Andhra Pradesh

Chittoor-II at triputi

CC/35/2013

A.Kusuma W/o. Late A.Premchand - Complainant(s)

Versus

The Life Insurance Corporation of India, Represented by its Branch Manager, - Opp.Party(s)

S.S.Naidu

02 Sep 2014

ORDER

Filing Date:12.09.2013

Order Date: 02.09.2014

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

TIRUPATI

 

PRESENT: Sri.M.Anand, President (FAC),

        Smt. T.Anitha, Member

 

TUESDAY THE SECOND DAY OF SEPTEMBER, TWO THOUSAND AND FOURTEEN

 

C.C.No.35/2013

 

Between

 

A.Kusuma,

W/o. late. A.Premkumar,

Hindu, aged about 60 years, Widow,

Residing at Near Sub Station,

Sainadh Nagar,

Ramayampet,

Chandragiri Mandal,

Chittoor District.                                                                              … Complainant

 

And

 

1.         The Life Insurance Corporation of India,

            Rep. by its Branch Manager,

            Narasimha Theertham Road,

            Tirupati.

 

2.         The Life Insurance Corporation of India,

            Rep. by its Divisional Manager,

            “Jeevan Prakash”,

            Dargamitta,

            Nellore – 524 003.

 

3.         The Life Insurance Corporation of India,

            Rep. by its Zonal Manager,

            South Central Zonal Office at

            “Jeevan Bhagya”,

            Saifabad,

            Hyderabad – 500 063.                                                         …  Opposite parties.

 

 

            This complaint coming on before us for final hearing on 06.08.14 and upon perusing the complaint, written version and other relevant material papers on record and on hearing Sri.S.Sankara Naidu, counsel for the complainant, and Sri.A.Sudarsana Babu, counsel for the opposite parties, and  having stood over till this day for consideration, this Forum makes the following:-

 

ORDER

DELIVERED BY T.ANITHA, MEMBER

ON BEHALF OF THE BENCH

 

            This complaint is filed under Section-12 of C.P.Act 1986, complaining deficiency of service on the part of the opposite party for repudiating the claim.

2.  The case of the complainant is that A.Premkumar, who is the husband of the complainant taken a policy No.843453638 on 28.08.2006 for an assured sum of Rs.1,50,000/- and paid the premium till his death on 05.06.2011. After the death of her husband, the complainant has made a claim to the opposite party. The 2^nd opposite party on 30.06.2011 sent a letter repudiating the claim on the ground of suppression of previous ill-health at the time of taking policy, which is unjustified and repudiation amounts to deficiency of service and she further contended that the said policy was issued after thorough examination by the doctor of the 1^st opposite party and he certified the same. On 27.07.2011, she issued a legal notice to the opposite parties to settle the claim. The 3^rd opposite party served a letter to submit the records from the 2^nd opposite party to settle the claim and also the 1^st opposite party served a letter dt:04.08.2012 to the complainant stating that “We are committed to settle the above claim in time and also stated that  the payment under the policy will be credited directly to bank account of the complainant”. Again the 2^nd opposite party issued a letter dt:11.10.2012 stating that the claim was finally rejected because of suppression of material facts by the deceased at the time of taking policy. Hence, the act of opposite parties denying the terms of the contract is nothing but deficiency of service. Hence, the complainant filed the complaint and prayed the Forum to direct the opposite party to pay Rs.1,50,000/- being the assured amount with interest at 24% p.a. and also Rs.50,000/- towards damages for the deficiency of service and Rs.30,000/- towards compensation for mental agony and torture suffered by the complainant and also costs.

3.  The opposite parties 1 and 2 entered in appearance. Opposite party No.1 filed the written version, which was adopted by opposite party No.2. Opposite party No.3 remained absent. In the written version of opposite parties it is contended that the policy was issued on the basis of self-declaration by the deceased Premkumar. But the investigation disclosed that the allegation that he was keeping good health at the time of taking policy and not taken any treatment is false and he was suffered with chronic liver problem since 2001 and hence the claim was repudiated under Section-45 of the Insurance Act and the same was duly communicated to the complainant and there is no deficiency of service and thus the complaint may be dismissed.         

4.  Both the complainant and opposite party filed their affidavit on evidence. On behalf of the complainant Exs.A1 to A9 were marked. On behalf of opposite parties Exs.B1 to B5 were marked. Both the complainant and opposite parties filed their written arguments and heard the oral arguments. 

5.  The points for consideration are:-

(i).  Whether the repudiation by the opposite party is justified or whether there

        is deficiency of service on the part of the opposite parties?

(ii).  Whether the complainant is entitled to the reliefs as prayed for?

(iii). To what extent?

6.  Point No. (i):-  There is no dispute with regard to issuance of policy in favour of the deceased and there is any dispute with regard to Section-45 of the Insurance Act has to be seen to find out whether the repudiation was justified or not. In the present case, the policy was issued on the basis of self-declaration of the deceased Prem Kumar in the proposal form. It is said to have been stated that the general condition of his health was good and also answered negatively to the question “Whether the deceased was subjected to any treatment”. It is the Insurance Company to prove that the declaration was fraudulently made and the policy holder knows at the time of giving declaration that the statement was false or suppressed the facts, which are the material to be disclosed.

7.  The counsel for the opposite party submitted that the deceased Premkumar suffered with Hepatitis-B and took treatment as inpatient in SVIMS hospital for the period from 19.10.2001 to 22.10.2001 and again admitted on 14.08.2008 and discharged on 27.08.2008 and again admitted on 28.06.2010 and discharged on 30.06.2010 and again admitted on 05.02.2011 and discharged on 08.02.2011 and finally he got admitted on 06.04.2011 and discharged on 21.04.2011 for ailment of chronic liver problem and died on 05.06.2011 after 44 days of his discharge from the hospital. But these facts are not disclosed to the opposite parties by the insured in the declaration form, which was submitted by him at the time of making policy and in the declaration form signed by him and contended that the insured has knowledge that he was suffering from the said decease and underwent medical treatment prior to making of the policy, but he was guilty of suppressing material facts at the time of taking policy and hence the claim of the complainant was repudiated on the ground of non-disclosure of material facts. Hence, there is no deficiency of service and contended that the claim is liable to be dismissed.

8.  Since the scope of the complaint is very narrow, going through the evidence and documents are not much relevant. The opposite party relied upon Exs.B1 to B5. Ex.B1 is policy copy dt:21.02.2007, Ex.B2 is proposal form dt:04.02.2007, Ex.B3 is Medical examiners confidential report dt:24.01.2011, Ex.B4 is personal statement dt:24.01.2011 and Ex.B5 is letter of repudiation dt:30.06.2012. These documents are not at all relevant to support the contention of the opposite party and it is stated that the deceased undergone treatment for liver problem since 2001 to 2011. But in order to prove their contention, the opposite party has not marked any related document on their behalf. The above said documents are not at all related to prove the above said contentions of the opposite party. The case of the opposite party is that the contract of insurance is in pure and good faith and this policy also issued on the strength of declaration by the deceased. As the previous ill-health was suppressed, the claim was rightly repudiated. But the burden lies on the opposite party to prove that the insured suppressed the previous ill-health at the time of making self-declaration and he took treatment for Hepatitis-B. In the absence of any proof and as the opposite party could not mark any records to prove their contention, we cannot draw any inference that the deceased suffered with illness prior to making of the policy on 28.08.2006. Regarding this aspect, The Hon’ble National Commission observed in Tarlok Chand Khanna Vs. United India Insurance Company Ltd. – I (2012) CPJ 84 (NC)

“The onus to prove that the petitioner was suffering from a pre-existing disease as per settled law is on the respondent. We note that the respondent has not produced any credible documentary evidence / expert medical opinion in support of its case. The medical opinion dated 16.03.2003 of Dr.Neel Kanth Sharma cited in support is of little evidentiary value because he is not a medical expert being an M.B.B.S. doctor and on the panel of physicians of the Respondent / Insurance Company. His letter is also not backed by any affidavit nor was he ever cross-examined. Further, it is not disputed that the insured had been taking mediclaim policy right from 1996 and nowhere has it been recorded that she had any medical condition including the problem of the knees, by the Respondent’s doctor who examined her. Thus, there is no record produced by the Respondent to indicate that any such disease existed and that it was, therefore, pre-existing disease was on the Respondent which as stated above, it has failed to do.”

 

and in Life Insurance Corporation of India Vs. Priya Sharma & Ors. – IV (2012) CPJ 646 (NC). In these two decisions, The Hon’ble National Commission observed that mere alleging that the insured had pre-existing disease is not sufficient but it must be show that the insured had prior knowledge of pre-existing illness and suppressing the same. In the above said decisions, it was also observed that the burden lies on the insurance company to establish the case. In the present case also as the opposite party failed to prove that the deceased was guilty of suppressing the pre-existing illness at the time of self-declaration and also fail to mark any documents related to that aspect on their behalf, the repudiation is not justified. Except mere allegation that the deceased suppressed the facts of ill-health, the opposite party failed to prove their contention. As the opposite party failed to prove that the repudiation was justified, it must be necessarily held that there is deficiency of service.  Hence, we are of the opinion that there is deficiency of service on the part of the opposite parties. Accordingly this point is answered against the opposite parties.

9. Point No.(ii):-  The opposite parties are liable to pay Rs.1,50,000/- being the assured amount and the complainant is also entitled for interest at 9% on the assured amount from the date of repudiation, till the date of payment. The complainant is also granted Rs.4,000/- towards mental agony suffered by him and Rs.1,000/- towards costs.

10.Point No.(iii):-  In the result, the complaint is allowed directing the opposite parties to pay Rs.1,50,000/- (Rupees one lakh fifty thousand only) towards assured amount with interest at 9% from the date of repudiation, till the date of payment to the complainant.  The opposite party further directed to pay Rs.4,000/- (Rupees four thousand only) towards compensation and Rs.1,000/- (Rupees one thousand only) towards costs to the complainant.  

Typed to dictation by the stenographer, corrected by me and pronounced in the Open Forum this the 2^nd day of September, 2014.

      Sd/-                                                                                                                       Sd/-                        

Lady Member                                                                                               President (FAC)

 

APPENDIX OF EVIDENCE

WITNESS EXAMINED ON BOTH SIDES

 

PW-1: Smt. A.Kusuma (Chief Affidavit filed).

RW-1: M.Jayaprasada Rao (Chief Affidavit filed).

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/S

 

Exhibits	Date	Description of Documents
Ex.A1		Letter addressed by the LIC first respondent to the deceased A.Prem Kumar
2		Xerox copy of death certificate of A.Prem Kumar
3		Xerox copy of family members certificate.
4	30.06.2012	Letter issued by the 2nd Opposite party.
5	27.07.2012	Office copy of Legal notice.
6	04.08.2012	Reply letter issued by the 2nd Opposite party.
7	30.07.2012	Reply letter issued by the 3rd Opposite Party.
8	11.10.2012	Reply letter issued by the 2nd Opposite Party.
9		Postal acknowledgements of the Opposite Parties.

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/S

 

Exhibits	Date	Description of Documents
Ex.B1	21.02.2007	Policy copy of Vide policy Number: 843453638
2	04.02.2007	Filed in proposal for insurance made by the deceased assured A.Prem Kumar.
3	21.01.2011	Medical examiners confidential report of the policy holder
4	21.01.2011	Personal Statement regarding Health made by the policy holder.
5	30.06.2012	Letter of repudiation

                                               

 

                                                                                                                                                                                                           Sd/-        

President (FAC)

// TRUE COPY //

// BY ORDER //

 

 

Head Clerk/Sheristadar,

                                                                                   Dist. Consumer Forum-II, Tirupati.   

 

Copies to:-     1. The Complainant.

                        2. The opposite parties.