State Consumer Disputes Redressal Commission
Branch Manager, Life Insurance ... vs Smt. Rajinder Kaur on 20 December, 2012
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.338 of 2008.
Date of Institution: 21.04.2008.
Date of Decision: 20.12.2012.
1. Branch Manager, Life Insurance Corporation of India Limited, Railway
Road, Sangrur.
2. Life Insurance Corporation of India Limited, through its Divisional
Office, Jeevan Bharti, Sector-17, Chandigarh.
(All through its Sr. Divisional Manager, Jeevan Parkash, LIC Building,
Sector 17-B, Chandigarh)
.....Appellants.
Versus
1. Smt. Rajinder Kaur Wd/o Sh. Jaswant Singh, Resident of Village Roga,
Tehsil Sunam, District Sangrur.
2. Jaswant Singh S/o Sh. Kharak Singh, Resident of Village Roga, Tehsil
Sunam, District Amritsar.
...Respondents.
First Appeal against the order dated
14.02.2008 of the District Consumer
Disputes Redressal Forum, Sangrur.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Baldev Singh Sekhon, Member.
...................................
Present:- Ms Jaimini Tiwari, Advocate, proxy for Sh. Rajneesh Malhotra, Advocate, counsel for the appellants.
Sh. R.S. Joshi, Advocate, counsel for the respondent with Smt. Rajinder Kaur, in person. .
----------------------------------------
INDERJIT KAUSHIK, PRESIDING MEMBER:-
Branch Manager, Life Insurance Corporation of India Limited and another, appellants (In short "the appellants") have filed this appeal against the order dated14.02.2008 passed by the learned District Consumer Disputes Redressal Forum, Sangrur (in short "the District Forum").
2. Facts in brief are that Smt. Rajinder Kaur and another, respondents/complainants (hereinafter called as "the respondents") filed a First Appeal No.338 of 2008 2 complaint under section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the appellants, on the grounds that Sh. Sarbjot Singh son of Jaswant Singh obtained life insurance policy no.131784654 from the appellants on 15.05.2003 and the sum assured was Rs.50,000/-. The respondents are the legal heirs and beneficiaries of the deceased. The above policy was originally taken from the Branch Office of the appellants at Dasuya and later on it was got transferred to the Branch Office, Sangrur.
3. The deceased Sarbjot Singh applied for the post of Constable in Punjab Police in February, 2006 for the recruitment and when he underwent the physical test in May, 2006, he failed to clear the same because first time he felt some problem in breathing during the physical test. The deceased got himself examined at DMC & Hospital, Ludhiana on 24.05.2006 and he was diagnosed as suffering from Dilated Cardiomyopathy, LVEF=22%. He was also treated at PGI and finally he died on 29.08.2006 at Sadbhavna Hospital, Patiala.
4. After the death of Sarbjot Singh, the respondents lodged the claim and filled up the claim form and submitted the same to the appellants, but the amount of insurance was not paid and the respondents requested the appellants a number of times and ultimately, sent a legal notice on 07.08.2007, requesting the appellants to make the payment, but neither any reply was filed nor any payment was made. The respondents suffered a lot of mental tension, agony and physical harassment as well as financial loss at the hands of the appellants.
5. It was prayed that the appellants be directed to make the payment of Rs.50,000/- plus vested bonus along with 18% interest from the date of death of Sarbjot Singh i.e. 29.08.2006 till realization, Rs.30,000/- as compensation and Rs.5500/- as litigation expenses.
6. In the written reply filed on behalf of the appellants, it was admitted that Sarbjot Singh son of Jaswant Singh obtained policy no.131784654 for the sum insured Rs.50,000/- on the basis of proposal First Appeal No.338 of 2008 3 no.833 dated 04.04.2003 under table 75 for the term of 20 years. The date of commencement of the policy was 15.05.2003. The premium of policy was half yearly. The personal statement was signed by the deceased life assured (hereinafter called as 'DLA') on 04.04.2003 and at the time of submitting the proposal, the respondents were appointed as nominee under the policy. The life assured died on 29.08.2006 due to breathlessness within a period of three months 10 days of the date of revival of the policy, though the policy had run for more than three years. The policy which revived on 19.05.2006 required investigations to know the bonafides of the claim and, as such, the claim was got investigated and during investigation, it came to light that the DLA was suffering from heart problem and he took treatment from Dr. Rai Hospital, Sangrur, where he remained admitted on 26.04.2006 i.e. 23/24 days prior to the date of revival of the policy affected on 19.05.2006. The DLA was getting treatment since 26.04.2006 regularly from different hospitals i.e. from Sadbhavna Medical & Heart Institute, Patiala; PGI, Chandigarh and DMC & Hospital, Ludhiana. During investigation, form no.3816 was produced by the respondents which was obtained from Sadbhavna Medical & Heart Institute, Patiala. As per hospitalization certificate, the DLA was admitted in that hospital on 27.08.2006 with the history of progressive dyspula 4/5 months and received treatment from PGI, Chandigarh and DMC & Hospital, Ludhiana earlier to his admission in Sadbhavna Medical & Heart Institute, Patiala. From the clinical examination, the DLA was diagnosed as Dilated Cardioma and poor L.V. Function. At that time, the DLA was also suffering from jaundice and was having features of cardiogenic shock. This period of illness was prior to the date of revival which was very much in the knowledge of the DLA and at the time of getting the said policy revived, correct information regarding his health was not disclosed. Although, the deceased had full knowledge that on 04.04.2003, he was not keeping good health and was suffering from above said diseases. The policy has been vitiated by reasons of fraudulent suppression of material facts by the life assured and the contract is also bad First Appeal No.338 of 2008 4 on the ground of giving untrue information as per the policy conditions framed u/s 45 of the Insurance Act, 1938. The contract of insurance is based on the principle of utmost good faith. The non-disclosure of material facts or giving wrong information for getting revival of the policy is fatal to the validity of the contract. The claim was rightly repudiated. There is no deficiency in service on the part of the appellants. Other similar pleas were repeated and denying allegations of the complaint, it was prayed that the complaint may be dismissed with costs.
7. Parties led evidence in support of their respective contentions by way of affidavits and documents.
8. After going through the documents and material placed on file and after hearing the learned counsel for the parties, the learned District Forum observed that except the claimant's statement Ex.R-3, certificate of hospital treatment Ex.R-4 and Ex.R-5 and claim inquiry report Ex.R-7, there is nothing on record to show that the deceased was ever treated and admitted in any hospital for the disease with which he died. In Ex.R-3, Ex.R-4 and Ex.R-5, there seems to be mention of the fact that the DLA was admitted on 26.04.2006 in Dr. Rai Hospital, but neither there is any discharge summary nor any medical certificate issued by the doctor nor the doctor who treated the DLA has come forward to file any affidavit and in the absence of that, mere mentioning of the fact in the record of the hospital will not carry much weight nor will prove that the DLA was having any physical problem, including the heart problem at the time of filing the personal statement Ex.R-2 on 19.05.2006 and he cannot be attributed any intention of making a deliberate misstatement in order to defraud the insurance company. The complaint was allowed and the appellants were directed to pay Rs.50,000/- along with interest @ 9% p.a. from the date of repudiation i.e. 31.07.2007 till realization, Rs.3,000/- as compensation and Rs.1,000/- as litigation expenses.
9. Aggrieved by the impugned order dated 14.02.2008, the appellants have come up in appeal.
First Appeal No.338 of 2008 5
10. We have gone through the pleadings of the parties, perused the record of the learned District Forum and have heard the arguments advanced by the learned counsel for the parties.
11. Learned counsel for the appellants contended that the DLA obtained the insurance policy on the basis of proposal form dated 04.04.2003 which commenced from 15.03.2003 and the said policy lapsed and the same was revived by submitting the proposal form dated 17.05.2006 regarding good health. It was contended that the DLA at the time of signing the statement dated 17.05.2006 concealed the material facts regarding his heart ailment and the treatment taken. The DLA was admitted in Dr. Rai Hospital, Sangrur and took treatment from 26.04.2006 onwards and thereafter, from various other hospitals, such as DMC & Hospital, Ludhiana, PGI, Chandigarh and Sadbhavna Medical & Heart Institute, Patiala. The DLA concealed the material facts about his health and the claim was rightly repudiated. The District Forum has not taken into consideration all these facts and wrongly relied upon the law. It was prayed that the appeal may be accepted and the impugned order may be set aside.
12. On the other hand, learned counsel for the respondents has argued that the order of the District Forum is legal and valid. The DLA was hale and hearty and applied for recruitment in Punjab Police as Constable vide application Ex.C-4 dated 07.02.2006 and during physical test, he felt difficulty in breathing and got himself examined from the DMC & Hospital, Ludhiana and as per the discharge summary Ex.C-5, he had the complaint of dyspnoea on exertion since one month associated with orthopnoea and palpitations. The date of admission was 24.05.2006 and date of discharge was 01.06.2006. It was contended that at the time of filing the proposal on 04.04.2006, the DLA was not suffering from any disease. It has been contended that even in the claimant's statement, the duration of illness was shown 3-4 months approximately from the date of death i.e. 29.08.2006 and the admission in various hospitals was also after the filing of the proposal First Appeal No.338 of 2008 6 form. As per Ex.R-4 certificate of hospital treatment also, the date of admission was after the proposal form. As per certificate of hospital treatment Ex.R-5, the doctor or the person who wrote the history has not been examined nor any treatment record has been produced. Similarly, in the claim inquiry report, the admission was prior to the filing of the proposal form. It was contended that the order passed by the District Forum is legal and valid and the appeal may be dismissed.
13. We have considered the respective submissions advanced on behalf of the parties and have thoroughly scanned the entire documents and other material placed on the record.
14. The DLA took the policy from the appellants on 15.05.2003 for a sum of Rs.50,000/- and the said policy lapsed and the same was got revived by submitting the personal statement dated 17.05.2006 regarding good health. The proposal form filled on 17.05.2003 is Ex.R-1. The personal statement regarding the health submitted on 17.05.2006 by the DLA is Ex.R-2 and in this the DLA answered the questions in negative. The relevant questions are reproduced as follows:-
Q. Have you every suffered from any illness/disease for a week or more?
Q. Are you at present in sound health?
The answer to the above first question was given as 'NO' and the answer to the question about sound health was given as 'YES'. Claimant statement Ex.R-3 is signed by respondent Rajinder Kaur and in this statement, she mentioned that duration of illness was 3-4 months approximately prior to death of Sarbjot Singh i.e. 29.08.2006. As per the certificate of hospital treatment Ex.R-4 the DLA remained admitted on 26.04.2006, 15.06.2006 and 12.08.2006. As per the certificate of hospital treatment, the DLA remained admitted with progressive dyponea 4-5 months, received treatment at PGI/DMC/Patiala Heart Institute earlier for the same problem and he was diagnosed as Dilated Cardiomypathy and poor L.V. First Appeal No.338 of 2008 7 function. The patient had also jaundice and features of cardiogenic shock. As per claim inquiry report Ex.R-7, the DLA was admitted in Dr. R.S. Rai Hospital on 26.04.2006 as heart patient.
15. From the above documents, it is clear that the DLA was admitted for the treatment of the heart problem in Dr. R.S. Rai Hospital on 26.04.2006 and he filled up the form for revival of the policy Ex.R-2 on 17.05.2006, but did not disclose the material fact of his admission in the above hospital and got revived the policy and he died after three months of the revival of the policy. He also took treatment from PGI,Chandigarh and DMC & Hospital, Ludhiana, but that was also not disclosed. The respondents have not rebutted this evidence brought on record and the claimant's statement is signed by Rajinder Kaur herself, who was identified by the Panch of the village. The District Forum has not taken notice of all these documents and also the latest proposition of law. Hon'ble Supreme Court in case "Satwant Kaur Sandhu Vs. New India Assurance Company Ltd.", IV (2009) CPJ-8 (NC), held that since the life assured had suppressed material facts while filing the proposal form, therefore, the insurance company was justified to repudiate the insurance claim.
16. Hon'ble National Commission in case "Bhagwati Prasas Borasi Vs Life Insurance Corporation of India", II (2009) CPJ-19 (NC), in similar circumstances, held the repudiation justified when fraudulent concealment of material facts was proved.
17. In view of above discussion and the law laid down, the appeal filed by the appellants is accepted and the impugned order under appeal dated 14.02.2008 passed by the District Forum is set aside. Consequently, the complaint filed by the respondents/complainants is dismissed. No order as to costs.
18. The appellants had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the Sr. Divisional First Appeal No.338 of 2008 8 Manager, Jeevan Parkash, LIC Building, Sector 17-B, Chandigarh by way of a crossed cheque/demand draft after the expiry of 45 days.
19. The arguments in this appeal were heard on 13.12.2012 and the order was reserved. Now the order be communicated to the parties.
20. The appeal could not be decided within the stipulated timeframe due to heavy pendency of court cases.
(Inderjit Kaushik) Presiding Member (Baldev Singh Sekhon) Member December 20, 2012.
(Gurmeet S)