BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD.

 F.A.No.1287/2013 against CC 35 of 2012, District Consumer Forum, Mahabubnagar

Between:

1. LIC of India, Divisional office

Saifabad, Hyderabad, being

Represented by its Divisional Manager

1. The Branch Manager, LIC of India

Station raod, Mahabubnagar         .. Appellants/opposite parties 1 &2

Varanasi Pentaiah, S/o Bheemaiah

Aged about 38 years, Occ : Coolie,

R/o Mohammadabad Village, Gandeed Mandal,

Ranga Reddy District    ..      Respondent/complainant

Counsel for the  Appellant     :       M/s. Srinivasan s. Rajan

Counsel for the Respondents :       M/s. K. Mohan

QUORUM: HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT.

      S. BHUJANGA RAO,        HON’BLE MEMBER

AND

SRI. R. LAKSHMINARASIMHA RAO, HON’BLE MEMBER

THURSDAY, THE SEVENTH DAY OF AUGUST

TWO THOUSAND FOURTEEN

Oral Order (As per  Sri R. Lakshminarasimha Rao, Hon’ble Member)

***

01.    The opposite parties in CC 35 of 2012 have preferred this appeal against the order dated 26.3.2013 in CC 35 of 2012 on the file of the District Forum, Mahabubnagar.

2.             The case of the respondent is that his wife during her life time obtained life insurance policy bearing number 645104708 for a sum of Rs.30,000/- and she appointed the respondent as her nominee and she  died in the fire accident on 03.02.2007  and a case was registered in Cr. No. 10/2007 at Mohammadabad P.S. and after her death he lodged claim with the appellant-insurance corporation. Thereafter he got issued a legal  notice on 17.01.2012 to settle the claim. Despite receipt of notice, the claim was not settled which amounts to deficiency in service and hence the complalint.

3.             The appellant resisted the claim on the premise that the life assured had paid quarterly premium for June, 2005, September, 2005 and December 2005 and on the date of fire accident ie on 28.01.2007 the policy has not acquired the status of paid up value and the policy went into lapsed condition and then on 29.01.2007 the policy was revived when the life assured was admitted in District Government  hospital, Mahabubnagar on 28.01.2007 for  treatment of  the burn injuries up to 80% to 90% sustained by her where there was no scope for survival.  The insured  was admitted in the hospital on 28.01.2007 and her death took place on 3.2.2007. She suppressed her health condition at the time of revival of the  policy by paying the premium  for the months of march, 2006 to December, 2006 and hence annulled the revival and repudiated the claim and therefore  there is no deficiency in service on their part and prayed for dismissal of the complaint.

4.             In support of his  claim, the respondent had filed his affidavit and the documents, ExA1 to A6 and on behalf of the appellant-insurance corporation , its Manager filed his  affidavit and the documents,  Ex.B1 to B4

5.             The District Forum allowed the complaint in part directing the appellant to pay  the assured  sum of Rs.30,000/- and  Rs.2000/- towards compensation and Rs.1000/- towards costs.

6.             Aggrieved by the order of the District Forum, the opposite party insurance company  preferred the appeal contending that the District Forum failed to consider that  the policy was in a lapsed state as on the date of accident and that the deceased suppressed the fact that she was hospitalized with severe burn injuries to an extent of  80-90% at the time of revival of the policy and that there is no deficiency in service on their part and thus prayed for setting aside the impugned order while allowing the appeal.

7       The points for consideration are:

1.    Whether the repudiation of the insurance claim by the 
      appellant is not justified thereby constituting 
      deficiency in service?

2.      To what relief?

8. POINT NO.1 :  The issuance of the life  insurance policy and the death of the insured are not disputed. The appellant-insurance company repudiated the claim onthe ground that the insured suppressed her meeting with fire accident at the time of submitting personal statement for revival of the insurance policy. The deceased submitted the personal statement on 29.01.2007 for revival of the life insurance policy which was in lapsed condition by the time and she was admitted to Government Hospital, Mohaboobnagar for treatment of burn injuries that she sustained in an accident when her  caught fire while she was feeding her son at 8 PM on 28.01.2007.

9      The brother of the insured lodged complaint with the police, Mohammadabad on 03.02.2007 stating that his sister met with fire accident at night on 28.01.2007 and she was admitted to Government Hospital the same night and while undergoing treatment she succumbed to the injuries in the hospital.  The Final Result and the Report of Post Mortem Examination would support the contention of the learned counsel for the appellant that the insured suffered 80% to 90 % burn injuries in the accident.

10             The insured submitted personal Statement on 28.01.2007 to the effect she has not met with any accident, operation or injury.  She replied to the question no.2 (a) to (c) in negative and the questions and her answers thereto are reproduced below:

        Q.No. 2

a)     Have you ever suffered from any illness /disease requiring treatment for a week or more?

                        Ans: NO.

                b)     Did you ever have any operation, accident or injury?

                        Ans : NO.

                C)     Did you ever undergo ECG, X-ray, screening Blood Urine or stool                    examination ?    

                        Ans;  No

11     She answered to the question as to her present state of health as Good and in the circumstances it cannot be imagined that a lady sustaining 80% to 90% burn injuries and being admitted to a hospital can state that she did  not meet with any accident and she was in perfect state of health. The insured suppressed the fact that she met with fire accident on 28.01.2007 and she was not in sound state of health as also she was undergoing treatment in Government Hospital.  As such we are of the view that the insurance policy was revived basing on incorrect information which would vitiate the contract of insurance .

12     The Hon’ble Supreme Court in  ‘SatwantKaurSandhuvs New India Assurance Company Ltd ‘ IV(2009)CPJ 8(SC)  held that a contract of insurance is one of utmost good faith on the part of the assured.  The Apex court observed, “Thus it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for proposer to determine whether the information is sought for is material for the purpose of the policy or not”.

13     In the aforementioned decision the repudiation of the claim for non-disclosure of the material facts was held valid and sustainable. The facts of the aforementioned case and those of the present case are similar and as such the ratio laid down therein is applicable to the facts of the case. In the case on hand the insured was suffering from burn injuries from 28.01.2007 till she died on 023.02.2007  and  she had not revealed the factum of fire accident causing burn injuries to her and the treatment she had undergone therefor at the time of  submitting personal statement for revival of  the insurance policy.  The order of the District Forum in the circumstances is liable to be set aside.

14     In the result, the appeal is allowed setting aside the order of the District Forum. Consequently, the complaint is dismissed.  There shall be no order as to costs.

                                                                PRESIDENT

                                                                MEMBER

                                                                MEMBER

                                                                DATED : 07.08.2014