O R D E R 

(per Smt. R. Seetaramamma, President (FAC))

1.       This is a complaint filed by the complainant under section 12 of the Consumer Protection Act., 1986 with a prayer to direct the opposite parties to pay the insurance amount of Rs.4,00,000/-  according to the insurance norms, direct the opposite parties to pay an amount of Rs.10,000/- towards mental agony and sufferance caused to her and costs and other reliefs to the complainant.

2.       The facts of the complaint in brief are that the complainant is the daughter of Dasupalli Peda Kotamma. Deceased life insured  obtained the life insurance policy with Birla Sun Life Insurance Company Limited at Eluru branch, dt.06-10-2006 for Rs.4,00,000/- and annual premium is Rs.2,823.68. At the time of obtaining the policy from the opposite parties the deceased life insured  put the name of this complainant as nominee. Deceased life insured submitted pan card to the opposite parties as age proof at the time of taking policy.  She is hale and healthy person by the date of obtaining policy. The deceased life insured paid annual premiums up to April, 2010 at Eluru Branch with Opposite party No.2 and she paid 4 annual premiums without any default, in total she paid Rs.11,449.86.

3.       The deceased life insured died on 19-04-2010 due to heart failure. She died as intestate leaving behind this complainant. After the death of deceased life insured the complainant approached opposite party No.2 and submitted all required documents for settlement of claim. But the Opposite parties failed to settle her claim. Recently the complainant shifted to Machilipatnam for her livelihood, thereafter also the complainant approached opposite party No.3 to settle the claim. But the opposite party No.3 also failed to settle her claim and the opposite party No.3 orally stated to the complainant that her claim is refused by opposite party No.1 and thereby repudiate her claim. Hence, the complainant is constrained to file this complaint.

Opposite parties 1 to 3 served with notices, opposite parties 2 and 3 called absent and they remained exparty. opposite party No.1 filed his version and contested the matter.

4.       Opposite party No.1 in his version contended that- the complaint filed by the complainant does not fall within the definition of consumer dispute as neither  any unfair trade practice adopted by them nor any deficiency of service on their part, the complainant has not approached the forum with clean hands and she suppressed the material facts before the forum. Opposite party No.1 further contended that the claim made by the complainant was repudiate by them for the reason of mis-representation of material facts by the deceased life insured at the time of making proposal. In support of his contentions he relied upon judgments reported in :

i) (2009) 8 (SCC) 316, ii) 2001 SCC 160 iii) AIR 1971 AP 41, iv)  (1996) 6 SCC 428, v) (2000) 2 SCC 734, vi)  (2008) 1 SCC 321, vii) III (2003) CPJ 172(NC),  viii) I (2009) 212 (NC), ix) II (2008) CPJ 156 and x) III (2008) CPJ 226 and a national commission decision in the executive director (marketing) LIC Vs. Yogendra Prasad Singh RP.No.692/2006 on 14-05-2009.

5.       Opposite party No.1 further contended that the deceased life insured at the time of making the proposal for the policy had misrepresented  her age which  amounts to suppression of material facts. Opposite party further admitted that Dasupalli Peda Kotamma is the policy holder with Opposite party No.1 and the present complainant is the nominee, and she take a policy for an assured sum of Rs.4,00,000/- for which annual premium amount of Rs.2,874.20 was proposed to be paid for a term of 20 years  and the premium amount is also  paid by  deceased life insured. In her proposal form she mentioned her date of birth is 18-02-1966 and her age is 40 years which is a deliberate mis-representation, then the contract of insurance would become void. Opposite parties received death claim intimation along with claimants statement on 26-06-2010 and thereby informed to the opposite parties, that the deceased life insured died on 19-04-2010 due to natural death. In the claim form the complainant mentioned that the age of deceased life insured is 43 years and the age of complainant is 40 years, there is only 3 years age deference in between deceased life insured and complainant though both are mother and daughter respectively.

6.       The opposite party No.1 received the death claim on 12-07-2010 and they requested the claimant to send original policy document and claimants statement. Later, they conducted investigation on death claim. Later, they came to a conclusion that the deceased life insured had mentioned wrong date of birth in her proposal form and opposite party No.1 confirmed that the deceased life insured would be around 65 to 70 years of age at the time of death on the basis of household card procured by opposite party No.1. So, they are rightly repudiate the claim of the complainant on the ground of suppression of material facts by deceased life insured at the time of filling up of the proposal form and made a false representation and prayed to dismiss the complaint with costs.

7.       In support of her contentions, the complainant filed her chief affidavit and got marked Exs.A1 to A8.

On the other hand chief affidavit of opposite party No.1 filed and Exs.B1 to B6 are marked for opposite party No.1. Opposite parties 2 and 3 are set exparte. No documents were marked on their behalf.

 Written arguments filed on behalf of both parties.

Now the points that arises for consideration are:

1. Whether the complainant is a consumer to the opposite party or not?

2. Whether there is any misrepresentation deliberately made by the deceased life insured, in her proposal form are not, pertaining to her age?

3. Whether the Opposite parties rightly repudiate the claim of complainant or not?

4. Is there any deficiency of service on the part of the opposite parties?

5. Whether the complainant is entitled for the reliefs sought for by her or not?

6. If so to what extent? 

Point No.1

8.       The counsel for opposite party taken a plea that the complainant is not a consumer to the opposite parties as they entered into a contract with deceased life insured only is not tenable one, because while entering into a contract with deceased life insured, deceased life insured send a proposal by showing the present complainant as a nominee in the proposal form and the same is accepted by the opposite party. While entering into the contract of insurance with deceased life insured, the opposite party having knowledge that if in any case the deceased life insured passed away during the existence of the contract of insurance, the opposite party has to pay the policy amount to the present complainant. Moreover, according to sec 2(1) d(ii) of the C.P.Act., it is not only covered the parties who entered into contract, it is applicable to the beneficiaries also. So here the present complainant is the beneficiary of the deceased life insured, as deceased life insured show the complainant as nominee. So, the present complainant comes under the purview of the term of consumer, and when the deceased life insured shown the complainant as nominee in the proposal form, there is a previty of contract in between the complainant and opposite parties. Hence, the complainant is a consumer to the opposite parties. Point No.1 is answered accordingly.  

Point No.2:

9.       Citation filed by the complainant counsel reported in 2008 ACJ 456 (C.A. No.5322 of 2007 arising out of S.L.P (C) No. 23951 of 2005; decided on 20-11-2007 (SC) in which it was held that, when the insured person suppressed a material fact fraudulently then the LIC was justified in repudiation of claim of insured.

10.     In this case insured suppressed a material fact with regard to the health condition and undergoing an operation within 4 years prior to filling of proposal form and death also accorded within 6 months of taking policy. So the said citation is not applicable to the present set of facts.

11.     At the time of hearing, the learned counsel for opposite party No.1 reiterated the grounds which were taken in their version and chief affidavit. On the other hand the learned counsel for complainant in his written arguments have stated that there was no documentary proof to show the deceased life insured misrepresented her age deliberately and she mentioned her age on the basis of pan card which issued by Government of India in her proposal form, thus there is no mis-representation of material fact on the part of deceased life insured. 

12.     On a careful consideration about the submissions of both counsels and after gone through evidence on record,  the fact that deceased life insured had taken a policy with opposite party No.1 for a sum of Rs.4,00,000/- with annual premium mode @ Rs.2,823.68 p.a. she paid 4 installments. Later on 19-04-2010 she died. After death of deceased life insured, complainant approached the opposite parties with claim form to settle the policy claim in a status of nominee. But the opposite parties failed to settle the claim and  stated that they repudiate the claim of the complainant on the basis of mis-representation of material facts, that is pertaining to age of the deceased life insured, at the time of taking policy with opposite party No.1 by deceased life insured, as she mentioned in proposal form her date of birth is 18-02-1966 and her age is 40 years, though she had nearly 60 years of age approximately.

13.     Here in this case taking policy by deceased life insured is not at all disputed by both parties. Four annual installments were also paid by deceased life insured without any default. By the date of death of deceased, policy is in existence, to that extent no dispute was made by either of the parties. Deceased life insured died on 19-04-2010. On the death of deceased life insured, the complainant submitted a claim form to the opposite parties for claiming the insured amount as nominee. This fact is also admitted by the opposite party No.1 after submission of all required documents by the complainant as sought by opposite party No.1, the opposite party conducted an investigation in this matter. During the course of investigations they came to a conclusion on the basis of alleged Exs. B4 and B5 got procured by opposite party No.1, the deceased might have 65 to 70 years of age at the time of her death and they felt that, by the date of taking policy by deceased life insured she might be aged about 61 years. She fraudulently shown her age as 40 years, thus she induced the opposite party No.1 to accept her proposal and obtained policy by misrepresenting her age.

14.     Whether any misrepresentation was made by deceased life insured in her proposal form with regard to her age is very prominent thing in the present case. Because except this issue nothing was disputed by opposite parties  in this case. Deceased life insured while submitting her proposal form to the opposite party No.1 for taking policy, she submitted her age proof  that is a pan card. That pan card issued by the proper authority that is Government of India.

(I) The date of birth which was shown in pan card is only entered in the proposal form submitted by deceased life insured to the opposite party for obtaining policy.

 (II) deceased life insured and her daughter i.e. present complainant are village women. They eking out their livelihood by doing collie works or work on the basis of daily wage. So they are innocents. They could not create any document to show themselves as underaged persons and to induce the opposite parties inorder to obtain policy.

 (III) the deceased life insured did not produce any certificate of doctor at her own choice to show herself as underaged person at the time of sending proposals to opposite party No.1 for taking insurance policy.

(IV) she relied upon an authenticated document to show her age.

 (V) when the opposite parties while entering into contract of insurance with deceased life insured , they relied upon the document filed by deceased life insured to show her proof of age that is pan card.  But, after death of deceased life insured, when the complainant submitted her claim to opposite party No.1, at that time they raised an objection with regard to age of deceased life insured surprisingly, and in support of their version they relied on house-hold card allegedly procured by them.

(VI) when the proposal send by deceased life insured to opposite party No.1 for taking policy by showing her age as 40 and relied on pan card, nothing was prevented the opposite party No.1 to enquire into the matter and reject her proposal. But the opposite parties did not take such step.

(VII) after entering into the contract also they did not disputed the age of the deceased life insured for all period of 4 years. All the four years they kept quite.

(VIII) later they take a different view , when the claim form came before them to settle, that there is a mis-representation of material fact on behalf of the deceased life insured deliberately, so the insurance contract in between opposite parties and deceased life insured is null and void and they are rightly repudiate the claim of the complainant.

 (IX) nothing in the record to show that the deceased life insured mis-represented her age deliberately in the proposal form and thereby induced the opposite party No.1 to accept her proposal and got issued policy.

(X) In support of the contention of opposite party No.1 they relied upon Exs.B4 and B5. But opposite party No.1 is failed to state how they procure those two documents through what source and they failed to prove the geniuses of those two documents and simply they filed photo copies and got marked. So, can’t rely upon those documents.

15.     opposite party No.1 relied upon number of judgments in his version. All the judgments categorically reiterates that “the contract of insurance including contract” of life assurance are contracts uberrima fides and every fact of material must be disclosed. Otherwise there is good ground for recession of contract.

16.     We are also accepting that, contract of life assurance is a contract of insurance and every fact of material must be disclosed. If there is any mis-statements or suppression of material facts, the policy can be called in to question. For determination of the question whether there has been any suppression of material fact, it is necessary to examine the suppression or miss-statement relates to that fact is with the knowledge of maker or without knowledge of maker of that statement. In the present case the deceased life insured submitted her date of birth on the strength of pan card only. It is not the case of the opposite party No.1 that pan card itself created for the purpose of taking policy and that document was not disputed by opposite party No.1.  In fact Exs.A1 to A9 which submitted by the complainant is not disputed by opposite party No.1 pertaining to their genuinety or relevancy or admissibility. Hence, those documents can be considered as genuine. When they become genuine, the contests of those documents also not disputed by opposite party No.1, the date of birth which mentioned in Pan card could not be disputed at a later stage.

17.     Division Bench of Hon’ble High court of Andhra Pradesh in a judgment between LIC of India and B.Chandravathamma reported in AIR 1971 (AP) 4 reiterated that-

“the proposal, the personal statement and the life insurance policy all contain a special class putting the insured on notice that in any case of such deliberate misrepresentation, the contract of insurance would become void and the amounts paid there under  shall be forfeited. The misrepresentation, therefore is fraudulent and deliberate and is with respect to a material particular”.

 As seen from the above proposition it is clear that if any misrepresentation was made fraudulently and deliberately then the contract of insurance would become void.

18.     The judgment of Hon’ble Supreme Court of India, in the case of Satwant Kaur Sandhu Vs. New India Assurance Company Limited (2009) 8 SCC 316, National Commission in the executive Director (mktg) LIC of India Vs. Yogendra Prasad Singh, in the case of LIC of India and others Vs. Asha Goel (Smt) and another (2001) SCC 160 also categorically held the same thing.

19.     According to section 45 of the insurance Act., 1938 at 2^nd part of section 45 “unless the insurer shows that such settlement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose”. No policy was called in question by an insurer on the ground that statement made in the proposal or in any report of medical officer or referee friend of the insured or in any other document leading to the issue of the policy, was in accurate or false after expiry of 2 years from the date on which it was effected.

20.     At the proviso of section 45 of the insurance Act, 1938 nothing shall prevent the insurer from calling proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of policy are adjusted on subsequent proof that age of the life insured was incorrectly stated in the proposal.

21.     As seen from the above provision of law also if insurer felt that it is need to him and he is entitled to do so, he shall call for proof of age, and on subsequent proof of age the terms of policy may be adjusted and no policy shall be deemed to be called in question mearly on the ground that insured was stated incorrect age in the proposal unless the insurer shows that mis-statement was made by the policy holder fraudulently and insured having knowledge at the time of making it, otherwise the insurer not entitled to call the policy in question after expiry of two years from the date of its commencement, in the present case the insured person not made any misstatement with regard to her age in the proposal form. Though we consider the Exs.B4 and B5 and felt the deceased life insured made mis-statement in proposal form with regard to her age, it was not made fraudulently or deliberately by deceased life insured. So, the above said judgments and the other judgments which were coated by the counsel for opposite party No.1 are not applicable to the present facts of the case. In these circumstances and on the above said discussions in length there is nothing to say the deceased life insured made mis-statement of material fact that is her age in proposal form fraudulently or deliberately. Point No.2 is answered accordingly.

Point No.3

22.     In M/s. Modern Insulators Limited Vs. Oriental Insurance Company Limited (2000) 2 SCC 734 it was held that :

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-discloser of the facts the parties know” and commented that obligation of good faith applies to both parties equally.

The contract of insurance is purely based on the sound principles of equity and utmost good faith and both parties have an obligation to act upon good faith equally.

23.     In the present case if the opposite party No.1 got any doubt with regard to the age of deceased life insured during her life time they have to call for proof of her age and they have to adjust the terms of policy. But, they did not take such steps for a period of four years. After death of deceased life insured only they raised the contentions of mis-statement of material fact is not sustainable one, and the opposite party failed to act in good faith. No where opposite party No.1 contended that as per the new fact came into his knowledge he is ready and willing to adjust the terms of policy.

 24.    It is a settled principle that he who seeks equity, must do equity. When the opposite party raised its index finger towards complainant by stating that she did not approach the forum with clean hands. Then it must come forward this forum with clean hands. But, in the present case raised an objection with regard to the age of the deceased life insured after her death is nothing but an admit to evade their liability under the policy No.000726091 stands in the name of deceased life insured. So, repudiation of claim of the claimant/complainant by opposite party No.1 is not right one. Point No.3 is answered accordingly.

Point no.4

25.     After the death of the deceased when the complainant approached opposite parties by claiming the insured amount, and the opposite parties failed to settle the claim, clearly made out a deficiency of service on the part of the opposite parties.  Point No.4 is answered accordingly.

Point No.5

26.     As points 1 to 3 are decided in favour of complainant, the complainant is entitled for the reliefs sought by her. Point No.5 is answered accordingly.

Point No.6

27.     The complainant is entitled for the policy amount of Rs.4,00,000/- from the opposite parties and she further entitled for an amount of Rs. 2,000/- towards compensation for her sufferance with mental agony and she further awarded an amount of Rs. 1,000/- towards costs of the complaint.

In the result the complaint is allowed and the opposite parties 1 to 3 are directed (jointly and severally) to pay an amount of Rs. 4,00,000/- (Rupees Four Lakhs Only) to the complainant towards policy amount, Rs. 2,000/- (Rupees Two Thousand Only) towards compensation for mental agony and Rs.1,000/- (Rupees one Thousand Only) towards costs of the complaint to the complainant within one month from the date of due dispatch of free copy of this order, failing which the policy amount shall carry interest @ 9% p.a. from the date of complaint till realization.

Dictated  to the Shorthand writer and corrected and pronounced by us in the open forum on this the 20^th day of November, 2014.  

      (S.Sreeram)                                                                                                    (SMT. R.Seetaramamma)  

         MEMBER                                                                                                                     PRESIDENT (FAC)

APPENDIX OF EVIDENCE

WITNESSES EXAMINED.

FOR COMPLAINANT :  Evidence Affidavit                        

FOR OPPOSITE PARTies:  Evidence Affidavit of Opposite party No.1

DOCUMENTS MARKED

FOR COMPLAINANT:

FOR OPPOSITE PARTy No.1 :      

PRESIDENT (FAC)