Date of filing:29-10-2011
Date of Disposal: 28-04-2014
DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: ANANTHAPURAMU
PRESENT:- Sri S.Niranjan Babu, B.A.,B.L., President (FAC).
Smt.M.Sreelatha, B.A., B.L., Lady Member
Monday, the 28th day of April, 2014
C.C.NO.167/2011
Between:
L.Lakshmi
W/o Late L.Vijaya Kumar Reddy
D.No.11-1-412,
Aravinanagar,
Ananthapuramu. …. Complainant
Vs.
The General Manager,
Shriram Life Insurance Co. Ltd.,
3-6-478, 3rd floor, Anand Estate
Liberty Road, Himayat Nagar
Hyderabad. …. Opposite Party
This case coming on this day for final hearing before us in the presence of Sri P.Guru Prasad, Advocate for the complainant and Sri N.R.K.Mohan, Advocate for the opposite party and after perusing the material papers on record and after hearing the arguments of the both side, the Forum delivered the following:
O R D E R
Sri S.Niranjan Babu, President (FAC):- This complaint has been filed by the complainant under section 12 of the Consumer Protection Act, 1986 against the opposite party claiming a sum of Rs.7,50,000/- towards the sum assured with interest @ 12% p.a. from the date of death of the life assured and Rs.20,000/- towards mental agony and other expenses.
2. The brief facts of the complaint are that :- The complainant is the wife and nominee of the deceased L.Vijaya Kumar Reddy, who has taken life insurance policy during his life time by paying a premium of Rs.1,00,000/- to the opposite party under receipt No.107320070300009 dt.10-03-2007. Subsequently the policy was issued bearing No.LN080700093653 for a sum of Rs.7,50,000/- commencing from 26-05-2007 and the period of policy is for 15 years. The life assured /deceased has renewed the policy by paying 2nd premium of Rs.1,00,000/- by way of demand draft dt.24-05-2008 vide receipt No.0190621 dt.27-05-2008.
3. Subsequently the life assured died on 02-05-2009 during the subsistence of the policy. Immediately after the death of the life assured, the complainant, who is the nominee under the policy has made a claim to the opposite party for the payment of the sum assured under the policy by submitting the relevant documents for settling the claim. But the opposite party repudiated the claim with untenable grounds stating that the life assured suppressed the material fact, hence the repudiation of the claim vide repudiation letter dt.30-10-2009.
4. The complainant further submits that there is no justification in repudiation of the claim by the opposite party having received the premium and after issuing the policy it is the liability of the opposite party to settle the claim after the death of the life assured. Further the complainant submits that the opposite party has repudiated the claim and caused deficiency of service to the complainant and made her to suffer mentally and financially. Hence filed this complaint against the opposite parties claiming a sum of Rs.7,50,000/- with interest @ 12% p.a. from the date of death of the life assured till the date of realization and also Rs.20,000/- towards mental agony and other expenses.
5. Counter filed by the opposite party stating that the complaint is not maintainable as the life assured has suppressed the material facts at the time of taking policy. The opposite party submits that the policy of life insurance is a contract of utmost good faith. Upon receiving the proposal form from the proposer, proposal form is scrutinized by the opposite parties by reviewing/revaluating the relevant factors such as age, health ailment’s of the prospective life assured, personal habits of the prospective life assured like smoking, alcohol, tranquilizers, stimulants, sedatives, narcotics, barbiturates, marijuana, cocaine etc., After such evaluation the quote/insurance premium is communicated to the prospective life assured, once the quote and the terms of the policy are accepted by the prospective life assured and upon payment of the insurance premium and completion of the necessary documentation, the life insurance policy is issued by the opposite party. It is pertinent to note that the opposite party company will decline to issue life insurance policy if not satisfied with the facts like health ailments like accelerated Hypertension, Diabetes, heart related diseases, acute and chronic renal failure etc., are revealed at the time of proposal. The personal information like health and habits disclosed by the prospective life assured is very vital in a contract of life insurance as it is on the basis of those information that the life insurance company decides whether to take the risk or not and if taking the risk under certain condition.
6. The opposite party has repudiated the claim of the complainant as the deceased having withheld material information that he was suffering from with diabetes since 9 years and he was undergoing treatment for the same before signing the proposal for the policy subject matter. The opposite party is setting out the correct factual matrix leading to the filing of the present petition:
L.Vijay Kumar Reddy, who is the husband of the complainant (hereinafter called as Life assured) submitted a proposal for insurance dated 28-02-2007 (for policy No.LN080700093653) to the opposite party company proposing for Shri Plus Plan an insurance and investment plan offered by the opposite party company. In the said proposal forms the life assured had answered the following question under llpersonal medical details under clause 25 as follows:
- Have you ever been hospitalized for general check up or observation, treatment or
Surgery?
- The life assured has answered “ No “
- Did you have any ailment/injury requiring treatment for more than one week?
- The life assured has answered “No “
- Have you ever suffered or suffering from any of the following?
- Diabetes, high/low blood pressure, stroke, Epilepsy, cancer, Leprosy, Tuberculosis.
- The life assured has answered “ No ‘
- Have you ever suffered any ailment relating to the heart, digestive system, stomach, lungs, kidney, brain or nervous sytem?
- The life assured has answered “ No “
Basing on the answers, statements and declarations made in the proposal form duly executed by the life assured, the opposite party has issued the above policy to the life assured.
7. Subsequently the complainant made death claim intimating on 26-05-2009 stating that her husband died on 02-05-2009 and the cause of death was mentioned in the intimation letter as cancer.
8. The opposite party further submits that the death of the life assured occurred within short period of taking policy, an internal investigation was carried as per the routine business practice of the opposite party and in the said investigation it was revealed that the life assured was suffering from diabetes since 9 years and was taking treatment for the same prior to the date of proposals. Further the opposite party submits that medical reports given by the Agadi Hospital, Bangalore also reveals that the life assured was suffering with diabetes from the past 9 years and also suffering with heart related disease.
9. Further the opposite party submits that the life assured was suffering with diabetes, which was deliberately suppressed by the deceased at the time of taking policy. Had the fact that the deceased revealed to the opposite party that the life assured was suffering from diabetes since 9 years prior to the date of proposal, the opposite party would have declined to issue policy to the life assured. Further the opposite party submits that at the time of issuance of life insurance contract, what is contemplated is the normal life span of the life assured and any fact which tends to lower the life span of the life assured is material information, which would definitely influence the decision of the insurer in the issuance of the policy. But in the instant case the life assured had fraudulently suppressed his life threatening illness which he was suffering from prior to proposals. The opposite party was constrained to repudiate the death claim submitted by the complainant.
10. Further the opposite party submits that the documents of Agadi Hospital, Bangalore reveals that the life assured has undergone for the treatment of BMV (Baloon Mitral Vulvoplasty), this is an heart related ailment and surgery. Further the opposite party submits that the life assured, who was suffering with Hypertension and habituated with smoking was well aware of his life threatening illness but deliberately made false statement and withheld material information in his proposal form at the time of taking policy thereby misleading the opposite parties to issue the policy.
11. The life assured made following declaration in the proposal form”
“ I hereby declare and agree that the statements and this declaration made under this proposal will be the basis of the contract of assurance between me and Shriram Life Insurance Co. Ltd., and that if any statement is untrue or inaccurate, or if any matter that might influence the terms of this proposal is not disclosed, the contract shall be absolutely null and void and all premiums so far paid in respect of this contract shall stand forfeited to the company. “ Thus it was specifically agreed by the deceased life assured himself under the above said declaration that if the policy was obtained by him by providing untrue or inaccurate statements or if there has been non-disclosure of any material fact then the policy shall be absolutely null and void.
12. Further the opposite party submits that in the above circumstances the opposite party has rightly repudiated the claim mentioning the reasons for repudiation. Hence there is no deficiency of service on the part of the opposite party and not liable to pay the sum assured under the policy or any damages towards mental agony or other expenses.
13. Basing on the above pleadings, the points that arise for consideration are:-
1. Whether there is deficiency of service on the part of the opposite party?
2. To what relief?
14. In order to prove the case of the complainant, the complainant has filed evidence on affidavit on his behalf and marked Ex.A1 to A5 documents. On behalf of the opposite party, evidence on affidavit of opposite party has been filed and marked Ex.B1 to B9 documents and Dr.Naveen Kumar, Medical Officer, Agadi Hospital, Bangalore has been examined as RW1.
15. POINT NO.1:- The counsel for the complainant submitted that the complainant’s husband during his life time has taken insurance policy from the opposite party by paying a sum of Rs.1,00,000/- and the policy was issued bearing No. LN080700093653 for a sum assured Rs.7,50,000/- and the policy commenced from 26-05-2007. Subsequently the life assured/deceased has renewed the policy by paying the 2nd premium of Rs.1,00,000/- by way of demand draft dt.24-05-2008.
16. The counsel for the complainant submitted that the life assured died on 02-05-2009 during the subsistence of the policy. The counsel submitted that after the death of the life assured the complainant, who is the wife and nominee of the policyholder made a claim to the opposite party for the payment of the sum assured under the policy by submitting relevant documents for settlement of the claim. The counsel for the complainant submits that it is a contractual obligation of the opposite party to pay the sum assured to the nominee of the life assured in case of death. But the opposite party has repudiated the claim with untenable ground that the life assured has suppressed the material facts vide their repudiation letter dt.30-10-2009. The counsel for the complainant further submitted that there is no justification in repudiating the claim of the complainant having received the premiums. The counsel for the complainant further argued that the opposite party has repudiated the claim of the complainant without any justifiable reason saying that the complainant has deliberately withheld information with regard to his health condition. The counsel for the complainant argued that it is the burden of the opposite party to prove that the complainant has deliberately withheld the information with regard to his health condition by suppressing the material fact. The counsel for the complainant further submitted that though the opposite party has relied upon exhibits B1 to B9 to substantiate their version the witness of the opposite party RW1 has deposed in the cross-examination that he has not clinically examined the patient. Further the counsel argued that RW1 has deposed that he does not know who supplied the data that the deceased L.Vijaya Kumar Reddy was suffering with diabetes mellitus since 9 years and the last check-up was done about 2 years ago. Further the counsel argued that RW1 evidence clearly shows tht the deceased was within normal blood sugar levels.
17. Further the counsel for the complainant argued that the complainant’s husband was hale and healthy at the time of taking policy and subsequently the deceased also visited United States. The counsel for the complainant further argued that all the above facts show that the complainant has not concealed any information with regard to his health and the opposite party only to evade the payment of sum assured under the policy has taken the plea that the complainant’s husband has fraudulently not disclosed his health condition and taken the policy. Further the counsel for the complainant argued that as it is the liability of the opposite party to pay the sum assured under the policy with interest @ 12% p.a. from the date of death till the date of realization and also award Rs.20,000/- towards mental agony.
18. The counsel for the opposite party submitted that there is no dispute with regard to taking of the policy by the complainant’s husband. The counsel for the opposite party submitted that the complainant’s husband while taking policy in the proposal form, the complainant’s husband intentionally not disclosed his health condition and obtained the policy by suppressing the fact that he was diabetic. The counsel for the opposite party argued that the claim of the complainant was repudiated on the ground that the deceased life assured was a known case of diabetes since 9 years which came to light on their investigation and the medical records of Agadi Hospital, Bangalore also establish the same. The counsel for the opposite party argued that the opposite party has rightly repudiated the claim on the ground that the complainant had suppressed the material facts by not disclosing his health condition in the proposal form as follows:
- Have you ever been hospitalized for general check up or observation, treatment or
Surgery?
- The life assured has answered “ No “
- Did you have any ailment/injury requiring treatment for more than one week?
- The life assured has answered “No “
- Have you ever suffered or suffering from any of the following?
- Diabetes, high/low blood pressure, stroke, Epilepsy, cancer, Leprosy, Tuberculosis.
- The life assured has answered “ No ‘
- Have you ever suffered any ailment relating to the heart, digestive system, stomach, lungs, kidney, brain or nervous system?
- The life assured has answered “ No “
19. The counsel for the opposite party argued that as the life assured died within a period of 2 years from the date of commencement of the policy a thorough investigation was conducted and in the investigation it came to light that the complainant was diabetic since 9 years and he was under medication for the same and the medical reports of Agadi Hospital also reveals the same as per Ex.B1, B7 & B9. The counsel for the opposite party argued that the investigation report, which is marked as Ex.B6 clearly shows that the deceased was suffering with diabetes mellitus since 9 years and he died due to complications of cutaneous large T Cell Lymphoma (CTCL). It is a type of skin cancer for which chemo-therapy treatment was given to the deceased. The counsel for the opposite party argued that as seen from Ex.B9, which is an expert doctors opinion that substantiates the version of the opposite party that the deceased was also having rheumatic heart disease – Baloon Mitral Valvuloplasty (BMB). Further the counsel argued that Ex.B7, which a clinical laboratory report of Agadi Hospital, Bangalore dt.17-12-2008 in which it is mentioned that his blood sugar was 216 , which is above normal levels (60-160) and the Echocardiography Report dt.18-11-2008 also clearly shows that he was suffering with rheumatic heart disease . Further counsel for the opposite party argued that the clinical laboratory report dt.31-12-2008 wherein blood sugar of the deceased was 338 i.e. above normal levels (60-160).
20. Further the counsel for the opposite party argued that RW1 has clearly mentioned in his chief that the deceased was admitted with a complaint cutaneous large T Cell Lymphoma – diabetes mellitus as per records and he was treated for second cycle of chemo-therapy. RW1 has stated that L.Vijaya Kumar Reddy was suffering with diabetes since 9 years as per Ex.B6 record and 2 years prior to the admission he went for eye check-up. The counsel for the opposite party argued that as the complainant failed to disclose his health condition in the proposal form before taking the policy, the opposite party has rightly repudiated the claim of the complainant on the ground that the life assured has fraudulently taken the policy by deliberately suppressing the material facts. Hence the counsel argued that there is no deficiency of service on the part of the opposite party, hence the complaint is liable to be dismissed.
21. After hearing the arguments and perusing the documents submitted by both sides as far as the policy is concerned there is no dispute. As seen from the documents submitted by the opposite party, in the proposal form the complainant has disclosed as follows, which is marked as Ex.B2:
- Have you ever been hospitalized for general check up or observation, treatment or
Surgery?
- The life assured has answered “ No “
- Did you have any ailment/injury requiring treatment for more than one week?
- The life assured has answered “No “
- Have you ever suffered or suffering from any of the following?
- Diabetes, high/low blood pressure, stroke, Epilepsy, cancer, Leprosy, Tuberculosis.
- The life assured has answered “ No ‘
- Have you ever suffered any ailment relating to the heart, digestive system, stomach, lungs, kidney, brain or nervous sytem?
- The life assured has answered “ No “
22. On perusal of Ex.B9 which is a review of available medical records in which the doctor opined that Echocardiography Report shows that the deceased was treated for rheumatic heart disease and Baloon Mitral Valvuloplasty (BMV) and Ex.B7 document is the discharge summary, which clearly discloses that he was admitted for second cycle of chemo-therapy on 16-02-2009 and discharged on 21-02-2009. Annexed clinical laboratory report of Agadi Hospital dt.17-12-2008, 18-11-2008 it is cardiograph report and blood sugar report dt.31-12-2008 clearly establish that the deceased was having sugar above normal levels and he was under treatment for skin cancer and also had taken treatment for rheumatic heart disease. Further progress sheet of Agadi Hospital it discloses that the patient was diabetic since 9 years and he has medical checkup for his eyes 2 years prior to 19-02-2009. The above documents of Agadi Hospital show that the life assured deceased has taken treatment for cancer before his death and the reports of the Agadi Hospital establish that he was diabetic prior to taking the policy. Further the deceased had rheumatic heart disease and had taken treatment for the same, which was not disclosed by the deceased in his proposal before taking policy. This shows that the deceased has suppressed material facts with regard to his health condition deliberately and taken the policy by suppressing the facts. Hence the repudiation of the claim of the complainant by the opposite party cannot be considered as deficiency of service and the opposite party is not under obligation to pay sum assured under the policy. The citations filed by the counsel for the complainant does not apply to the facts of the present case. Hence, we are of the view that the citations cannot be taken into consideration.
23. Hence, we are of the view that there is no deficiency of service on the part of the opposite party.
24. POINT NO.2 – In the result the complaint is dismissed without costs.
Dictated to Steno, transcribed by him, corrected and pronounced by us in open Forum this the 28th day of April, 2014.
Sd/- Sd/-
LADY MEMBER, PRESIDENT (FAC),
DISTRICT CONSUMER FORUM, DISTRICT CONSUMER FORUM,
ANANTHAPURAMU ANANTHAPURAMU
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
ON BEHALF OF THE COMPLAINANT: ON BEHALF OF THE OPPOSITE PARTY
-NIL- RW1 – Dr.Naveen Kumar, Medical Officer,
Agadi Hospital, Bangalore on
On 06-06-2013.
EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT
Ex.A1 - Photo copy of Shri Plus Policy relating to deceased L.Vijaya Kumar Reddy issued
by the opposite party.
Ex.A2 - Photo copy of First Premium Receipt issued by the opposite party to the deceased
L.Vijaya Kumar Reddy.
Ex.A3 - Original receipt issued by the opposite party to the deceased L.Vijaya Kumar Reddy.
Ex.A4 – Photo copy of Certificate of Death relating to L.Vijaya Kumar Reddy issued by the
Registrar Births & Deaths, Anantapur Municipal Corporation.
ExA5 - Original repudiation letter dt.30-10-2009 issued by the opposite party to the
complainant
EXHIBITS MARKED ON BEHALF OF THE OPPOSITE EPARTY
Ex.B1 – Admission Record relating to deceased L.Vijaya Kumar Reddy issued by Agadi
Hospital, Bangalore.
Ex.B2 – Original Proposal for unit linked insurance relating to deceased L.Vijaya Kumar
Reddy dt.28-02-2007.
Ex.B3 - Original First Premium Receipt issued by the opposite party to the deceased
L.Vijaya Kumar Reddy.
Ex.B4 – Letter dt.21-05-2009 given by the complainant to the opposite party.
Ex.B5 - Photo copy of Certificate of Death relating to L.Vijaya Kumar Reddy issued by the
Registrar Births & Deaths, Anantapur Municipal Corporation.
Ex.B6 – Investigation Report on Death Claim dt.15-06-2009 submitted by G.Rama Murthy
Insurance Surveyor to the opposite party.
Ex.B7 – Agadi Clinical Laboratory record relating to deceased L.Vijaya Kumar Reddy issued by
the Agadi Hospital, Bangalore.
Ex.B8 - Repudiation letter dt.30-10-2009 issued by the opposite party to the complainant.
Ex.B9 – Report of Review of medical records issued by KK Nuclear Scans, Hyderabad.
Sd/- Sd/-
LADY MEMBER, PRESIDENT(FAC),
DISTRICT CONSUMER FORUM, DISTRICT CONSUMER FORUM,
ANANTHAPURAMU ANANTHAPURAMU
Typed JPNN
