National Consumer Disputes Redressal
Pnb Metlife Insurance Compamy Ltd. & ... vs Mopidevi Lalitha on 25 May, 2017
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 55 OF 2015 (Against the Order dated 04/12/2014 in Complaint No. 79/2013 of the State Commission Andhra Pradesh) 1. PNB METLIFE INSURANCE COMPAMY LTD. & ANR. MOTILAL NEHRU NAGAR, BEGUMBET, HYDERABAD-500016 ANDHRA PRADESH 2. PNB METLIFE INDIA INSURANCE COMPANY LTD., BRIGADE SESHAMAHAL, 5 VANI VILAS ROAD, BASAVANAGUDI, BANGALORE-5600004 ...........Appellant(s) Versus 1. MOPIDEVI LALITHA W/O. MOPIDEVI RAJESWARA RAO, 12-60/1, MANDYAPALEM, NIZAMPATNAM, GUNTUR-522314 ...........Respondent(s)
BEFORE: HON'BLE MR. DR. B.C. GUPTA,PRESIDING MEMBER HON'BLE MR. DR. S.M. KANTIKAR,MEMBER
For the Appellant : For the Respondent :
Dated : 25 May 2017 ORDER
APPEARED AT THE TIME OF ARGUMENTS
For the Appellants
:
Mr. Ritesh Khare, Advocate
For the Respondent
:
ex-parte
PRONOUNCED ON: 25th May 2017
ORDER
PER DR. B.C. GUPTA, PRESIDING MEMBER This first appeal has been filed under section 19 read with Section 21(a)(ii) of the Consumer Protection Act, 1986, against the impugned order dated 04.12.2014, passed by the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (hereinafter referred to as "the State Commission") in Consumer Complaint No. 79/2013, filed by the present respondent, vide which, the said complaint was partly allowed.
2. Briefly stated, the facts of the case are that the husband of the complainant/respondent Mrs. Mopidevi Lalitha, during his life time, had taken a life insurance policy, bearing no. 20527202 dated 24.03.2011 for a sum assured of Rs. 30 lakhs, commencing from 10.03.2011. The policy in question has been designated as Met Suraksha LT 2A 16. As per the complainant, her husband paid the renewal premium vide cheque no. 247463 dated 24.02.2012 drawn on Axis Bank Ltd., Hyderabad and receipt no. C3161385 dated 27.02.2012 was issued by the Insurance Company. However, her husband fell seriously ill on 06.03.2012 and was taken to Primary Health Centre, Nizampatnam, but he died on the same day. The complainant filed claim with the Insurance Company alongwith necessary documents under the terms and conditions of the policy, but the same was not settled by the OP Insurance Company despite reminders. The OP Insurance Company informed her that the income tax returns, said to have been submitted as proof of income by the complainant's husband, were fabricated. By not disclosing proper income to the Insurance Company, the complainant had violated the principle of utmost good faith. Vide their letter dated 13.09.2012, the Insurance Company repudiated the claim, stating that any non-disclosure or misrepresentation in the application form renders the claim voidable. The Insurance Company stated that they had treated the policy as void ab initio and they enclosed a cheque of Rs. 13,898.20 as full and final payment of the claim. The complainant filed the consumer complaint in question, seeking directions to the OP Insurance Company to pay the sum insured under the policy, amounting to Rs. 13 lakhs to her and also to provide compensation of Rs. 1 lakh for mental agony etc. and Rs. 30,000/- as cost of litigation and further to award interest @ 18% per annum on the insurance amount from the date of claim till payment.
3. The complaint was resisted by the OP Insurance Company by filing a written reply before the State Commission in which they stated that as per the terms and conditions of the policy, which were duly explained to the insured, the policy contract becomes null and void, if any untrue statement is made. During the course of investigation and assessment of the claim, the ITR submitted by the complainant was found to be fabricated. It was further revealed that the life assured was working as net fish maker and his annual income was only Rs. 13,000/-. He had, therefore, misrepresented the facts before the Insurance Company and played fraud upon them. However, they still refunded the fund value available in the policy amounting to Rs. 13,898.20, acting as a customer-friendly organisation. The life insured had described his occupation as Civil Contractor and stated that his annual income was Rs. 3,30,000/-. The complainants had not approached the consumer fora with clean hands.
4. The State Commission, after considering the averments made by the parties, passed the following order:-
"During the course of hearing and in view of the rival contentions, this Commission suggested a via media method and directed the parties to arrive at a settlement. The insurance company i.e. opposite parties have come forward and stated that it is ready to pay an amount of Rs. 5,00,000/- towards settlement whereas the complainant's counsel submitted that the complainant is agreeable provided the opposite parties pay an amount of Rs. 15,00,000/-. As both parties have agreed for a compromise, this Commission is of the view that the matter can be settled and accordingly this Commission is hereby directing the opposite parties, insurance company to pay an amount of Rs. 10,00,000/- (Rupees ten lakhs only) to the complainant towards full and final settlement of the claim of the complainant."
5. It is clear from above that the Insurance Company had made offer to pay an amount of Rs. 5 lakhs, whereas the complainant was agreeable provided the OPs paid her the amount of Rs. 15 lakhs. As a via media, the State Commission directed the Insurance Company to pay an amount of Rs. 10 lakhs to the complainant as full and final settlement of the claim. Being aggrieved against the said order of the State Commission, the OP Insurance Company is before this Commission by way of the present first appeal. The notice of the appeal was sent to the respondent; however, she did not appear despite service and hence, was proceeded against ex-parte.
6. During arguments before us, the learned counsel for the appellant pointed out that the State Commission had not decided the matter on merits, rather they had simply ordered the appellant/Insurance Company to pay a sum of Rs. 10 lakhs to the complainant. In view of the fact that fabricated documents for proof of income were produced by the complainants, it was necessary that the issue is examined on merits and a final conclusion made. The matter should, therefore, be remanded to the State Commission for taking a decision on merits.
7. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.
8. A perusal of the operative portion of the order passed by the State Commission as reproduced above reveals that during the course of hearing, the State Commission made a suggestion to the parties to arrive at some kind of settlement. It is recorded that the complainant demanded a sum of Rs. 15 lakhs, whereas the Insurance Company was agreeable to pay a sum of Rs. 5 lakhs. However, the State Commission, acting on their own, directed the parties to settle the matter at Rs. 10 lakhs as full and final settlement of the claim. In our opinion, the step taken by the State Commission cannot be upheld on the basis of any legal principles. Had both the parties agreed to the said settlement, the State Commission could have recorded the fact and disposed of the matter accordingly. However, the State Commission did not have any authority to impose their own judgment on the two parties by pronouncing that a sum of Rs. 10 lakhs shall be payable by the Insurance Company to the complainants. The order passed by the State Commission cannot be sustained, therefore, on any ground.
9. The main issue involved in the matter is whether the husband of the complainant made true disclosure about his income to the Insurance Company at the time of obtaining the policy in question. In the income tax return, the income has been shown to be Rs. 3,30,000/-, whereas as per the Ration Card, the income of the assured is only Rs. 13,000/- per annum. The State Commission should have examined the issue in depth by asking the parties to submit detailed evidence in support of their contention. During hearing before us, the learned counsel for the Insurance Company vehemently argued that the income tax statement made by the insured was incorrect. However, he could not explain whether any attempt had been made to verify from the income tax department, whether the said statement had been accepted as correct by that department or not. The report of the Investigator has also not been produced on record, during the proceedings in appeal. Moreover, it also needs to be examined if the policy becomes void in the event of the income having been wrongly stated before the Insurance Company. The policy in question has been issued after accepting the due amount of premium from the insured and then renewed after receiving the yearly premium. It has not been explained, how the policy became void ab initio, if the income was wrongly disclosed.
10. From the foregoing discussion, it is evident that the order passed by the State Commission deserves to be set aside and we order accordingly. This first appeal is ordered to be accepted and the matter is remitted back to the State Commission with the direction that they should call both the parties again, provide them an opportunity to produce evidence in their favour and then give a clear finding based on the merits of the case, rather than forcing them to accept a particular amount by way of settlement.
The parties have been directed to appear before the State Commission for further proceedings on 31.07.2017.
...................... DR. B.C. GUPTA PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER