Per Sri A. Hazarath Rao, President:-

The complainant filed this complaint u/s 12 of the Consumer Protection Act seeking for payment of Rs.9,00,000/- being assured amount and Rs.25,000/- as compensation besides costs. 

2.  In brief the averments of the complaint are:

        Complainant is nominee of the insured Koduri Narasamma.   The insured took Reliance invest assure plus plan policy for Rs.1,00,000/-.   The term of the said policy was twenty years.   The insured paid premiums regularly till her death on 18-05-11.   The complainant intimated the death of the insured to the opposite parties on 18-05-11 who in turn sent cheque for Rs.1,00,000/- on 28-06-11 drawn on HDFC Bank.   The complainant cashed the said cheque.   The said Narasamma took another policy namely Reliance endowment policy for Rs.9,00,000/- bearing No.18077894.   The opposite parties issued a valid certificate.   The insured paid premiums regularly till her death.   But the opposite parties failed to pay the assured amount covered by the endowment policy.  The opposite parties on 14-10-11 addressed a letter to him mentioning that if the complainant withdrew the said amount within fifteen days it amounts to accepting settlement for both policies.  The opposite party sent letter four months after sending the cheque.   The above conduct of the opposite parties is not bonafide.   The opposite parties are trying to escape from their liability by rejecting to pay the assured amount of Rs.9,00,000/- under the endowment policy.  The complainant issued a notice on 01-12-11 to the opposite parties demanding the assured amount.   The opposite parties gave reply with false allegations.   The above conduct of the opposite parties amounted to deficiency of service.   The complaint therefore be allowed.

3.  The contention of the opposite parties in nutshell is hereunder:

        The complainant is not a consumer and there is no triable consumer dispute and as such the Consumer Protection Act has no application.   The contract of insurance is uberrimae fides.  The person seeking insurance is expected to maintain a higher and rigorous standard of good faith.  The complaint is misconceived, incorrect and baseless.   The insured did not disclose all the facts.  The opposite parties did not commit any deficiency of service. The complaint therefore be dismissed.

4.   Exs.A-1 to A-8 and Exs.B-1 to B-3 were marked on behalf of the complainant and opposite parties respectively.     

5.  Now the points that arose for consideration in this complaint are:

1. Whether the complainant is a consumer?
2. Whether the opposite parties committed deficiency of service?
3. Whether the complainant is entitled to compensation?
4. To what relief?

6.  POINT No.1:-   The opposite parties categorically admitted about issuing policies in favour of insured after taking premium.   Non settlement of the claim by the opposite parties made the complainant to approach this Forum and raised a triable consumer dispute.   Therefore the complainant is a consumer.   We therefore answer this point in favour of the complainant.

6.   POINT No.2:-   The opposite parties issued the policy (Ex.A-3) in question after receiving premium of Rs.59,893.61ps.   The insured Koduri Narasamma took the said policy on 27-10-10.   It is well settled in law that contract of insurance is uberrimae fides.  The complainant contended that the burden is on the opposite parties to prove that the complainant suppressed material facts while obtaining insurance policy. The complainant relied on the decision reported in Life Insurance Corporation of India vs. Smt G.M. Chenna Basamma                AIR 1991 SC 392 wherein it was held:

          “It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured.  The assured is thus under a solemn obligation to made full disclosure of material facts which may be relevant for the insurer to take into account while deciding, whether the proposal should be accepted or not.   While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted.  Section 45 of the Act has made special provisions for a life insurance policy if it is called in question by the insurer after the expiry of two years from the date on which it was effected……………………………………………………….the burden of proving that the insured had made false representations and suppressed material facts is undoubtedly on the Corporation.”      

7.     The opposite parties did not file any decision contra.  Therefore the burden is on the opposite parties to prove that the insured suppressed material facts while obtaining the policy in question.                             The opposite parties in their version did not specifically mention what material facts the complainant suppressed while obtaining the insurance policy.  But in the affidavit filed by the opposite parties through Smt Patibandla Sivaranjani it was mentioned that the insured mentioned her age as 82 though she was 63 at the time of obtaining policy.   The opposite parties failed to take such plea in their version and did not surprise the complainant by mentioning the details of suppression of material facts in their affidavit.  But the opposite parties so mentioned in their repudiation letter dated 14-10-11 by the opposite parties.  

8.     The deponent on behalf of the opposite parties  in her affidavit further mentioned that they received claim intimation from the complainant for the subject policy on 18-05-11, further the amount of Rs.1,00,000/- has already been paid to the complainant dated                    28-06-11 via (cheque) (wrongly typed as 28-06-12) which was duly accepted and withdrawn by the complainant as per the policy rules if the insured accepts the payment within fifteen days it means that the insured accepted for the entire settlement of the policies.   The complainant filed xerox copy of cheque (Ex.A-3) for Rs.1,00,000/- dated 28-06-11.  Ex.A-5 letter dated 14-10-11 is extracted below for better appreciation:

          “Please accept our heartfelt condolences on the early demise of your mother, we have received all the documents submitted by you.

          Upon investigation we understand that the age of your mother at the time of submission of the proposal 21-10-2010 had been grossly understated, in view of the fact that she was aged 81.   Thereby Late Mrs. Koduri Narasamma had misled the insurer to offer life insurance covered to her even though the permissible age at early in the plan of insurance under which the above policy was issued was only 65.

          The understatement of age was material to the issuance of the policy and ought to have been disclosed the proposal form.   By not doing so, the proponent had misled us to grant her insurance cover on the terms as stated in the policy schedule.

          In the light of the above facts and the irrefutable evidence we hold that we were provided with false and inaccurate answers, hence the contract is void ab initio.

          Please note that encashment of the said cheque or no revert from you or 15 days on receipt of this letter shall be deemed to be an acceptance of the claim settlement and shall discharge Reliance Life Insurance Company Limited of all the liabilities under the aforesaid policy.

          Should you have any further clarifications or need any assistance, please feel free to contact us at                               044-30277947/30277946.

          If you find that the facts as stated by us are not acceptable to you or on any other reason you wish to lodge a grievance or complaint, you may write to us at the following address”.         

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9.     Neither of the parties filed evidence when the complainant cashed Ex.A-4 cheque.  In the absence of such evidence it has to be inferred that Ex.A-5 letter did not accompany Ex.A-4 cheque and the complainant had withdrawn the amount covered by Ex.A-4 cheque much earlier to Ex.A-5 letter.   Under those circumstances, Ex.A-5 letter in our considered opinion cannot help the opposite parties.  

10.        The contention of the opposite parties is that the insured suppressed her age.   To discharge their burden the opposite parties  relied on Ex.B-3 electoral rolls published on 05-01-11.  In Ex.B-3 age of the Koduri Narasamma w/o Pitchi Reddy was mentioned as 82 as on 05-01-11.   The complainant on the other hand contended that the entries in voters list/electoral rolls are not conclusive proof of the age mentioned therein of a particular person.  In Ex.B-2 affidavit notarized on 20-10-10 the insured mentioned her date of birth as 15-07-54.   The contention of the opposite parties that an illiterate woman cannot furnish actual date of birth in the absence of any documentary evidence is having considerable force.   On the other hand, the complainant contended that the opposite parties are estopped from disputing the age of the insured having accepted the age of the insured and issued cheque for the policy of Rs.1,00,000/- and the said contention is also having considerable force.  The difference of age of the insured between Ex.B-3 and A-3 is about 25 years and it can be easily known to any person to naked eye that too in case of woman.   The delay in dispatching Ex.A-5 letter to the complainant and the opposite parties issuing cheque for Rs.1,00,000/- for Ex.A-1 policy leads us to draw an inference that the contention of the opposite parties regarding suppression of age is malafide.   Under those circumstances, the opposite parties are bound by the terms mentioned in Ex.A-3 policy.  In Ex.A-3 policy under the caption benefit payable it was mentioned that Rs.9,00,000/- plus vested bonus will be payable on survival of the life assured to 27^th October, 2029; Rs.9,00,000/- plus vested bonus and term benefit rider sum assured (if chosen) will be payable on death of the life assured prior to 27^th October, 2029.   The opposite parties repudiating the claim made by the complainant Ex.A-3 policy is not bonafide and did not stand to scrutiny.   We therefore opine that the opposite parties committed deficiency of service and answer this point in favour of the complainant.     

11. POINT No.3:-  The complainant claimed Rs.25,000/- as compensation.  The complaint as well as the affidavit of the complainant did not disclose reasons for claiming compensation.    Under those circumstances, we are of the opinion that the complainant is not entitled to compensation and answer this point against the complainant.  

12.  POINT No.4:-    In view of above findings, in the result the complaint is partly allowed as indicated below:

1. The opposite parties are directed to pay Rs.9,00,000/- together with interest @9% p.a., from the date of repudiation i.e., 14-10-11 till payment.
2. The opposite parties are directed to pay Rs.2,000/- towards costs of the complaint.
3. The above order shall be complied within a period of six weeks from the date of receipt of the copy of the order.  

Typed to my dictation by Junior Stenographer, corrected by me and pronounced in the open Forum dated this the 30^th day of November, 2012.

          MEMBER                                                               PRESIDENT

APPENDIX OF EVIDENCE

                                                         DOCUMENTS MARKED

For Complainant :

For Opposite Party: 

                                                                                                                                                  PRESIDENT