Complaint filed on: 31-10-2017
Disposed on: 25-04-2018
BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL FORUM,
OLD DC OFFICE COMPOUND, TUMAKURU-572 101
CC.No.97/2017
DATED THIS THE 25th DAY OF APRIL 2018
PRESENT
SMT.PRATHIBHA. R.K. BAL, LLM, PRESIDENT
SRI.BALAKRISHNA V.MASULI, MEMBER
Complainant: -
E.Padmavathi
C/o. Krishnamurthy,
Staff Nurse,
Thovinakere PHC Quarters,
C.N.Durga Hobli, Koratagere
Taluk, Tumakuru district
(By Advocate Sri.Thippeswamy.K.H)
V/s
Opposite parties:-
- The Manager,
LIC of India, Division No.2, BH Road, Tumakuru
- The Zonal Manager,
LIC of India, South Central Zonal Officer,
Jeevan Bhagya, Sifabad, Hydrabad-63
(By advocate Sri.G.S.Narayana)
ORDER
SMT.PRATHIBHA. R.K, PRESIDENT
This complaint is filed by the complainant against the OP No.1 and 2, under section 12 of the Consumer Protection Act, 1986. The complainant prays to direct the OP No.1 and 2 to pay settle the claim preferred by the complainant pertaining to two insurance policies i.e. 1) 617463930 for Rs.5,00,000=00 and 2) 617534033 for Rs.2,00,000=00 by paying the above said amount along with interest @ 18% p.a. from the date of claim petition together with Rs.50,000=00 towards general damages for mental torture and deficiency in service and grant such other relief in the interest of justice and equity.
2. The brief fact of the complaint is as under.
The complainant’s brother Sri.Krishnamurthy S/o. Veeranna who is residing at Thovinakere village, Koratagere taluk had insured his life by obtaining insurance policies bearing No.617463930 for sum assured Rs.5,00,000=00 and No.617534033 for sum assured Rs.2,00,000=00 from the OP Company. While taking the insurance policies, the said Sri.Krishnamurthy had made the complainant as a nominee. Sri.Krishnamurthy had paid two yearly premium of Rs.13,497=00 pertaining to the first insurance policy No.617463930 and Rs.11,481=00 premium pertaining to the second policy No.617534033.
The complainant further submitted that, Sri.Krishnamurthy died on 24-3-2016 due to heart attack. Thereafter, the complainant has filed a claim petition before the OPs for settlement of the claim amount. But the OPs have raised flimsy grounds i.e. standard age proof of the deceased was not furnished. In fact, this objection ought to have risen by the LIC at the time of accepting the proposal. But now with an intention to defeat and defraud the complainant from getting the insured amount, the OPs are raising the above flimsy ground. Hence, the OPs have shown deficiency in service in not settling the insurance claim.
The complainant further submitted that, on 15-9-2017 the complainant had issued a legal notice to the OPs calling upon them to settle the insurance claim. The said notices were served on the OPs, but the OPs have failed to settle the insurance amount. Hence, the present complaint is filed.
3. After service of the notice, the OPs have appeared through their counsel and filed version contending interalia as under:
The OP submitted that, the complaint filed by the complainant is frivolous, vexatious and unsustainable in law. The allegations made in the complaint are baseless, false and untenable and the same are hereby denied. Hence, there is no deficiency in service on the part of the OPs. The OPs further submitted that, as per Section 11 (2) (a) or 17 (2) (a) of the CP Act 1986, the 2nd OP is the South Central Zonal Office at Hyderabad neither resides in the place where the complaint has arisen nor works for gain at the said place. Hence the complaint has not come within the the purview of these sections. Hence, prays for dismissal of the complaint.
The OPs further submitted that, the reliefs sought for the complainant in the complaint are discretionary relief and as such the complaint is required to set out true facts and further required not to suppress material facts, but then the complainant is guilty of suppression of the material facts.
The OPs further submitted that, the OPs corporation is a statutory body and act in accordance with rules and regulations and it is also governed by the Insurance Act 1938, LIC Act 1956 and IRDA Act 1999 and it has no grievance or enmity against any one and it has to guard and safeguard the interest of the public and their money being the Trustee.
The OPs further submitted that, as per the terms and conditions of the policy, if the policyholder dies within a period of three years from the date of taking the policy or from the date of revival of the policy, the Insurance Corporation will conduct an enquiry to look into the bonafides of the claim, if the life assured suppressed the material information at the time of taking the policy or at the time of revival of the policy.
The OPs further submitted that, the OPs branch office is throughout the country. While taking the new policy, details of all his previous insurance policies are to be furnished in the proposal for. Further OPs would be consider total insurance cover vis-à-vis his total earned income or capacity to pay the premiums. When a person with fraudulent intention takes the insurance policies from different branches under different divisions away from his native place, suppressing material information submitting false age proof without disclosing the previous policies already having, it amounts to severe offence and to guard against such persons, Section 45 of the Insurance Act 1938 envisages for conducting the claim Investigation by an authorised official of the Insurer.
The OPs further submitted that, the age of the life assured and the sum assured coverage on an individual life are wholly depending on the age of the person taking the insurance policy. More the age, more will be the premium and beyond certain age, insurance cannot be considered or beyond certain limit, insurance cannot be granted. After issue of the policy, if it comes to the knowledge of the insurer that, the age of the DLA was wrongly given fake school certificate just to obtain the fresh policy. Insurer is liberty to cancel such policy and forfeit the premiums as per the conditions.
The OPs further submitted that, the name of the complainant and the nominee as per the policies is E.Padmavathi and the relationship mentioned as sister. However there is no proof to establish the relationship between as DLA and the complainant.
The OPs further submitted that, the policy holder had obtained two policies bearing No.629099953 and 668878574 from the OPs corporation from its Chitradurga branch office and sum assured Rs.1,00,000=00 and Rs.1,50,000=00 respectively. The above two said policies were settled by the OPs Corporation. This was not mentioned in the complaint by the complainant. Further two policies which is under litigation i.e. vide policy No.617463930 for Rs.5,00,000=00 and 617534033 for Rs.2,00,000=00 total Rs.7,00,000=00 were brought from Tumakuru – II branch under Bengaluru Division – 1 away from the native place. It is further submitted that, the deceased Sri.Krishnamurthy had two wives and five children. The deceased life assured in connivance with the nominee had submitted a fabricated school certificate as age proof, as the maximum sum assured allowed under non-standard age proof is only Rs.2,00,000=00.
The OPs further submitted that, the allegations made in the para-3 of the complaint are denied as false, fictitious ad fabricated. Death of the policy holder is not in dispute, but the cause of death and death of the insured person within one year from the date of taking the policy resulted into early claim, demanding investigation into bonafides of the claim. It is only when it comes to the knowledge of the insurer that there is suppression of material information which was relevant for assessment of risk and underwriting of proposal, Section 45 of the Insurance Act becomes applicable and hence investigation was done and claims repudiated in order to protect the funds of other genuine policy holder.
The OPs further submitted that, the deceased policyholder Sri.Krishnamurthy had taken policy no.629099953 in Chitradurga branch under Shimoga Division for Rs.1,00,000=00 by giving voter’s card as age proof and the same was settled in favour of wife of the DLA. The second policy Jeevan Ananda policy bearing No.617463930 was obtained by DLA on 28-4-2015 for sum assured Rs.1,00,000=00 from Tumakuru-II branch under Bengaluru Division-I without disclosing the first policy and given school certificate as age proof and date of birth is mentioned as 10-1-1975 and nominee name is mentioned as Smt.E.Padmavathi. The third policy New Endowment policy bearing No.6688574 on 25-5-2015 was obtained from the Chitradurga branch under Shimoga Division sum assured for Rs.1,50,000=00. The life assured has given voters card as age proof and date of birth as mentioned as 5-10-1974. The fourth policy Jeevan Ananda policy bearing No.617534033 obtained from Tumakuru branch under Bengaluru Division –I for sum assured Rs.2,00,000=00 the life assured has given voter’s card as age proof, the age of the DLA mentioned as 1-7-1973 and made nominee as Smt.E.Padmavathi/complainant.
The OP further submitted that, the deceased life assured did not disclose any previous policies though he was fully aware about the previous policies, if he had disclosed the particulars of previous policies, as per rules fasting blood sugar, lipidogram, HB%, Routine Urine Analysis and Elisa for HIV along with full medical report would have been called for and the underwriting would have been done at the Divisional office of the OP-Corporation by referring the papers to the Divisional Medical referee and the OP-corporation would have declined/rejected the insurance coverage.
The OP further submitted that, the deceased life assured Krishna Murthy submitted copy of the school certificate dated 20-12-2105 obtained from Madakarinayaka High School, Chitradurga as per which he was a student of 9th standard during the year 1986-87 vide admission no.103/86-87. As a part of the claim investigation, the OP investigating officer had visited the said School, Chitradurga and verified the school certificate and confirmed that the above DLA Sri.Krishnamurthy S/o. Eranna was not a student of that school during that year against the said admission number and the same has been certified by the Head Master of Madakarinayaka High School, Chitradurga vide letter dated 16-9-2016. Against the said admission number 103/87-87, one certain Nataraja s/o. Basavaraja was a student as per the books of the high school.
The OP further submitted that, The OP has repudiated the claim under the above two litigated policies based on the above facts i.e. non-disclosure of previous policies and submission of fabricated school certificate and this decision was communicated to the complainant on 3-12-2016 by giving an option to approach the Zonal Office Claims Disputes Redressal Committee, South Central Zone, Hyderabad and the same was communicated to the complainant on 12-7-2017. The OP has not violated the terms and conditions of the insurance policies and there is no deficiency in service on the part of the OP. The complainant has not come with clean hands and has concealed the true and material facts. The allegations made in the complaint as to mental agony and stress, injury, financial loss and hardship made by the complainant are all emphatically denied as false. Hence, the complainant is put to strict proof of the same.
The OPs further submitted that, the OP-Corporation is not a charitable organization and it is a trustee of the public money. Hence, the OPs have prayed to dismiss the complaint with compensatory cost, in the interest of justice and equity.
4. In the course of enquiry in to the complaint, the complainant and OPs have filed their affidavit evidence reproducing what they have stated in their respective complaint and version. The complainant has produced documents along with complaint which were not marked. The OPs have produced documents which were marked as Ex.R1 to R21. We have heard the arguments of both parties and we have gone through the oral and documentary evidence of both sides meticulously.
5. Based on the above materials, the following points will arise for our consideration.
- Whether the complainant has proved there is deficiency in service on the part of the OPs?
- What Order?
6. Our findings on the above points are;
Point no.1: In the affirmative
Point no.2: As per the final order below
REASONS
7. On perusal of the averments of the complaint, objection of the OPs and affidavit evidence of both parties, it is an admitted fact that, the DLA (Deceased life assured) had obtained four polices i.e. two policies bearing No.629099953 and 668878574 from the Chitradurga branch for a sum assured of Rs.1,00,000 and Rs.1,50,000=00 and the same was settled by the OP-Corporation.
8. It is also an admitted fact that, the DLA (Deceased Life Assured) had obtained two policies bearing No.617463930 and 617534033 from Tumakuru branch, Bengaluru division. The complainant has made the nominee for the said policies. The above said two policies has repudiated by the OPs vide letter dated 3-12-2016/Ex-R17 and letter dated 30-6-2017/Ex-R18.
9. The OP had repudiated the claim of the complainant that the DLA falsely had answered the question No.2, 4 and 9 in the proposal form. The DLA (Deceased Life Assured)/Sri.Krishnamurthy had taken two more policies bearing No.668878574 and 629099953 from the Chitradurga branch office. The same was suppressed by the DLA (Deceased Life Assured) while taking the two policies bearing No.61743930 and 617534033 from Tumakuru branch office. Further, the DLA (Deceased Life Assured) has produced fake school certificate while taking the above said policies. Hence, the claim of the complainant was repudiated. The counsel for the OP submitted that, if the death of the insured person is within one year from the date of obtaining the policy. As per Section 45 of the Insurance Act an investigation has to be done and it was revealed that, the total claim of the policy for Rs.10,25,000=00 and they would have been called for medical report for fasting blood sugar, lipid gram, hb%, routine urine analysis and Elisa for HIV etc and the same would have been sent to the divisional office of the OP-Corporation. The Ops would have declined/rejected the insurance coverage.
10. To substantiate the above said facts, the OPs submitted one citation of National Consumer Disputes Redressal Commissioner, New Delhi- Revision Petition No.1059 of 2009- Smt.Seema Agrawal and Ors and v/s LIC of India order dated 17-7-2015, it reads as under:
“Deceased Life Assured Purushottam Agrawal, husband of the complainant obtained New Bima Kiran Policy for Rs.5.00 lakhs from LICI, Insured died in accident. It was revealed that, the Deceased had obtained some more policies prior to this policy and had not disclosed all other previous policies to avoid medical examination for ECG etc. As information regarding earlier policies was concealed. The claim was repudiated rightly and prayed for dismissal of complaint. Learned District forum after hearing both the parties allowed complaint”.
11. The above said citation reported by the Ops is not applicable. Since, in the aforesaid case, the case was in reference to an accident it was not a case of heart attack or other ailment. Hence the aforesaid case is not applicable.
12. The complainant submitted that, the above said objection with regard to the fake school certificate and suppressed information of the previous policies were not raised at the time of acceptance of the policies. The Ops have raised such objection only after the death of Sri.Krishna Murthy/life assured. The OPs have raised the above such contention is only to defeat and defraud the complainant from getting the insured amount. In respect of his contention, the complainant has produced the following citations.
- 2013(4) CPR 90 (NC) - M/s. Sahara India Commercial Corporation Ltd. Through its Sector Manager -v/s- Smt. Rasal Devi Meghwanshi & Anr. In para-17 and 18 of the order the Hon’ble National Commission, it is held that,
“17. It is an undisputed fact that, the petitioner Shri Ram Pal Meghwanshi in his application form no.208 dated 29-9-1998 had declared his age as 51 years. He had also not given his date of birth certificate to support the same. The petitioner had not raised any objection at that point of time and allowed him to purchase the bond. In fact they never raised the issue regarding date of birth till after the death of the Shri Ram Pal Meghwanshi, and the respondents who are nominated by him, claimed the due amount of death help as per clause 10 of the bond. We agree with the State Commission that it is not reasonable and fair to raise the dispute regarding the age after the death of the bond holder.
18. In view of the above circumstances, we find that there is no jurisdictional error or illegality in the order of the State Commission warranting our interference. However, a partial modification is made to the extent that as agreed to by the counsel for the respondents/complainants the amount of loan that is paid by the petitioner will be repaid within a period of 20 years as per the terms and conditions of the bond”.
- 2013(1) CPR 33 (NC) – Sub Post Master & Anr. –vs- Santho Kaur. It is held that,
“........ ...... Non Payment of maturity amount for non-submission of succession certificate-State Commission directed to pay terms deposit amount of Rs.1. Lac Deposited by deceased along with interest permissible and costs of Rs.3,000=00 – Such requirement was not indicated and conveyed duly by petitioners to respondent right in first instance when she visited sub-post office- Complainant started visiting sub-post office soon after death of her husband and even before maturity of term deposit and in every visit she was asked to comply with new requirements and furnish fresh documents- There is no specific denial to her visits and averments made by her in complaint- If sub Post Master who is in charge of sub post office which accepts such term deposits himself is not sure of rule position and takes months together to furnish correct advice, petitioners should be held liable for deficiency in service – Revision petition dismissed”.
- 2012(4) CPR 80 (NC) – Post Master Office, Taluk Sindkheda and Anr. –vs- Shri Samachan Subash Patil. It is held that,
“...... ...... Claim was not paid allegedly on ground that policy was in lapsed condition as premium were not paid regularly – complainant allowed by For a below – As premia were accepted by Post office they are estopped from raising any objection regarding policy – There is deficiency in servcie on part of the post office in repudiating claim, though all premia were deposited by policy holder as per terms and conditions of the policy – Nothing to show whether lapse of policy was communicated in any manner to deceased or complainant – Revision petition dismissed on ground of limitation as well as on merit”.
- 2017(1) CPR 818 (NC) – Azaz Haider –vs- LIC of India. In para-9 of the order the Hon’ble National Commission, it is held that,
"It is pertinent to note that the policy was issued after due verification by the officer of OP 1 and examination of panel of LIC doctors. In the instant case, the OP relied upon the primary school certificate, which shows the date of birth as 24-4-1956 whereas the Kutumb register showed date of birth as 1-2-1969. On perusal of birth certificate issued by Government of UP, Department of Health, it revealed the date of birth as 1-2-1969. The registration was done on 16-2-1994. The certificate was issued by the Registrar (Birth and Death) at Gram Panchayat, Pedi on 23-1-2002. It clearly establishes the date of birth was 1-2-1969. On perusal of certificate issued by School, it is a hand written certificate in which name of school, name of head master and seal is not seen. The certificate is not convincing one. There is 13 years age difference between those two certificates. It is surprising to note that how the agent or OP 1’s official failed to note such vast age difference. It shows negligence, passivity and inaction of the agent and the OPs.
10. It clearly indicates unfairness on the part of OP to save a meager sum of Rs.50,000=00. We are of considered view that dragging the innocent illiterate consumer from the District forum to National Commission itself shows that the OPs are bent upon harassing such like consumers, who have kept the utmost good faith of such insurance companies. The family members of the deceased are struggling to avail genuine claim of Rs.50,000=00 only since 1998 i.e. for almost two decades”
13. As per the aforesaid citations produced by the complainant and facts of the case, we hold that, there is deficiency in servcie on the part of the OPs in rejecting the claim of the complainant. Admittedly, Sri.Krishnamurthy died on 24-3-2016 due to heart attack. The death of the deceased/life assured was not objected by the OPs and also health condition of the deceased/life assured was not objected by the OP-Corporation. Now, the allegations of the OPs is that, suppressed the information of the previous policies of the deceased/life assured. If DLA discloses the other previous policies they would have been called for medical reports viz. Fasting blood sugar, Lipido gram, hb%, Routine urine analysis and Elisa for HIV. This contention of the OPs does not hold no water. Since, the Ops have failed to prove that, the complainant had suppressed the previous policy only to obtain these two policies.
14. Further allegation of the OP is that, the complainant had produced fake school certificate and the same was not raised by the OP at the time of acceptance of the policies. Once the OPs had scrutinized the documents and issued the policy and accepted the premium amount, now the OPs are estopped by raising objection regarding age of the deceased Sri.Krishnamurthy after death of Sri.Krishnamurthy. Hence, we hold that, the complainant is entitled to get the benefits covered under the policy. According we answer the point No.1 in the affirmative. In the result, for the foregoing reasons, we proceed to pass the following order:
ORDER
The complaint filed by the complainant is allowed.
The OP No.1 and 2 are jointly and severally directed to pay benefits covered under the policies bearing No.617463930 and 617534033-(New Jeevan Anand) to the complainant along with 9% interest per annum from the date of claim application to till the date of realization.
The OP No.1 and 2 are further directed to pay Rs.10,000=00 as compensation and Rs.5,000=00 towards litigation cost to the complainant respectively.
This order is to be complied by the OP No.1 and 2 within 30 days from the date of this order.
Supply free copy of this order to both parties.
(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Open forum on this, the 25th day of April 2018).
MEMBER PRESIDENT
