O R D E R

Per Sri A. Hazarath Rao,  President:-      The complainant filed this complaint under section 12 of the Consumer Protection Act seeking insured amount of Rs.15,00,000/- ; Rs.1,00,000/- towards mental agony; Rs.1,00,000/- towards compensation and Rs.50,000/- towards legal expenses.  

2.      The averments of the complaint in brief are these. 

The complainant’s husband namely S.Venki Reddy on 08-02-2012 obtained the insurance policy bearing No.675539619 for Rs.15,00,000/- from the opposite party.  The insured nominated the complainant as his nominee.  The insured died on 19-05-2012 due to acute pulmonary oedema & severe LV dysfunction.  The complainant along with claim form  submitted relevant documents to  the opposite party for processing claim.  The opposite party on 20-06-13 repudiated the claim on untenable grounds.  The insured never under went any tests or any treatment from any hospital prior to obtaining the subject policy.  The insured got admitted in Care Hospital on 12-05-12 with the  complaint of shortness of breath.  The insured is the only bread winner of the family.  Due to sudden death of the insured the complainant’s family suffered severe financial problems.  The opposite party’s repudiation is against the provision of Consumer Protection Act.  The complaint therefore be allowed.          

3.      The contention of the opposite party in short is here under. 

          The insured Sanaivarapu Venki Reddy obtained the insurance policy bearing No.675539619 for Rs.15,00,000/-.  The said Venki Reddy died on 19-05-12.  The opposite party issued the said policy on the basis of contents mentioned in proposal form.  The insured under went blood test on 09-02-12 at Care Hospitals, Hyderabad and again on 27-02-12 underwent ultra sound scan of full abdomen.  The insured had undergone blood test immediately after processing the proposal for insurance. Considering the same the opposite party rightly repudiated the claim.  To have unlawful enrichment the complainant filed this complainant with false allegations.  The complaint therefore be dismissed.   

4.  Exs.A-1 to A-5 on behalf of the complainant and Ex B-1 marked on behalf of the opposite party were marked.       

5.      Admitted facts in this case are these:

          a) The insured submitted his proposal form on 08-02-12 (Ex.A-1).

          b) The insured obtained the insurance policy bearing No.67553961.

          c) The insured died on 19-05-12 (Ex.A-2).

          d) The complainant is nominee of the insured. 

e) The complainant submitted claim form to the opposite party who in turn  repudiated the claim (Exs.A-3 & A-4).

          f) The complainant approached ombudsmen (Ex.A-5). 

6.   Now the points that arose for consideration in this complaint are:

          1.       Whether the repudiation of claim by the opposite party is unjust

                    and if so amounted to deficiency in service?

         2.      Whether the complainant is entitled to the insured amount?.

          2.       Whether the complainant is entitled to compensation and if so to

                   what amount?

          3.       To what relief? 

7.      POINTS 1 &2:- The contacts of insurances are treated as Uberrimae fidei unlike other contracts as based on the principle of utmost good faith. In Shnyni Valsan Pombally vs. State Bank of India & another 2014 (1) CPJ 387 (NC) it was held that it is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – Uberrimae fidei, applicable to both parties. The rule of non disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal.  The insured knows all the facts, the insurer is unaware anything which may be material to the risk. Very often it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out the facts which would materially affect the risk.  The law therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable enquiries.   A contract of insurance therefore can be repudiated for non disclosure of material facts.  

8.      It is also well settled in Law that burden is on the opposite party to prove that it rightly repudiated the claim.  In SBI Life Insurance Company Limited vs. Smt D. Kambala Sadhya 2012 (3) CPR 302 (NC) it was held repudiation of death claim for suppression of pre-existing medical condition must be supported by cogent evidence. In LIC of India vs. Tarachand 2011 (4) CPR 122 (NC) it was held;

            “The State Commission upheld the order of the District Forum and dismissed the appeal by concluding that there was no suppression of material facts since the insure did not suffer from any pre-existing disease which would affect her life span and the disease from which she was suffering i.e., Gastroenteritis is not a permanent disease but is a common and temporary medical problem”.  

9.     The complainant either in her complaint or in affidavit failed to disclose the period of the subject insurance policy and when it commenced.  The averments in version and affidavit of opposite party revealed that policy commenced on 22-02-12 though the insured submitted proposal on 08-02-12. 

10.    For any living creature the event of death is certain but its date is uncertain.  The insured died within three months of the commencement of the subject policy.  A genuine doubt therefore had arisen in minds of the opposite party regarding health declaration given by the insured under Ex.A-1 proposal as rightly contended by the learned counsel for the opposite party.  That is why the opposite party made enquiry and the concerned person submitted copy of Ex.B-1 report and on its basis the opposite party repudiated claim alleging that the insured suppressed his health conditions and treatment taken.  For better appreciation the relevant portion in Ex.A-4 is extracted below:

                    We may, however, state that all these answers were false as we have evidence and reasons to believe that the life assured was not having good health prior to date of proposal of the policy.  As per the records, he underwent medical tests at care hospitals, Hyderabad on 09-02-12, he was diagnosed as suffering from CAD and the same was not intimated to us before completion of proposal i.e., 22-02-12.  He underwent complete blood & urine tests, ECG, CTMT, all biochemistry and pathological tests on 27-02-12 and was suffering from CAD, chronic cirrhosis of liver, splenomegaly and DM+.  There was family history of T2DM & CAD and attendants were advised to bring all old reports.  However the life assured had not mentioned about his adverse state of health in his proposal/personal statement dated 08-02-12 and also not informed before acceptance of proposal i.e., 22-02-12 intentionally.  Hence, there was suppression of facts had he mentioned his correct state of health in the proposal, we would have called for the related special medical reports, basing on which, decision would have been taken. 

          It is, therefore, evident that he had made deliberate mis-statements and with held material information from us regarding his health and hospitalization/ treatment at the time of effecting the assurance and hence in terms of the policy contract and the declarations contained in the forms of proposal for assurance, we hereby repudiate the claim and accordingly; we are not liable for any payment under the above policy and all moneys that have been paid in consequence therefore belong to us.

11.    The National Consumer Disputes Redressal Commission  in LIC of India Vs. Krishan Chander Sharma – II(2007) CPJ 53(NC) has ruled that if there is other credible evidence to prove the fact of a pre-existing disease, mere absence of an affidavit of the concerned treating doctor is not an adequate reason to reject the proof.  Exs A-3 & A-4 revealed that the opposite party gathered information regarding medical tests which the insured had under gone at Care Hospitals on   09-02-12 and 27-02-12. The opposite party in order to discharge its burden relied Ex B1 report by its investigator. The contents of Ex.A-2 & Ex.B-1 differ regarding health condition of the insured.  The opposite party for the reasons best known to it  neither summoned  the record pertaining to treatment taken by the insured on    09-02-12 and 27-02-12 at Care Hospitals, Hyderabad nor filed affidavit of that doctor. The opposite party miserably failed in discharging its burden of proving that the insured suppressed material facts while obtaining the subject insurance policy by adducing cogent and convincing evidence. For the discussion made supra we opine that the opposite party repudiating complainant’s claim is not at all justified and it amounted to deficiency in service and is entitled to the insured amount and answer these points against the opposite party.

12. POINT No.3:  The complainant claimed a sum of Rs1,00,000/- towards mental agony and another sum of  Rs1,00,000/-as compensation. The complainant failed to mention either in her complaint or affidavit when she informed to the opposite party regarding death of the insured or submitted documents to the opposite party. A spouse ordinarily will be put to mental agony on demise of his/her spouse. In the absence of those particulars the complainant in my considered opinion is not entitled to any compensation. We therefore answer this point against the complainant.

13. POINT No.4: In view of above findings in the result the complaint is partly allowed as indicated below:

a) The opposite party is directed to pay the insured amount of Rs15,00,000/-(Rupees fifteen lakhs only) to the complainant together with interest @ 9% p.a. from the date of complaint till payment.

B) The opposite party is directed to pay costs of Rs.2000/-(Rupees two thousand only) to the complainant.

C)   The opposite party is directed to comply the said order with in a period of six weeks from the date of receipt of this order.

Typed to my dictation by Junior Stenographer, corrected by me and pronounced in the open Forum dated this the 23^rd  day of September, 2014.

MEMBER                                                         MEMBER                                             PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party:    

     PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.