State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India, vs Smt. Dalbir Kaur on 29 July, 2011
2nd Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
SCO NO.3009-12, SECTOR 22-D, CHANDIGARH.
First Appeal No.1295 of 2007
Date of Institution: 20.9.2007.
Date of Decision: 29.07.2011.
1. Life Insurance Corporation of India, having its Divisional Office at
Jeevan Udyog Building, City Centre Scheme, Amritsar through
Authorised Officer, Smt. P.Kwatra, Manager (Legal & HPF),
Divisional Office, Sector -17, Chandigarh
.....Appellant
Versus
Smt. Dalbir Kaur widow of Sh. Kewal Singh, R/o Village & Post Office Bal
Sarai, Tehsil Baba Bakala, District Amritsar.
.....Respondent
First Appeal against the order dated
3.7.2007 of the District Consumer Disputes
Redressal Forum, Amritsar.
Before:-
Shri Inderjit Kaushik, Presiding Member.
Shri Piare Lal Garg, Member.
Present:-
For the appellant : Sh. R.K.Sharma, Advocate ,
For the respondent : Ex-parte
PIARE LAL GARG, MEMBER:-
This is an appeal filed by Life Insurance Corporation ( in short "the appellant" ) against the order dated 3.7.2007 passed by the learned District Consumer Disputes Redressal Forum, Amritsar (in short "the District Forum") vide which, the complaint of Smt. Dalbir Kaur (in short "
the respondent") was partly allowed.
2. Facts in brief of the case are the Late Kewal Singh husband of the respondent ( in short "the life assured") had purchased an insurance policy bearing No. 471326193 for a sum of Rs. 1,00,000/- from Batala II branch under Amritsar division on 28.10.2004 and the mode of payment of the insurance premium was Rs. 3750/- half yearly. The respondent was First Appeal No. 1295 of 2007 2 opted as nominee by the life assured. It was further submitted that her husband was healthy who died on 18.7.2005. She lodged the insurance claim with the appellant and furnished all the requisite documents for the settlement of the claim with the appellant. It was alleged by the respondent that one official of the appellant was demanding bribe from her for the settlement of claim, but she refused to do so. Respondent alleged that the appellant had not settled the claim of the respondent without any justification which amounts to deficiency in service. Respondent prayed for direction to the appellant to pay an amount of Rs. 1,00,000/- along with interest at the rate of 12%, and Compensation of Rs. 2,00,000/- along with litigation expenses of Rs. 1,000/-.
3. Upon notice, the appellant filed reply by taking preliminary objections that the complaint was not maintainable as the life assured had concealed the facts regarding his health at the time of taking the policy. It was also pleaded that the life assured had also got the medical examination conducted from the Doctor of the LIC by impersonation, which has been proved beyond doubt by the Forensic Expert Report, as such the life assured was guilty of fraud. The life assured had expired after about 7 months after filling the proposal form. The claim of the respondent was rightly repudiated after applying mind and after conducting an inquiry.
4. It was further submitted that the respondent had also approached the insurance Ombudsman at Chandigarh and on the directions of the Ombudsman, the claim of the respondent was re- investigated. It was found that life assured had played fraud with the appellant and his thumb impression on the proposal form do not tally with the thumb impression on the medical examiners reports, which were procured by the life assured by impersonation. The life assured had induced the appellant to enter into the insurance agreement by way of misrepresentation and played fraud with the appellant and as such his First Appeal No. 1295 of 2007 3 claim was rightly repudiated. Since the complicated questions of law and facts were involved in the dispute as such, only civil Court had jurisdiction to try and decide the dispute and the summary trial under the Consumer Protection Act, 1986 was not a proper remedy to decide the dispute between the parties. The life assured was suffering from typhoid at the time of filling the proposal form. The medical examination of the life assured dated 27.11.2004 was conducted by impersonation i.e. by presenting another person on behalf of the assured before the medical examiner of the LIC. It was prayed that complaint of the respondent may be dismissed with costs in the interest of justice.
5. Learned District Forum after hearing the learned counsel for the parties and going through the record, partly allowed the complaint with Rs. 1,000/- as litigation expenses; by holding that the insurance claim had been unjustly and illegally repudiated by the appellant, as such, repudiation cannot be allowed to sustain in the eyes of law. Appellant was directed to pay Rs. 1,00,000/-.
6. Hence, the appeal.
7. We have gone through the pleadings of the parties, perused the record of the learned District Forum and heard the arguments advanced by the learned counsel for the appellant.
8. The respondent has not contested the appeal and was proceeded against ex-parte vide interim order dated 27.2.2008.
9. The appeal was filed on the grounds that the District Forum has failed to appreciate the evidence brought on the file that the life assured deliberately provided false information and concealed the material facts while answering the questions of the proposal form, has not appreciated the report of the Forensic experts and wrongly held that that there was deficiency in service on the part of the appellant. There is no First Appeal No. 1295 of 2007 4 dispute between the parties that the life assured had taken an insurance policy bearing No. 471326193 for a sum of Rs. 1 lac from 2nd Branch Batala of the appellant on 28.10.2004 after paying Rs. 3,750/- as half yearly premium. The life assured died on 18.7.2005 i.e. after only seven months from the purchase of the insurance policy. The respondent was appointed as nominee in the policy by the life assured. The respondent lodged the claim with the appellant alongwith requisite documents with the appellant.
10. The claim of the respondent was repudiated by the appellant vide letter dated 31.3.2006 on the ground "the Corporation has declared the policy as void ab-initio and repudiated the claim liability as the correct information was suppressed regarding the health of the life assured. After the receipt of the repudiation letter, respondent filed a complaint on 7.7.2006 under the Redressal of Public Grievances Rules, 1998 and Conciliation Act, 1996 before the Insurance Ombudsman, Chandigarh. The Ombudsman vide its order dated 27.9.2006 decided the complaint and it was held by the Ombudsman that the appellant has failed to establish that prior to purchase of policy, the life assured was suffering from any ailment. The relevant portion of the same is as follows:-
"8. After hearing the parties and considering the facts on file, I find that there is little evidence in any of the investigation reports about the DLA having suffered from any ailment prior to the purchase of policy. Nor is there statement of any respectable of the village that he was unwell prior to purchase of policy. The only confirmatory evidence relied upon by the insurer is the statement of an R.M.P. I am afraid that it would not be fair to repudiate the claim solely on the basis of his statement, particularly so when there is nothing to establish that the DLA was under his treatment. Besides, the insurer has not been able to lay hand on any other corroborative First Appeal No. 1295 of 2007 5 evidence or document to establish that prior to purchase of policy, DLA was suffering from any ailment."
11. It is also admitted case of the appellant that it was an early claim, as such, it was subjected to investigation. Four investigations had been conducted by Branch Manager Batala-II, Branch Manager Batala-I, Branch Manager Rayya and ABM(S), B.O., Rayya. The first two investigator i.e. Branch Manager, Batala-II and Branch Manager, Batala-I had submitted their reports on 17.11.2005 and 2.1.2006 against the life assured. The first two reports were against the life assured but the later two investigators i.e. Branch Manager, Rayya and Assistant Branch Manager(S), Rayya did not find any evidence that prior to purchase of the policy, life assured had been suffering from any ailment or taken any treatment. They recommended that the claim should be paid as the same was genuine.
12. The investigation report of Sh. Pritam Singh Bedi, Branch Manager, Batala-II had relied upon the statement dated 16.11.2005 of Dr. Bagicha Singh, R.M.P. at page No. 147 of the District Forum file. In his statement he had stated that the life assured was resident of village Balsarai and he had known to him very well. The life assured was suffering from typhoid from past eight months and he has gone to Bada Bakala where he had died in the hospital. But it was not stated by him that the life assured has remained under his treatment nor he has stated that any prescription was made by him.
13. We have perused the statement, which is written on a small paper of a Register. It is also not mentioned in the report of the Investigator that who recorded the statement of Dr. Bagicha Singh. There is also statement of one Avtar Singh son of Chanan Singh resident of Balsarai at page No. 149 of the District Forum, which was also recorded by the said First Appeal No. 1295 of 2007 6 Investigator and said Avtar Singh stated in his statement that he was very well known to Kewal Singh-life assured, who was also resident of his village Balsarai. He has also stated that life assured was having a good health but on 7.7.2005 in the morning he suffered heart attack and died at the spot, who was cremated at 5.00 p.m. on the same day. It was further stated that he was not suffering from any ailment. He was agriculturist.
14. From the perusal of the statement of Dr. Bagicha Singh, it seems that the same had been procured by the said Branch Manager only to rebut the claim of the respondent. The life assured had taken the treatment from Baba Sawan Singh Radha Swami Hospital but the investigator had not recorded the statement of any doctor to come to the conclusion whether the life assured was suffering from any ailment at the time when the policy was purchased by him from the appellant.
15. It is also the version of the appellant that the life assured was suffering from typhoid at the time of filling the proposal form and he had concealed the material facts regarding his health at the time of filling the proposal form. The life assured had procured the medical examination report by impersonation, which is proved beyond doubt from the report of Forensic Expert produced by the appellant.
16. The version of the appellant is that the life assured got his medical examination conducted from the Doctors of the L.I.C. As per the directions of the Ombudsman the matter was reinvestigated and it was found that deceased life assured had played fraud with the appellant and his thumb impression on the proposal form do not tally with the thumb impression on the medical examiner's report, which was procured by life assured by impersonation. The life assured had induced the appellant to enter into the insurance contract by way of mis-representation and fraud as First Appeal No. 1295 of 2007 7 such, the contract of insurance was rightly declared null and void under the provisions of Section 17 and 18 of the Indian Contract Act, 1872.
17. We have also perused the report of the Jassy Anand, Finger Prints and Handwriting Expert Ex. R-3 as well as the photo of the thumb impression, which is disputed as Q-1 on the Medical Examiner's confidential report and S-1 on the proposal form dated 27.11.2004. The opinion of the Finger Prints and Handwriting Expert is that "the disputed thumb impression on the medical examiner's confidential report of Life Insurance Corporation of India dated 27.11.2004, marked as Q-1, has not affixed by Sh. Kewal Singh, whose standard thumb impression had been marked as S-1 on the proposal form dated 27.11.2004".
18. So from the report of the Finger Prints and Handwriting Expert, the person who thumb marked the proposal form was not the same who was examined by the Doctor of the appellant before the issuance of the policy. It is proved beyond doubt that the life assured procured the medical examiner report by producing someone else before the Doctor for the medical examination than the life assured and had played a fraud with the appellant.
19. We have also perused the proposal form, the life assured answered the following questions as under:-
Sr. No. Personal History Answer 'Yes' If Yes.
or 'No' Please
give details
11 (a) During the last five years did you consult No.
a Medical Practitioner for any ailment
requiring treatment for more than a
week?
(b) Have you ever been admitted to any No
hospital or Nursing Home for general
check-up, observation, treatment?
(d) Are you suffering from any disease No
pertaining to Liver, Stomach, Heart,
Lungs, Kidney, Brain or Nervous
First Appeal No. 1295 of 2007 8
System?
(e) Are you suffering from or have you ever No.
suffered from Diabetes, Tuberculosis,
High Blood Pressure, Low Blood
Pressure, Cancer, Epilepsy, Hernia,
Hydrocele, Leprosy or any other
disease?
(i) What has been your usual state of Good
health?
20. So from the perusal of the proposal form it is also established that the life assured had also made a wrong declaration regarding his health to the official, who filled the proposal form on the behalf of the appellant. As such, there is no deficiency in service on the part of the appellant for the repudiation of the claim of the respondent. It is not disputed that the respondent had approached the Ombudsman for the settlement of her claim and it was directed by the Ombudsman to the appellant to settle the claim based on the report of the Forensic Expert. If impersonation is established, repudiation will stand. In that case in continuation of the earlier repudiation letter, additional ground of repudiation will be conveyed to the claimant otherwise the claim will be payable. This order of the Ombudsman was not challenged by the respondent before the Appellate Authority nor the same was challenged in the complaint, filed by the respondent in the District Forum. The respondent also not challenged the report of the Forensic Science Laboratory.
21. The claim of the respondent was repudiated vide letter Ex. R-2 dated 31.10.2006 on the ground that:-
"The Insurance Ombudsman vide his letter dtd. 27.09.2006 directed us to get the report of the Forensic Expert regarding the signatures / LTI of the deed, life assured. We have obtained the report of the Finger Print expert and the impersonation has been established. So we once again inform First Appeal No. 1295 of 2007 9 you that our repudiation action stands as it has become abundantly clear that the decd. Life assured was not keeping good health at the time of insurance and the medical report was obtained in-absentia by impersonation i.e. by presenting some other person before the medical examiner."
22. So as per the above discussion, we are of the view that the claim of the respondent was rightly repudiated by the appellant and the order of the District Forum is against the evidence produced by the appellant on the file.
23. Accordingly, the appeal is accepted and the order under appeal is set-aside. Consequently, the complaint filed by the complainant is dismissed. No order as to costs.
24. The arguments in this appeal were heard on 27.7.2011 and the order was reserved. Now the order be communicated to the parties.
25. The appellant had deposited an amount of Rs. 25,000/- with this Commission at the time of filing of the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the registry to the appellant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum.
26. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Inderjit Kaushik)
Presiding Member
July 29, 2011. (Piare Lal Garg)
as Member