BEFORE THE  DIST.CONSUMERS DISPUTES REDRESSAL FORUM; DHARWAD.

DATE: 28^th May 2015

PRESENT:

1) Shri B.H.Shreeharsha : President

2) Smt. Vijayalaxmi.M    : Member

Complaint No.: 157/2012 (Remanded)

COMPLAINANT/s    :

Baburaddi s/o.Kanakaraddi Jakaraddi, Age: 41 years, Occ: Agriculture, R/o. Nalavadi, Tq. Navalgund.

                                (By Smt.Uma H. Handi, Adv.)

                                             -Vs-

RESPONDENT/s     :      

1. Branch Manager, AVIVA Life Insurance Co. Ltd., Gokul Road, Hubli-30.

2. The Manager, AVIVA Life Insurance Co. Ltd., New Delhi -110 001.

                                (By Sri.G.M.Kansogi, Adv.)

O R D E R

By: Sri.B.H.Shreeharsha: President.

1. The aforesaid complaint after contest disposed on 23.08.2012 by allowing the complaint. Aggrieved by the order the respondent preferred appeal in Appeal No.136/2013 before Hon’ble Karnataka State Consumer Disputes Redressal Commission, Bangalore. The Hon’ble  State Commission, Bangalore by its order dtd.16.09.2014 allowing the appeal by set asiding the order of this Forum dtd.23.08.2012 & remanded back to this Forum for adjudicate the entire case afresh by providing opportunity to both the parties to lead their evidence with regard to the additional documents filed by the appellant / respondent with a direction to dispose the case within 6 months from the date of appearance of both the parties. After receipt of the direction and records by this Forum, the disposed file taken on record of this complaint on 10.02.2015 & issued direction to the office to intimate the parties for appearance on 13.02.2015. Accordingly both the counsels of the respective parties made appearance before this forum on 13.03.2015. The learned counsel for respondent Sri.GMK filed vakalat on behalf of respondents on 04.03.2015 i.e. on adjourned hearing date and respondent was given an opportunity to file additional versions if any. After given opportunity the respondent did not filed any written version but not filed evidence affidavit nor produced any documents as observed and permitted by the Hon’ble State Commission, Bangalore to produce and contest the matter by the respondent. Since fresh evidence affidavit in support of fresh written version filed and as documents are not produced the complaint was posted for argument finally on 13.05.2015.  Complainant advocate submits oral argument and produced 2 citations. While respondent counsel filed memo reporting documents not available and argument could be taken as heard. Except the complainant advocate relying on additional 2 citations nothing more were produced or submits by the parties.

2. The complainant filed the instant case through her GPA holder claiming for a direction to respondent to pay a sum of Rs.15 lakhs, sum assured on the policy along with interest and to pay a sum of Rs.2.50 lakhs towards compensation and for cost and other reliefs.

Brief facts of the case are as under:

3. The case of the complainant in brief is that, the complainant’s wife late Smt.Surekha B.Jakaraddi, during her life she had taken a policy bearing No.ALA00027371 with the respondent for a sum of Rs.15 lakhs and the complainant is the nominee for the said policy and the premium was Rs.7,376/-. The said policy was maturable after 15 years from the date of commencement. While the policy was in force, on 31/10/2011 the assured died due to massive heart attack. Thereafter, the complainant being the nominee submitted claim papers with all necessary documents to the respondent for settlement of the claim. Though the respondent assured to settle the claim thereafter to the surprise of the complainant, the respondent through letter dtd.23/3/2012 repudiated the claim for the reason best known to him & only the reason is that, “the assured has not disclosed real facts as earlier or other policies held in her name with other companies or with this company and she has been replied as - No –”. At the time of proposal either the agent or officials of the respondent company have not asked anything with regard to the existence of other policies and assured has not furnished the answer either ‘YES or NO’. The company officials colluding with agent have written the answer in accordance with their whims and fancies. The deceased-assured had disclosed all the material facts at the time of query and there is no bar or restriction to have insurance policy to any number or to whatever extent and it is left to the ability and capacity of the assured. The complainant repeatedly requested the respondent to settle the claim, but not settled and the very act of the respondent amounts to deficiency in service by the respondent. At last the complainant got issued legal notice on 13/4/2012 to the respondent calling upon to comply the requests. Despite service of notice, the respondent did not settled the claim nor replied. Hence, the complainant filed the instant complaint praying for the relief as sought.

4. In response to the notice, the respondent appeared through the counsel and filed detailed written version denying and disputing the complaint averments made by the complainant. Also taken contention that, the complaint is totally vexatious, misconceived, based on misrepresentation of facts and pray for dismissal of the complaint. The respondent also narrated in detail the terms and conditions of the policy, nature of the contract. Apart from other denial and disputing the complaint averments the respondent disclose the details of the policies possessed by the deceased assured amounting to more than Rs.70,29,667/- and also took contention that the contract of insurance is based on utmost good faith “Uberrima fidae”. The assured at the time of proposal did not disclosed the real facts and knowingly well aware of the facts to the questionnaire she has given adverse replies. Subsequent to the submission of the claim the respondent company on 15/2/2012 appointed stellar for investigation to investigate the cause of death. In response the stellar submits final report on 9/3/2012 along with certain documents procured by them during the time of investigation. During that time it reveals, the deceased assured had insured with various other life insurance companies amounting to more than Rs.70 lakhs. Hence, the assured has misrepresented the respondent. At the time of proposal the assured had also given undertaking that, if any statement or declarations found untrue the company shall have the right to cancel the policy if issued and may forfeit any payments made. Hence, the complaint is not maintainable. The respondents have not committed any deficiency in service as alleged as the assured had misrepresented, the respondent justified in repudiating the claim, the complainant is not entitled for any relief and sought for dismissal of the complaint.

5. On the said pleadings the following points have arisen for consideration:

1. Whether complainant has proved that there was deficiency in service on the part of respondents ?
2. Whether complainant is entitled to the relief as claimed ?

3.  To what relief the complainant is entitled ?

Since both the parties have not produced fresh evidence affidavit nor additional evidence affidavits and documents, previous sworn to evidence affidavit and written argument of the parties are taken and considered. Apart from previously relied few citations the LC for complainant also produced 2 more additional citations at this stage.  Since no new pleadings and evidence are led by the parties earlier pleadings and discussions are adopted except discussions on newly relied 2 citations. Heard. Perused the documents.

Finding on points is as under:

1. Affirmative

2. Affirmative and accordingly

3. As per order

Reasons

Points 1 and 2

6. By looking into the contents of the pleadings, evidence affidavit and documents relied and as per the admission made by the respondent, there is no much dispute with regard to issuance of the policy in question and coverage of the risk under the policy to the date of the death of the assured. Now the question to be determined is, whether the respondent justified in repudiating the policy and thereby not committed any deficiency in service as alleged.

7. As discussed above there is no dispute with regard to coverage under the policy. On look over the repudiation letter of the respondent dtd.23/3/2012 under UIN No.122NO81VO1 produced and relied by the complainant. While repudiating the claim the reason mentioned is – “Are you holding any life, health or critical illness insurance policies (in – force/paid-up) in your own name or submitted any simultaneous proposal with us or any other life insurance company which is under consideration ?  - No”. This reason has been recited. In the explanation to this, it is stated, this amounts to serious non disclosure of material facts, which is a violation of the terms and conditions of the insurance policy. The complainant both in the pleading as well as in the evidence it is taken contention that, the assured at the time of proposal has disclosed all the facts in detail and she has not withhold any real facts or truth. The proposal forms was filled by the agent of the respondent at the time of proposal no specific question was asked to the assured with regard to the holding of other policies by the assured at the time of proposal. Also have taken contention that, there is no bar or restriction to hold as much as policies to the capacity of the assured. Hence, non disclosure of holding other policies by the assured is not a material fact and hence the repudiation of the claim on the said ground is not sustainable.
8. The learned counsel for complainant addressing her vehementary argument invite the attention of this Fora to the guideline issued by IRDA and to the fact of investment of the money in the insurance business in accordance with the income and age. Further the learned counsel for complainant also invite the attention of this Fora to the tax returns pertaining to the deceased assured for the assessment year 2011-2012, wherein the said returns the gross income of the deceased assured is shown as Rs.5,99,480/-. When this income is compared with the chart of the IRDA guidelines, the deceased assured had eligibility to invest the amount in insurance company to an extent as contended by the respondent that, she had possessed policies worth more than Rs.70 lakhs, is not violation of the norms and is within the limit.

9. The main grounds for repudiation of the claim by the respondent is, non disclosure of possession of other policies by the deceased assured, is amounts to violation and amounts to withholding of material facts. Except taking this contention the respondents at the time of prosecution or at the time of argument not produced any cogent evidence in support of their contention that the suppression of holding other policies by the deceased assured amounts to a material facts. Under those circumstances it cannot be considered that it is a material fact.

10. Though the contract of insurance is governed by and based on utmost good faith & suppression of material facts is a valid ground for forfeit the claim. Whereas in the instant case except the grounds mentioned and discussed above the respondent has not repudiated the claim for suppression of other facts viz., pertaining to health.

11. Though the respondent in the written version as well as in the evidence has taken stand that, immediately after receipt of the claim by the complainant, the respondent appointed stellar for investigation and inturn the stellar after investigation had submitted detailed report with supporting documents, wherein it is also mentioned, the assured at the time of proposal she was suffering from diseases the same was traced out from the records maintained by the KIMS Hospital, Hubli. Hence, this amounts to suppression of real facts with regard to the health also. Except the say the respondent has not produced any documentary evidence in support of that investigation. Under those circumstances the findings of the stellar or the contention taken by the respondent cannot be accepted. For this reason and also for the reason that, the repudiation is not made on the ground of suppression of material facts pertaining to the health. In the forfeiture order the grounds taken is only non mentioning of other policies.

12. In reply to the above the learned counsel for the complainant also has taken contention and argued that, as the assured had sufficient income and as she had invested the amount within the prescribed target as fixed by the IRDA and as the assured has invested the amount in other companies through the agent of the respondent company only the respondent company was well aware of the investments made by the assured in other companies. Added to it, apart from this instant policy the assured also had invested in another policy of the respondent company through the same agent only and submits there does not arise question of suppression of material facts as alleged or contended by the respondent. In support of the contention and argument the learned counsel for complainant also invite the attention of this Fora to the citation – 2009 (1) CPR 142 RSCDRC – Madanlal v/s. LIC of India, wherein their lordships have held that, non mentioning of the fact of taking earlier policy in the declaration form by the deceased would not amounts to suppression or concealment of material fact or misstatement in the real sense. And also invite to another citation 2012 (2) CPR 220 – RSCDRC – LIC of India V/s. Dalikunwar Devada - wherein their lordships have held that, once accepting premium and having entered into agreement without verifying facts insurance company cannot riggle out of liability. Apart from above discussed reliance of citations the learned counsel for complainant relied on 2013 (1) CPR 199 NC-LIC of India & Anr Vs. Chaitanyadas Advocate. In support of contention of the complainant that the proposal form were filled at the instance & by own handwriting of the agent whereas in the relied case their lordship have held LIC is held responsible for act of its agent. Their lordships are of the view that when once the insurance company taken the contention the proposal were filled up at the instance and with the knowledge of the proposer it is the bounden duty of the insurer to lead the evidence of the agent to rebut the contention of the complainant/insured that the proposer was explained and made known of the facts filled up by the agent and signed by the proposer at the time of proposal. The complainant also relied on another citation 2014 (4) CPR 342 NC- Oriental insurance Co. & Anr. Vs. Subhas Shakahari Pachdhai. The complainant in the instant case taken contention that the respondents have gathered the information with regard to the death of the insured by appointing surveyor twice. In the relied case their lordship have held, insurance company cannot appointed repeated surveyor in order to get favourable report. Hence, in the instant case also the report of the respondent company surveyors have no relevancies with regard to the investigation of the subject matter.

13. On considering of all the above evidence and facts it is evident that, the respondent has failed to justify grounds taken for forfeiture of the claim. In such an event the act of the respondent in non settling the claim amounts to deficiency in service. Under those circumstances the complainant is entitled for the amount covered under the impugned policy and also for compensation and for cost of the proceedings. With the above discussions and findings we have arrived and proceed to pass issue.1 in affirmative and issue.2 in affirmative and accordingly.

14)Point:3: In view of the finding on points 1 and 2 proceeded to pass the following 

Order

The complaint is allowed in part.

The respondents 1 & 2 are jointly and severally directed to pay policy amount of Rs.15,00,000/- to the complainant with 6% interest p.a. from the date of repudiation till realization along with Rs.3,000/- towards compensation for mental agony and Rs.2,000/- towards the cost of the proceedings within 60 days from the date of receipt of certified copy of this order. Failing to comply the order, the respondents are liable to pay the same with interest @9% p.a. from the date onwards till realization.

(Dictated to steno, transcribed by him and edited by us and pronounced in the open Forum on this day on 28^th day of May 2015)

(Smt.Vijayalaxmi.M)                                    (Shri.B.H.Shreeharsha)

Member,                                                      President,

Dist.Consumer Forum,                                Dist.Consumer Forum,

M.S.R.