DATE OF FILING: 26.04.2014.
DATE OF DISPOSAL: 25.09.2017.
Dr. N.Tuna Sahu, Presiding Member:
The complainant has filed this consumer dispute under Section 12 of the Consumer Protection Act, 1986 alleging deficiency in insurance service against the Opposite Parties (in short the O.Ps) and for redressal of his grievances.
2. The brief facts that are relevantly required for disposal of this consumer dispute is that on 27.08.2010, the life of the complainant’s son, Late Santosh Kumar Das was insured by the O.Ps on payment of Rs.11,999.40 as annual premium for a period of 30 years of policy term with a pay term of 20 years for an assured sum of Rs.2,70,000/-. The policy was commenced under “Birla Sun Life Insurance Dream Endowment Plan” and the said policy was duly accepted by the O.Ps. The O.P. accordingly issued a policy bond bearing No.004345721 to the son of the complainant commencing from the year 2010. While the policy in dispute was in force, unfortunately on 03.10.2010 the insured Sanotsh Kumar Dash, the son of the complainant, suddenly fell ill and died at the age of 17 years, after commencement of two months of the policy in dispute. After the formalities and obsequies of the deceased son, the complainant submitted death claim of his son for settlement with the O.Ps being the nominee of the said policy. The complainant filed an application to that effect on 3.3.2011 along with death claim form which was accepted by O.Ps. But after elapse of two years and 10 months no action was taken by the O.Ps for the settlement of the claim. It is also stated in the complaint that the complainant was not informed about the enquiry and waited for three years for settlement of the claim and payment of death benefits. For that the complainant also frequently visited the Birla Sun Life Insurance Office at Bhubaneswar and requested for settlement of the death claim of his deceased son. The O.P.No.2 suggested to the complainant to file original bond, premium receipt along with other documents and after filing the same they assured to settle the death claim immediately. As stated, the complainant on 01.01.2014 filed original documents such as policy bond, premium receipt along with original death certificate before the O.P.No.2 but after that O.Ps remained silent over the matter and not settled the death claim of the complainant which caused mental agony and harassment to the complainant. On 8.3.2014 the complainant sent a registered legal notice to the O.Ps through his Advocate for early settlement of claim of the policy but all went in vain. The O.Ps received the premium till the death of insured as well as issued the policy bond after due confirmation but surprisingly after the death of the insured, the O.Ps did not pay the death claim to the nominee of the policy which amounts to deficiency in service. Hence, alleging deficiency in insurance service on the part of the O.Ps, the complainant prayed to direct the O.Ps to pay the death claim of Rs.2,70,000/- along with penal interest of 9% from the date of death of insured and to pay a sum of Rs.50,000/- towards compensation for mental agony and suffering along with Rs.10,000/- as cost of litigation in the best interest of justice.
3. On receipt of notice from this Forum, the O.Ps appeared and filed written version through learned counsels for Vidhi Associates. In the written version, it is admittedly stated that the O.Ps issued a policy bearing No.004345721 on 27.08.2010 for an assured sum of Rs.2,70,000/- in the name of the Life Assured (LA) on payment of premium of Rs.11,996/- annually. In the instant matter, the Life Assured died within one month and eight days after issuance of the policy and on investigation it revealed that the LA was suffering from PNET (Epidural Lt. Paraverebrat). The O.Ps issued the policy bearing No.004345721 believing on the information provided by the complainant which turned out completely deceitful, erroneous and inaccurate. He further stated that it is worthwhile to mention herein that an adult of 17 years in hale and healthy condition would die mere having fever is beyond imagination. The LA was suffering from Tumor and died due to the complications of the same. The LA was not keeping well before death around since 2009 and in past LA was operated for Tumor and he got operated in GB Pant Hospital, Delhi. Hence the claim of the claimant was repudiated on 30th June 2011. There is no contributory negligence by O.Ps as they properly monitored and rationally followed the procedure in the instant matter from issuing policy till the investigation and repudiation of the claim. There is as such no fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance of services that is found deficient on the part of answering O.Ps rather it is the complainant who put forth the wrong information and asking for the claim. The O.Ps replied to the notice dated 18.03.2014 vide letter dated 31.03.2014 and reiterated the grounds for repudiation of claim in the reply. Since it was established through company’s investigation that the LA was sufferings from Tumor for which he was admitted, investigated and was under treatment prior to the application for insurance and hence, the aforesaid replies in the application for insurance are found false. It is evidently established that there is no deficiency on the part of the O.Ps and the complainant is infructuous and hence the same is not maintainable and is liable to be dismissed. It is further contended that the contracts of insurance including the contract of life insurance are contracts of ‘uberrimma fides’ and every material fact must be disclosed on utmost good faith. It is duty of insured to disclose all material facts regarding the health of the policy holder while taking of the insurance policy and if there are any misstatements or suppression of material facts, the policy in question can be called. In the instant case, the complainant did not disclose the previous disease while taking of the insurance policy since he took the policy on 27.08.2010 and died on 03.10.2010. He has mis-stated the conditions of his health during taking of the policy and personal history of deceased insured was not disclosed during taking of the policy and life assured concealed the fact about his health condition and gave false information in the proposal form while taking of the insurance policy in dispute, hence the insured is not entitled for any insurance benefit on the ground that the insured was suppressed the material fact regarding his health i.e. he was suffering from cancer prior to taking of the policy. In support of his argument the learned counsel also cited the authorities of Hon’ble Supreme Court in the case of Maya Devi versus Life Insurance Corporation of India, 2007, in the case of Mithoolal Nayak versus LIC of India, 1962 SC 814 and in the case of P.C. Chako and Another versus Chairman, Life Insurance Corporation of India and Ors, 2008 reported in CPJ 78 (SC) and prayed to dismiss the case in the interest of justice. However, no copy of the aforesaid decisions was filed by the learned counsel for the O.Ps to go through by the Forum and to observe the applicability of decisions as mentioned above.
4. On the date of denov hearing of the consumer dispute, we have heard the learned counsel for the complainant as well as for the O.Ps. We have also gone through the submissions of learned counsel for respective parties and considered the submissions thoughtfully. We have also verified the written argument of both parties and material documents placed on the case record submitted by the complainant as well as O.Ps. During the course of hearing on going through the record of file, we found that there is no dispute or doubt that the son of the complainant deceased policy holder obtained the policy in dispute bearing No.004345721 under Dream Endowment Plan for a term of 30 years from the O.Ps. It is also not in dispute that the policy was issued on 27.08.2010 and the deceased policy holder was died on 03.10.2010 as is evident from the death certificate place in the case record. On further careful perusal of case record we find that it is an admitted fact that the complainant intimated the O.P. regarding the death claim on 09.06.2011 for settlement of the claim of the present nominee complainant. It is also a fact which is beyond dispute or doubt that the claim of the complainant was repudiated on 30.06.2011 on the ground of suppression of material facts regarding health condition of the deceased policy holder during taking of policy. In view of the above, the point in dispute crops up for consideration is – (i) whether the O.Ps are justified by repudiating the claim of the complainant due to suppression of material fact? (ii) Whether the complainant is entitled for any benefit under the policy in dispute?
5. With regard to first point as set above, we would like to state that on a perusal of documents placed on case record and report of investigator, it appears that the complainant took the policy in dispute as stated above on 27.08.2010 but prior to that he was under treatment in Acharya Harihara Regional Cancer Centre, Cuttack during January 2010 as is evident from the Annexure-I of documents submitted by the O.Ps. The investigation report dated 02.07.2011 placed on the case record submitted by the instigator of insurer reveals that the deceased insured had suppressed his health condition during taking of the policy in dispute since the son of the complainant took the policy on 27.08.2010 and died on 03.10.2010 i.e. merely 2 months of taking of the said policy as he was under treatment for cancer. In the foregoing context, on this account only it can be construed that the deceased policy holder during taking of the policy had suppressed material facts regarding his health condition and he did not disclose the disease in the proposal form that he was sufferings from cancer. It is a fact that insurance policy is issued based on utmost good faith. In this case the complainant did not disclose the material fact regarding his health and suppressed his disease of cancer and fraudulently obtained the policy hence the O.Ps are justified repudiating the claim of the complainant. The learned counsel for the O.Ps has also filed a decision of Hon’ble High Court of Odisha reported in Orissa Law Reviews 2015 (Supp.II), OLR 540 in support of his case in which the a similar ruling has been passed by the Hon’ble Court. On perusal of the said decision, we find that the Hon’ble High Court has held that when the policy is vitiated by reason of fraudulent suppression of material facts by the insured, the claimant ought to be denied with any benefit. In the light of the authority as discussed above, the claim of the complainant is liable to be denied and the nominee complainant is not entitled for any death benefits.
6. Regarding the second issue as framed above, we would like to state that due to fraudulent suppression of material facts by the son of the complainant during obtaining of the policy in dispute, the nominee complainant is not entitled for any death benefit out of the said policy. In this case, as we feel that the contract of insurance is void, if material fact is not disclosed during the time of taking of the policy by the insured. In this context, in our considered view we would like to state that when the parties knew at the very outset that the agreement was void, there was no contract at all. In the aforesaid fact and circumstance, in our opinion we would like to say that the complainant had deposited a handsome amount of Rs.11,996/-, deposited as premiums under a void agreement. The amount was deposited under a void contract but the agreement is not unlawful. When a contract is void, the O.Ps are liable to refund the same since no premium can be accepted by O.Ps under a void contract and the equity, justice and good conscience say that it should be refunded to the nominee complainant. This is a welfare society and in a welfare state, the insurance company is to help the legal representatives of the deceased in their crisis period and not to even digest the deposits made by them on technical grounds. We, would therefore, like to direct the O.Ps for returning the premium amounts to the nominee of the policy i.e. the present complainant. Our finding is fortified with the decision of Hon’ble State Consumer Disputes Redressal Commission, Uttaranchal, reported in (2004) 10 CLD 145 (SCDRC-Uttaranchal) in the case of Life Insurance Corporation of India Vs. Smt. Kamla Devi where it was held that “ Insurance policy obtained by false representation would be void and claimant would get nothing but amount of premium deposited”. In the light of the above discussion, decisions of law and taking into consideration to the fact and circumstances of the present case, we partially allowed the case of the complainant against the O.Ps and the O.Ps are directed to refund the premiums to the nominee complainant.
7. In the result, we direct the Opposite Parties to refund the premium amounts of Rs.11,996/- to the nominee complainant within two months from the date of receipt of this order failing which the complainant is at liberty to recover the said amount from O.Ps under Section 25/27 of the Consumer Protection Act, 1986. In the peculiar facts and circumstances of the case, there are no orders as to cost and compensation. The case of the complainant is disposed of accordingly.
8. The order is pronounced on this day of 25th September 2017 under the signature and seal of this Forum. The office is directed to supply copy of this order to the parties free of cost and a copy of same be sent to the server of
