O R D E R

Sri.K.Vijayakumaran, President.

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The complaint for realization of insurance amount, compensation, cost etc.

The averments in the complaint can be briefly summarized as follows.

The complainant is a consumer of the opposite parties. The complainant is the mother and nominee of Late. Soorya Prakash who insured his life with the opposite parties, as per Policy No.782180753.The said Soorya Prakash died on 14.08.2003. Since the said policy was a double risk cover endorsement policy with accident benefit cover, the nominee is entitled to get three times the sum assured and bonus as compensation in case of death of policy holder in an accident.

The policy commenced on 28.03.2000. The deceased was aged 24 years at the time of inception of the policy. On 01.12.2001 deceased got employment with Tex Corporation Limited, Gurgaon, Hariyana as assistant machine operator and he died during the

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currency of the said policy on 14.08.2003 in a furnas blast. After the death of Soorya Prakash the complainant who is the mother and nominee of the insured submitted claim for the assured amount. However, the claim was repudiated on 19.01.2005. The repudiation is illegal and amounts to deficiency in service. Hence the complaint.

        The opposite party filed version contenting, inter alia, that the complaint is not maintainable either in law or on facts. The complainant is not a consumer of these opposite parties. The averment in para 2 that the second opposite party is the agent of the first opposite party at Kottarakkara is incorrect. The branch managers are subordinate officers of the Divisional Manager. It is admitted that Life Insurance Policy No.782180753 was issued to deceased Soorya Prakash. The term of the policy was 15 years Geevan Mithra double cover plan (88-15).The date of commencement of the policy was 28.03.2000 and the date of proposal is 31.03.2000. The sum assured under the policy is Rs.30,000 plan and term was 88-15 and the consideration for the

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contract of insurance under the policy viz, the premium was arrived at Rs.541/- quarterly and the nominee is the mother of the life assured. The insured died on 14.08.03. The averment that the premium was being paid regularly is not true. Policy was lapsed on 28.12.01 and revived on 14.04.02. Again the policy lapsed on 28.09.02 and was revived on 27.05.03. The averment that the insured was aged 24 years at the time of issuance of the policy is false. As per the proposal form the insured had declared his occupation as agriculturist with an annual income of Rs.28,000/- and death happened within three months from the date of revival of the policy. So LIC had conducted an enquiry into the matter. As per the available documents the deceased had undergone medical examination for reviving the policy from Dr.T.M.Joseph in his clinic at Kottarakkara on 26.05.2003 and also he has signed the form of declaration of good health at Kottarakkara. The insured died on 14.08.2003 at Safdarjung Hospital, New Delhi due to burn injuries sustained at an accident at his work place at Gurgaon, Hariyana. On enquiry it was revealed that the life assured was employed as an

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Assistant operator at M/s.Tex Corporation Ltd, Mohammadpur, Khandasa Road, Gurgaon, Hariyana from 01.12.2001. But the change of employment was not informed to the LIC of India during the term of the policy. The details of leave obtained from the employer shows that deceased was on duty at Tex Corporation Ltd, Mohammadpur, Gurgaon, while the policy was revived on 27.05.03 with medical certificate dated: 26.05.03. Further the assured fraudulently suppressed the material facts regarding his occupation at the time of revival. A contract of insurance is a contract uberima fidei and that there must be atmost good faith on the part of the assured.

        In this case medical certificate was obtained by the deceased without presenting himself before the Medial Examiner on 26.05.2003. Therefore, the insured has revived the policy on forged declaration of good health and forged medical report. The service of Dr.T.M.Joseph as the medical examiner of LIC of India has been terminated for issuing medical report on 26.05.03 without

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examining the life assured who was at Gurgaon on 26.05.2003. Under these circumstances, the opposite party has no other alternative than to repudiate this claim. There is no deficiency in service on the part of the opposite parties. Hence the opposite parties press to dismiss the complaint.

        The evidence in this case consists of the oral evidence of PW1 and Exts. P1 and P2 on the complainant side. The DW1 examined on the side of opposite party and marked Exts.D1 to D21.

Points

1.     Whether there is deficiency in service on the part of opposite parties?

2.     Reliefs and costs.

As a matter of fact the policy is admitted. The policy was revived twice is also an admitted fact. The contention of the opposite party is that at the time of second revival the insured without presenting himself for medical examination obtained

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medical certificate fraudulently and filed certificate of good health and therefore they were compelled to repudiate the policy. The contention of the complaint is that the deceased used to come  without availing leave as permitted by the company as he used to work overtime while he was at the company and therefore the contention that the certificate of good health was obtained fraudulently  is unsustainable.

        The opposite party has repudiated the claim mainly on two grounds. The first ground is that the insured suppressed material facts regarding his employment and therefore the opposite party is entitled to repudiate the claim. It is contended that while in
Ext.D1 Policy    the insured has shown his employment as agriculturist, Ext.D6 shows that he was employed in M/s.Tex Corporation, Gurgaon, Hariyana at the time of his death from which  it is obvious that there was suppression of material fact regarding his employment. It is to be noted that the opposite party has no case that, the declaration that the insured was an agriculturist at

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the time of inception of the policy on 31.03.2000 is false. Ext D22 shows that the insured was offered employment by Tex Corporation

Limited on 01.12.2001. So it can not be said that the insured has suppressed any material fact in Ext.D1.The declaration by the proposal in Ext D1, which requires the intimation of change in occupation is as follows “ And I further agree that if after the date of submission of the proposal but  before the issue of the First Premium Receipt (I) any change in my occupation or any adverse circumstances connected with  my financial position or the general health of myself or that of any member of my family occurs or (II) if a proposal for assurance or an application for revival of a policy on my life made to any office of the Corporation has been withdrawn or dropped, deferred or accepted at an increased premium or subject to a lien or on terms other than as proposed I shall forthwith intimate the same to the Corporation in writing to reconsider the terms of acceptance of assurance. Any omission on my part to do so shall render this Assurance invalid and all monies which shall have been paid in respect thereof forfeited to the Corporation”. So as per

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Ext D1 the change of occupation is to be intimated before the issuance of 1^st premium receipt. It is worth pointing out in this context that opposite party has not produced any material to show that the intimation regarding change of occupation after the issuance of 1^st premium receipt is  mandatory. At the time of cross examination DW1 has agreed to produce the circular in this regard but he failed to produce the same for reasons best known to him. As argued by the Learned Counsel for the complainant it can only be because there is no such circular. The burden to establish this aspect is on the opposite party but they failed to discharge the same. The learned counsel for opposite party would argue relying on the decision of Apex Committee reported in 2007-2-LW 661 that the variance in the occupation in the proposal form and other documents amounts to  material suppression enabling the opposite parties to repudiate the claim. We are unable to agree with that argument. In the said decision the Hon’ble Supreme Court was considering the adjudication of the question as to whether the insured therein was a house wife or a teacher by the consumer commission and not regarding omission to intimate the change in

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occupation. In this case as pointed out earlier there is absolutely nothing to show that the insured has suppressed his actual employment in Ext.D1. The failure to intimate his employment which he got subsequently cannot be said to be a material suppression enabling the opposite parties to repudiate the claim especially when the opposite party failed to establish that intimation of change in occupation is mandatory.

        The second ground on which the opposite parties justify their repudiation is on the ground that the insured obtained Ext.D4 certificate of good health without presenting himself for medical examination before the doctor. A perusal of Ext.D4 shows that Dr.T.M.Joseph and the LIC agent have also signed in it in addition to the insured. Both the doctor as well as the LIC agent are known to the opposite party and there is no dispute with regard to their signature in Ext D4 even though they would dispute the signature of the insured in Ext.D4. The opposite party is relying on Ext.D16  

for arriving at a conclusion that the insured has not presented himself for examination before the doctor Ext.D16 is a document

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alleged to  have been issued by M/s.Tex Corporation Limited, Gurgaon to the Manager claims LIC, Divisional Office, Thiruvananthapuram. This document was proved through DW1 who has no previous acquaintance with the signatory in Ext.D16. The Learned Counsel for the complainant would argue that a document which has not been properly proved is not admissible in evidence relying on the decision reported in 2009 (4) KLT Suppl. 82 (SC) wherein it was held that “a document becomes inadmissible in evidence unless author there of is examined, the contents thereof cannot be held to have been proved unless he is examined and subjected to cross examination”. So no reliance can be given to Ext.D16 over Ext.D4. As pointed out earlier the opposite party has no case that the signature of the doctor and the insurance agent in Ext.D4 is forged. On considering the documents we are of the considered view that Ext.D4 which is signed by a doctor and an insurance agent who are known to the opposite party is preferable to a document which is signed by a party with whom DW1 has no previous acquaintance. Apart from that it could not be believed by any strech of imagination that a doctor would issue a certificate like

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Ext.D4 without seeing and identifying the person in respect of whom the certificate was issued. In this context the evidence of

PW1, the mother of the deceased is also material. PW1 has stated that her son used to come without availing leave as permitted by the company considering, the quantum of work done by him during the period he was on duty in the company. We find no reason to disbelieve PW1 as the company where the insured was working is a private company.

        Under Section 45 of the Insurance Act a policy cannot be called in question by the insurer on the ground of misstatement after the lapse of two years after the inception of the policy, even if  there were misstatements or inaccurate statements. The Learned Counsel for the opposite party would argue that benefit is not available on revival of the policy “Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is

clear from the wording of the operative part of Sec 45 that the period of two years for the purpose of the Section has to be

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calculated from the date on which the policy was originally effected” (AIR 1962 SC 814). For all that has been discussed above we find that the repudiation of the policy is illegal and there is deficiency in service on the part of opposite parties. Points found accordingly.

In the result, the complaint is allowed directing the opposite parties to pay the complainant all the benefits as per Ext.D1 .The opposite parties are also directing to pay Rs.5,000 towards compensation and costs.

                Dated this the 30th  day of August 2010.

K.Vijayakumaran     :Sd/-

Adv.Ravi Susha        :Sd/-

R.Vijayakumar         :Sd/-

// Forwarded by Order //

    Senior Superintendent

Date of Filing: 04.03.2006

Date of Order: 30.08.2010.

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INDEX

List of witness for complainant

PW1                               - Jayadevi Amma

List of documents for complainant

P1                                  - Death Certificate

P2                                  - Repudiation Letter

List of witness for opposite party

DW1                               - N.Chandrasekharan

List of documents for opposite party

D1                                  - Copy of proposal form dtd: 31.03.00

D2                                  - Copy of Medical Examiner’s confidential   

                                        report dtd:31.03.2000.

D3                                  - Copy of Policy

D4                                  - Medical Examiner’s report dtd: 26.05.03.

D5                                  - Personal statement dtd: 26.05.03.

D6                                  - Death intimation report

D7                                  - Death Certificate

D8                                  - No objection certificate

D9                                  - Postmortum Certificate

D10                                - Copy of claim certificate

D11                                - Copy of Hospital treatment

D12                                - Medical attendant certificate

D13                                - Certificate of identity

D14                                - Copy of newspapers report

D15                                - Claim enquiry report

D16                                - Details of Leave (Subject to proof)

D17                                - Details of Leave (Subject to proof)

D18                                - Repudiation letter

D19                                - Notice

D20                                - Copy of complaint

D21                                - Copy of Delegation of power