The Life Insurance Corporation of India The Director, Karnataka State Fire and Emergency Services
...........Respondent(s)
BEFORE:
Complainant(s)/Appellant(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
ORDER
This is a complaint filed U/s. 12 of Consumer Protection Act by the complainant Smt. Hafeez Bee against the two Respondents (1) Divisional Manager LIC of India, Raichur and (2) The Deputy Director, Karnataka State Fire and Emergency Services, Anna Swamy Mudliar Road, Bangalore, for deficiency of service in not settling her insurance policy claim. The Respondent NO-1 appeared through his counsel and Respondent NO-2 appeared through DGP and have filed separate written statement/version denying the claim of the complainant. 2. During the course of enquiry the complainant Hafeez Bee filed her sworn affidavit by way of examination-in-chief and relied on (32) documents at Ex.P-1 to P-32. In rebuttal the Respondent NO-1 Insurance Company has filed sworn affidavit of its Divisional Manager of authorization signatory of Respondent NO-1 as RW-1 and has got marked as many as (40) documents at Ex.R-1 to R-40. The Respondent NO-2 has filed sworn affidavit of District Fire Officer Raichur as RW-2 but has not relied on any documents. 3. Heard the arguments of both sides and perused the records. The following points arise for our consideration and determination: 1. Whether the complainant proves deficiency of service in not settling her insurance claim, as alleged.? 2. Whether the Respondent NO-1 proves suppression of material of facts in obtaining the insurance policy by late policy holder, as alleged. 3. Whether the complainant is entitled for the reliefs under various heads as sought for by the complainant.? 4. Our finding on the above points are as under:- 1. In the affirmative 2. In the Negative 3. As per final order for the following. REASONS POINT NO.1 :- 5. We shall discuss these two points together in order to avoid repetition of facts and evidence. 6. From perusal of averments of complaint and written version of respective Respondents, it discloses that there is no-dispute that late Syed Rasool who was working in Karnataka State Fire and Emergency Services Department at Indi of Bijapur Dist. he had taken policy No. 362108688 on 15-11-2000 for assured sum of Rs. 1,00,000/- under salary-saving-scheme and that the complainant is his widow and nominee and that the policyholder/Syed Rasool died on 14-06-03. 7. The Respondent NO-1 Insurance Company in the written version has contended that the late policy holder had authorized his employer-Karnataka State Fire and Emergency Services through letter dt. 20-10-2000 to deduct his policy premium of Rs. 955/- p.m. in his salary from January 2001 onwards and in the said authorization letter he had under taken that he will be entirely responsible for any consequences on account of non payment of premium of his policy and that it will be his responsibility to make arrangements for remittance of premium directly to the life Insurance Corporation to prevent his policy from lapsing. As per the records the premium received upto May 2002 only and further premium from June-2002 were not received from his Employer-Respondent No-2. The life assured has not made alternative arrangements as agreed by him for payment of premium. So his policy was lapsed with effect from June 2002 since the life assured has not paid the premium from June 2002 onwards. The policy was under lapsed condition on the date of his death on 14-06-03. The policy was also not acquired any surrender or paid-up-value hence nothing is payable under the lapsed policy and the same was intimated to the complainant vide letter dt. 31-03-04. It is also contended by the Respondent No-1 that the premium under policy were received upto May 2002 only and further premiums were not received from Respondent No-2 however Respondent NO-2 has sent the premium for April-2003 & May-2003 along with premiums of other employees through the Treasury cheque dt. 08-05-03 & 10-06-03. As the cheque amount was consolidated amount for policy of other employees the same was accepted by Manvi Branch Office of the Respondents. While adjusting the amount to the respective policy it was found that the policy No. 362108688 ( of the deceased policyholder) premiums were not remitted from June-2002 to March-2003. The premium for April-2003 & May-2003 were received by the Respondent on 10-06-03. By the time they came to know the gap after adjusting the premium the life assured was dead. An amount of Rs. 9,550/- received by D.D. No. 346263 towards premium from June 2002 to March-2003 along with letter dt. 15-09-03 from the Fire Officer Karnataka Fire Service Emergency. As the remittance received after the death of the life assured and insurance contract cannot be renewed after the death of the life assured so this Respondent returned the DD to Respondent NO-2. It is also a fact that the revival of the policy is not an obligation. Insurer has got every right to reject the revival on the ground of health condition of the life assured. The Respondent NO-1 has further contended that the late policy holder before he proposed for the policy had suffered from Cardiac related problems for which he had consulted medical men and had availed medical leave during the period from 26-04-2000 to 29-05-2000 for (34) days. He did not however disclose this fact in his Proposal Form. Instead he gave false answers stating his good health. The husband of the complainant has deliberately concealed material facts about his health to obtain the insurance by fraudulently. As per the terms and conditions of the contract, fraud vitiates everything and hence the complainant has no right to get any payment and policy based upon mis-represent is liable to be repudiated. The Respondent while processing the claim found that the life assured had taken treatment for Cardiac related problems. The copies of hospital records enclosed shows this facts, but the life assured did not disclose about true facts regarding his health in the proposal. Had he disclosed true & correct facts regarding his health, the Insurance Corporation would not have accepted his proposal. Hence this Respondent has rightly repudiated the claim and the same was communicated to the complainant vide letter dt. 31-03-04. Therefore there is no defect or deficiency of service of the Respondents. It was also advised to the complainant that in case she is not satisfied with this decision of the Divisional Manager, she may send her Representation for consideration to the Zonal Manager of Respondent within (30) days. The complainant submitted her representation to Zonal Claim Review Committee but since she has approached this Forum, the representation preferred by her was not placed before Zonal Claim Review Committee on the ground of sub-judice. Hence for all these reasons there is no deficiency in service by the Respondent NO-1 Insurance Corporation. 8. The Respondent NO-2 in para-4 of the written version has admitted that the salary of the deceased (policyholder) was not drawn for the period from June-2002 to March-2003 as there were two persons on a single post at Indi(of Bijapur District) and it was not within the power of drawing officer to pay the salary to double persons to a single post. So due to administrative reasons drawing officer at Indi could not draw and pay the salary of the deceased/policyholder and could not remit the premiums too. In Para-13 of the written version it is contended by Respondent NO-2, that Respondent No-1 has accepted the premiums paid by the Respondent NO-2 for the month of April & May 2003 which clearly indicates that the policy of the deceased was inforce and question of rejecting the claim must not arise at all. Hence the Respondent NO-1 is liable to pay the assured amount to the claimanant. 9. From the written version and affidavit-evidence of Respondent NO- 1 & 2 it shows that the insurance premium was received by the Respondent NO-1 from January-2001 to May-2002. and the premiums for the month of April-2003 May-2003 was received on 10-06-03 and that an amount of Rs. 9,550/- received by D.D. No. 346263 towards premium from June-2002 to March-2003 along with Respondent No-2s letter dt. 15-09-03 was not accepted as remittance was received after the death of the life assured and insurance contract cannot be renewed after the death of the life assured. 10. Of course the DD for Rs. 9,550/- towards from June-2002 to March-2003 sent by Respondent NO-2 on 15-09-03 was after the death of the deceased policyholder but a perusal of the letter dt. 15-09-03 at Ex.P-15 it shows that this letter was addressed by Respondent NO-2 to Respondent No-1 stating that: Late Syed Rasool was working as Fire Station Officer at Indi and in February-2002 he was transferred to Manvi Fire Station and he was getting salary from Indi Fire Station through Sub-Treasury Indi and he was paid salary upto May-2002 only. From June-2002 his salary was not made at Indi Fire Station. Manvi Fire Station is newly opened on 16-01-02. The drawing and disbursing power was issued from 01-04-03 onwards. The deceased had submitted his arrears of pay bill from June-2002 to March-2003 to Manvi Sub-Treasury, it was objected by STO Manvi because it was earlier payment. However he was paid salary from April to May-2003. So it is the case where late policyholder a Government Servant who has worked and not taken salary from June-2002 to March-2003. Now his earlier period of salary was drawn at Bangalore, payment were given to his wife and other department recoveries were submitted. The Manvi LIC Manager is not accepting his premium amount pertaining to the period from June-2002 to March-2003. Hence he is sending a crossed D.D. No. 346263 for Rs. 9,550/- in favour of Manger LIC Manvi towards premium for period from June-2002 to March 2003 for needful. As seen above the Respondent NO-2 in his written version has stated as to why the salary of the deceased employee/policyholder was not drawn from June-2002 to March-2003. From the written version and from the contents of letter at Ex.P-15 it shows that deceased was working as Fire Station Officer at Indi till January-2002 and he was transferred to Fire Station Office at Manvi in February-2002 which was newly opened on 16-01-02 and pay drawing disbursing power was issued only from 01-04-03 onwards. The arrears of his salary from June 2002 to March 2003 was objected by the STO Manvi because it was earlier payment, so the salary for the earlier period was drawn at Bangalore and payment were made to widow of the policyholder. If these factors are taken into account it is shows that it is peculiar case wherein the Respondent Corporation or its Head office would have taken into account the delay in-remittance of policy premium from June-2002 to March-2003 on account of non drawal of salary of the deceased policyholder even though he had worked for the said period and that they could have accepted the premium amount as delay in submitting the same was not a fault on the part of the policyholder. Of course the Respondent NO-1 in Para-2 has contended that the policyholder had given an authorization letter dt. 20-10-2000 undertaking that he will be entirely responsible for any consequence on account of non-payment of premium particulars and it will be his responsibility to make arrangements for remittance of premium directly to the life insurance corporation to prevent his policy from lapsing. But the Respondent No-1 has not produced the so called Authorization Letter said to have been given by deceased policyholder to Respondent NO-2 and not to Respondent No-1 who is relying on it. Admittedly the policy taken by the deceased policyholder was under salary-saving-scheme and the monthly premium of Rs. 955/- was being deducted from January-2001 till May 2002 from the salary of the deceased policyholder and it was remitted to the Respondent NO-1 by Respondent No.2. So when the policy taken by the deceased policyholder was under salary saving scheme and monthly premium was to remitted through employer, then in the natural course of events duty, if not heavy responsibility, cast on the Respondent NO-1 Corporation, to make enquiry/correspondence to the employer of the policyholder and also to the policyholder regarding non remittance/payment of monthly premium of the policy to avoid lapsing of policy, especially when the main object of the Insurance Corporation is to safeguard the interest of the policyholder and to his nominee. In this case when according to the Respondent NO-1 the monthly premium of the policyholder was regularly remitted from January-2001 to May-2002 then in the natural course of business-transaction of the corporation, they could have made correspondence to the employer and to the policyholder regarding non-remittance of premium from June-2002 onwards. But kept mum on the so-called Authorization letter that too given to Respondent NO-2 and not to them and allowed, to lapse the policy for non payment of premium. Hence we do not find any legality in the attitude of the Respondent NO-1 Corporation in keeping mum and also in not accepting the premium amount for the period from June-2002 to March-2003 sent with covering letter of employer vide Ex.P-15 narrating the reasons for delay in remittance of premium due to non-drawal of salary of the deceased policyholder from June-2002 to March-2003 even though he had worked for the said period. Especially when they have accepted premium for April & May 2003 as discussed above. The Respondent NO-1 would have bestowed their attention on the basis of the letter of Respondent NO-2 at Ex.P-15 and even they could have sought clarification from their Head office as a special-case but without doing so they kept mum leaving to the fate of the policyholder or his nominee as if they have no-concern. This attitude reflects the deficiency in service on the part of the Respondent Corporation. 11. Now with regard to Point NO-2, regarding suppression of material facts Respondent NO-1 Insurance Corporation has contended that the deceased policyholder had suppressed the material facts regarding his health by false answers in his proposal form but in-fact he had suffered Cardiac related problems for which he had consulted medical men and had availed leave during the period from 26-04-2000 to 29-05-2000 for (34) days on medical grounds. In this regard the Respondent NO-1 has produced letter of the Employer of the deceased policyholder at Ex.R-37 dt. 08-01-04 stating among other things that Syed Rasool/policyholder was on committed leave on medical grounds from 26-04-2000 to 29-05-2000 and has also produced Medical certificate with fitness certificate at Ex.P- 35 issued by Government Hospital, Indi of Bijapur District. This Ex.R-35 discloses that the said deceased-employee/policyholder was suffering from chest pain and was fit for duty from 30-05-2000. The Respondent NO-1 have also produced Case-sheet of Navodaya Medical College Hospital & Research Center Raichur at Ex.R-3 showing that deceased policyholder Syed Rasool was admitted in their hospital on 12-06-03 at 1-10 PM and was discharged on same day i.e, 12-06-03 at 8-00 PM. The column diagnosis in this case-sheet states Malignant H.T.N. ? Cerebra Vascular Accident. The column complaints with duration, states loss of conuousness since four hours convulsions 2-3 episodes since four hours vomitting once. Previous history column states no such type of complaints in the past. Previous history of complaint of H.T.N. hypertension as not available. Family history shows nothing contributory. From this case-sheet it shows that attending doctors while have diagnosing have suspected Malignant H.T.N. (hypertension) since they have put question mark.? But however they have diagnosed Cerebral Vascular (CVA). The previous history shows that no types of complaints in the past and complaint of H.T.N. not available. 12. The Respondents have also produced the Medical Records of the policyholder issued by Rajiv Gandhi Super Specialty Hospital, Raichur at Ex.R-12 to Ex.R-16. Ex.R-16 is the letter dt. 12-06-03 issued by Navodaya Medical College Hospital & Research Center, Raichur addressed to the Neoro Physician Rajiv Gandhi Hospital for referring the patient-Syed Rasool for higher treatment. The case/progress sheet of this patient especially at Ex.R-15 shows that the patient (late policyholder) referred with complaint of hypertension (Essential) on irregular with history of Cerebral Vascular Accident (VCA) since yesterday night. The Respondent No-1 have also produced Medical Records of this deceased policyholder issued by Apollo Hospital Hyderabad at Ex.R-17 to Ex.R-29. Ex.R-19 is Death Summary & Ex.R-20 is the Discharge Summary issued by Department of Neoro Surgery Apollo Hospital Hyderabad. Ex.R-19 & Ex.R-20 shows that the patient-Syed Rasool was admitted in the hospital on 13-06-03 at 2-48 AM and he died on 14-06-03 at 12-10 PM. The principle Diagnosis-shows Left Thalamic Haematoma with Right Hemiparesis. Chief complaints shows the patient came with history of altered sensorium snd inability to move right upper limb and lower limb since one day. History of vomitings one day duration. No history of seizures. History of giddiness and headache. Personal past history of known hypertensive on irregular treatment. 13. According to the Respondent NO-1, the deceased policyholder prior to proposal for insurance policy, had suffered Cardiac related problems and was on medical leave on (34) days from 26-04-2000 to 29-05-2000 and he did not disclose this fact in his Proposal Form. No where in the written version or in the affidavit-evidence Respondent No-1 have contended that the death of the deceased on 14-06-03 was nexus to the said disease suffered by the deceased policyholder for the above said (34) days earlier to the Proposal Form for the insurance policy. But however the Respondent NO-1 has produced Medical Records of Navodaya Medical College Hospital & Research Center Raichur, Rajiv Gandhi Super Specialty Hospital Raichur, & Apollo Hospital Hyderabad. This Medical Records as discussed above shows the admission of the deceased policyholder in the Navodaya Hospital on 12-06-03 at 1-10 PM and was discharged on same day at 8-00 PM. He was admitted in Rajiv Gandhi Hospital on the same day i.e, 12-06-03 at 10-58 AM. Further this deceased policyholder was admitted in Apollo Hospital Hyderabad on 13-06-03 at 2-48 AM and died on 14-06-03 at 12-10 PM. Except these Medical Records regarding duration of the hospitalization of the deceased policyholder from 12-06-03 to 14-06-03 no other Medical records produced by the Respondent for having taken medical treatment by this deceased policyholder. As stated supra these Medical records shows that the deceased policyholder was suffering from suspected hypertension and Cerebral Vascular Accident with no previous history of such disease, as could be seen from the first diagnosis of Navodaya Medical College Hospital & Research Center, Raichur on 12-06-03. 13(A) According to Medical Dictionary the word Hypertension means High Blood Pressure. The term Cerebral Vascular Accident (CVA) means stroke a sudden blocking on or bleeding from a blood vessel in the brain resulting in temporary or permanent paralysis or death. ( Vide Medical Dictionary IInd Edition by P.H. Collin Universal Book Stall New Delhi). The Death Summary of the deceased policyholder issued by Apollo Hospital shows that the diagnosis of left Thalamic Haematoma with Right Hemiparesis. According to the Medical Dictionary the word Thalamus refers to one of the two masses grey matter situated beneath the cerebrum where impulses from the sensory neurones are transmitted to the cerebral cortex i.e, Brain. So from the diagnosis of the disease of the deceased made by these three hospitals in the light of medical terms as per the Medical Dictionary it shows that the deceased policyholder was suffering from Cerebral Vascular Accident and while he was under medical treatment in the Apollo Hospital Hyderabad he died on 14-06-03 at 12-10 AM. As stated earlier the Respondent Insurance Company has not substantiated by any material particulars that the cause of death of the deceased was nexus to the medical treatment taken by him earlier to the Proposal Form. At the cast of repetition the medical certificate at Ex.R-35 issued by Medical Officer, Primary Health Center Indi shows that the deceased policyholder Syed Rasool was suffering from chest pain. The period of absence from duty of (35) days from 25-04-2000 to 29-05-2000 was necessary for the preservation of his health. This medical certificate is not specific that he was an in-patient in the hospital for the said period. Further no material is produced like prescription-chit showing the medicines prescribed by the attending doctor. However the Fitness Certificate which is part of medical certificate at Ex.R-35, shows that the deceased Syed Rasool was medically fit for duty from 30-05-2000. So it cannot be said that the deceased policyholder was in deed suffering from Cardiac related problems which resulted in his death on 14-06-03 especially when the Medical Records of Navodaya Medical College Hospital & Research Center Raichur shows that the deceased was suffering from Cerebral Vascular Accident with no previous history of complaint. Hence the contention of the Respondent NO-1 that the deceased policyholder had suppressed material facts and thereby they have rightly repudiated the claim does not stand to reason. Consequently it follows that the complainant has proved deficiency in service by the Respondents in not settling her claim under the policy. Therefore Point NO-1 is answered in the affirmative and Point NO-2 is answered in the negative. POINT NO.3:- 14. The complainant has sought for direction to Respondent NO-1 to receive the premium dues at Rs. 9,558/- with late fees as may be charged for revival to do the equity or to set off against the assured sum payable with vested bonus along with interest at 8% on that sum and for awarding damages for mental agony as deemed fit along with cost of Rs. 2,500/-. As discussed above the DD for Rs. 9,550/- sent by the employer of the deceased policyholder was not accepted by the Respondent for the reasons discussed above. In view of our conclusion and finding on Point NO-1 the complainant is entitled for the policy amount but however we feel it just and proper to award policy amount with its benefits by deducting the premium amount for non payment/remittance period as fairly stated by the complainant. The Respondent NO-1 has also to pay Rs. 10,000/- by way of total compensation including cost of litigation. In the result we pass the following order: ORDER The complaint of the complainant is allowed in part. The Respondent No-1 LIC shall pay the assured sum under the policy along with its benefit by deducting a sum of Rs. 9,550/- being the premium amount for the non payment/remittance period as observed in the judgement. The Respondent NO-1 shall also pay a sum of Rs. 10,000/- towards total compensation including cost of litigation. The Respondent NO-1 shall comply this order within (6) weeks from the date of receipt of copy of this order. Office to furnish certified copy of this order to both the parties forth with free of cost. (Dictated to the Stenographer, typed, corrected and then pronounced in the open Forum on 31-10-07) Sd/- Sri. N.H. Savalagi President Dist.Consumer Forum-Raichur. Sd/- Sri.Pampannagouda Member. Dist.Consumer Forum-Raichur. Sd/- Smt.Kavita Patil Member. Dist.Consumer Forum-Raichur.
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