Andhra Pradesh

Nellore

CC/71/2012

Katari Nirmala - Complainant(s)

Versus

The Manager S.B.I Insurance Co.ltd. - Opp.Party(s)

Y.Venkateswara Reddy

30 Jul 2015

ORDER

Date of filing      : 30-11-2012

Date of Disposal : 30-07-2015

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

           :: NELLORE ::

                                                       

Thursday, this the 30th day of JULY, 2015.

 

          PRESENT:  Sri M.Subbarayudu Naidu, B.com., B.L., LL.M.,

                                  President(FAC)

                                     

                                      Sri N.S.Kumara Swamy, B.Sc., LL.B., Member

                             

                      C.C.No.71/2012

Katari Nirmala,

W/o.late Lazarus Karunanidhi,

Aged about 36 years,

R/o.Plot No.69, Military Colony,

Indiranagar, Gudur,

S.P.S.R.Nellore – 524 101.                                               …  Complainant

 

                      Vs.

                                                                                                                                                             The Manager,

SBI Insurance Co.Ltd.,

SBI Life Unit plus III,

Nellore, Ramalingapuram.                                              …    Opposite party.

 

This matter coming on 16-07-2015  before us for final hearing in the presence of Sri Y.Venkateswara Reddy, Advocate for the complainant and  Sri K.Bhaskara Rao,                                  

Advocate for the opposite party and having stood over for consideration till this day, this Forum passed the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

ORDER                                                                                                                                                                                                                          (BY SRI M.SUBBARAYUDU NAIDU, PRESIDENT(FAC) ON BEHALF OF THE BENCH)

 

  This consumer case is filed by the complainant against the opposite party to direct the opposite party to pay the claim amount of Rs.3,00,000/- with interest @ 18% p.a., from the date of the claim application till the date of the realization to the complainant to grant reasonable expenses and also grant such other and further reliefs as the Hon’ble Forum may deem fit and proper and the circumstances of the case. 

 

1. The factual matrix leading to filing of this complaint is set out as hereunder:

    

(a)   It is the case of the complainant that her husband by name Katari Lazarus Karunanidhi  had took policy from the opposite party by insuring his own life for an amount of Rs.3,00,000/- vide policy No.37003510408,  which is commencing from   03-08-2010 by nominating his wife.  So, the complainant’s husband had died on     03-06-2011 due to Acute Meningo encephalitis/sepsis.

(b) It is also further submitted by the complainant in para-4 of her complaint that she had submitted a claim application with all relevant documents.  But the opposite party had sent a letter dated 01-02-2012 stating that the complainant’s husband had died due to hypertension and was chronic alcoholic prior to the date of commencement of the policy and so repudiated the claim submitted by the complainant.  As such, the complainant had approached insurance Ombudsman, Hyderabad on 03-05-2012 and the complaint No.I.O.(HYD) L-21-002-115-2012-13 and after hearing both sides, the Hon’ble Ombudsman dismissed the petition on 08-08-2012 supporting the contention of the opposite party.  The said insurance ombudsman had passed award without examining the concerned Doctor about the specific reasons for the cause of the death.   Hence, the complainant is constrained to file her complaint before the Hon’ble Forum for the redressal of her grievances.  It is further submitted that in para-6 of her complaint that there are causes of action to file this complaint are narrated in para-6 of her complaint.  Hence, this complaint.

 

DEFENCE:

(a)   The opposite party was resisted the complaint by denying the allegations of the complaint of complainant by filing written version in detail on  question of law and facts of the case as the case may be. 

 

 (b)   With regard to the facts of the case, the deceased life assured Katari Lazarus Karunanidhi had applied for State Bank of India life insurance policy vide proposal  No.370828797, dated 27-02-2010  on the basis of the proposal form submitted by the DLA and believing the information furnished therein to be true and in accurate,  the answering the opposite party had accepted the risk cover issued the policy bearing No.37003510408 to the date of the commencement 12-03-2010 for a basis of assured of Rs.3,00,000/-.  The deceased life assured is reported to had died on  03-06-2011.  The policy resulted in a claim in 1 year two months twenty two days.  So, State Bank of India life assured corporation limited enquired into the matter and found that the DLA (deceased life assured) was suffering from hypertension and he was a chronic alcoholic and smoker much prior to the date of the commencement of the policy,  which he has not disclosed in the proposal form.  But the fact is based upon in investigation report of the opposite party (Ex.B3).

 

( c )  It is further submitted by the opposite party in para - 5 in page-9 of its written version, it is clear from the case record of Narayana hospital that the DLA, deceased life assured Sri Katari Lazarus Karunanidhi was admitted there on       02-03-2008 and was discharged on 03-03-2008 .  It is also clear from the discharge summary that he was discharged against medical advice. In this connection, case record of Narayana Hospital looked into the matter for further details.

 

(d)   It is submitted by the opposite party  in para-7 of page-10 of its written version,  in the outpatient card of Narayana Hospital dated 02-03-2008, it is noted that the DLA was a known  hypertensive on irregular Rx.  It is also noted that he was a known alcoholic and smoker.  As per the laboratory report of Narayana Hospital, dated 02-03-2008, the (DLA) deceased life assured was having Prothrombine time of >3 min whereas the normal range was 11-16 seconds.  He was also having APTT (activated Partial Thromboplastin time)  of >3 min  whereas the normal range  was 32-40 seconds.

    

(e)  It is further narrated by the opposite party that the proposal for insurance dated 28-02-2010, the life assured had answered the questions in the proposal form as follows (as per Ex.B7):-

 

Question No.	Question	Answer
Q 8 (iv)	During last 10 years, have you undergone or advised to undergo hospitalization or an operation or any investigation or tests of medical treatment?	No
Q 8 (xiii)	Do you have High Blood pressure or have you ever suffered or treated or have you been advised to undergo investigation for High Blood Pressure?	No
Q 8 (xvii)	Do you consumer or have ever consumed Tobacco in any form (Cigarettes/Beedis/Gutka/Cigar etc)?	No
Q 8 (xviii)	Do you consume or have ever consumed Alcohol in any form or have you suffered from complications due to alcohol consumption?	No

 

 

       The opposite party had noted in the proposal form for insurance.  The material facts from the deceased life assured were not disclosed at the time of serving the insurance also.  Therefore, the claim is repudiated by the opposite party.

 

    It is also further narrated in the written version filed by the opposite party that the complainant had not only suppressed the facts and also concealed his health position while obtaining the policy and committed fraud in order to get wrongful gain.  It is a false claim.  The opposite party had discussed at length the points on law and also the facts in detail to disallow the claim of the complainant.  Finally, the opposite party had prayed that the Hon’ble Forum may pleased to dismiss the complaint with costs.

 

III.   The complainant has filed his affidavit and the documents which are marked  on his behalf as Exs.A1 to A9 in support of his case. PW2 one Dr.Katepogu Manoraju is also filed his affidavit on 04-03-2015 and PW3 is one Professor Udesh Ganapthy, working as Senior Civil Surgeon, Madras Medical college and Rajiv Gandhi Government General Hospital, Chennai has also  filed his affidavit on 06-05-2015 in support of the complainant.  Whereas, the opposite party has also filed his affidavit and also documents which are marked as Exs.B1 to B12.  Both parties have not filed their written arguments in support of their case. 

 

IV.    Basing on the material available on the record, the points that arise for determination are namely:-

 

(a)Is there any deficiency in service on the part of the opposite

    party towards the complainant?

(b)Whether the complainant is entitled to get the reliefs as

    prayed for, if it is so, to what extent?

                   (c) To what relief?

 

V.  POINTS 1 AND 2 :

 

     In view of these two points are interrelated and depends on each other, they have been taken up together for discussion and determination of the case.  The complainant has once again reiterated the facts of the case, basing on the complaint and documents.

 

Oral Submissions by the learned counsel for the complainant:

 

   The counsel for the complainant Sri Y.Venkateswara Reddy, has vehemently argued that the complainant had submitted a claim application with all relevant documents but the opposite party had sent a letter dated 1-2-2012 stating that the complainant’s husband had died due to hyper tension and was alcoholic prior to the date of the commencement of the policy and so the opposite party had repudiated her claim.  Thereafter, he has further argued that  the complainant had approached insurance ombudsman on 3-5-2012 and after hearing the both sides , the Hon’ble Ombudsman dismissed the petition on  08-08-2012, supporting the contention of the opposite party. The said learned counsel for the complainant contended that this Ombudsman had passed award without examining the concerned doctor about the specific reasons for the causes of death of her husband.  He has prayed that the Hon’ble Forum may please to allow the complaint with costs. 

 

Oral submission on behalf of the opposite party:

 

     On the other hand, Sri K.Bhaskara Rao, the learned counsel for the opposite party has also vehemently argued that the deceased life assured (DLA) had obtained the policy from the opposite party by suppressing the material facts.  He has also further argued that the hospital records would go to show that the complainant’s husband had undergone treatment in the said hospitals (Chennai hospital and Narayana hospital) prior to the obtaining policy from the opposite party.  The main thrust of his arguments for the opposite party, the complainant’s husband has concealed with the facts of the material facts and discharged from the hospitals for the said diseases mentioned therein in the record, it appears that the deceased life assured had kept all those material facts in secret without informing to the insurer(opposite party).  Finally, the learned counsel for the opposite party has once again reiterated the facts of the case which are containing in the written version as well as their affidavit in detail and prayed that the Hon’ble Forum may be pleased to dismiss the complaint, with costs.

 

Forum Findings and observations

 

VI.       Heard, the learned counsel for the both parties at length and perused the record very carefully.  Parties adduced their evidence by way of affidavits.  One who seeks equity from the Forum/Court must come with clean hands.  Many cases are filed in respect of insurance claims.  Complaint against deficiency in service in one of the crucial aspects of C.P.Act, 1986.

 

    The core point is involved in the complaint that to decide whether the complainant has suppressed material facts and concealed them prior to obtaining the policy from the opposite party?  On this aspect, there are several decisions rendered by the Hon’ble Supreme Court,  Hon’ble National Commission, New Delhi and Hon’ble A.P.State Commission, Hyderabad.

 

Deficiency in service:

 

1.  To bring home the elements of deficiency in service,( the elements of willful action, or as the case may be, inaction) needs to be established and the onus of proof of such action/inaction lies on the complainant.   2010(II) CPR 89 (NC). The complainant must prove her claim by reliable evidence 2011(III) CPR 81(NC).  The complainant based on deficiency in service must establish the same by leading cogent evidence – 2011(II) CPR 68(NC).

          

   Apparently, it is crystal clear that there is a clear suppression of material facts and concealing them by the complainant’s husband amounts to justification for repudiation of her claim by the opposite party.

 

Documents are relating to the subject matter of the case:-

    

  The deciding factor is to look into the relevant documents on both sides namely : Exs.A1 to A9; Exs.B4 to B6, B9 and B10 such as relating to patient’s/ DLA medical record, investigation report, Narayana Medical College Hospital, Nellore and Chennai Hospital, all of them  would go to establish that the complainant’s husband has undergone for treatment in the said hospitals prior to obtaining the policy from the opposite party.

 

   The insured has such a medical history and  ailments during the years 2008 and 2011, approached Narayana Medical College hospital and Chennai hospital for treatment.  Their laboratory findings according to the documents are filed herewith Ex.B4, how can the complainant had purchased a policy from the opposite party by concealing and suppressing material facts and answering such as negative in nature to specific questions in the proposal form.  It is absolutely incorrect information furnished to opposite party to obtain a policy and law will not permit to do so, consequently his aim is to get wrongful gain.  It is public money to be safe guarded by the opposite party.  This is also one of the reasons to disallow the complaint of the complainant.  The complaint is liable to be dismissed according to the facts and circumstances of the case.  The complainant must disclose information to the opposite party in order to obtain policy, well in advance and not for the sake money, he should not venture to do such acts to meet selfish ends.  There is a justification to consider the case of the opposite party.  We have considered rival submissions of the parties.  We are convinced with the arguments of the said learned counsel for the opposite party.  It is settled law on insurance subject.  The concerned problem arose within two years from the date of policy obtained by the complainant.  One must be fair and bold enough to say correct facts but not otherwise.  Law will not permit such persons to do so as they like as the case may be.

Case-law: On the present subject matter of insurance.:-

 

1. Contract of insurance falls in the category of contract of uberrimaefide meaning a contract of utmost good fiath on the part of the assured.  2011(2)CPR 190(NC).
2. Insurer is not liable to pay compensation when there is violation of terms of Insurance 2011(2) CPR 330(NC)
3. Fraud vitiates insurance cover 2011(2) CPR 334(NC)
4. The contract of insurance is based on the principle of ubberimae fide where under both parties to the contract have to disclose the material particulars which form the basis or the issuance of the insurance policy. 2011(4)CPR244(NC)

 

5. Repudiation of claim by insurer is justified in case of mis-statement

on a material fact being made by life assured at the time of purchase of policy. Suppression of material facts relating to the health condition amounts to breach of terms and conditions of insurance contract. 2011(4) CPR 50 (A.P.).

 

6.  Insurance claim can be repudiated for fraudulent suppression of material facts, as the insured has responsibility to disclose all material facts.  However, burden of proof in respect of alleged fraud lies with insurer.  It is further to be proved that the statement was falsely made by policy-holder with the knowledge of falsity of statement  - New Inida Assurance Co.Ltd. Vs.P.P.Khanna – 1998 CCJ 177(NC).

 

7. If incorrect or wrong information is supplied or relevant facts are not disclosed, insurance claim can be repudiated as contract of insurance is based on good faith. LIC Vs.Smt.Minukalita – III (2002) CPJ 10 (NC).

 

8.  The contract of insurance is concluded only when the party to whom an offer has been made accepts it unconditionally and communicates its acceptance to the party making the offer – 2010 CTJ, 786(NC).

 

9.  The Principle that insurance is a contract founded on good faith is of Vintage value.  Good faith forbids either party from non-disclosing the facts which the parties knew – 2010 CTJ 1109 (SC).

 

10.  If the insured makes a misstatement on a material fact at the time of purchase of policy, the insurer is  fully justified in repudiating the claim. – 2010 CTJ 1138(NC)

 

        The Supreme Court in the leading case of Mithoolal Nayak Vs. Life Insurance Corporation of India, (AIR 1962 S.C. 814) had laid down 3 conditions for applicability of Sec.45 of Insurance Act.  It is highly relevant on the present subject of Suppression of material facts”.

 

1. The statement made must be on the material matter or the insured must have suppressed facts, which it was material to disclose.
2. The suppression must have been fraudulently made by the insured.
3. The insured must have known at the time of making the statement that it was false or that he suppressed fact which it was material to disclose.

 

In United India Insurance Co.Ltd. Vs. M.K.J.Corporation(1997 CTJ 649 SC), the Supreme Court of India held that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties.  Good faith forbids either party from non-disclosure of the facts which the party privately knows to draw the other into a bargain, from his ignorance of that fact and his believing to the contrary.

 

  Again in Life Insurance Corporation of India & Ors. V. Asha Goel (smt) & Anr.( AIR 2001 SC 549)   It was held:

 

 The contracts of insurance including the contract of life assurance are contracts uberrimae fides and every fact of material must be disclosed, otherwise, there is good ground for rescission of the contract.  The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance”.   It has been repeatedly held that the contract of insurance falls in the category of contract of uberrimae fide meaning a contract of utmost good faith on the part of the assured.  When information on a specific aspect is asked for in the proposal form, the insured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge.  Of course obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known.    Contracts of Insurance are of ubireme fide i.e., of utmost good faith. Where the Insured obtains a policy by suppressing material facts the contract would be void abinitio.  No claim would be admissible under such policy.  

 

     Non-disclosure of material facts pertaining to the health of the insured which he alone knows would put the insurer as well as the community of policyholders at a disadvantage.

 

    By observing the facts and circumstances of the case in detail and question of law on the subject as well, we have given our thoughtful consideration to the entire matter and find no force in the contentions raised on behalf of the complainant by her said learned counsel.  There is no sufficient substance and no merits in the complaint for our consideration and determination.  The question of consideration of the affidavits of PW2 and PW3 does not arise.  It is purely suppression of material facts which are not required for obtaining a policy, from the opposite party.  Being a quasi-judicial authority i.e., Forum, we must record reasons in support of our conclusion as per the decision of Honourable Apex Court which is reported in 2011 CTJ (SC) 135. Realization of justice is the ultimate function of law.  Consumer Forums should be wary of passing cryptic orders in the adjudication of complaints 2007 CTJ AP P6(SC).  Law assists those who are vigilant.  Justice is rendered in accordance with law.  Rules of procedure are intended to be a handmaid to the administration of justice. So, these two points are held in favour of complainant, accordingly.

 

Point No.3:  In the result, the complaint is dismissed but without costs.

 

Typed to the dictation to the stenographer and corrected and pronounced by us in the Open Forum this the 30th day of JULY,               2015.    

 

 

               Sd/-                                                                         Sd/-

         MEMBER                                                                 PRESIDENT(FAC)

 

 

  APPENDIX OF EVIDENCE

 

 WITNESSES EXAMINED FOR COMPLAINANT:

 

PW1       PW2           PW3

19-06-2013       04-03-2015           06-05-2015

:       :           :

Katari Nirmala, W/o.late Lazarus Karunanidhi, aged about 36 years, R/o.Plot No.69, Military Colony, Indiranagar, Gudur, SPSR District.   Dr.Katepgu Manoraju, S/o.Mr.K.Pedda Gajjalanna aged 51 years presently working as Assistant Professor in Government General Hospital, Kurnool residing  plot No.104, Gandhi Apartments, Sunkesula Road, Kurnool City, Kurnool District A.P.State.   Prof.Udesh Ganapathy, S/o.Ganapathy, aged about 57 working as Senior Civil Surgeon, Madras Medical college and Rajiv  Gandhi Government General Hospital, Chennai – 600 003.

 

 

WITNESSES EXAMINED FOR OPPOSITE PARTIES:

 

RW1

22-03-2013

:

V.Srinivas, S/o.Sh.Late.V.M.Somayajulu, aged  about 50 years having office at 1st floor, Kapas Bawan, Central Processing Center)CPC), CBD-Belapur, Navi Mumbi – 4000614.

EXHIBITS MARKED FOR COMPLAINANT:

 

Ex.A1	29-05-2011	:	Photostat copy of Central Clinic Laboratory Report along with ultrasonography - abdomen issued by Narayana General Hospital, Chintareddypalem, Nellore.
Ex.A2	31-05-2011	:	Photostat copy of discharge summary issued by Narayana General Hospital, Chintareddypalem, Nellore.
Ex.A3       Ex.A4       Ex.A5       Ex.A6     Ex.A7     Ex.A8   Ex.A9	24-10-2011       10-02-2012       05-06-2012       08-08-2012     01-02-2012     26-11-2014      26-11-2014	:       :       :       :     :     :   :	Photostat copy of death certificate of complainant’s husband issued by Dr.P.Kuganantham, Health Officer, Corporation of Chennai.   Photostat copy of letter addressed by the complainant to opposite party.     Photostat copy of complaint (letter) addressed by the complainant to the Insurance Ombudsman, Hyderabad.   Photostat copy of proceedings of the insurance ombudsman, Hyderabad.   Photostat copy of letter addressed by the opposite party to the complainant.   Photostat copy of registered post receipt.   Photostat copy of letter addressed by the complainant to the Regional Medical Officer, Chennai

 

                                                                       

EXHIBITS MARKED FOR OPPOSITE PARTY:                         

 

Ex.B1	08-08-2012 27-02-2010	:	Attested copy of the proceedings of Hon’ble insurance ombudsman, Hyderabad(Annexure-Z) along with proposal form.
Ex.B2   Ex.B3     Ex.B4     Ex.B5     Ex.B6     Ex.B7     Ex.B8     Ex.B9     Ex.B10     Ex.B11     Ex.B12	17-03-2010   30-12-2011                    -             -             -     02-03-2008            -                  -              -     01-02-2012     22-03-2012	:   :     :     :     :     :     :     :     :     :     :	Attested copy of Policy document (Annexure-B).   Attested copy of claims investigation report. (Annexure-C)   Attested copy of case record of Narayana Hospital (Annexure-D).   Attested copy of  Doctor’s orders (Annexure-E1 and E2).   Attested copy of Outpatient card (Annexure-F) issued by Narayana Hospital, Nellore.   Attested copy of central clinical laboratory report (Annexure-G) issued by Narayana Hospital, Nellore.   Attested copies of prescriptions along with drug receipts. (two in nos.)(Annexure-H)   Photostat copy of discharge summary issued by Narayana General Hospital, Nellore.)((Annexure-I)   Attested copies of continuation  sheets (Annexure-J)     Attested copy of letter addressed by the opposite party to the complainant.(Annexure-K)   Attested copy of uphold repudiation letter addressed by the opposite party to the complainant.                                                                  Id/-                                                    PRESIDENT(FAC)

   Copies to:

 

1. Sri Y.V.Venkateswara Reddy,

Advocate,

Opp: Sai Baba Temple,

Near Sunday Market, Gandhi Nagar,

Nellore-1.

 

2. Sri K.Bhaskara  Rao,

Advocate,

Nellore.

 

Date when order copies are issued: