Delhi

North East

CC/352/2015

Rajbiri - Complainant(s)

Versus

The LIC of India - Opp.Party(s)

29 May 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No. 352/15

 

In the matter of:

 

	Rajbiri W/o Late Rishi Pal R/o B-274, Street No. 2/4, West Nathu Colony, Shahdara, Delhi-110093.	Complainant
	Versus
1.         2.	The LIC of India Through its Branch Manager Unit No. 11M, Zulfae Bangal, GT Road, Dilshad Garden, Pin No. 110092.   VIjender Singh (Agent) LIC Agent House No. E-404, Gali No.16, Ashok Nagar, Shahdara, Delhi-110093.	Opposite Parties

 

DATE OF INSTITUTION:         JUDGMENT RESERVED ON:               DATE OF DECISION      :

21.09.2015 18.05.2018 29.05.2018

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

Ravindra Shankar Nagar, Member

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. The complainant is the widow of Rishi Pal (the deceased life assured with OP1) who was working as gardener with the office of Dy. Conservator of Forest, North Forest Division, GNCT, Delhi. The case of the complainant is that her late husband was approached by OP2, agent of OP1 for taking LIC Jeevan Saral Policy of OP1. The deceased husband of the complainant took the said LIC Jeevan Saral Policy bearing No. 126450754 for the period 28.05.2012 to 28.05.2032 for a total sum assured of Rs. 2,00,000/- and was regularly paying quarterly premium of Rs. 2450/- to OP1 in May 2012, August 2012, November 2012, February 2013 and May 2013 and the complainant was made the nominee of the said policy cover. However the complainant’s husband expired on 24.08.2013 due to jaundice fever at GTB hospital at the age of 51 years and after his death the complainant lodged the claim for Rs. 2,00,000/- on 09.12.2013 with the OP1 informing the OP that her husband died due to jaundice and cardio-respiratory arrest and submitted the requisite documents viz policy bond, death certificate, NEFT Form to the OP on 09.01.2014 however the OP1, vide repudiation letter dated 12.05.2014, wrongfully and illegally rejected the genuine claim of the complainant on grounds of her deceased husband having withheld material information regarding his health at the  time of effecting the assurance with OP1. The complainant has therefore alleged deficiency of service on the part of the OPs on grounds that at the time of giving the policy, no medical test/medical history was conducted / inquired by the OP1 with respect to the complainant and the complainant’s husband was made to sign on proposal form at 2-3 places by OP2 /agent and the remaining form was filled by the agent himself without disclosing T&C of the policy against IRDA guidelines. The complainant has further alleged deficiency of service against the OPs on grounds that her deceased husband was of sound health and he was on leave from office in 2009 due to a serious road accident and not because of any chronic disease. The complainant has further averred that the OP2 had filled his own address instead of the complainant’s on the proposal form of OP1 who was an illiterate person and had signed the proposal form on the suggestion of OP2. The complainant alleged wrongful repudiation of claim on grounds of her deceased husband allegedly having alcoholic liver disease with cirrhosis of liver and denied that he was a chronic alcoholic as made out by the OP1. Therefore the complainant has filed the present complaint before this Forum praying for directions to the OPs to pay the amount of Rs. 2,00,000/- as the sum assured under the policy taken by the deceased husband of the complainant of which the complainant is nominee alongwith 18% interest from the date of claim till realization and has also prayed for directions to OPs to pay 1,00,000/- as compensation for mental agony and harassment caused to the complainant and Rs. 20,000/- towards cost of litigation.

The complainant has attached copy of the LIC policy alongwith premium receipts and renewal premium receipts, death certificate of her deceased husband dated 24.08.2013 issued by MCD, Delhi and GTB hospital, Delhi, certificate of burial and cremation as required by OP1, statement of claimant as required by OP1, letter dated 24.03.2014 by manager claims OP1 to office of the employer of deceased husband of the complainant for submission of report of medical leave / reason for illness alongwith attested copy of medical certificate of deceased husband of complainant for dates 29.06.2009 to 08.07.2009, 30.12.2011 to 04.01.2012, 05.01.2012 to 24.01.2012, repudiation letter dated 12.05.2014 by OP1 to the complainant and legal notice dated 25.08.2014 by the complainant’s counsel to the OPs.

2. Notice was issued to the OPs and OP1 entered appearance on 23.10.2015 and filed its written statement on 30.11.2015. OP2 did not appear despite service effected on 06.10.2015 and was therefore proceeded against ex-parte vide order dated 30.11.2015. The OP1 took the preliminary objection that there is no deficiency in service and liability of death claim was repudiated on 12.05.2014 before expiry of two years from the date of issuance of policy on grounds of suppression of material facts about past illness suffered by the (DLA) Deceased Life Assured (husband of the complainant) in pursuance with provision of section 45 of insurance act 1938. The OP1 further submitted that the DLA died at GTB hospital Delhi on 24.08.2013 due to alcoholic Liver Disease, Cirrhosis, Portal HTN, Ascitis and with Upper GI Bleed and was Chronic Alcoholic for 30-40 years as per claim form no. 3784 and 3816 completed by GTB hospital which disease the DLA was suffering from before submission of proposal for assurance with OP1 but did not disclosed the same in his proposal / personal statement signed on 11.06.2012 as also the DLA had not disclosed about the long duration medical leave availed by him from 29.06.2009 to 18.09.2009 and again from 05.01.2012 to 11.04.2012 from work. Therefore the competent authority of OP decided to repudiate the claim liability vide letter dated 12.05.2014 to the complainant. The OP has attached the repudiation letter dated 12.05.2014, note for D.O.DRC with respect to the DLA case in which it was observed that as per I.O., DLA died in GTB hospital on 24.08.2013 i.e. one year two months thirteen days after taking policy of 2 Lacs sum assured from OP1 due to alcoholic lever disease. The OP has also filed form for medical opinion from DMR / ZMR in respect of claim case of DLA, claim inquiry report filled by the investigating official, leave details records availed by DLA to validate its repudiation of claim of the complainant.
3. Rejoinder and evidence by way of affidavit was filed by the complainant reiterating her grievance in the complaint against the OP and rebutted that the OP has not filed or provided full medical report with respect to the DLA dated 10.06.2012 which it be directed to furnish to the complainant.
4. Evidence by way of affidavit was filed by the OP exhibiting the proposal form for insurance taken by DLA vide policy no. 126450754 for a sum assured of Rs. 2 Lacs coverage commencing from 28.05.2012 to 28.05.2032 with premium of Rs. 2450/- payable quarterly, on page 3, clause 11 sub clause (h)(i) under the head do you use or have you used alcoholic drinks, the DLA has written “NO”. The OP has further exhibited the policy cover note, repudiation letter, Medical attendants Certificate by Deptt. Of Medicine GTB Hospital dated 10.03.2014 in which as per clause 4, the primary cause of death of DLA has been assigned as “alcoholic liver disease with cirrhosis with portal HTN with Ascitis with Upper GI Bleed” and as per clause 11, the GTB hospital has written that the DLA was chronic alcoholic for 30-40 years with respect to the deceased’s aliments, habits, mode of living etc. The OP has further exhibited the certificate of hospital treatment as tendered by GTB hospital dated 10.03.2014 with the history of abdominal distension etc at the time of admission of DLA with the said hospital. The OP has lastly the leave certificate records/ medical certificate with respect to DLA vide covering letter dated 04.04.2014 from department of forests (employer of DLA) to manager claims OP1 pertaining to medical certificate dated 19.09.2009, 25.03.2012, 03.04.2012 as leaves availed / medical certificate of DLA on grounds of lumber spondylitis, hip dislocation etc.
5. Written arguments were filed by both the parties delineating their respective complaint / defence.

OP filed copy of Section 45 of Insurance Act 1938 as a special provision of law which entitled / empowers the insurance company to call into question any life insurance policy before the expire of two years from the date of its commencement / effect on grounds of it being issued on the basis of documents which were inaccurate of false or any statement made in the proposal for insurance unless prove and otherwise by the insured in support of its repudiation of claim of the complainant with respect to the DLA within two years of the policy on the basis of “fraudulent misrepresentation” made by the policy holder (deceased husband of the complainant).

6. We have heard the rival contentions addressed by both the parties and have carefully scrutinized the documentary evidence and medical records of the DLA i.e. the deceased husband of the complainant insured with the OP.

It is not in dispute that vide policy no. 126450754 w.e.f. 28.05.2012 till 28.05.2032, the deceased husband of the complainant was covered for sum assured of Rs. 2 Lacs with OP on regular quarterly payment of payment to the tune of Rs. 2450/- each paid by the DLA in May 2012, August 2012, November 2012, February 2013 and May 2013. However, on the death of the DLA, when his wife, the complainant herein who was the nominee in the said policy filed claim before the OP in December 2012- January 2013 after submission of requisite documents, the OP, vide repudiation letter dated 12.05.2013 rejected the claim of the complainant on account of her deceased husband having “withheld material information regarding his health at the time of effecting the assurance” with OP in the proposal form dated 10.06.2012 and personal statement signed by the deceased on 11.06.2012 at the time of taking the policy specifically related to alcoholism. The hospital records of GTB Hospital where the DLA was admitted and treated before his death clearly show that the DLA died at GTB hospital Delhi on 24.08.2013 due to alcoholic Liver Disease, Cirrhosis, Portal HTN, Ascitis and with Upper GI Bleed and was Chronic Alcoholic for 30-40 years as per claim form no. 3784 and 3816 completed by GTB hospital which disease the DLA was suffering from before submission of proposal for assurance with OP1 but did not disclosed the same in his proposal / personal statement signed on 11.06.2012, which proposal form for insurance was taken by DLA vide policy no. 126450754 for a sum assured of Rs. 2 Lacs coverage commencing from 28.05.2012 to 28.05.2032 with premium of Rs. 2450/- payable quarterly, on page 3, clause 11 sub clause (h)(i) under the head do you use or have you used alcoholic drinks, the DLA has written “NO”. The OP has further exhibited the policy cover note, repudiation letter, Medical attendants Certificate by Deptt. Of Medicine GTB Hospital dated 10.03.2014 in which as per clause 4, the primary cause of death of DLA has been assigned as “alcoholic liver disease with cirrhosis with portal HTN with Ascitis with Upper GI Bleed” and as per clause 11, the GTB hospital has written that the DLA was chronic alcoholic for 30-40 years with respect to the deceased’s aliments, habits, mode of living etc. The OP has further exhibited the certificate of hospital treatment as tendered by GTB hospital dated 10.03.2014 with the history of abdominal distension etc at the time of admission of DLA with the said hospital.

The Hon’ble National Commission in a similar case of marketing Manager LIC Vs Vijaya 1995 1 CPJ 122 (NC) had upheld the repudiation by the insurer (LIC) by Hon’ble SCDRC on the grounds that the insured had suppressed the ailments from which he had been suffering and case summary and discharge record of the hospital showed that insured was suffering from cirrhosis of liver and was a chronic alcoholic for about ten years and had three attacks of jaundice and had dismissed the claim filed by his widow. The Hon’ble National Commission in the case of Mrs. Dilraj Singh Vs LIC IV (2015) CPJ 665 (NC) had held that the suppression of pre-existing disease of Wegner’s granulomatosis since 2009 and showing himself to be a good health for obtaining policy was a fraudulent act as such an act was held to be fraudulent also by the Hon’ble Apex Court in LIC vs Smt Asha Goyal I (2001) SLT 89 =AIR (2001) which was also considered by the Hon’ble Apex Court in P C Chacko and Ors. Vs Chairman LIC III (2008) CPJ 78 (SC) = IX (2007) SLT 533 in which the Hon’ble Apex Court observed that deliberate wrong answer given by insured having a great bearing on contract of insurance may lead to policy being vitiated in law and policy can be repudiated if obtained with a fraudulent act. The Hon’ble National Commission in the judgment of Vinita Sethi Vs ICICI Prudential Life Insurance Co. Ltd and Anr. III (2016) CPJ 254 (NC) had dismissed the complaint on grounds of false declaration by the insured and concealment of material information of chronic lever disease which the complainant was suffering from 2011 or prior and had not disclosed it in the proposal form while submitting the same with the agent of OP. The Hon’ble National Commission in Bajaj Alianz Life Insurance Co. and Anr. Vs Jaspal Kaur IV (2016) CPJ 352, held on the basis of the landmark judgment of the Hon’ble Supreme Court in Satwant Kaur Sandhu Vs New India Insurance Co. (2009) 8 SCC 316 in which the Hon’ble Supreme Court had emphasized that when a information on a specific aspect asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge, that since the deceased was suffering from chronic renal failure and died less than one month after the last policy was taken by him on 28.02.2008, and as per clause 14 of his proposal form, the deceased insured had answered as “no” to any kidney disease, it is evident that he gave false answers to the questions and committed fraud with the insurer by making willful misrepresentation regarding his health.

7. In light of the above judgments and facts of the above case we therefore find no merits in the present complaint as the DLA had concealed the factum of his history of chronic alcoholism from the OP at the time of taking the policy and we therefore uphold the repudiation of claim of the complainant by the OP and dismissed the complaint as false and vexatious under Section 26 of the CPA.              
8.  Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
9.   File be consigned to record room.
10.   Announced on 29.05.2018

 

(N.K. Sharma)     President

(Sonica Mehrotra) Member

(Ravindra Shankar Nagar) Member