National Consumer Disputes Redressal
Metlife India Insurance Co.Ltd. vs Pragnaben Rajesh Batunge on 1 August, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3442 OF 2012 (From the order dated 13.07.2012 in Appeal No. 911/2011 of State Consumer Disputes Redressal Commission, GUJARAT ) MetLife India Insurance Co. Ltd. Through its Chief Manager Legal Brigade Seshamahal, 5-Vani Vilas Road Basavanagudi, Bengaluru 560 004 Petitioner Versus Pragnaben Rajesh Batunge Single Chalik, Chharanagar Kubernagar Bunglow Area Road Ahmedabad 382 340 Respondent BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HONBLE DR. S.M. KANTIKAR, MEMBER For the Petitioner : Mr. Saurabh Kansal, Advocate For the Respondent : N E M O PRONOUNCED ON_1st AUGUST, 2013 ORDER
JUSTICE J.M. MALIK
1. The question involved in this case is Whether the insured is bound to explain the correct educational qualifications before the Insurance Company, when that insurance is meant only for Graduates?.
2. Rajesh Batunge, the insured/deceased, obtained a Death Insurance Policy from MetLIfe India Insurance Co.Ltd., the respondent/opposite party. The duration of the policy was from 31.03.2005 to 31.03.2025, i.e. for 20 years. This was one of the stipulations of the policy that in case the insured died during the currency of the insurance policy, the insurance company would pay the entire amount of policy in the sum of Rs.7,50,000/-. The insured died on 20.10.2005. The claim was made by his wife, Smt.Prgnaben Rajesh Batunge. The claim made by Smt.Prgnaben Rajesh Batunge, the complainant, was repudiated on the ground that the insured had mentioned his wrong educational qualifications. He had declared that he was B.Com, but he had studied upto 8th Standard only.
3. A complaint case was filed before the District Forum. The District Forum allowed the complaint and directed the OP to pay the complainant a sum of Rs.7,50,000/- along with 9% interest.
4. Aggrieved by that order, the petitioner/OP approached the State Commission.
The State Commission dismissed the appeal, relying upon the affidavit filed by one, Jeetubhai Bajrang. In his affidavit, he stated that, on 01.10.2007, while taking a policy, deceased had given all documentary evidence, like School Leaving Certificate, Voters I.D., etc., to Sandeep Bagga, the agent of OP1. District Forum vide its order dismissed the complaint against the opposite Party No.2. Jeetubhai Bajrang further stated that the deceased had stated that he had studied only up to 8th Standard, but his education qualification was wrongly mentioned as B.Com. He also signed as a witness to the proposal form. The District Forum also directed MetLife Insurance Co.Ltd., to pay the said amount. OP2 contended that he had filled-in the form, as per the statement made by the deceased.
5. From the above said discussion, it is clear that the words B.Com were written in the presence of Jitubhai Bajrang and the Deceased. The Deceased had studied up to 8th standard, he also affixed his signature in English Language. He must also be aware of fact, being mentioned by the Agent. It was the bounden duty of the deceased to raise objection and should not have allowed the Agent to mention his incorrect educational qualifications.
6. We have also gone through the Written Statement filed by the opposite party. The written statement in Para 6.1, reads as follows:-
6.1. It is further submitted that as per underwriting guidelines, if the academic attainment of the proposer was not graduation, then he would not be covered under the category which is reserved for graduates and he would not be extended a sum of Rs.7.5 lakhs as insurance cover. Based on late Rajesh Batunges actual academic qualifications, he would have been fallen in the category of non-graduates, and the maximum limit of the sum assured could not have exceeded Rs.1.00 lakh.
7. It is thus clear that there are two categories, one for Graduates and the other for Non-Graduates. The mis-statement made by the deceased go to the root of the case and violate the basic principle of utmost faith, which obviously forms the corner stone of any insurance contract. Due to this mis-statement, the complainant is not entitled to any claim.
The Honble Apex Court, in the case of Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., reported in IV (2009) CPJ 8 (SC), was pleased to hold that :
The term material fact is not defined in the Act and, in therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be material.
8. The Honble Apex court in Satwant Kaur Sandhu (supra) in Paras 12, 13 & 18, further held as under :-
12..
Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning, a contract of utmost good faith, on the part of the assured.
Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment. (See: Joel Vs. Law Union & Crown Ins. Co. [1908] 2 K.B. 863).
13. In United India Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)=(1996) 6 SCC 428, this Court has observed that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (Also see: Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000) SLT 323 = I (2000) CPJ 1 (SC) = (2000) 2 SCC 734).
18. As stated in Pollock and Mullas Indian Contract and Specific Relief Acts, any fact, the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium, is a material fact.
9. In view of this discussion, we allow the revision petition, set aside the orders rendered by both the fora below and dismiss the complaint. No costs.
....J (J.M. MALIK) PRESIDING MEMBER .
(DR.S.M. KANTIKAR) MEMBER Dd/6