DATE OF DISPOSAL: 09.04.2021.
Dr. Aswini Kumar Mohapatra,President:
The factual matrix of the case is that the complainant has filed this consumer complaint Under Section 12 of the Consumer Protection Act, 1986, alleging deficiency in service against the Opposite Parties (in short the O.Ps) and for redressal of his grievance before this Forum.
2. Briefly stated the case of the complainant is that the complainant’s father Sudarshan Patro has insured his life with the above O.Ps vide policy No. 1K 066041063 on 5.10.2016 for an assured sum of Rs.5,00,000/- only by paying the full premium consideration amount of Rs.50,000/- per annum and after carefully observing all medical tests , legal formalities as required for undertaking an insurance policy, the O.Ps have accepted the policy and issued policy bond in favour of the complainant’s father namely Sudarshan Patro. On 28.06.2017 suddenly, the father of the complainant died due to sudden heart attack. After the sad demise of the complainant’s father, the complainant lodged a claim before the O.Ps being the nominee in the said policy of his father. But prolonged follow ups, the O.Ps arbitrarily repudiated his legitimate claim on the ground that the complainant’s father possesses pre-existing disease vide their official letter dated 28.11.2017, which is contrary to law and equity because at the time of agreement while accepting the policy of the complainant’s father. The O.Ps have conducted physical/medical test by their own approved doctors and received the policy premium amount. But when their turn came and liability is due to be discharged from their end, instead of settlement of policy in favour of the complainant they are denying to settle the claim of the complainant on such false/untenable pleas, which is just illegal, unfair and the O.Ps should be punished/levied penalty for such type of illegal/unfair practices. Alleging deficiency in service on the part of the O.Ps the complainant prayed to direct the O.Ps to pay Rs.5,00,000/- towards settlement of assured policy amount, Rs.50,000/- for harassment and mental agony and Rs.15,000/- towards costs of this litigation in the best interest of justice.
3. Upon notice the O.P.No.1 filed written version through his advocate. It is stated that the allegations made in the complaint petition are not all true and correct and the complainant is put to the strict proof of such of those allegations, which are not specifically admitted herein. The O.P. submits that the proposal for insurance was forwarded by this O.P. as received from the life assured/proposer. Then the proposal form was forwarded to the competent authority of SBI Life insurance i.e. O.P.No.2 & 3 based on which the policy No.1K066041063 was issued. Role of this O.P. is confined to the sourcing and forwarding the proposal only. It is not a party in the contract of insurance governed under the insurance policy in question between insure and the insurer i.e. complainant and the O.P.No.2 and 3. Moreover, as per the terms and conditions of the policy this O.P. is neither responsible for settlement of the claim nor liable for payment of the insured amount. This case involves complex question of facts, evidence and law. Hence, this Hon’ble Forum has no jurisdiction to try the same and the matter can be properly adjudicated in the civil court. Hence prayed may graciously be pleased to take the above facts and circumstance in to consideration and dismiss the complaint with exemplary costs against this complainant in the interests of justice.
4. Upon notice the O.P.No.2 & 3 per contra filed version through his advocates. It is stated that the O.P.No.2 & 3 are at Bhubaneswar and Navi Mumbai, whereas the complaint is filed before the Hon’ble Forum, Ganjam, Berhampur. Hence the present complaint is liable to be dismissed on the ground of territorial jurisdiction. The Life Insurance contract is a contract of “UTMOST GOOD FAITH” wherein the proponent is duty bound to disclose everything concerning his/her health, habits and other related matters which are within/his knowledge at the time of making the proposal, failing which the insurer has every right to repudiate the claim. In the instant case, the Deceased Life Assured (hereinafter referred to as the “DLA”). Mr. Sudarshan Patra committed a breach of the principle of utmost good faith by suppressing the material fact that he was suffering from Heard disease prior to the date of commencement of risk. At the time of signing the proposal form on 17.09.2016 he replied in negative to the relevant questions. It is clear from the records that the DLA was suffering from Heart disease prior to the date of signing the proposal form. He deliberately suppressed this material fact and obtained the insurance cover fraudulently. Hence the complaint is not maintainable and hence is liable to be dismissed.
5. On the date of final hearing advocates for complainant and advocate for O.Ps are present. Heard arguments from the Ld. Counsel for the complainant and from the O.Ps. Perused the records, documents filed by the parties. This Commission examined the entire materials on record and given a thought and consideration to the arguments advanced before us by the parties touching the points both on facts as well as law.
To prove the case the complainant submitted the related documents of insurance policy and produced medical report, receipt of the premium deposited the copy of policy bond and the letter of repudiation but on the other hand O.P. filed written version alongwith documentary evidence Annexure-A to F and affidavit in support of their case.
It is admitted fact that the insured had purchased the SBI Life Insurance Policy benefits contain death benefit in case of life assured while the policy is in force the O.P. will pay the highest of the fund value as on the date of death intimation vide policy No. IKO66041063 on 05.10.2016 by paying full consideration amount of Rs.50,000/- after carefully observing medical test reports and legal formalities as required for undertaking any insurance policy. Thereafter the O.Ps had accepted the policy and issued the policy bond in favour of the insured late Sudarshan Patra. It is not disputed the insured expired on 28.06.2017 within 8 months of commencement of the policy. It is in dispute whether the insured had suppressed that the existing diseases and make false statement to pen the insurance policy. It is revealed from the record that the proposal form of the insured accepted by the O.Ps after examining the health condition of the insurer by the penal doctors of the O.Ps and suppression of the pre-existing disease is the sole ground of repudiation of the claim by the O.Ps the ground of repudiation never intimated to the insured in his life time. If there is some reason the O.P. should have investigate the matter prior to accept the proposal form. After accepting the proposal form, receiving the premium amount and issuance of bond in favour of the insured, repudiation of the claim at the time of payment by the O.Ps is unjustified.
The O.Ps in their written version contended that the complainant has suppressed material information and attempted to mislead the Forum by giving incorrect information. In this connection this Commission cited the decision of the Apex Court which are mentioned here under:
It is held and reported in C.P.R. 2021 (3) page 65 wherein the Hon’ble Rajastan State Commission, observed that a common man is not supposed to know all the niceties and technicalities of law. Once accepting the premium and having entered in to an agreement without verifying the facts the Insurance Company can not wriggle out of liabilities mearly by saying the contract was made by mis-representation and concealment the insurance policies should not be issued and repudiated in such a casual mechanical manner the policy entitles the liability on both sides. It is rather exploitation of the consumer and more or less fraud on the public such practice should be strongly deprecated.
The O.P. in their written version contended that the above case is lack of territorial jurisdiction on the plain reading of Section 11 (2) (b) of the C.P.Act, 1986 it is clear that a complaint can be filed within territorial jurisdiction of the Forum. The O.P. has a Branch office in the district of Ganjam, hence this Forum has got territorial jurisdiction to entertain the case. Further it can be stated that office of the O.P. though located at Bhubaneswar and Mumbai yet it can not be over ride statutory provision of Section 3 of the C.P.Act. 1986.
The object of obtaining of any Insurance Policy is mainly to protect the interest of the surviving legal heirs for looking after their needs for this purpose the materials and the most important fact which is relevant is the state of health of the person and the treatment obtained by him in the past for any serious diseases which during the subsistence of the policy would have been responsible for his death. However the contention of the counsel for the O.P. that the income of the insured has also to be taken into consideration as it should be commensurate with the sum insured does not find favour with us as it is no concerned of the insurer to see. As to how much income insured having and whether insured is in position to pay the premium or not. Any person who obtained insurance policy becomes entitled to its benefits in his capacity as insured and it is immaterial whether the insured contributes to the installments himself or pay the premium from any other sources the insurance policy can not be placed on the same pedestal as they benami transaction.
It is revealed from the record that the complainant had filed the affidavit, copies of the insurance, premium paid which tagged in the file of this Forum and from evidence it is quite clear that the complainant is a bonafide consumer of the O.Ps and the O.Ps are accepting the insurance policy by receiving the premium and the insured died while the policy is in force that is also admitted by the O.Ps and registered the claim. And the claim under the policy was repudiated by the SBI Life and the decision was communicate d to the complainant vide letter dated 03.10.2017 an amount of Rs.50,000/- was transferred to the bank account No. 32252389535 held with State Bank of India Kanisi Bank on 27.09.2017 vide UPR No. CPA 897935900037 to the deceased insured by repudiating the claim.
From the record it is seen that, undisputedly the complainant had availed the insurance policy after getting medical checkup report examined by their medical officer of O.Ps with proper verification of death of birth and health condition of the insurer thereafter they accepted the proposal without any objection or comment relating to the suppression of material facts while accepting the proposal later while the time of payment submitted the letter of repudiation alleging non discloser of pre-existing disease what they collected through investigation after receiving claim form while to meet the claim amount to be honoured, repudiated the claim without any valid reason except the affidavit of investigator and photo copies of the prescription of the DLA who treated as outdoor patient nothing filed any documentary evidence to substantiate their claim without any documentary evidence to prove the suppression of the material facts. Repudiation of the claim of assured amount by the O.Ps is amounts to deficiency in service and unfair trade practice. We rely the decisions it is held and reported in CPR 1991 (2) page 18 the Hon’ble National Commission clearly defines the merely rejection of an insured parties claimed by the insurer does not per-se operate as jurisdictional barred to seek Redressal before the Forums under the Act. In another case “Once proposal is accepted and policy is issued LIC is liable for payment of claim” 2011 (4)CPR LIC of India verses Prabhasa Ranjan Nayak. Further rejection or acceptance of insurance policy proposal must be expressly communicated to the proposer N.C. D.P. 278 CPR N.Venkateswarulu versus the BPM and other 2011 (4) CPR 278 (N.C.)
The O.P.No.1 submitted that the proposal for insurance was forwarded by O.P.No.1 as received from Life assured/proposer then the proposal form was forwarded to the competent authority of SBI Life Insurance i.e. O.P.No.2&3 based on which the policy No. 1K066041063 was issued. Hence it is viewed that the role of O.P.No.1 is confined to the survey and forwarding the proposal only. It is not a party to contract of insurance governed under the insurance policy in question between insurers and insure i.e. complainant and O.P.No.2 & 3 as per terms and conditions of the policy O.P.No.1 is neither responsible for settlement of the claim nor liable for payment of the insured amount as there is no specific claim had made by the complainant against the O.P.No.3 as such we hold that there is no liability on the part of O.P.No.1.
The O.P.Nos. 2&3 offers an individual insurance scheme wherein each individual to be insured furnishes full information about his/her health personal and family history health and habit, income , date of birth and details of existing insurance cover with all Insurance Companies relying on the information so furnished the company grants insurance cover on the principle of utmost good faith. The counsel for O.P.No.2 & 3 argued that the DLA was suffering from heart disease prior to the date of signing the proposal form as he deliberately suppressed the material facts the repudiation of the claim by O.P.No.2 & 3 are justified. It is astonished how the O.Ps a leading company of insurance had accepted the proposal of DLA without considering his age and health condition by the oral statement of a year old illiterate layman in which policy the risk of life covers? The O.Ps should have go to the details whereabouts of the DLA prior to issue policy bond in favour of the DLA. In this case O.Ps had not discharge their duty and responsibility properly. The DLA was an illiterate and year old person signed in oriya language it is presumed that he was not understand the English language prior to issue the policy bond the O.Ps 2 & 3 have to collect the information regarding the pre-existing disease of the DLA through investigation. In this case that has not done by the O.Ps. The defense pleas of the O.Ps are after thought process just to avoid the claim.
On foregoing discussion as well as settled principles of law, the complaint petition is allowed in part against the O.P. No.2&3on contest. The O.P. No.2 & 3 are directed to settle the insurance claim of the deceased policy holder Sri Sudarshan Patro as permissible by the terms and conditions of the policy under the agreement vide policy No.1K066041603 in favour of the complainant. The O.P. is directed to make compliance the aforesaid order within two months from the date of receipt of this order failing which all the dues shall carry an interest @9% per annum on the settled amount from the date of default till realization of the same. In peculiar facts and circumstances of this case there is no order as to cost and compensation.
The order is pronounced on this day of 9th April 2021 under the signature and seal of this Forum. The office is directed to supply copy of order to the parties free of cost and a copy of same be sent to the server of www.confonet.nic.in for posting in internet and thereafter the file be consigned to record room.
