State Consumer Disputes Redressal Commission
1.The Branch Manager, Lic Of India, vs Kodurupaka Vijayalaxmi on 6 September, 2022
Before the State Consumer Disputes Redressal Commission
(constituted under the Consumer Protection Act, 2019)
of Telangana, Eruvaka Building, Khairathabad at Hyderabad
FA NO.137 OF 2018 AGAINST CC NO.35 OF 2015
ON THE FILE OF DISTRICT COMMISSION,WARANGAL
Between:
1) The Branch Manager,
LIC of India, Parkal Branch office,
Jeevan Jyothi,
Hanamkonda road,
Parkal Post and mandal,
Warangal district.
2) The Senior Divisional Manager,
Life Insurance Corporation of India,
Divisional Office: Jeevan Prakash,
near Dr.B.R. Ambedkar Statue,
Balasamudram, Hanamkonda (P & M),
Warangal district - 506 001.
..Appellants/Opposite parties
And
Kodurupaka Vijayalaxmi
W/o late Shekaraiah, aged 46 years,
Occupation: Household,
R/o H.No.1-24, Chainpaka (P & V),
Chityal (M), Warangal district - 506 356.
..Respondent/Complainant
Counsel for the Appellants Sri G.Anand Kumar
Counsel for the Respondent Sri Kunamalla Karunakar
CORAM *****
Hon'ble Sri Justice MSK Jaiswal President
and
Smt Meena Ramanathan Member
Tuesday, the Sixth day of September Two Thousand Twenty-Two Oral Order *** This is an appeal preferred by the Opposite parties aggrieved by the orders dated 21.12.2017 passed by the District Consumer Forum, Warangal in CC No.35/2015 in allowing the complaint and directing the Opposite parties therein jointly and severally to pay a sum of 2 Rs.62,500/- towards sum assured along with interest @ 7.5% per annum from the date of filing complaint i.e., 22.04.2015 till date of realisation; to pay death benefits, if any, as per the policy and also to pay damages of Rs.5,000/- and costs of Rs.2,000/-, granting time of one month for compliance.
2 Por the sake of convenience, the parties are referred to as arrayed in the complaint.
3) t is the case of Complainant that she is the wife of one Shekaraiah, who died on 05.07.2014 due to fever. During the lifetime o1 her husband, he obtained the policy bearing No.689391753 from the Opposite party No.1 for an assured sum of Rs.62,500/- which commenced on 28.04.2012, to which, she is shown as nominee. After the death of her husband, she made claim with the Opposite parties, at which time, the Opposite party No.1 obtained her signatures on printed forms by affixing revenue stamps without explaining the contents thereof. Though she approached the Opposite parties on numerous occasion, they failed to settle the claim but instead vide letter dated 23.01.2015 they repudiated the claim. Hence, complaining deficiency of service filed the complaint with a prayer to direct the Opposite parties to pay Rs.62,500/- towards sum assured; Rs.9,000/- towards vested bonus; to pay interest@9% p.a. from 01.12.2014 to 22.04.2015; to pay compensation of Rs. 10,000/-; to pay travel expenses of Rs.1,000/- and legal expenses of Rs.2,500/-.
4) Opposite parties filed their written version admitting issuance of policy on the name of Shekaraiah vide policy No.689391753 for the assured sum of Rs.62,500/- which commenced on 28.04.2012 and also admitting the Complainant to be its nominee. The life assured died on 05.07.2014. The policy was in lapsed condition for non-payment of premium due on 4/2013, which was revived on 11.02.2014 on the strength of personal statement. The life assured had suffered CVA (R) Hemiplegia and took treatment at Rohini Hospital, Hanamkonda on 23.10.2013 which is prior to the revival of the policy, which fact was suppressed at the time of revival. Hence, there is no deficiency of service on their part and accordingly prayed to dismiss the complaint.
35) During the course of enquiry before the District Forum, in order to POYC neT case, the Complainant filed her affidavit evidence as PW1 and got marked the documents Ex.Al to A17. On behalf of Opposite parties, one B.V.Pushparaju, their Administrative Officer (Legal & HPF) 1iled his alidavit evidence as RW1 and got marked the documents Ex.B1 to B3. On an application filed by the Opposite parties bearing IA No.254/201, by orders dated 21.11.2016, the Commission below summoned the original case sheet/treatment record of K.Shekaraiah, IP No.RAS 2191, dated 23.10.2013 from Rohini Hospitals, Rohini Medicare Private Limited, # 2-5-742, Subedari, Hanamkonda, Warangal and the same is marked as Ex.X1.
6 The District Forum after considering the material available on record, allowed the complaint bearing CC No.35 of 2015, by orders dated 21.12.2017, as stated, at paragraph No. 1, supra.
7) Aggrieved by the said orders, the Appellants preferred the present appeal contending that the forum below failed to appreciate the fact that the insurance contract is a contract of utmost good faith wherein the proponent is duty bound to disclose everything concerning his health, habits and other related matters within his knowledge. It failed to consider the fact that there is a suppression on the part of the litfe assured which goes to the root of the case. Hence, prayed to allow the appeal by setting aside the orders impugned.
8) The point that arises for consideration is whether the impugned order as passed by the District Forum 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?
9) What is the effect of a life assured falling sick or being admitted in the hospital for more than a week during the interregnum when the original policy issued lapsed and its revival is the point for determination in the present appeal.
10) The facts in brief are that the husband of the Complainant by name Shekaraiah has taken the policy from the Opposite party on 28.04.2011 by paying the annual premia. Ex.B3 is the original policy issued by the Appellants/Opposite parties. The premia which fell due on which was duc in April, 2013 2012 was also paid, however, the premia was not paid and the policy got lapsed.
Subsequently, on 11.02.2014, by the policy revived. In between paying the premia, the life assured got and 11.02.2014 28.04.2013 i.e., the date when the policy was lapsed admitted in Rohini when the policy was revived, the life assured was from Ex.X1 Hospital from 23.10.2013 to 01.11.2013 as is borne-out which is a medical record summoned by the District Forum from the of the self hospital authorities. The policy was revived on the basis declaration which is Ex.B2 certifying that the life assured was of good health; that he has never suffered from any illness or the disease requiring treatment for a week or more and that he never underwent investigations such as X-ray, ECG, etC.,
11) When Ex.X1 is carefully perused, it is manifest that what is mentioned in Ex.B2 by the life assured at the time when the policy was being revived on 11.02.2014 is incorrect and that amounts to suppression of material fact, which will affect the life assured getting the policy revived.
12) The learned counsel appearing for the Respondent/ Complainant submits that since the policy commenced more than two years prior to the alleged suppression, in view of Section-45 of the Insurance Act, the insurance company cannot repudiate the claim on the ground of suppressing the material fact. In support of this contention, the learned counsel appearing for the Respondent/Complainant has relied upon the following authorities.
i) Sunita Devi versus Branch Manager, Life Insurance Corporation of India and another, in R.P.No.3234 of 2018, decided on 20.08.2019 by the National Consumer Disputes Redressal Commission, New Delhi. A similar point fell for consideration. The facts in the case before the NCDRC when juxtaposed with the facts of the present case are quite at variance. In the case before the NCDRC, the policies lapsed in November 2001 and they were revived in June 2002. Before revival, he was subjected to medical examination by the panel doctors of the insurance company and only after he was found fit, the policy was revived. However, the life assured is said to have died on 24.05.2005 i.e., after the life assured applied for 5 Tevival but before the policy could be revived in June 2006. In between this period, the life assured had kidney transplant which was the development subsequent to obtaining the policies originally. Therefore, the question before the NCDRC was whether at the time when the insured applied for revival, he concealed the factum of his illness and if he has, does it in any way affected the validity of the policies which were issued to him in the year 1997. The NCDRC has relied upon the decision of the Supreme Court in "Mithoolal Nayak versus Life Insurance Corporation of India, AIR 1962 SC 814 (V-48 C-117". The Supreme Court in Judgment referred to above held as under:
"No policy of life insurance effected before the commencement the date of of this Act shall after the expiry of tuwo years from insurance commencement of this Act and no policy of life the effected after the coming into force of this Act shall, after be expiry of two years from the date on which it w a s effected, that a called in question by an insurer on the ground statement made in the proposal for insurance or in any report or in of a medical officer, or referee, or friend of the insured, w a s issue of the policy, any other document leading to the inaccurate or false, unless the insurer shows that such statement was_on _a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose."
(emphasis supplied) NCDRC held that since there was Relying upon the above authority, the before the policy was issued, the no suppression of any material facts Section-45 of the Insurance period of two years as contemplated under Act is to be computed from the date of issuance of original policy, repudiation cannot be made, recent decision of the Supreme Court on
(i) However, there is another similar subject which is a Judgment reported in Reliance Life Rekhaben Nareshbhai Insurance Co., Ltd., and another v e r s u s
712. The relevant paragraph is Rathod, reported in 2019 (6) SCJ extracted.
13, which c a n usefully be is to restrict the right of The cumulative effect of Section-45 insurance after a period the insurer to repudiate a policy of life date on which the policy w a s effected.
of two years of the establish Beyond two years, the burden lies on the insurer to theinaccuracy or falsity of a statement on a material matter or addition to this thesuppression of material facts. Moreover, in this non- requirement, the insurer has to establish that disclosure or, as the case may be, the submission of inaccurate or false information was fraudulently made and that the policy holder while making it knew of the falsity of the SLatement or of the suppression of facts which were mateial todisclose".
(ii) Subsequently, in another decision reported in The Branch Manager, Bajaj Allianz Life Insurance Company Limited and others versus Dalbir Kaur, SLP (C) No.10652 of 2020, the Supreme Court held as under.
"The medical records which have been obtained during the course of investigation indicate that the deceased was Sujfering from a serious pre-existing medical condition which was not disclosed to the insurer" This authority also lays down the same proposition of law that if the proposer has suffered from any ailment and undergone treatment and if he does not disclos e the same and if subsequently the insurance company can produce cogent evidence to the effect that the proposer has fraudulently suppressed material information affecting the contract, the same cannot be acted upon".
13) What could be culled-out from the above authorities is that when there is no doubt about the calculation of the period of two years for repudiating the claim on the ground of suppression in view of Section-45 of the Insurance Act, but, both the authorities have clearly laid down that it is not as though that beyond two years, the insurance company cannot repudiate the claim on the ground of suppression of existing ailment. As a matter of fact, in the portions of the orders highlighted in the Judgments referred to supra, the Supreme Court has clearly laid down that if the repudiation on the ground of suppression is to be made beyond two years, the burden lies on the insurer to establish the inaccuracy or falsity of a statement on a material matter or the suppression of material facts. The insurance company is further required to establish that this non-disclosure or submission of inaccurate or false information was fraudulently made and that the policy holder while making it knew of the falsity of the statement or of the suppression of the facts which were material to disclose.
14) Applying above authoritative pronouncements to the facts of the instant case, what is required to be seen is as to whether the life assured nas suppressed the material fact at the time when the policy was revived.
AS aiready stated supra, the facts of the case clearly show that tne aeceased life assured was guilty of suppressing the material information rom the insurance company when he submitted the request for revival of the policy. In the instant case, the policy was lapsed in April 2013 and was revived on 11.02.2014. In between this, the life assured was hospitalised from 23.10.2013 to 01.11.2013 as is borne-out from Ex.X1 which is a medical record, the authenticity of which cannot be doubted.
Ex.X1 is the case-sheet of Rohini Medicare Private Limited, Hanamkonda reatment for Warangal, wherein the deceased has undergone "Haemorrogic stroke CVA Right Hemiplegid"'.
submits that
15) The learned counsel appearing for the Complainant is Ex.X1 which is the main stay of the case of the Insurance Company connection, he not in respect of the deceased life assured and in this submits that the name of the deceased life assured is inconsistently mentioned and that as per Ex.X1, the patient treated there under was aged about 65 years.
16) The learned counsel further submits that on the alleged date of admission under Ex.X1 and when the age of the DLA was compared with than 45 to 48 years of the proposal-Ex.A1, he would not have been more the other documents that are age. If this contention is to be accepted, claim have also to be relied by the Complainant in support of the is the study, conduct discarded on the same ground. For example, Ex.A3 issued by the and date of birth certificate (marked in CC No.34/2015) Head Master of the school where the deceased life assured is said to have studied from class 6th and 7th, In this crucial document, there is an which ought not to have been overwriting in the column of date of birth The year 1966 the case if all was well with the claim of the Complainant.
and also when the is tampered and interpolated both in words, alphabets is overwritten after same is written in words, it is clear that the word 'six' the original of Ex.A3 is erasing some word underneath that. Significantly, not produced to see as to whether the tampering was done and if so by is another document which whom. Ex.A9 (marked in CC No.34/2015) It is an Identity Card issued by the falsify the claim of the Complainant.
15.12.1995 and per the Election Commission which was issued on as on 01.01.1995, the age of the said Election Commission ldentity Card, as deceased life assured was 45 years. If this is taken into consideration, in the year 2014 when he died, the age of the life assured will be 65 years.
As against the documents referred to above, Ex.A14 is the claim
17) statement made by the Complainant submitted to the Insurance Company. It is the claim made by the Complainant herself and in this she has described the age of her husband as 58 years. In view of the above, there is a clear inconsistency in between the documents that are produced by the Complainant herself to show as to what the age of the deceased life assured was either at the time of taking the policy or when he died. Therefore, no benefit can be derived by the Complainant from the fact that in Ex.X1 the age of the patient admitted there is shown as 65 years.
18) The other submission of the learned counsel appearing 1or the Complainant is that the medical record Ex.X1 shows the name of Shankaraiah as against the name of Shekaraiah. This submission also is devoid of substance for the reason that the entire Ex.X1 consists of several pages and in many of the pages the name is correctly mentioned as Shekaraiah but only in few pages, the name is written as Shankaraiah. That apart, the name of the father of the patient admitted therein is K.Mogalaiah which is correctly mentioned. Therefore, we see no reason to hold that Ex.X1 is not in respect of the deceased life assured aas has been submitted.
19) The learned counsel appearing for the Complainant further submits that there is no nexus in between the alleged suppression and the cause of death. In support of this contention, he relied upon several authorities. A detailed reference to said authorities need not be made for the reason that there is no quarrel with the legal proposition that when the insurance claim is sought to be repudiated on the ground of suppression of material fact, the same should have a direct bearing with the cause viz., there should be nexus in between the cause of death and the disease with which the deceased life assured was suffering and which is said to have been suppressed.
20) The Complainant has failed to show by any cogent evidence as to what is the cause of death of the deceased life assured. Except for producing Ex.A15 which is the certificate issued by Revenue Authorities, 9 Even in the c a u s e of death.
1 S produced to show as to what was 05.07.2014 after is mentioned that the deceased died on t XAI of the stated in Ex.A15, the age Suliering with fever for 3 days. As already to and even according person who was cremated is shown as 58 years therefore, it the Complainant, her husband was aged only 45 years, assured in of the deceased life cannot be said that Ex.A15 is in respect buried the age of the person of the material discrepancy insofar as View also placed upon under Ex.A 13 is concerned. The other reliance is the agent. Confidential Report Ex.A16 which is the confidential report by information is based conclusive since the ol the agent cannot be taken as in respect of Ex.X1.
the hear-say which the Complainant alleges upon the people will be the basis of what is informed to the agent by Only on that as per the had clearly mentioned made note of. In Ex.A16, the agent was fever. There the cause of death information that is obtained by him, a s to evidence on the part of the Complainant to show is no clinching what was the cause of death.
Ex.X1 behalf of the Insurance Company,
21) As against the above, on wherein been summoned from the hospital is the medical record that has As it is mentioned that the deceased was suffering with Hypoblesemia.
with Haemorrogic medical record, the deceased was suffering per the medical record further shows that the stroke CVA Right Hemiplegia. The was on medication there patient was a known case of hypertension and ailment. What is evident from for and was diagnosed with the above assured had Haemorrogic Stroke for Ex.X1 is that the deceased life a the said hospital. It is evident that the which he underwent treatment in deceased life assured suffered such serious ailment just few months revived by suppressing the same.
prior to getting the lapsed policy The learned counsel for the Respondent/Complainant relied upon
22) which shows that the facts the following judgments, the perusal of therein are quite distinct.
In the matter of Parvathapu Mangamma versus The Aviva Life
(a) Insurance Company of India in CC No.58/2019, decided on 17.01.2022 passed by Telangana State Consumer Disputes Redressal Commission, Hyderabad, wherein, it is observed as under:
"..if it is shown that the life assured has taken the policy by suppressing existence of material ailment which was well within 0 his knowledge and obtaining the policy and ultimately succumbs to that aiment after the policy is issued, he will be held to be responsible for having suppressed the material information from the insurance company thereby making the insurance company to accept the proposal. Ifno satisfactory evidence is produced to Show that prior to the proposal and issuance of the policy, the e assured had any ailment which was well within his nowledge, underwent treatment therefor, did not disclose the Same and subsequently resulting the death and if there is a nexus between all these three, only then the insurance company can be heard saying that the claim of the life assured is liable to be repudiated on the ground of suppression varie."
(b) In the matter of India First Life Insurance Botla Company Limited versus Yakantha @ Srtkala in 14.07.2022 passed by FA No.13/2019 decided on Redressal Telangana StateConsumer Disputes under:
Commission, Hyderabad, wherein, it is observed as "...in the absence of there being any nexus or close proximity in between the cause of death and the facts suppressed, the insurance company cannot repudiate the claim solely on that ground. May be if there are other grounds on which the repudiation is made, this may be one of the factors to be weighed but in the instant case, the entire claim is solely on the ground that the life assured has repudiated fact he was admitted in suppressed hospital in January 2010 when he the the policy in March 2014 and taken died on 28.05.2015.
no evidence is Absolutely,
produced to show about any treatment or
hospitalisation in between 2010 and 2015. The Forum below has appreciated the material on record in correct perspective and granted the relief. We see no reason to findings and the interfere with the said impugned order is liable to be confirmed by dismissing the appeal."
(c) In the matter of SBI Life Insurance Company Limited versus Katkam Padma, in FA No.328/2017 decided on 12.07.2022 passed by Telangana State Consumer Disputes Redressal Hyderabad, wherein, it is observed as under: Commission, "When the insurance company seeks to repudiate the claim on the ground of suppression of material fact, onus lies upon them to convincingly and cogently establish that the life assured has suppressed the existing ailment. The burden is upon them to prove but in the instant case, though an attempt has been made but the insurance company could not succeed in that the Bhoomanna who has undergone treatment establishing during May 2009 is the same Katkam Bhumaiah who has obtained the April/ housing loan and the insurance from the Appellant insurance company
(d) In the matter of India First Life Insurance Company Limited versus Ajmeera Sammaiah, in FA No.74/2017 decided on 18.03.2021 passed by Telangana State Consumer Disputes Redressal Commission, Hyderabad, wherein, it is observed as under:11
the claim on te insurance C ground company seeks to repudiate the of suppression of material fact, onus lies upon them assured has to convincingly and cogently establish that the ife Suppressed the existing ailment. The burden is upon them to attempt has been made prove but in the instant case, though an succeed in establishing Dut the nsurance company could not treatment during Apr that the Bhoomanna who has undergone Bhumaiah who has obtained the May 2009 is the same Katkam the Appellant insurance housng loan and the insurance from company."
others
n the matter of Life Insurance Corporation
of Indta and on
decided
Munugunurl Vanitha, in FA No.464/2017
Dersus State Consumer Disputes
24.09.2021 passed by Telangana
Redressal Commission, Hyderabad.
except the insurance company In the instant case, admittedly, Sciences, Nizam's Institute of Medical for producing the record of admitted on the insured was Hyderabad hospital where no other 12.05.2011 and died on 28.05.2011, absolutely shouu that insurance company to evidence was produced by the w a s sujffering insurance policies, the insured prior to taking the chronic alcoholic which ailment or that he was a from any resulted in the insured being affected uwith jaundice We have medical record that has been produced by carefully perused the there is nothing in the said the insurance company. Absolutely his hospitalization, the deceased record to show that prior to evidence was suffering from any serious ailment. The medical to his placed on record which shows that 20 days prior The medical admission, he was complaining of stomach-pain.
record produced by the insurance company do not in any way an alcoholic or that the show that the deceased insured was cause of the ailment of the deceased was consumption of alcohol."
others versus Bajaj Allianz Life In the matter of Burra Cheralu and Insurance Company Limited and another, in FA No.31/20155 State Consumer decided on 14.07.2019 passed by Telangana Disputes Redressal Commission, Hyderabad.
and another versus In the matter of Sulbha Prakash Motegaonkar Corporation of India, in Civil Appeal No.8245/2015 Life Insurance decided on 16.09.2014 passed by National State Consumer Disputes Redressal Commission.
It is manifest from the above that when Ex.B2, the request to
23) revive the policy was made, the deceased life assured was aware about his hospitalisation just few days prior thereto as is evident from Ex.X1.
This is a material fact which will affect the insurability of the life assured.
Therefore, the insurance company cannot be said to be in any way deficient in repudiating the claim on the said grounds. The District Forum has not properly appreciated these aspects in proper perspective 12 and the said and has erroneously held against the insurance company s a m e is liable to iindings cannot be sustained. In view of the above, the be set aside and the appeal to be allowed.
the District
24) In the result, the appeal is allowed and the order of in this Forum is set aside, however, the parties to bear their own costs appeal. The statutory deposit, if any, made by the Appellants/Opposite with parties shall be returned to the insurance company together accrued interest.