The case of the complainants is that the father of the complainant No.1&2 and husband of the complainant No.3 being a healthy businessman to get income tax benefit and also thinking over the futurity of the minor daughters used to open LICI policies. Life Assured Ranjit Kumar Basak never suffered from any sort of disease when he opened LICI policies and after checking up by the empanelled doctor of LICI.
That on 01.05.2014 the life assured died due to cardiac failure. After the death of the assured his wife being the nominee claimed petition before the zonal manager of LICI on 26.09.2014 along with other documents. Senior divisional manager send a letter to the petitioner No.3 stating that Ranajit Basak suppressed about his health condition or about the disease. The petitioner No.3 stated that Ranjit Basak at the time of opening the policy on 25.09.2013 specified the Insurance Corporation that he never suffered from any sorts of disease like Diabetics, Tuberculosis, High blood pressure, Cancer, Epilepsy Hernia, Hydrocele or any other diseases which are the bar to opening the LIC policy. So there is no question of concealing the disease. The opposite parties are trying to decline to pay the insured sum of Rs.5,00,000/- as covered by LIC policy . The OP has no right to decline the same. He is bound to pay the claim amount. The petitioners being failed to get the assured sum of Rs.5,00,000/- preferred the recourse of this Forum praying for a direction upon the OP to pay the insured sum of Rs.5,00,000/- including interest and cost of litigation.
The OP No.1to3 appeared by filing written version denying the allegations as leveled against them and they averred that the husband of the complainant Ranjit Basak took one endowment policy bearing No. 495504260 from Calcutta City Branch No. 5 of LICI, sum assured Rs. 5,00,000/- date of commencement 28.04.2013. Life assured deposited first premium of the policy and after that he became ill and admitted to a nursing home at Uttarpara on 30.04.2014 and died of Sepsis on 01.05.2014. Complainant being nominee lodged a claim with the O.P. LICI. The claim of the complainant was repudiated by the OP on the ground of non disclosure of material fact by the LA in the proposal form. Repudiation was communicated to the complainant on 10.07.2015. Further the repudiation was verified by the Zonal Claim Review Committee and the decision of the said committee also communicated to the claimant. Hence the complainant being aggrieved filed the instant complain before this Forum. LA died of Sepsis and Abdominal pain on 01.05,2014 within 7 months from the date of first premium received. As per statutory provision OP LICI investigated the matter and it revealed from the last medical attendant certificate issued by Dr. B. Banerjee RMO of Arogya Niketan Pvt. Ltd. Uttarpara that LA was suffering from Bilateral Synonasal Polypsis with Fungal Sinusitis and he was operated at Kamala Roy Hospital on 04.04.2014. LA suppressed the above facts while filing proposal form for taking the instant policy. It is evident from the claim form B signed by Dr. B. Banerjee that DLA consulted Dr. Snehasis Barman, ENT prior to taking the instant policy and he was operated at Kamala Roy Hospital on 04.04.2014. It is evident from the said report of Dr. Banerjee that LA himself disclosed these facts at the time of admission in the Arogya Niketan Pvt. Ltd. on 30.04.2014. The LA deliberately concealed the said fact while taking the policy. Similarly, the complainant in her claim Form A dated Nil also deliberately concealed that her husband underwent an operation in the month of April of 2014 with a view to mislead the OP LICI. As per section 45 Insurance Act, 1938 read with Section 17 of Indian Contract Act, 1872 and in terms of conditions of policy stated in Clause 5 the OP rightly justified in repudiating the claim of the complainant owing to non disclosure of material fact. The perusal of proposal form depicts that while giving personal history the deceased in negative in response to the question as to whether he had consulted a medical practitioner for any ailment requiring treatment for more than a week. In a similar question, whether he had been admitted to any hospital or nursing home for general check up, observation, treatment or operation in answer the deceased replied, ‘No’. While filing up the proposal form the deceased denied as to he had consulted any medical practitioner for any ailment requiring treatment for more than a week. But, falsely denied having consulted the medical practitioner in five years prior to submitting the proposal form and lastly denied that he underwent operation. In LIC Vs Asha Goyel reported in 2001 SCC 160 the Hon’ble Apex Court held that, ‘the contracts of insurance including the contract of life assurance are contracts Uberrima fides and every fact of material must be disclosed otherwise there is good ground for rescission of contract. If there is any misstatements or suppression of material facts, the policy can be called in question. In another case Satwant Kaur Sandhu Vs New India Assurance Co. Reported in (2009) 10 SCR 560, the Apex Court, inter alia, observed “ that the term material fact has been explained by the court in general terms to mean as any fact which would influence the judgement of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the contract of Insurance and has a bearing on the risk involved would be material.” So it cannot be said that it was a bona fide suppression without any mala fide intention. The concealment was of a fact which was exclusive in the knowledge of the insured and could not have been detected by the OP LICI by way of a reasonable and practicable inquiry. So, the OP LICI rightly repudiated the claim on the ground of suppression of material fact and there is no deficiency on the part of the OP LICI. Hence the instant complaint should be dismissed. It is specifically denied that at all material times the LA was healthy & hearty. LA was suffering from acute sinusitis before taking the instant policy and he deliberately concealed this fact to defraud OP LIC. It is pertinent to mention here that while proposing for a large sum assured viz. Rs. 5,00,000/- as per norm doctor of OP LIC recorded what the insured disclosed before him. It is not the result of any test/examination. If the medical report does not reveal anything adverse, the LA is still liable for the consequences of deliberate misstatement in the proposal form. LA filled up the proposal form for taking the instant policy knowing fully well that he had been suffering from acute Bilateral Sinonasal Polypsis with fungal Sinusitis and consulted ENT doctor. He deliberately concealed this fact to defraud OP LIC. OP LIC after proper investigation of the instant early death claim repudiated the claim under the policy on proper application of mind. The matter was further reviewed by the Zonal Claim Review committee upheld the decision of the repudiation. The deceased LA while filled up the proposal form himself declared that any untrue averment be contained therein the said contract shall be absolutely null & void and all the moneys which shall have been paid in respect thereof shall stand forfeited to the corporation. The LICI cannot be blamed for any gross negligence, unfair trade practice and/or for deficiency of service as alleged, as every step taken by the Corporation was in accordance with law, accordingly the complainant is not entitled to any compensation and/or cost as claimed and hence the Complaint is liable to be dismissed.
The complainants filed evidence on affidavit which is nothing but replica of complaint petition and supports the averments of the complainant in the complaint petition.
The OP filed evidence on affidavit which is nothing but replica of his written version.
Both sides filed written notes of argument which are taken into consideration for passing final order.
Argument as advanced by the agent of the complainant heard in full.
From the discussion herein above, we find the following Issues/Points for consideration
ISSUES/POINTS FOR CONSIDERATION
1. Whether the Complainants Riya Basak.( Minor), Rithika Basak. ( Minor) & Smt.Ratna Basak are ‘Consumers’ of the opposite party?
2. Whether this Forum has territorial/pecuniary jurisdiction to entertain and try the case?
3. Whether the O.Ps carried on unfair trade practice/rendered any deficiency in service towards the Complainant?
4. Whether the complainant proved his case against the opposite party, as alleged and whether the opposite party is liable for compensation to them?
DECISION WITH REASONS
In the light of discussions here in above we find that the issues/points should be decided based on the above perspectives.
- Whether the Complainants Riya Basak.( Minor), Rithika Basak ( Minor) & Smt. Ratna Basak are ‘Consumers’ of the opposite party?
From the materials on record it is transparent that the Complainants are “Consumers” as provided by the spirit of section 2(1)(d)(ii) of the Consumer Protection Act,1986.The Complainant No.3 herein being the nominee as well as wife of the deceased customer of the OP Insurance Company who insured his life before the Op No.2 office , OP No. 1 to 3 are the offices of the said Insurance Company, so being a consumer they are entitled to get service from the OP insurance company being the service provider.
(2).Whether this Forum has territorial/pecuniary jurisdiction to entertain and try the case?
Both the complainant and opposite parties are residents/carrying on business within the district of Hooghly and the cause of action took place at Bhadrakali, P.S.- Uttarpara, Hooghly. The complainant prayed for a direction upon the OP a death claim amounting to Rs.500,000/- including the interest thereupon against the endowment policy, and litigation cost ad valorem which is within Rs.20,00,000/- limit of this Forum. So, this Forum has territorial/pecuniary jurisdiction to entertain and try the case.
(3).Whether the opposite party carried on Unfair Trade Practice/rendered any deficiency in service towards the Complainant?
The opposite party being the largest Insurance Company of the Nation associated with the insurance of a lot of people throughout the whole nation since a long back with self generated assets i.e. goodwill of the business. So, the credibility of the OP Insurance Company is unquestionable and that is why the husband of the complainant No.3 insured his life before the said company without any doubt.
It is well settled proposition of law that a contract of insurance is based on the principles of utmost good faith-uberrimae fidei applicable to both the parties. The rule of nondisclosure of material facts vitiating a policy still holds the field. The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge. The insurer may not even have the means to find out facts which would materially affect the risk. The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which is within his/her personal knowledge or which he ought to have known had he made reasonable inquiries. A contract of insurance, therefore, can be repudiated for non disclosure of material facts.
The expression “material fact” is not defined in the Insurance Act,1938 and therefore, as observed by the Supreme Court in Satwant Kaur Sandhu -vs- New India Assurance Company Ltd. 2013 (3) CPR 644 (sc),it has to be understood in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact, which goes to the root of the contract of insurance and has a bearing on the risk involved, would be “material” and if the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance.
That the observation of the Apex court in Satwant Kaur’s case as :-
“thus it needs little emphasis that when an information on specific aspect is asked for in the proposal form, an assured is under solemn obligation to make a true and full disclosure of the information on the subject which is within his /her knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses.”
The husband of the complainant No.3 Ranjit Kumar Basak insured his life through a policy issued by OP No.2 and paid yearly premium amounting to Rs.26417/- on last week of April, 2013. After the death of the life assured the complainant No.3 being the nominee approached before the OP who on their turn repudiated the claim on the ground that the assured suppressed the material fact stating in the proposal Form regarding the suffering of diseases. Hence the point of dispute in between the parties is whether the life assured willfully suppressed the material fact in the columns of proposal Form and took the high valued policy to gain a huge amount from the insurance company after his death. But from face of the case record it depicts that the life assured is a whole sale saree seller and owner of a building in which the Uttarpara branch of OP Insurance Company exists. After perusing the Proposal Form it appears that the life assured only put his signature in the specific column of policy holder or declarant and remaining columns were filled either by the agent of the OP or by any person rather than life assured.
LA died of cardiorespitory failure in a case of Sepsis and Abdominal pain on 01.05,2014 within 7 months from the date of first premium received. LA filled up the proposal Form for taking the instant policy knowing fully well that he had been suffering from acute Bilateral Sinonasal Polypsis with fungal Sinusitis and consulted ENT doctor.
The policy details speaks that the date of commencement of risk i.e. 09.10.2013 and if the death occurred before the death of maturity then the maturity is Sum assured + Vested Bonus.
On the face of the case record it appears that the claim of the complainant was repudiated by the OP Insurance Company on the ground that he was suffering from preexisting disease and the life assured suppressed his suffering in the policy Form so it is breach of terms and condition on the part of the complainant.
As per statutory provision OP LICI investigated the matter and it revealed from the last medical attendant certificate issued by Dr. B. Banerjee RMO of Arogya Niketan Pvt. Ltd. Uttarpara that LA was suffering from Bilateral Synonasal Polypsis with Fungal Sinusitis and he was operated at Kamala Roy Hospital on 04.04.2014. But no prescriptions filed as to such treatment except stating in the last medical attendant certificate.
By collecting the Certificate of Hospital Treatment issued by Dr. Bikash Chandra Banerjee dated 21.07.2014 in specific proforma of LICI regarding the treatment of the deceased life assured who admitted on 30.4.2014 and the certificate manufactured to establish that before such admission he received treatment under Dr.Snehasis Burman, ENT Specialist and operated on 4.4.2014 and he lastly died on 1st May,2014, primary cause due to Sepsis, G.I. Bleeding + pain Abdomen & secondary cause- Chicken Pox and before the death he was suffering from Bilateral Synonasal Polypsis with Fungal Sinusitis since 21.2.2013. But it is crystal clear that the life assured was not treating before the Dr. Bikash Chandra Banerjee for Bilateral Synonasal Polypsis with Fungal Sinusitis before his death, reason not known to us why the doctor wrote such note in the specific question answer proforma of the OP company. The OP investigated the claim of the complainant and repudiated claim on the pretext that he suppressed his suffering in the proposal Form. And banking upon the Certificate of Hospital Treatment & Medical Attendant’s Certificate issued by Dr. Bikash Chandra Banerjee the OP repudiated the claim of the complainant on flimsy ground that the deceased life assured prior to taking the insurance policy was suffering from disease and he suppressed those disease while taking the policy from the OP. It appears from the information of death that life assured died of Sepsis and Abdominal pain on 01.05.2014. Now it is a matter of discussion that the suffering from Bilateral Synonasal Polypsis with Fungal Sinusitis in the year 2014 leads to Sepsis and Abdominal pain on 01.05.2014. After perusing the documents and going through the averments of the both sides that deceased was not suffering from any chronic disease and there was no contributory cause of death, the cause of death has been occurred suddenly. Moreover, nobody knows when she/he will suffer from any kind of sudden pain or disease requiring treatment/operation. In the instant case the OP could not file any previous prescription of any doctor prior to taking out insurance policy that the deceased life assured borne any symptoms or sickness relating to his disease.
We do not find suppression of any material fact by the insured in the proposal form and OP has committed deficiency in repudiating claim on flimsy grounds.
Had he been suffering from Bilateral Synonasal Polypsis with Fungal Sinusitis prior to acceptance of policy then what was his problem to receive treatment from date of knowledge of suffering? No one would like to remain without treatment when he has sufficient funds to take treatment.
During the period of argument the advocate on behalf of the OP assailed that the policy holder undergo treatment Bilateral Synonasal Polypsis with Fungal Sinusitis and was under the treatment of Dr.Snehasis Burman, ENT Specialist before the acceptance of policy of OP it does not mean that the Bilateral Synonasal Polypsis with Fungal Sinusitis leads to Cardiorespiratory failure in a case of Sepsis and Abdominal pain. Merely because one is having Sepsis and Abdominal pain may be without his knowledge, it cannot be said that ultimately he will die due to that disease. There is no material in the record to show that in any proposal form, it was concealed or mentioned by the LA that he was suffering from Sepsis and Abdominal pain. There is no material to show that there was any earlier treatment in respect of any Bilateral Synonasal Polypsis. In absence of any treatment paper, no court/Forum can hold that there was some earlier pre-existing disease which was concealed by the complainant while making proposal for the insurance cover. Thus the defense which has taken by the OP Company was having no legs to stand so it is rightly discarded by this Forum.
It was pleaded on behalf of the complainant that if an insured is not aware of an ailment he may be suffering, nondisclosure thereof does not tantamount to suppression of material fact.
No documents in respect of treatment of the complainant before the acceptance of Proposal Form are in the case record which corroborates that the complainant has been suffering from Sepsis and Abdominal pain which leads to his death. The OP failed to produce such document to deny the claim of the complaint that during the acceptance of proposal Form LA supplied the correct information regarding his health.
So the life assured was unaware of his disease whether he was suffering from Sepsis and Abdominal pain and his illness at the material point of time i.e. taking the insurance policy does not arise. He was not aware whether he will suffer from Sepsis and Abdominal pain in the future and he/ his nominee have to make claim before the Insurance Company for which the Insurance Company by repudiating his/complainants claim destructed the myth of utmost on good faith.
Upon consideration of the evidence adduced by the parties, this Forum observed that the Insurance Company had failed to bring on record any proof in support of their plea that the deceased was suffering from any pre-existing disease at the time of obtaining the policy, there was no evidence to prove that the deceased was ever admitted for any treatment in a hospital for the alleged pre-existing disease at the time of obtaining the policy, there was no evidence to prove that the deceased was ever admitted for any treatment in a hospital for the alleged pre-existing disease and that the medical evidence relied upon by the Insurance Company was neither supported by any corroborative evidence nor did it prove that the said treatment had any nexus with the cause of Sepsis and Abdominal pain. This should not be the intention of the organisation who has been established for the purposes of benefit of the public. This Forum thus came to the conclusion that there was no suppression of any material fact by the life assured and therefore, in repudiating the claim of the complainant, there was deficiency of service on the part of the Insurance Company, causing great hardship, financial loss and mental agony to the complainant.
So we are in a considered opinion to allow the complaint as policy holder was not suffering from any disease when he signed the policy proposal of this OP Insurance Company and OP could not prove the same. We direct the OP Insurance Company i.e. the OP No.2 to pay the death claim amounting to Rs.5,00,000/- against the policy being no.495504260 along with vested bonus & interest and another Rs.10000/- for litigation cost.
4. Whether the complainant proved his case against the opposite party, as alleged and whether the opposite party is liable for compensation to him?
The discussion made herein before, we have no hesitation to come in a conclusion that the Complainant is able to prove his case and the Opposite Party is liable to pay the ordered amount. Ordered amount includes interest so there is no question of allowing compensation.
ORDER
Hence, it is ordered that the complaint be and the same is allowed on contest against the Opposite Party with a litigation cost of Rs.10,000/-.
The whole gamut of the facts and circumstances leans in favour of the complainants. We, therefore, allow the complaint and Opposite Party No.2 is directed to pay the assured sum amounting to Rs.500,000/- + Vested Bonus alongwith interest @ 9% since the date of repudiation of claim on 10.07.2015 to the complainants within 45 days from the date of order.
At the event of failure to comply with the order the Opposite Party No.2 shall pay cost @ Rs.100/- for each day’s delay, if caused, on expiry of the aforesaid 45 days by depositing the accrued amount, if any, in the Consumer legal Aid Account.
Let a plain copy of this Order be supplied free of cost to the parties/their Ld. Advocates/Agents on record by hand under proper acknowledgement/ sent by ordinary Post for information & necessary action.
