Andhra Pradesh

Nellore

CC/115/2013

Badvelu Hemalatha - Complainant(s)

Versus

The Manager SBI life Insurance company Limited - Opp.Party(s)

R.K.SARMA

23 Oct 2015

ORDER

Date of Filing     :13-11-2013

                                                                                                Date of Disposal:23-10-2015

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM:NELLORE

Friday, this the  23^rd day of   October, 2015

 

PRESENT: Sri M. Subbarayudu Naidu, B.Com.,B.L.,LL.M.,President(FAC) & Member                             

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

 

C.C.No.115/2013

 

Badvelu Hema Latha, Aged about 38 years,

W/o.Badvelu Harinatha Reddy,Padugupadu Village,

Kovur Mandal,  S.P.S.R.Nellore District.                                                 ..… Complainant    

 

                                                                           Vs.

 

The Manager, SBI Life Insurance Company Limited, D.No.16-1433, 2nd floor, Sunshine Plaza, Ramalingapuram, Main Road, Nellore-3.                                                ..…Opposite party

                                                              .  

            This complaint coming on 22-09-2015 before us for hearing in the presence of                Sri R.K. Sarma, advocate for the complainant and                                                                       Sri K. Bhaskara Rao, advocate for the opposite party  and having stood over for consideration till this day and this Forum made the following:

 

ORDER

(ORDER BY  Sri N.S.KUMARA SWAMY, MEMBER)

 

The brief averments of the complaint are that  complainant father late  Ogili Krishna Reddy, S/o.Ogili Pulla Reddy took a SBI Life – Flexi Smart Insurance Policy in the opposite party company limited  bearing policy No.56003734101, dated 10-10-2011.  The deceased policy holder paid an amount of Rs.49,900/- towards first premium               dated 28-09-2011 issued by opposite party company and a letter dated 10-10-2011 issued by opposite party stating in that the said policy was accepted.  The sum assured  was Rs.9,98,000/-  and the next premium due date on 08-04-2012.  Subsequently, her father died on 27-04-2012 at Vidavaluru village.  The death extract of her father is filed  for perusal.  Soonafter the death of her father she being the nominee  of the said insurance policy approached the insurance authorities  along with her husband namely B. Haranatha Reddy  for claiming of insurance amount of Rs.9,98,000/- with interest etc.,  But the opposite party did not pay the  above said insurance amount inspite of repeated demands.  Due to the act of  negligent and dereliction of duties, the complainant has suffered loss and injury, mental agony for which she is entitled for compensation.  Since, the opposite party  committed breach of contract between them,  the complainant is  entitled for payment of  Rs.9,98,000/- with subsequent interest thereon at 12% p.a. and costs.  Hence, the complaint for negligent and dereliction of duties on the part of opposite party.

 

2.         The opposite party resisted the complaint by filing the written statement  except admitting that policy was issued to late Ogili Krishna Reddy, vide policy bearing No.56003734101, which was commenced from the date of 08-10-2011 with utmost good faith.  The said policy was issued for a sum of Rs.9,98,000/- for a term of 15 years with half yearly instalment of premium at Rs.49,900/-.

 

3.         The opposite party further contended that the Deceased Life Assured  (D.L.A)  at the time of signing the proposal form bearing No.56QC236625, dated 28-09-2011, he replied negative answers to the question No.13 (iv) “During  the last ten years, have you undergone or advised to undergo hospitalization,  an operation or any investigation or tests or medical treatment?”, No.13 (xiii) ” Do you have high blood pressure or have you ever suffered or treated or  have been advised to undergo investigation for high blood pressure?”, No.13 (xiv) “Do you have habits or have ever suffered or treated  or have been advised to undergo investigation for diabetes?”, No.13 (xv) “Are you suffering from or did you suffer or undergo investigation in the past from or have you been advised to undergo investigation or treatment for (b) Kidney Disease  (Stones, Blood in Urine etc.,), (d)  Heart Disease (Chest Pain, Vascular Disease etc.,).

 

4.         The opposite party further contended that at the time of proposal  medical examination was also conducted.  The D.L.A. replied negatively for the specific questions mainly question No.3.  “Have you everbeen investigated or treated or diagnosed of any of the following conditions  (a) Diabetes or Raised Blood  Sugar (b)  Hypertension of Blood Pressure (c) Heart Attack or any other heart trouble, chest pain or any disorder of the circulatory system including stroke or  brain hemorrhage.”  A copy of the medical examination form also filed for perusal.  The said facts were deliberately suppressed by the D.L.A. in the medical examination which  inturn  prejudice the interest of the insurer.  Had the D.L.A. disclosed in the proposal form about his pre-existing disease, the proposal would not have been accepted.

 

5.         The opposite party further contended that the D.L.A. reported to have  died on 27-04-2012, which resulted in an early claim in just 6 months and 19 days.  The opposite party further also contended that the above said material facts evident from the medical records obtained from Aravinda Kidney Centre, Nellore.  Further D.L.A. was admitted in the hospital on 26-08-2011 and discharged on 27-08-2011 for the chronic kidney disease, end stage, Renal disease, Coronary Artery Disease, Post Coronary Artery Bypass Surgery, Diabetes mellitus and hyper tension.  It is also an important to note that D.L.A. had undergone coronary artery bypass surgery prior to the admission in the said hospital, which in turn prior to the date of commencement of risk under the policy.  This vital fact suppressed  at the time of obtaining the insurance cover, which renders the policy to be void  abinitio as per the  terms and conditions of the policy.    Further, the D.L.A.  was under medication for anti diabetes, anti hypertension and other tablets etc., for heart and kidney elements.  Due to the suppression of the material facts in the proposal form, the complainant was informed that the claim was repudiated and a letter dated 26-09-2012 addressed  in this regard to the complainant.  Further, under Section-45 of Insurance Act is clearly applicable only where the claim is repudiated after two years from the date on which it is affected.  In this case, the claim was repudiated within two years of the date of acceptance of the risk. Hence, the said case  does not come into the purview of Section-45 of Insurance Act.  Hence, the relief prayed by the complainant are unjust, illegal and unfair on her part and the complaint may be dismissed with costs as it is frivolous, vexatious and abuse of process of law.

 

6.         Now the point for determination is:

1. Whether there is any deficiency in service on the part of opposite party in settling the claim of the complainant?  If so, whether the complainant is entitled for the relief as prayed for in the complaint?
2. To what relief?

 

            7.         In order to substantiate  the complainant averments, complainant filed evidence on affidavit  as P.W.1 and marked Exs.A1 to A3.  On the other hand,   the opposite party filed chief affidavit as R.W.1 and marked Exs.B1 and B6.  Written Arguments on behalf of complainant filed.  The opposite party did not file written arguments on his behalf.  Heard, on both sides.

8.         POINT No.1:  This Forum considered the entire material on record and also submissions made by their respective counsel.  Before going into the matters  in controversy between the parties, it is necessary to state the  admitted facts. The deceased life assured namely Ogili Krishna Reddy took a policy of  S.B.I. Life Flexi Smart Insurance policy bearing No.56003734101, it was commenced from 08-10-2011 for a sum of Rs.9,98,000/- for a term of 15 years by paying half yearly instalment premium at Rs.49,900/-. 

9.         The complainant alleged against the opposite party that she is the daughter of diseased policy holder namely Ogili Krishna Reddy nominated her  as nominee in his policy.  Due to the unfortunate death of her father on 27-04-2012 at Vidavaluru Village, she being the nominee along with her husband went and approached the opposite party and preferred a claim for Rs.9,98,000/- before the opposite party  but the said opposite party did not pay the amount inspite of  repeated demands.  Due to the negligent act  and dereliction of duty and also violation of contract of insurance by the opposite party she is entitled for compensation for mental agony along with insurance amount with interest at 12% p.a. thereon  and for costs.

            10.       On the other hand, the opposite party repudiated the claim on the ground that insured suppressed the material facts of pre-existing diseases of  before taking the policy.  These facts came to light, on the medical records obtained from Aravind Kidney Centre, Nellore.  Thus, the contract of policy becomes null and void and there is no  liability on the part of opposite party to pay the  amount  as claimed. 

11.       Here the onus lies on the  opposite party to prove its case.

12.       In the instant case, the opposite party challenged the allegations of the complainant and submitted that credible recorded proof of  pre-existing disease prior to  his having  taken the insurance policy.  From the proposal form, filled by the insured  which was also certified by him disclosed that the D.L.A.  replied  negative answers for the question No.13 (iv) “During  the last ten years, have you undergone or advised to undergo hospitalization,  an operation or any investigation or tests or medical treatment?”, No.13 (xiii) ” Do you have high blood pressure or have you ever suffered or treated or  have been advised to undergo investigation for high blood pressure?”, No.13 (xiv) “Do you have habits or have ever suffered or treated  or have been advised to undergo investigation for diabetes?”, No.13 (xv) “Are you suffering from or did you suffer or undergo investigation in the past from or have you been advised to undergo investigation or treatment for (b) Kidney Disease  (Stones, Blood in Urine etc.,),                  (d)  Heart Disease (Chest Pain, Vascular Disease etc.,).

13.       The opposite party further contended that at the time of proposal  medical examination was also conducted.  In the medical examination form i.e., Ex.B4, the D.L.A. replied negatively for the specific questions mainly question bearing No.3.  Have you everbeen investigated or treated or diagnosed of any of the following conditions  (a) Diabetes or Raised Blood  Sugar (b)  Hypertension of Blood Pressure (c) Heart Attack or any other heart trouble, chest pain or any disorder of the circulatory system including stroke or  brain hemorrhage.  A copy of the medical examination form also filed for perusal.  The said facts was deliberately suppressed by the D.L.A. in the proposal form  which  inturn prejudice the interest of the insurer.  Had the D.L.A. disclosed in the proposal form about his pre-existing disease, the proposal would not have been accepted.

14.       The opposite party further contended that the D.L.A. reported to have  died on 27-04-2012, which resulted in an early claim in just 6 months  19 days.  The opposite party further also contended that it is evident from Ex.B5 i.e., the medical records obtained from Aravinda Kidney Centre, Nellore that  D.L.A. was admitted in the hospital on 26-08-2011 and discharged on 27-08-2011 for the chronic kidney disease, end stage, Renal disease, Coronary Artery Disease, Post Coronary , Artery Bypass Surgery, Diabetes mellitus and hyper tension.  It is also an important to note that D.L.A. had undergone coronary, artery bypass surgery prior to the admission in the said hospital, which in turn prior to the date of commencement of risk under the policy.  This vital fact suppressed  at the time of obtaining the insurance cover, which renders the policy to be void  abinitio as per the  terms and conditions of the policy.    Further, the D.L.A.  was under medication for anti diabetes, anti hypertension and other tablets etc., for heart and kidney ailments.  Due to the suppression of the material facts in the proposal form, the complainant was informed that the claim was repudiated and a letter dated 26-09-2012 i.e., Ex.B6 addressed  in this regard to the complainant.  Further, under Section-45 of Insurance Act is clearly applicable only where the claim is repudiated after two years from the date on which it is affected.  In this case, the claim was repudiated within two years of the date of acceptance of the risk. Hence, the said case  does not come into the purview of Section-45 of Insurance Act.  Thus, it is evident from Ex.B2 (common proposal form) that the diseased suppressed previous existing ailment at the time of taking the policy contrary to the terms and conditions of the policy.

15.       Going by the entirety of facts and circumstances of the case and in particular, the life assured was suffering from chronic kidney disease and also undergone coronary bypass surgery before making the proposal for insurance  but  suppressed the material facts in the declaration given by him in proposal form.  We are of the considered opinion that our findings are in consonance with decisions of Supreme Court in the case of  P.C. Chacko and  anr. V. Chairman, L.I.C. of India, IX (2007) SLT 533=III(2008), CPJ 78 (SC)=IV (2007) ACC 773 (SC)=IV (2007) CLT 229 (SC)-(2008) 1 SCC 321,  and Satwant Kaur Sandhu Vs. New India Assurance Company VI (2009) SLT 338=IV (2009) CPJ 8 (SC)=(2009) 8 SCC 316, wherein the similar circumstances the Supreme Court held that suppression of such material fact about the status of health by the life assured disentitled the nominee / heirs of the insurance claim.  There is no bonafide proof placed by the complainant in affirmation about the sound health of the insured on the date of entering into contract of insurance and other allegations.   On record, we have only  self serving and  interested  statement of the complainant about sound health of insured on the date of entering into the policy. Further, the deceased life assured has given declaration in the proposal form that all the statements and answers  made in the proposal form are all true and complete to the best of his knowledge and belief.  The said statement is quite contrary to the evidence placed by the opposite party’s material documents.  It is well settled law in number of judgments including Appex court that an insurance policy between the two parties is based on the principal of “utmost good faith” and breach of the same would justify repudiation of the insurance claim.

 

16.       In view of the  breach of conditions of the policy, the opposite party issued a letter dated  26-09-2012 addressed to the complainant, which is Ex.B6 about the  repudiation of the claim.  The complainant failed to place any documentary proof  of sound health about the insured  in support of her claim.  It is settled law that the medical record placed by the  opposite party is  a reliable evidence and cannot be brushed aside unless something contrary  is proved.  The complainant denied all the  reliances placed by the opposite party in its written arguments but at the same time the complainant has not placed any reliances to rebut the evidence of  opposite party by filing rejoinder affidavit. We come to conclusion that the material records with regard to the suppression of facts is justified and the same gains from the  abundant documentary proof  placed by the opposite party. In such is the case,  we cannot find fault with the  opposite party as there is clear violation of terms and conditions of the policy by the complainant.  Hence, there is no negligence or dereliction of duties on the part of opposite party.  Accordingly, the point No.1 is answered.   

 

17.       POINT No.2:  In the result, the complaint is dismissed, without costs.

 

Typed to the dictation to the Stenographer, corrected and pronounced by us in the open  Forum, this the  23^rd day of  October, 2015.

 

 

                 Sd/-                                                                                                Sd/-

           MEMBER                                                                               PRESIDENT(F.A.C.)

                                                APPENDIX OF EVIDENCE

 

Witnesses Examined for the complainant

 

P.W.1  -

08-04-2015

Smt.Badvelu Hema Latha, D/o.Late Ogili Krishna Reddy, Kovur Mandal, S.P.S.R.Nellore District (Evidence Affidavit filed).

 

Witnesses Examined for the opposite party

 

R.W.1  -

23-12-2013

Sri Dhanya K P, W/o.Sh.Unnikrishnan K P, Navi Mumbai-4000614 (Affidavit in Evidence filed).

 

                             EXHIBITS MARKED FOR THE COMPLAINANT

 

Ex.A1  -	08-10-2011	Photocopy of First  Premium Receipt in favour of Ogili Krishna Reddy issued by the opposite party.
Ex.A2  -	10-10-2011	Photocopy of  Letter from opposite party to the  Ogili Krishna Reddy, Nellore-524 218.
Ex.A3  -	01-05-2012	Photocopy of  Death Certificate in favour of  Ogili Krishna Reddy issued by  Panchayat Secretary,  Grama Panchayat, Vidavalur Mandal.

 

                         EXHIBITS MARKED FOR THE OPPOSITE PARTY

 

Ex.B1  -	21-03-2013	Photocopy of Mail between opposite party’s branch officers,  Manjula Shamuganathan to Gurpreet Kaur.
Ex.B2  -	28-09-2011	Photocopy of  application No.QC236625, Common Proposal Form-Traditional & Variable Insurance Products   in favour of Ogili Krishna Reddy issued by the opposite party.
Ex.B3  -	-	Photocopies of  letter from opposite party to the complainant, First  Premium Receipt dated 08-10-2011, Policy Document.
Ex.B4  -	30-09-2011	Photocopy of Medical Examination Form in  favour of   O.Krishna Reddy issued by the opposite party.
Ex.B5  -	-	Photocopy of Aravind Kidney Centre, Nellore, hospital details relating to I.P.No.3766 in favour of  Ogili Krishna Reddy.
Ex.B6  -	26-09-2012	Photocopy of  letter from opposite party to the  complainant.

                                                                                                              

                                                                                                                           Id/-

                                                                                                         PRESIDENT(F.A.C.)

Copies to:

1.	Sri R.K. Sarma, Advocate & Notary, Tekkemitta, Nellore-3.
2.	Sri K. Bhaskara Rao, Advocate, Nellore.

 

Date when free copy was issued: