Complainant/s:           Smt. Sujata Bheemanagoudara

                                           D/o  Sannabhujanganagouda                                                          Bheemanagoudara, Age:37 Years,

                                            Occ: Household, R/o Hole-Alur,

                                            Ron Taluk, District: Gadag.

                                                (Rep. by Sri. M.V. Mudugal, Advocate)   

V/s

JUDGEMENT

JUDGEMENT DELIVERED BY SMT. YASHODA BHASKAR PATIL, MEMBER:

The complainant has filed the complaint U/Sec.35 of the C.P. Act, 2019 for recovery of insurance claim of Rs.75,00,000/-, Rs.1,00,000/- towards mental agony, Rs.1,00,000/- towards deficiency of service and towards cost of Rs.30,000/- in all Rs.77,30,000/-.

The brief facts of the complaint are as under:

         2.  The brother of complainant by name Kadesh Bheemanagoudar had insured for his life  and health on 31.03.2020 with the OP company for a sum of Rs.75,00,000/- and obtained a policy and paid towards premium an amount of Rs.12,894/-.  At the time of taking policy, the deceased was hale and healthy, Later Kadesh the insured expired on 12.12.2020. The complainant, who is nominee submitted the claim, OP denied to pay the insurance amount stating that, the deceased has suppressed the material facts regarding his income. Hence, filed this complaint.

          3.       After admitting the complaint, notice was issued to the OP, who appeared through his counsel and filed written version.

          4.       The brief facts of the written version of the OP are as under:

          OP denied the various averments made in the complaint.  OP contended that, the deceased obtained the insurance policy through fraud by concealment of material facts.  There was a suppression of material facts as to income and occupation of DLA.  The complainant/nominee submitted the ITRs of LA for AY-2017-18, 2018-19 and 2019-20 with gross total income of Rs.3,21,297/-, Rs.49,867/- and Rs.3,09,713/- respectively which showed that, declared annual income of LA was considerably less than the income disclosed in the proposal form i.e., Rs.5.5 Lakh.  Complainant submitted the ITR of the firm of LA for the year 2018-19 to 2020-21 of the DLA’s firm wherein the income of the DLA’s is mentioned as Rs.0/-, Rs,17,000/- and Rs.590/- respectively.  Hence, the policy was declared null and void U/Sec.45 of the Insurance Act and there is no deficiency of service,  committed by OP.  Hence, the death claim was repudiated.  OP further contended that, in the letter issued to the complainant clearly mentioned that, one premium paid by the DLA a sum of  Rs.12,894/- will be credited in the respective Bank account of the complainant.  Hence, prays for dismissal of the complaint.

          5.       To prove the case, complainant filed affidavit evidence and was examined as PW-1 and got marked the documents as Ex.C-1 to Ex.C-7.  One Swathy Nair, Senior Manager of OP filed affidavit and was examined as RW-1 and got marked the documents as Ex.OP-1 to Ex.OP-6. 

          6.       Heard the arguments on both side. Both counsels submitted their written arguments.

          7.       The points for our consideration arose are as under:

          i)        Whether the complainant proves that, there is a                      deficiency of service on the part of OP?

          ii)       Whether the complainant is entitled for the relief?

          iii)      What order?

          8.       Our findings on the above points are as under:   

                   Point No.1: Affirmative.

                   Point No.2: Partly affirmative.

                   Point No.3: As per final order.

          REASONS

          9.       Point No.1 & 2:- The points are taken together to avoid the repetition of facts. The counsel for complainant argued that, as per he evidence of PW-1 and the documents Ex.C-1 to Ex.C-4, complainant proved her case and is entitled for the relief.  The learned counsel for OP argued that, the deceased has suppressed the material facts and OP has rightly repudiated the claim and there is no deficiency of service. 

          10.     On careful perusal of the materials placed before us, PW-1 has filed affidavit in-lieu of her chief examination and reiterated the contents of the complaint.  PW-1 has stated that, the brother of complainant by name Kadesh Bheemanagoudar had insured his life on 31.03.2020 with the OP company for a sum of Rs.75,00,000/- and obtained a policy and paid premium amount of Rs.12,894/-.  At the time of taking policy, the deceased was hale and healthy.  Later Kadesh died on 12.12.2020.  When the complainant submitted the claim, OP denied to pay the insurance amount stating that, the deceased has suppressed the material facts regarding his income.

          11.     RW-1 has filed affidavit in-lieu of her chief examination and reiterated the contents of written version.  RW-1 has stated that, deceased obtained the insurance policy through fraud by concealment of material facts.  There was a suppression of material facts as to income and occupation of DLA.  The complainant/nominee submitted the ITRs of LA for AY-2017-18, 2018-19 and 2019-20 with gross total income of Rs.3,21,297/-, Rs.49,867/- and Rs.3,09,713/- respectively which showed that, declared annual income of LA was considerably less than the income disclosed in the proposal form i.e., Rs.5.5 Lakh.  Complainant submitted the ITR of the firm of LA for the year 2018-19 to 2020-21 of the DLA’s firm wherein the income of the DLA’s is mentioned as Rs.0/-, Rs,17,000/- and Rs.590/- respectively.  Hence, the policy was declared null and void in provisions of Sec.45 of the Insurance Act and there is no deficiency of service.  Hence the life land health claim was repudiated and further contended that in the letter issued clearly mentioned that, one premium paid by the DLA for an amount of Rs.12,894/- will be credited in the respective Bank account of the complainant to that effect nothing has transpired.

          12. Ex.C-1 & 2 are policy bond, Ex.C-3 is the premium receipt,
Ex.C-4 is the death certificate, Ex.C-5 is the repudiation letter, Ex.C-6 is the Aadhaar card of deceased and Ex.C-7 is the Aadhaar card of complainant, are not disputed by OP. So also OP is not disputing the insurance policy obtained by the deceased Ex.C-1 & 2. The main contention is that deceased suppressed the material facts regarding income, in proposal form.

         13. Ex.Op-1 is the proposal form, Ex.Op-2 Terms and conditions of the policy, Ex.OP-3 Letter from OP to complainant, Ex.Op-4 & 5 copies of Income Tax Return Acknowledgements; Ex.Op-6 is the letter repudiating the claim which also discloses that the OP has obtained the documents from complainant for confirmation of income of the deceased. According to OP, as the death occurred within a period 8 months Op has got power to investigate for bonafide genuiness of the policy.  RW-1 stated that, in the proposal form income disclosed by deceased was Rs.5.5 Lakh as personal income and also ITR of the  income of DLA’s firm is less than the income shown in the proposal form.  Op has not produced the original documents regarding Income Tax Returns Acknowledgments, Ex.Op-4 & 5 i.e.2017-18, 2018-19, 2019-20, 2020-21 which are Zerox copies. Without submitting detailed report of investigation conducted by the OP neither furnished on record to show whether expert investigation was made or what effort was made by the OP, what procedure was followed regarding the material fact for repudiation of the claim is not forthcoming without any original and reliable documents being produced, how they came to the conclusion that income of the deceased is less than income shown in the proposal form is not explained.

         We feel as regards to income, age or identity of life insured are concerned they are purely a question of fact. The insurance company should make verification at the time of acceptance of the insurance policy.  In case the life assured is unable to satisfy the insurance company regarding his age, identity or income. The insurance company should not issue insurance policy in his favour.  It is generally found that at the time of issuance of the insurance policy the insurance company remains in haste to receive the premium amount and to increase its business.  The insurance company starts making verification regarding income, age, etc., as and when the insurance claim is submitted.  So that the insurance company may be able to avoid the payments as per the terms of the insurance policy.

          14. It is pertinent to note here that, annual premium amount is only Rs.12,894/-.p.a. Deceased was an income tax payee as per the documents relied by OP. The premium amount of Rs.12,894/- p.a. is not a huge one.  Now a days, even agriculture labour is earning an income  of Rs.300/- per day as per the labour fixed by the Govt. So even an ordinary labour person can pay a sum of Rs.12,894/- p.a. Now the question is whether the deceased was capable of paying a sum of  Rs.12,894/- p.a. or not is important.  Op has not contended that deceased was not having income as shown in the proposal form. It is not the case of the Op that at the time of issuing policy, whether they have confirmed about income and obtained the necessary documents. Op has kept mum and did not enquire about income.  When claim form was submitted, then only the Op tried to make effort to ascertain the income.  The Op came to the wrong conclusion stating that income of the deceased was less than income shown in the proposal form. Even after taking into consideration, the average income of three years for the year 2017-18, 2018-19 and 2019-20, naturally it will be more than what is required to pay for the annual premium. As far as the difference found in the income of business is concerned, it is not a constant one. Business is based on uncertainties which cannot be predicted. So the Op has failed to prove that the deceased intentionally suppressed the material facts of his income. So the act and conduct of the OP, clearly goes to show that the OP has committed the deficiency of service.  Hence, repudiation of the policy is not in accordance with law.  Therefore, repudiation of the claim by the insurance company solely on the basis of income cannot be acceptable.           

          15. The counsel for the complainant is relying on the decision reported in II (2022) CPJ 414 (NC) Aditya Birla Sun Life Insurance Company Ltd. V/s Kusum Devi.  Wherein it is held that:-

                  On careful reading above decisions facts circumstances and ratio is aptly applicable to case on hand.

                  As per decision, Civil appeal No.407/2022 dtd:20.05.2022, in Gurmelsingh V/s The Branch Manager National Insurance Company. Ltd., Wherein, it is held that;

                  “While settling the claims, insurance company should         not seek documents which are beyond the control of     insured to furnish”.

                   Further, held that, insurance company should not be to     technical and ask for the documents, which, the insured          is not in position to produce due to circumstances     beyond  his          control.  It is found that the insurance    companies are                   refusing the claim on filmsy grounds        and on technical grounds”.

                  The facts, circumstances and ratio of the above decision is aptly applicable to case on hand, as insurance company repudiated the claim on filmsy ground that there is variation of income shown in proposal form and income tax returns.

                  Further, ILR 2007 Karnataka 602 in Huchappa and Another V/s Union of India and others.  Wherein, it is held that, the condition imposed by the insurance company while assuring the life of the policy holders to forfeit the amount if the premium is not paid for full three years, will be detrimental to the interest of the common man and it will be in clear violation of the Articles 21, 38, 39 of the constitution. The implied condition of forfeiture clause provided under condition No.4 by the authorities in the insurance policy is held to be void and without any basis.  Direction is issued to the authorities to return premium amount paid by the discontinued policy holders if the policy is not renewed.

                   Insurance Sec.2 (g) C.P.Act-1986 deficiency in service solely on the ground that the original certificate of registration (which has been stolen) is not produced,
non-settlement of claim can be said to be deficiency in service para No.4.

             The facts, circumstances and ratio of the above decision is aptly applicable to case on hand, as insurance company repudiated the claim on the sole ground, imposing one side condition in respect of income.   

             In the written arguments, the learned counsel for Op is relying on following decisions.

          On careful reading of the above decisions facts and circumstances and ratio it is not similar nor applicable to the case on hand as the Op has failed to prove that, the deceased knowing fully well with malafide intention, suppressed material facts for the income. 

          16. For the above complainant proved that the Op has committed deficiency of service and failed to settle the insurance claim amount.  Accordingly, we answer point No.1 in affirmative and point No.2 in partly in affirmative.

          17.     Point No.3:- In the result, we pass the following: 

           //O R D E R//

The complaint filed u/Sec.35 of the Consumer Protection Act, 2019 is hereby partly allowed.

The complainant is entitled for insurance claim for a sum of Rs.75,00,000/- (Rupees Seventy Five Lakh only) with interest @ 9% p.a. from the date of complaint till realization.

Further, the complainant is entitled compensation towards mental agony a sum of Rs.25,000/- (Rupees Twenty Five Thousand Only) and towards cost of litigation of Rs.5,000/-(Rupees Five Thousand only)

Office is directed to send the copies of this order to the parties free of cost.

           (Dictated to the Stenographer, transcribed by him, corrected and then pronounced by us in the Open Court on this 21^st day of
July-2022)

,            

(Shri Raju N. Metri)      (Shri. D.Y. Basapur)   (Smt.Yashoda Bhaskar. Patil)

        MEMBER                 PRESIDENT              WOMAN MEMBER

-: ANNEXURE :-

EVIDENCE ON BEHALF OF COMPLAINANT/S:

PW-1: Sujata  Sannabhujanganagouda Bheemanagoudra.

DOCUMENTS ON BEHALF OF COMPLAINANT/S

Ex.C-1 & 2 : Copy of Policy Bond with details.

Ex.C-3: Copy of Premium receipt.

Ex.C-4: Copy of Death Certificate.

Ex.C-5: Copy of letter from OP to complainant dated 17.05.2021.

Ex.C-6: Copy of Aadhar Card of DLA.

Ex.C-7: Copy of Aadhar Card of complainant.

EVIDENCE ON BEHALF OF OPs:

RW-1: Swathy Nair.

DOCUMENTS ON BEHALF OF OPs:

Ex.OP-1       : Copy of proposal Form.

Ex.OP-2       : Copy of terms and conditions of the policy.

Ex.OP-3       : Copy of letter from Op to complainant dated 28.03.2021.

Ex.OP-4 & 5 :Copies of Income Tax Return Acknowledgements.

Ex.OP-6       :Copy of repudiation letter from OP to complainant dated                    17.05.2021.

(Shri Raju N. Metri)    (Shri. D.Y. Basapura)   (Smt.Yashoda Bhaskar. Patil)

        MEMBER                 PRESIDENT              WOMAN MEMBER