State Consumer Disputes Redressal Commission
Ajay Vijay Lade vs Branch Manager Max Life Insurance ... on 1 April, 2026
1 A/112/2017
Date of Filing :05.01.2017
Date of Order :01.04.2026
MAHARASHTRA STATE CONSUMER DISPUTES REDRESSAL
COMMISSION,MUMBAI, BENCH AT AURANGABAD.
FIRST APPEAL NO. : 112 OF 2017
IN COMPLAINT CASE NO.: 161 OF 2013
DISTRICT CONSUMER FORUM : AURANGABAD
Ajay Vijay Lade, ...APPELLANT
R/o H.No.H-3, 37, Mhada Colony, ( Adv.M.A.Manjramkar)
Near Baba Petrol Pump,
Aurangabad.
VERSUS
1. The Branch Manager, ...RESPONDENTS
Max Life Insurance Co.Ltd., (Adv.R.V.Naiknaware)
Jalna Road, Akashwani,
Aurangabad.
2. The Manager,
Claim Department, Max New York
Life Insurance Co.Ltd.,
Plot No.90A, Sector 18,
Gurgaon-122002,
Hariyana.
CORAM : Milind.S.Sonawane, Hon'ble Presiding Member.
Nagesh.C.Kumbre, Hon'ble Member
JUDGMENT
(Delivered on 01.04.2026) Per Milind S.Sonawane, Hon'ble Presiding Member.
This is an appeal challenging the correctness and legality of the judgment and order passed by the learned District Consumer 2 A/112/2017 Disputes Redressal Commission, Aurangabad (the 'District Commission' for short) in C.C.No.161/2013, whereby the District Commission dismissed the complaint filed by the appellant by majority (President and one Member). The another Member of the Coram namely Kiran R. Thole however, wrote the dissenting judgment allowing the complaint.
2. The brief facts giving rise to this appeal are that, the complainant is a son of deceased Vijay Govind Lade, who had taken Life Insurance Policy from the respondents on 28.03.2012. Sum of Rs.24 Lakh was payable on the accidental death and Rs.16 Lakhs payable on the natural death of the insured. On 08.10.2012 means, merely 6 months of the policy, the insured Vijay Lade died of the heart attack. The appellant along with all the necessary documents preferred the insurance claim to the respondents. However, the respondents kept his insurance claim in abeyance for the reason that, during the early death inquiry it was allegedly found to them that, the insured has obtained the policy by fraud and the police investigation is pending.
3. Being aggrieved by that approach of the respondents the appellant firstly filed his consumer Complaint before the District Commission on 18.06.2013. That case proceeded 'ex-parte' against the respondents and the decision was given in the favour of the appellant on 26.02.2014 by allowing the complaint. Thereafter, the respondents preferred an appeal against that decision to this Commission. The First Appeal number of the same was 205/2014. This Commission after hearing both parties 3 A/112/2017 dismissed the appeal filed by the respondents and upheld the ex- parte judgment given by the District Commission. The respondents challenged that judgment before the Hon'ble National Commission by preferring Revision Petition No.3268/2015 . In that case Hon'ble National Commission on 08.07.2016 set-aside the ex-parte order passed against the respondents and directed the District Commission to give an opportunity to lead the evidence to them. After that, the case was heard by the District Commission afresh, in which the above impugned judgment has been passed.
4. The respondents appeared before the District Commission and contested the matter. It is contended by them that, the insured had obtained the insurance policy by fraud and deception. After the appellant has filed the claim form they initiated inquiry into it, as the death of the insured occurred within the 2 years of the inception of the policy. The inquiry report of S.A. Associates disclosed that, there was no person in existence named as Vijay Govind Lade at the time of taking the insurance policy. The address which was given by the insured was MAHADA colony, Aurangabad. On that address Govind Lade (father of the insured) and Rohini Lade were residing. They were not having any child. When the inquiry Officer visited that premises one Dyaneshwar Dasare was residing there since last 2 to 3 years. It is also claimed to have revealed to the investigator that, as per the record of the Municipal Corporation there was no cremation of any one bearing the name Vijay Lade on 08.10.2012. The policy in question has been falsely prepared by 4 A/112/2017 Vishal Dasare in the name of Vijay Lade. The ration card and death certificate produced by the appellant are false. Rohini Lade who claimed to be wife of Govind Lade (father of the insured) had filed criminal case against Dyaneshwar Dasare and others for forcible entry in her house. As such, the insurance claim of the appellant is not tenable and there is no deficiency in service committed by them to the appellant.
5. The District Commission after hearing both sides and on evaluating the evidence produced by them before it, drawn the conclusion by majority that, there are many suspicious facts and circumstances to indicate that, there is substance in the stand taken by the respondents . The District Commission while supporting their finding observed that the PAN card of the insured just mentions the name 'V Lade' (though it is observed by us that under his name the name of his father Govind Lade is also mentioned). The ration card produced by the appellant just has mention the name of insured and not his wife. The signature of the insured on the PAN card and proposal form does not match. The certificate of the residence of the insured has been obtained on 29.03.2012 i.e. after filing the proposal form on 28.03.2012. The District Commission also further observed that, the death of the insured occurred within the six months of the inception of the policy. Dnyaneshwar Dasare has filed Civil Suit No. 55/2009 (in fact it's number is RCS 551/2009 as observed by us) against the father of the insured namely Govind Lade and Rohini Lade (as LR). Rohini Lade has also filed Criminal Case against Dnyaneshwar Dasare and others for unauthorizedly 5 A/112/2017 occupying their premises at MAHADA colony. The FIR in that case was sought to be quashed by them by preferring W.P.(Criminal) No. 812/2010 before the Hon'ble High Court. From the documents of Regular Civil Suit No. 551/2009 and those of the W.P.(Criminal) No. 812/2010 filed before the Hon'ble High Court it appears that, Govind Lade and Rohini Lade were not having any child. The death certificate of the insured has the mention that, the name of his mother is Shantabai and not Rohini. According to the statement given by Rohini Lade his husband Govind Lade was no way related to Shantabai Lade. The extract of the cremation register shows that on 08.10.2012 there was cremation of only one person namely Padmawati Gangawal. After the death of the insured one Dr.Toshniwal issued the death certificate, who was no way acquainted with the appellant. There are multiple litigations pending pertaining to the facts involved in the case. So as to dispel the doubt as to the existence of Vijay Lade i.e. the insured, appellant has not offered the succession certificate. All these facts together tends to show that, the insured had suppressed the true facts while taking the policy. In fact, in the back ground of the above the respondents had not repudiated the insurance claim of the appellant but just kept it in absence till the final report of the police is received to them. As such, the District Commission dismissed the complaint filed by the appellant.
6. We heard learned Adv.M.A.Manjaramkar for the appellant. The respondents have filed written notes of argument but though given multiple opportunities after the matter has been 6 A/112/2017 retransferred by the Principal Bench of this Commission from Mumbai to this Bench, but not orally argued the matter.
7. On perusal of the record it transpires that, the respondents on the strength of the investigation report of S.A. Associates, the extract of the record of the Municipal Corporation, Aurangabad, papers of Civil Suit No. 551/2009, W.P.(Criminal) No. 812/2010 filed before the Hon'ble High Court and that one Dnyaneshwar Dasare residing in the premises, the address of which was given by the insured at the time of taking the policy, trying to establish the fact that, the insured was not in existence at the time of taking the policy. They are also trying to convince this Commission that, the insured furnished false information so as to obtain the policy. Adv.Manjramkar for the appellant submitted that, the respondents are taking the above defence merely to avoid their liability. The judgment given by the dissenting Member is the correct appreciation of the evidence of the facts produced before the District Commission. The litigations referred to by the respondents and relied by the majority view of the District Commission have no direct connection with the insurance claim of the appellant. The agent of the respondents verified all the facts as to the residence and existence of the insured. The appellant who is the nominee of the insured is entitle to the insurance claim. But under the pretext of the criminal complaint filed by Rohini Lade against Dnyaneshwar Dasare and the extract of the cremation register the respondents unnecessarily kept the insurance claim of the appellant in abeyance over the years, which they are statutorily to decide 7 A/112/2017 within 3 months. All these facts are ignored by the District Commission and drawn the erroneous conclusion. The impugned judgment is therefore, is based on incorrect appreciation of the facts and law.
8. The respondents have taken the defence that being the early death claim S.A. Associates were appointed as investigator. The investigator in his report stated that, he inquired with all neighbourhood and the persons in the vicinity as to the residence of the insured on a address given at the time of subscribing the policy. It revealed to him that on the given address the father of the insured namely Govind Lade and one Rohini were residing. But when he visited the said premises Dyaneshwar Dasare found to be residing there since two-three years. As per the statement of Rohini, his husband and she was residing in the said premises and they were not having any issue. On the strength of these facts respondents are demonstrating that, the address given by the insured was false.
9. The respondents referred us to the FIR No. 1-18/2010 registered at Aurangabad Police Station against Vishal Dasare and others. They also referred to the record of W.P. (Criminal) No. 812/2010 filed before the Hon'ble High Court. They also refer to the record of RCS No. 551/2009 the civil suit filed between Dyaneshwar Dasare and Rohini Lade. On the basis of these documents they claimed that the insured cannot be said to have resided in that premises.
8 A/112/2017
10. However on Perusal of the papers of those cases it is found to us that there has been dispute between the Dasare family and Rohini, who was residing there with the father of the insured namely Govind Lade. The copy of the deposition of Rohini in RCS 551/2009 shows that Govind Lade was already married to Shantabai and she was residing at Village Aambadi Tal. Kinwat It also shows that, Rohini never went to the native place of Govind and do not know any of his relatives. She lodged criminal case against the Dyaneshwar Dasare and others for alleged forcible occupation of the premises, the address of which is there on the Adahar Card and Ration Card of the insured. It is important to note that, neither the insured nor the appellant was and is a party to those proceedings. According to us, the documents which are referred to by the respondents are of no use to draw any conclusion as to whether the insured was residing there on the given address at the time of subscribing the policy or not. It is quite likely that, during the stay of his father Govind Ladhe in that house, he might have taken the Aadhar Card and therefore that address came to be mentioned on it. Thus, it cannot be just to conclude that the insured has played deception so as to get policy.
11. It is further claimed by the respondents that, when the investigator visited crematorium, no cremation of insured found to be done there in a register on a given date. The investigator also went to the Food and Civil Supply Office to inquire about the Ration Card. The officials told him that, the ration card is fake. However, from the investigation report on record it is forthcoming 9 A/112/2017 that, it is in abstract form and there is no statement of any neighbour of the insured. It also reveals that, there is no letter or the affidavit of the Supply Officer, who claimed to have told the investigator that the Ration Card is fake.
12. The respondents also claimed that, during investigation they are informed by the official of Municipal Corporation, Aurangabad that criminal complaint has been filed against one Vishal Dasare and the Appellant for preparing fake death certificate of the insured. However, there is no mention of the same in the report of the investigator. The copy of the FIR or the statements of the relevant persons recorded by Police are not on record. The respondents not produced any document to show that what happen after the alleged FIR, whether the accused got arrested and prosecuted or not etc. There is no evidence adduced by the respondents on record.
13. Here, we may conveniently refer to the judgment of the Hon'ble Supreme Court given in the case Mahakali Sujatha Vs Future Generalli India Life Insurance Civil Appeal No.3821 of 2024, decided on 10.04.2024, wherein it is ruled that insurers can not repudiate claims based on suppression of material facts, unless they prove the suppression was fraudulent. The insurer must conduct due diligence and inquiries at the initial stage, and not at the time of the claim. The court also indicated that the insurer should verify details at the proposal stage rather than relying on the investigations after the policy holder passes away.
10 A/112/2017
14. In the background of the above discussion the law relevant to decide this case is Registration of Birth and Death Act, 1969. Under the provisions of the said Act, Municipal Corporation in Maharashtra issues the death certificate primarily on the basis of medical certification of cause of death, cremation or the burial certificate from the crematorium, application form, identity proof of the deceased, applicants identity proof to establish relationship with the applicant. In the present matter though the District Commission held that, as per crematorium register only one person was cremated under the jurisdiction of Municipal Corporation, Aurangabad on a relevant date and the name of the insured is not there, but the death certificate has been issued by the corporation. According to us, the death certificate issued under the relevant Act prevails over all other documents which are erroneously relied. The death certificate issued by the corporation in the present matter discards the theory of the respondents that, there was no person as Vijay Lade in existence at the time of taking of the policy.
15. So far as the doubts regarding the certificate issued by Dr.Toshniwal certifying the death of the insured is concerned we do not see any valid reason to disbelieve that certificate. The District Commission reasoned that, the insured was never treated by that doctor before that. The above reason cited by the District Commission is not reasonable one, as it suggests that, even during the emergent situation person is suppose to approach his family doctor and not a doctor who is stranger to 11 A/112/2017 him. The another reason to suspect the existence and death of the insured given by the District Commission is that his signature on the PAN card and proposal form does not match. This reason is also not valid as there may be some apparent mismatch in the signatures especially when the person of 47 years of age might have obtained the PAN card years before he signed the proposal form. The District Commission ought not to have drawn such inference, especially when there is no evidence of figure print signature expert.
16. The District Commission while raising the suspicion on the claim of the appellant mentioned that, the documents of Civil Suit No. 551/2009 and W.P. (Criminal) No. 812/2010 filed before the Hon'ble High Court, does not have mention that, Govind Lade (father of the insured) and his wife Rohini was having any child. The death certificate of the insured mentions the name of the mother of the insured was Shantabai. The dissenting Member observed that, this fact tends to show that the father of the insured was having two wives. According to us, such observations were not actually necessary to adjudicate the validity of the insurance claim filed by the appellant. The insurance company which is approached by the proposed insured is under certain duties by virtue of the provisions of Master Circular of IRDA on Anti Money Laundering / Counter Financing of Terrorism (AML/CFT) Guidelines. The above Master Circular has been issued by IRDA on 24.09.2010 which was prevailing during the relevant time. The guidelines were for all life, general and health insurers. It required robust customer 12 A/112/2017 identification, risk profiling, and reporting of suspicious transactions to Government Agencies. It's provisions under Clause 3.1 which deals with Know Your Customer (KYC) Norms are very much relevant in the present case and reproduced below:
3.1 Know Your Customer (KYC) Norms:
3.1.1 What are KYC Norms?
i. Considering the potential threat of usage of the financial services by a money launderer, insurance company should make reasonable efforts to determine the true identity of all customers requesting for its services especially the person who funds/pays for an insurance contract, either as beneficial owner or otherwise. For the purposes of these norms, the term customers also refer to the proposer/policyholder; beneficiaries and assignee. Where a client is a juridical person, verification of identity is required to be carried out on persons purporting to act and is authorized to act on behalf of a client.
ii. Effective procedures should be put in place to obtain requisite details for proper identification of new customers. Special care has to be exercised to ensure that the contracts are not anonymous or under fictitious names.
iii. Measures have to be taken to identify the beneficial owner and take all reasonable measures to verify his/her identity to their satisfaction so as to establish who the beneficial owner is.
13 A/112/2017 ('Beneficial owner' for this purpose means 'the natural person(s) who ultimately owns or controls a customer and/or the person on whose behalf a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement.) iv. A list of documents to be verified at the time of accepting the risk for compliance with KYC requirement for individuals and others is given in Annexure I (which may be treated as illustrative only). No further documentation is necessary for proof of residence where the document of identity submitted also gives the proof of residence. It is mandatory to obtain any one of the documents to clearly establish the customer identity consistent with risk profile in respect of all new insurance contracts (Please also see 3.1.3 below). Any other document that is accepted by the Insurer should be such that it would satisfy regulatory/enforcement authorities, if need be at a future date that due diligence was in fact observed by the insurer in compliance with the guidelines and the PML Act. Documents collected towards the identity and address of the customer should be duly certified by an authorized person as identified by the insurer v. Customer information should be collected from all relevant sources, including from agents.
14 A/112/2017 vi. Insurance premium paid by persons other than the person insured should be looked into to establish insurable interest.
vii. The degree of due diligence to establish KYC could be decided by the insurers where premium is below ` 1 lakh per annum. However, premium of ` 1 lakh per annum in case of individual business should be considered as a threshold for exercising detailed due diligence, whatever be the payment mode viii. Considering the hardship in complying with the KYC requirement by small value policy holders and possible implications for spread of insurance into rural and low income sectors, especially micro-insurance, the Authority has decided to provide exemption upto a total annual premium of ` 10,000/- on life insurance policies held by a single individual from the requirement of recent photograph and proof of residence.
ix. At any point in time during the contract period, where an insurance company is no longer satisfied that it knows the true identity of the customer, an STR should be filed with FIU-IND.
15 A/112/2017 x. Remittance of premium is an important stage of entering into contract, hence,cash transactions need more diligence and care (Please also see para 3.2 (ii)) xi. The insurer should not enter into a contract with a customer whose identity matches with any person with known criminal background or with banned entities and those reported to have links with terrorists or terrorist organizations.
xii. A list of individuals and entities subject to UN sanction measures under UNSC Resolutions (hereinafter referred to as 'designated individuals/entities') would be circulated to the life and general insurance companies through the respective Councils, on receipt of the same from the Ministry of External Affairs (MEA). This is in addition to the list of banned entities that were circulated to the insurers till date.
xiii. Insurers are advised to maintain an updated list of designated individuals/entities in electronic form and run a check on the given parameters on a regular basis to verify whether designated individuals/ entities are holding any insurance policies with the company. An updated list of individual and entities which are subject to various sanction measures as approved by Security Council Committee established pursuant to UNSC 1267 can be accessed in the United Nations website at 16 A/112/2017 http://www.un.org/sc/committees/1267/consolist.sht ml xiv. Insurers are required to conduct detailed due diligence while taking insurance risk exposure to individuals/entities connected with countries identified by FATF as having deficiencies in their AML/CFT regime. Special attention should be paid to business relationships and transactions, especially those which do not have apparent economic or visible lawful purpose. In all such cases, the background and purpose of such transactions will as far as possible, have to be examined and written findings maintained for assisting competent authorities. Agents/ Corporate agents will have to be appropriately alerted to ensure compliance with this stipulation. While using the FATF Public Statements being circulated through the insurance councils, insurers should go beyond the FATF statements and consider publicly available information when identifying countries which do not or insufficiently apply the FATF Recommendations.
3.1.2 When should KYC be done?
i. Knowing New Customers:
a. In case of new contracts, KYC should be done before the issue of every new insurance contract. This requirement should be complied with in all life 17 A/112/2017 insurance contracts as specified. However, taking into account the fact that internationally a number ii...........
(Emphasis Suppied)
17. Thus, it can be seen from the above Master Circular of IRDA that in order to prevent money laundering and terrorist activities across the country, insurance business is also brought under the regulations. It may give the impression that the circular applies only to the big insurance contracts, especially those involves huge money and are made with the corporates and business entities. However, the provisions of its class 3.1.1(vii) clearly mentions that the 'life insurance policies' having the annual premium of less than Rs.10,000/- only exempted from it's applicability.
18. In the present case the quarterly (not annual) premium admittedly agreed to be paid to be more than Rs.10,000/- . It means that the annual premium to be paid by the insured was more than Rs.30,000/-, which makes this circular applicable to the case. So it can be held without any doubt that the present case is governed by the provision made under the relevant clause of the circular. It is very unfair and strange for us that, instead of explaining this legal position, respondents attempted to divert the matter in another direction round and round before the consumer commissions, by putting an uncorroborated story without any convincing evidence and intermingling facts more particularly of RCS 551/2009 and WP( Criminal) 812/2010, which were and are not really necessary to adjudicate the matter.
18 A/112/2017 We are of the view that, such kind of approach and conduct on the part of the respondents is contrary to the consumer rights given to the consumers under the benevolent provision of the Consumer Protection Act,1986.
19. It is the common experience and for that reason the matter of judicial notice that, the common persons, who usually approaches to have the insurance cover are told by the agents of the insurance company to furnish Aadhar Card ( Which is Universal Unique Identity including Biometric Parameters of an individual) Ration Card, Voter ID Card. Besides the Addhar Card residencial proof is required so as to locate the insured person or his legal heirs to communicate the legal correspondence.
Therefore we can observe in the master circular that effective procedures should be put in place to obtain requisite details for proper identification of new customers. Special care has to be exercised to ensure that the contracts are not anonymous or under fictitious names. It also mandated that measures have to be taken to identify the beneficial owner and take all reasonable measures to verify his/her identity to their satisfaction so as to establish who the beneficial owner is. Documents collected towards the identity and address of the customer should be duly certified by an authorized person as identified by the insurer. Customer information should be collected from all relevant sources, including from agents. Insurance premium paid by persons other than the person insured should be looked into to establish insurable interest. Instead of following these legal requirements the respondents are harping on the insignificant 19 A/112/2017 lapses of the other side, which can not be accepted as legal and juticiable.
20. Thus to conclude, at the time of giving of the policy the insurer shall be very careful in verifying the identity of the proposed insured . In this matter the record shows that, the insured had furnish his PAN card, Adhar Card, Photo identity etc. to the respondents. Instead of demonstrating that we have verified all the facts stated therein the respondents are unnecessarily trying to establish that, there was no such insured person in existence at the time of taking of the policy. According to us, when they have not discharged their statutory liability they cannot be heard to say so. It is not disputed that, the appellant was the nominee of the insurance policy of the insured. Every insurer is under a duty to handover the insurance claim money to the nominee to get the valid discharge under the contract of insurance. They have nothing to do to go and inquire in to that, who are the legal hairs - legitimate or illegitimate of the insured. The District Commission has also committed an error in this regard and observed that, the documents filed in various litigation (which have no direct connection with the insured) that there was no child to the father of the insured and one Rohini. The police case about which the respondents and District Commission are speaking about has nothing to do to adjudicate that, whether the insurance claim of the appellant was valid or invalid. According to us, there was no reason for the respondents to keep the insurance claim of the appellant in abeyance. They have committed deficiency in service to the appellant. Thus, the 20 A/112/2017 impugned judgment will have to be quashed and set-aside by allowing the appeal. Consequently, the respondents will have to be directed to pay to the appellant sum of Rs.16 Lakhs (which is the sum assured on the natural death) along with interest @ 9 % p.a. from the date of keeping the insurance claim in abeyance i.e. 31.05.2013 till the realization. In the facts and circumstance of the case the respondents will also have to be directed to pay to the appellant sum of Rs.50,000/- for mental and physical harassment and Rs.25,000/- as the cost of the proceedings. The record and proceedings called from the District Commission shall be sent back by the registry. The interim orders, if any stands vacated. Hence, we pass the following order.
ORDER
1. The appeal is allowed.
2. The impugned judgment is hereby quashed and setaside.
3. The respondents are directed to pay to the appellant sum of Rs.16 Lakhs (which is the sum assured on the natural death) along with interest @ 9 % p.a. from the date of keeping the insurance claim in abeyance i.e. 31.05.2013 till the realization.
4. Respondents are directed to pay to the appellant sum of Rs.50,000/- for mental and physical harassment and Rs.25,000/- as the cost of the proceedings.
5. The record and proceedings called from the District Commission shall be sent back by the registry.
6. The interim orders, if any stands vacated.
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7. Copy of this judgment be furnished to both sides free of cost.
Nagesh C.Kumbre Milind S.Sonawane
Member Presiding Member
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