= 2001 (2) SCC 160, the judgment of Mithoolal Nayak was considered   “in this connection , we may notice the decision of the Hon’ble Court in Mithoolal Nayak Vs/ LIC of India, in which the position of law was stated thus:- The three conditions for the application of the second part of Section 45 are

1. The statement must be on a material mater or must suppress facts which it was material to disclose.

 

2. the suppression must be fraudulently made by the policy holder and

 

3. The policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose”.

   But one thing was further observed in para-12 as under:-

   “For determination of the question whether there has been suppression of any material facts may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it cloud not be ascertained by reasonable inquiry by a prudent person”.

12.  In the present case, no documents have been marked on behalf  of the OPs. However at the time of arguments the counsels appearing for OPs produced some documents. Taking into consideration of those documents for proper adjudication of matter, the OP has relied on hospital records issued by KMC, Manipal. On perusal of this document it shows that the DLA was admitted to the hospital on 15-04-2018 and their diagnosed as “CVA-POSTERIOR CIRCULATIONS STROKE BILATERAL CEREBELLAR ISCHEMIC INFARCT BRAIN STEM INFARCT UPPER PONS,TYPE 2 DM/HYPERTENSION”, further it is also mentioned in the past history of DLA that ‘ H/O DM HTN NOT COMPLAINT TO MEDICATION, NO H/O ASTHMA,TB’.

13.  It is evident that information collected from the records of KMC, Manipal are not primary piece of evidence, but the primary evidence would be of the doctors who recorded the information in discharge summary. Admittedly, the OP No.1 has not examined the doctors who wrote the discharge summery of the patient. In view of the observation made in the judgment passed by National Commission in Life Insurance Corporation Vs Dr.P.S Aggarwal discharge summery of the patient cannot be taken into consideration until the insurer examined the doctors who wrote the discharge summery.

14.   Admittedly  the DLA died on 17-04-2018 and policy obtained by the DLA on 26-09-2013 and it was revival on 27-02-2016. The OPs have not produced any documents to show that at the time of making the policy/declaration of good health or prior to that the DLA was suffering from ill health. 

15.   Now we advert to the meaning of word pre-existing. As the word pre-existing suggests, a disease should not only be existing at the time of taking of policy but also should have been existing and continuing to exist prior to the date of policy. The OPs did not file any document which indicates or shows that deceased was continuously suffering from the diseases as mentioned in the question asked in the proposal form from 2013 till obtaining insurance. The OPs have not been able to prove that the deceased was suffering from diseases as mentioned in the medical report during last five years from the obtaining insurance policy. The OPs did not produce any evidence to prove that deceased was continuously suffering from the diseases as mentioned in the medical report.

16. 45 days exclusion period: The exclusion period starts from member policy commencement date and would apply for a fixed period of 45 days. On death of the life assured within exclusion period, the policy benefits are not payable unless the death is caused by an accident. For deaths due to causes other than accident, the premiums paid (not of taxes and cess) would be refunded without interest after deducting the cost of stamp duty, if any, already incurred by the insurance company. In case the life assured has undergone medical examination in connection with this policy, the 45 days exclusion period would not apply.

17.   Admittedly the DLA died on 17-04-2018 that too after 5 years of obtaining policy and after 2 years 2 months of reviving the policy. Hence as per the Term & Condition of policy the OPs are liable to honor the claim of complainant.

18. Experience shows that Insurance companies lay trap for the poor and gullible consumers to sell their product and once they are in their net they start wriggling out from their obligation. This is not the way to become rich by taking huge premium against policies of thousands of consumers and when one or two of them files a claim they start taking one excuse or the other and find out the ways to defeat the rightful claim of the insured by picking a stray reference from the discharge summary. This is not a consumer friendly practice and does not augur well even for the interest of the Insurance Companies. Half of the population suffers from such malaises and the other half is on medication in one form or the other. If Insurance Companies start denying policies on medical tests of the consumers they will be out of business sooner or later. If the consumers at large get such an impression of the Insurance Company, the Insurance Company will loose its customer in these competitive times. It appears that because of such an approach of monolithic public sector Insurance Companies that this sector was opened to private and international players. To cap it all the insurance companies always take precaution in subjecting their basic medical tests so as to rule out the possibility of a person suffering from such diseases which may not entitle him to insurance policy and once they give certificate of insurance that person concerned is having sound healthy, they cannot repudiate the claim on the basis of pre-existing disease particularly in view of the concept of non-disclosure of any such disease.

19. In the present complaint, the documents filed by the opposite parties are not sufficient to prove the pre-existing disease of husband of the complainant, therefore, repudiation of the claim on the ground of not disclosing the material information is erroneous and thus the OPs have committed deficiency in service by repudiating the claim on the ground of suppression of material facts is not justified. Accordingly, we answered this point in the affirmative against the OPs.

Point No.2 :- 

20. As the complainant has proved deficiency in service on the part of the OPs, she is entitled for assured amount with interest from the date of death of life assured till its realization and compensation towards deficiency in service as well as cost of the proceedings, which shall be as per final order. Accordingly, we also answer this Point partly in the affirmative.   

Point No.3: -

21. In view of the discussions made under Point No.1 and 2,   we pass the following;    

      // ORDER //

The complaint filed by the complainant is allowed. 

The Opposite parties are jointly and severally directed to pay Rs.11,00,000( Eleven Lakhs rupees only)  assured amount with respect to the policies bearing No. 629652348 and 669019467   to the complainant with 9 % from the date of death of life assured till its realization.  Further it is also directed to the Opposite parties to pay Rs.25,000/- (twenty five thousand)  towards compensation for deficiency in service, towards compensation for mental agony and cost of the proceedings, within 6 weeks from the date of receipt of this order. In case of non-compliance of the order the entire amount shall carry interest @ 10% per annum till its realization.

The assistant registrar is directed to send free copies of this order to the all the parties free of cost within a week from today.

(Typed directly on the computer to the dictation given to stenographer, the transcript corrected, revised and then pronounced by us on 17/12/2019)                (SHIVAKUMAR)                                                   (C.M.CHANCHALA)

 

Witnesses examined on behalf of Complainant:

PW-1:-Complainant by filing affidavit evidence.

Documents marked on behalf of Complainant:

-:ANNEXURE:-

01	Ex-A-1:-	Letter issued D.O. Shimoga Dated 19/12/2018
02	Ex-A-2:-	Letter issued D.O issued D.O. Shimoga Dated 19/12/2018
03	Ex-A-3:-	LIC bond bearing No. 629652348
04	Ex.A-4:-	LIC bond bearing No. 669019467
05	Ex.A-5:-	Death Certificate.
06	Ex.A-6:-	TC
07	EX.A.7:-	Aadhar card of Honnur Sab
08	Ex.A.8:-	Aadhar card of complainant.

DW-1: Manjunatha M. Raikar, S/o Manohar Raikar by way of

affidavit evidence.

 

Documents marked on behalf of Ops

NIL

 

 

 

 

 Member                                                                                             President.