State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India, vs Gaddam Sai Sunder on 20 June, 2023
1
BEFORE THE TELANGANA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION : HYDERABAD.
FA.NO.397/2020
AGAINST THE ORDERS IN CC.NO.328 OF 2018 ON THE FILE
OF DISTRICT COMMISSION, KARIMNAGAR
Between:
Life Insurance Corporation of India,
Rep. by its Manager, Jeevan Prakash,
Divisional Office, Ambedkar Stadium Road,
Karimnagar.
......... Appellant/Opposite Party
And
Gaddam Sai Sunder,
S/o.Late Gaddam Gangadhar,
Aged about: 19 years, Occ: Student,
R/o.H.No.7-4-94, Kashmirgadda,
Karimnagar Town & District.
..........Respondent/Complainant
Counsel for the Appellant/Opposite Party: M/s.Srinivas Karra
Counsel for the Respondent/Complainant : Notice served
QUORAM:
HON'BLE SMT. SMT. MEENA RAMANATHAN, INCHARGE PRESIDENT
&
HON'BLE SRI K.RANGA RAO, MEMBER-JUDICIAL
TUESDAY, THE TWENTIETH DAY OF JUNE
TWO THOUSAND TWENTY THREE
****
Order : (Per Hon'ble Sri K.Ranga Rao, Member-J)
1.This appeal is filed by the Appellant/Opposite Party U/s.15 of Consumer Protection Act, 1986 praying this Commission to set aside the order of the District Consumer Disputes Redressal Forum, Khammam dated 17.02.2020 passed in CC.No.328/2018 and consequently dismiss the complaint i.e., CC.No.328/2018.
22. For the sake of convenient discussion, the parties are referred to as arrayed in the complaint. The Appellant was the Opposite Party and the Respondent was the complainant in CC.No.328/2018.
3. The succinct facts of the complaint are that the father of the Complainant worked as a Constable. During his life time, he obtained the policies from Opposite Party vide Policy Nos.685862947 for an assured sum of Rs.1,00,000/- commencing from 28.10.2014 to 10/2033. While the said policy was in force, unfortunately the father of the Complainant, Gaddam Gangadhar died due to heart attack on 21.08.2016. The Complainant is the nominee for the said policies being the son of the deceased. So, after the death of his father, the Complainant submitted his claim with relevant documents under the policies. The Opposite Party settled the claim in respect of Policy Nos.683514520 and other policies, but failed to settle the claim in respect of the said policy till date. Therefore, the Complainant approached the Opposite Party and obtained the status report of the said policies. In the status report, it was mentioned as "DC REPUDIAT". In fact, the Complainant did not receive any repudiation letter from the Opposite Parties till date. Due to non-settlement of the claim by the Opposite Party, the Complainant suffered a lot, economically and mentally to go around the office of Opposite Party and the same amounts to deficiency in service on the part of the Opposite Party. Hence, he filed the present complaint.
4. The Opposite Party filed written version denying the averments made in the complaint and submitted that two more cases vide CC.No.327 and 329 were also filed by the different parties of the same deceased. Since the subject involved is one and the same, the Forum may kindly hear all these three cases simultaneously in order to avoid duplication and for proper appreciation of the subject and saving of the precious time of the Forum.
35. It is a fact that LIC issued the following to Sri G.Gangadhar.
Sl.No. Policy No. Commencement Sum First
Date Assured Unpaid
Premium
1. 685958136 10.09.2014 2,00,000 09/2006
2. 685958850 28.09.2015 1,50,000 09/2006
3. 685862947 28.10.2014 1,00,000 09/2006
4. 685958598 28.03.2015 2,00,000 09/2006
The Opposite Party Corporation has repudiated the death claims under the above policies as Sri Gaddam Gangadhar withheld the correct information regarding his health at the time of inception of above policies.
6. It is further submitted by the Opposite Party that they have evidence and reasons to believe that the deceased life assured had taken treatment for chronic liver disease, DM and left Forearm Abscess from Apollo Hospitals prior to the date of commencement of the policies. But the same information was not disclosed in the proposals submitted at the time of inception with fraudulent intention. Had he disclosed the said information, the Opposite Party would not have issued policies. Since there is suppression of material information regarding the health of the policy holder and that it is not disclosed to LIC at the time of issue of policies, the claims were repudiated invoking the Section-45 of Insurance Act, 1938. As per the forfeiture regulations of the policy, if any untrue or incorrect statement contained in the proposal/personal statement of health, declaration and connected documents or any material information is withheld, the policy shall be void. Further as per the provisions of Section-45, a policy can be called in question by insurer if there is suppression of material information and the death of the policy holder takes place within 3 years from the date of commencement of risk or from the date of revival of the policy. The repudiation of claims was intimated to the Complainant vide their letter Dt: 22.11.2017 stating to approach Zonal Office if he disagree with their decision. Cause of Action in the complaint is related to the allegation that the claim of Complainants was repudiated for no valid reason. Reasons are explained by the 4 Opposite Party in detail. Hence, there is no cause of action for this complaint. Therefore, prayed for dismissal of complaint with costs.
7. During the course of enquiry, the Complainant filed evidence affidavit and got marked Ex.A1 to A5. On behalf of the Opposite Party, one M.Chandrasekhar, Manager (L&HPF) DM, LIC of India filed his evidence affidavit and got marked Ex.B1 and B2.
8. The District Forum after considering the material borne by the record, allowed the complaint in part directing the Opposite Party to pay the Complainant the sum assured of Rs.1,00,000/- covered under Policy Nos.685862947 together with interest @ 9% p.a. from the date of filing of the complaint i.e., 29.08.2018 till realization to the Complainant and also to pay Rs.5,000/- towards costs of the proceedings within one month from the date of receipt of the order.
9. Aggrieved by the said order, the Appellant/Opposite Party preferred the present appeal with the following grounds:
The order of the District Forum is contrary to law, weight of evidence and probabilities of the case.
The District Forum ought to have dismissed the complaint considering the fact that the deceased suppressed the material fact with regard to his health at the time of taking the policies.
The District Forum failed to consider that the deceased life assured had taken treatment for chronic liver disease DM & LEFT Forearm Abscess from Apollo Hospitals, Hyderguda, Hyderabad, prior to the date of commencement of policies as per the discharge summary belonging to him.
With the above grounds, the Appellant/Opposite Party prays to allow the appeal and to set aside the impugned order of the District Forum and consequently dismiss the complaint i.e., CC.No.328/2018.5
10. Heard the arguments of the learned counsel for the Appellant who by and large submitted the points mentioned in grounds of appeal with regard to the suppression of material fact and thereby the Appellant/Opposite Party was justified in repudiating the claim of the Complainant.
11. It is observed from the docket that since inception, there has been no representation for the Respondent/Complainant. Hence, having heard the arguments of the Appellant, we reserved the appeal for judgment so as to decide the stand of the Respondent/Complainant on merits.
12. The point for consideration is:
Whether the impugned order passed by the District Forum, Karimnagar in CC.No.328/2018 suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with in any manner? To what relief?
13. We have carefully examined the whole material available on record and the same would manifest that the following are the undisputed facts:
The father of the Complainant, during his life time obtained the policy from Opposite Party vide Policy Nos.685862947 for an assured sum of Rs.1,00,000/- with the commencement of the risk from 28.10.2014 to 10/2033. While the policies were in existence, unfortunately, the Complainant's father Gaddam Gangadhar died due to heart attack on 21.08.2016. After the death of his father, the Complainant being the son and nominee of the deceased submitted the claims for the death benefits along with relevant documents to Opposite Party and requested to settle the same. But the Opposite Party repudiated the same on the ground of suppression of material fact with regard to his undergoing treatment for chronic liver disease, DM and Left Forearm Abscess from Apollo Hospital prior to taking of the said policies.6
14. It is the contention of the Opposite Party that as the claim was an early one, the Opposite Party enquired about the cause of the death of the deceased life assured and in the same, it came to light that the deceased life assured was admitted in Apollo Hospital on 04.04.2014 and was diagnosed for Diabetes Mellitus, chronic liver disease and Left Forearm Abscess. But the same was not mentioned in the proposal form by the deceased life assured and he furnished wrong information. Had the deceased life assured furnished the said details of treatment, the Appellant/Opposite Party would not have issued the policies on the life of the deceased life assured. The same amounts to suppression of material fact and therefore, the Opposite Party repudiated the claim vide Ex.B2 repudiation letter dated 22.11.2017.
15. As seen from the material borne by the record, it is the stand of the Complainant that his father (deceased life assured) was hale and healthy at the time of obtaining the policies. It is also the further stand of the Complainant that except filing the photocopy of the alleged discharge summary under Ex.B1, the Opposite Party has not placed any authenticated evidence to prove the said alleged undergoing of the treatment by the deceased life assured for the alleged disease at the Apollo Hospital. No affidavit of the Doctor was filed nor the Superintendent of the said hospital was examined, hence, Opposite Party has failed to substantiate the so called allegation of the suppression of material fact by the deceased about his state of health at the time of obtaining the policy.
16. The law is settled that when the Life Insurance Company of India (LIC) repudiate the claim under any policy on the ground of suppression of material fact by the deceased life assured about the state of his health at the time of obtaining the policy/policies, burden lies on the LIC of India to prove the same.
17. In the case on hand, the Opposite Party placed reliance on Ex.B1 photocopy of discharge summary of G.Gangadhar issued by Department of Internal Medicine, Apollo Hospital, Hyderguda. No 7 doubt, a perusal of the said Ex.B1 photocopy of the discharge summary of one Mr.Gangadhar shows that the said Gangadhar was admitted in the hospital on 04.04.2014 and was discharged on 14.04.2014. In the said Ex.B1 discharge summary, the columns are in printed form. At the column diagnosis summary "Diabetes Mellitus" is in handwritten form but the "chronic liver disease" Left Forearm Abscess, S/P. Incision and drainage are in printed form. Dr.Arshad Punani, Dr. Shaeq Mirza and Dr.Hari Kishan names are mentioned against the column treating doctors. Except filing Ex.B1 photocopy of the alleged discharge summary stating that the same belongs to deceased life assured, Opposite Party has not filed any cogent and satisfactory evidence to prove that Ex.B1 discharge summary belongs to the deceased life assured Gaddam Gangadhar. At this juncture, it is to be mentioned here that mere filing of Ex.B1 discharge summary would not support the contention of the Opposite Party, more particularly when there is no affidavit of the treating doctors or the affidavit of a competent person of the said hospital such as Superintendent of the said hospital. It may be noted here that production of the document is different from proof of the same. In case of repudiation of claim, the burden of proof heavily lies upon the Insurance Company. The Opposite Party Insurance Company ought to have made all the investigations to know the health condition of the proposer such as the deceased life assured, before issuing the policy but not at the settlement of the claim after the death of the life assured.
18. The Hon'ble National Commission in RP.No.2828/2012 dated 03.09.2012 wherein the Insurance Company repudiated the claim on the ground that the insured had suppressed the material fact that he was suffering from heart ailment, held that: "the entire case of the Petitioner hinges upon the said history. This kind of exiguous. It carries no value in the eyes of law. The Petitioner should have produced some concrete evidence in support of his case. The examination of a Doctor who checked the patient, prior to obtaining of the policy is in question. Some treatment papers, some prescriptions etc., should have been produced. There is 8 no evidence which may go to show that he had ever consulted the Doctor for taking treatment for the said disease. In the absence of solid and unflappable evidence, dallops of mystery surrounds Petitioner's case." The State Commission has referred to an authority of this Commission reported in Pravin Damani Vs. Oriental Insurance Company Limited (RP.No.1696/2005) decided on 03.10.2006, which fully dovetails with the facts of this case and favours the Complainant.
19. The proposition of law enunciated in the above case law, the Hon'ble National Commission makes it clear that the Insurance Company when repudiates the claim on the ground of suppression of material fact by the deceased life assured about the state of his health or undergoing treatment for the alleged treatment, it is incumbent upon the Insurance Company to prove the said fact with cogent and satisfactory evidence, such as by filing of the evidence affidavit of the Doctor who treated the patient and authenticated treatment papers and medical prescriptions etc., and in the absence of the same, the Insurance Company has no right to repudiate the claim, having issued the Insurance Policy.
20. In view of our afore-stated discussion, we have no hesitation to hold that the Appellant/Opposite Party has failed to substantiate its allegation of suppression of the material fact by the deceased life assured at the time of obtaining the policy, as such, the Insurance Company is directed to honour the claim of the Complainant.
21. Viewed from any angle, nothing appears to us to intervene with the well-reasoned order of the District Forum.
22. In the result, the appeal is dismissed by confirming the order of the District Forum. There shall be no order as to costs.
Sd/- Sd/-
I/C PRESIDENT MEMBER-J
Dt: 20.06.2023
*UC