State Consumer Disputes Redressal Commission
United India Insurance Co.Ltd., And ... vs Syed Noor Ahmed on 9 April, 2013
BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD F.A.No.1010 OF 2011 AGAINST C.C.NO.17 OF 2010 DISTRICT FORUM SANGA REDDY AT MEDAK Between: 1. United India Insurance Co.Ltd., Rep. by its Branch, Near Bus Stand Sangareddy, Medak District 2. United India Ins.Co.Ltd., rep. by its R.M. United India Towers, Basheerbagh, Hyderabad Appellants/opposite parties A N D Syed Noor Ahmed S/o Syed Mahaboob 66 years, Pensioner, 11-4-615/A, Mytri Apartments, Bazarghat, AC Guards Rd., Hyderabad Respondent/complainant Counsel for the Appellant M/s V.Sambasiva Rao Counsel for the Respondents Party in person QUORUM: SRI R.LAKSHMINARASIMHA RAO, HONBLE MEMBER
AND SRI THOTA ASHOK KUMAR, HONBLE MEMBER TUESDAY THE NINETH DAY OF APRIL TWO THOUSAND THIRTEEN Oral Order (As per Sri R.Lakshminarasimha Rao, Honble Member) ***
1. The appeal is filed by the opposite party - insurance company challenging the order of the District Forum directing it to pay `6 lakh covered under the policy with interest @ 9% p.a., from the date of complaint till the date of realization together with compensation of `10,000/- and `1,000/- towards costs.
2. The case of the respondent is that his wife Smt. Arifunnissa Begum, a government teacher obtained personal accident policy bearing No.051403/42/01/11/002026/2000 with the appellant for a sum of `6 lakh covering the period from 10.7.2000 to 09.7.2001. The respondents wife met with an accident on 6.08.2001 and she was admitted in Government Hospital, and the police concerned registered it as a case in Crime No. 83/2000 under section 337 of IPC later on was altered to Section 304B, 302, 201 IPC, and the case was registered against him was taken on file of III Additional Dist. & Sessions Judge, Medak u/s 301 and 201 of IPC wherein after trial he was acquitted by judgement dated 29.10.2004. Against the said judgement the government preferred appeal, and the Honble High Court dismissed it on 13.6.2008. After waiting till expiry of appeal time, the respondent lodged claim with the appellant. And as the appellant company had not settled the claim the respondent had got issued notice dated 19-02 -2010 to the appellant insurance company.
3. The appellant insurance company resisted the case. While admitting issuance of policy it is pleaded that the respondent had obtained in the name of his wife number of individual insurance policies covering the risk of her life from 4 insurance companies for the sum assured of `1,20,00,000/-. Obtaining number of personal accident insurance policies for huge amounts, nominating himself as beneficiary under the insurance policies. It is contended that the insured did not obtain the insurance policy and the respondent obtained the policy in her name and that there is no relationship between the respondent and the insured as also that the respondent made the insurance on the basis of forgery and misrepresentation. It is contended that as per criminal case records, the respondent murdered the deceased and the then branch manager of the appellant-insurance company in his deposition before the Sessions Court explained how the respondent is not entitled to the sum assured under the insurance policy. The respondent filed the complaint before the appellant could give reply to his notice.
4. The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A11 marked and on behalf of the appellant- insurance company neither the affidavit nor documents have been filed.
5. The District Forum after considering the evidence placed on record opined that the appellant ought to have paid the amount when he was acquitted in the sessions case, and in not settling the claim even after acquittal would amount to deficiency in service. The District Forum opined that the cause of action for filing the complaint is continuing cause of action till the appellant conveys its decision to the respondent.
6. Aggrieved by the order of the District Forum, the insurance company preferred the appeal contending that the death of the deceased was not accidental and not covered by the terms of the insurance policy and that the respondent had obtained 22 insurance policies apart from the insurance policy in question and that the respondent alone claiming the amount without adding the daughter of the deceased as claimant. It is contended that this Commission allowed appeals, F.A.No. 182 of 2011 and 10980 of 2010 filed by other insurance companies against the order of the District Forum with a conclusion that the death of the deceased was not accidental and that the sessions judge observed that the judgement does not have any impact on settlement or repudiation of the insurance claims. The complaint is not filed with in the period of limitation.
7. The points that arise for consideration are:
1. Whether the assured had suppressed the fact of obtaining other policies while taking the insurance policy from the appellant insurance company?
2. Whether the complainant is entitled to the amount covered under the policy?
3. To what relief?
8. POINTS NOS 1 &2: The parties are not at dispute in regard to the fact that insurance policy bearing No.051403/42/01/11/002026/2000 was issued in the name of Smt. Arifunnisa Begum for a sum of `6 lakh covering the period from 10.07.2000 to 9.07.2001. It is not disputed that there are as many as 22 insurance policies issued by different insurance companies in the name of the insured and in all the insurance policies respondent is shown as the nominee of the insured. The respondent had not denied the factum of the deceased leaving behind her an unmarried daughter who according to the appellant insurance company ought to have been appointed as nominee.
10. The appellant denied that the insured was the wife of the respondent. The insured in whose name the insurance policies inclusive the insurance policy in question were issued, sustained injuries in a motor vehicle accident on 6-08-2000 when she was crossing the road at Annaram village and while undergoing treatment shed died on 12-08-2000. On complaint lodged by the respondent, the police Jannaram, Medak had registered a case in crime number 83 of 2000 under Section 337 of IPC and after the death of the respondents wife the section was altered to 304-A IPC. On complaint lodged by the relatives of the deceased, the sections of law was altered from 304-AIOC to 302,201IPC. The Sessions Judge, Medak acquitted the respondent and the High Court in the Criminal Appeal No.59 of 2006 preferred by the State confirmed the judgment of the Sessions Court.
11. The respondent contended that he was acquitted in the criminal case by the sessions court and high court and in view of his acquittal he is entitled to the amount assured under the insurance policy. There is no denying of the fact that the respondent and his deceased wife suppressed the fact of their obtaining other insurance policies which were taken for such a huge sum assured as of `1,20,00,000/-.
Essentially, the parties are to an insurance contract are required to be fair as the principle of ubberima fides is applicable to both the insured and the insurer as one party does not have knowledge of the material facts relating to the other party which would influence and have direct bearing upon the decision to proceed to form the contract.
12. The respondent and the deceased are supposed to declare the fact of their obtaining the other insurance policies from other insurance companies to the appellant insurance company so as to enable the appellant insurance company to take a decision as to issuing the insurance policy or refrain from doing so in view of issuance of several insurance policies for the sum worth exceeding one crore rupees. The suppression of the fact in this regard is a material fact and it would go to the root of the contract invalidating it consequent upon which the respondent is not entitled to claim any amount under the insurance policy.
13. This Commission while deciding F.A.No. 182 of 2011 filed by New India Assurance Company Ltd which was filed against the order of the District Forum allowing similar claim of the respondent, observed :
The respondent has suppressed the fact from the appellant insurance company that the United India Insurance Company had criminal proceedings against him . The observation of the High Court while dismissing the appeal filed by the State would throw any amount of light on the diabolic nature of the claim lodged by the respondent. The Courts had acquitted the respondent for lack of sufficient evidence as the criminal law requires the prosecution to adduce evidence to prove the guilt of the accused beyond any reasonable doubt and the same is not so with the civil case. The Sessions Judge observed ;
Before conclusion this court would like to record its opinion and observations that the result of this case shall have no impact, influence, reference and bearing on other cases, if any, pending against the accused in connection with insurance policies in any court or courts.
14. In the aforementioned appeal this Commission had referred to opinion of the High Court as under
The observation of the High Court is essential to show the unfair nature of the claim lodged by the respondent. The High Court was of the opinion that the respondent was involved in the offence but could not be convicted due to lack of sufficient evidence. It was held that;
From the nature of injuries sustained by the deceased, it seems that they might not have been caused in an accident. There are strong suspicious circumstances against the accused to show that he might be the perpetrator of the crime.
15. Further, this Commission had taken into consideration the observation of the XI Addl. Chief Metropolitan Magistrate, Secunderabad which is reproduced herein below:
it is beyond the capacity of the deceased to obtain policies worth of Rs. 1.21 crores within a span of six months, who has got only very limited income as a teacher and even who could not place her Rs. 75,000/- savings with the accused during her life time and who saved the same and kept with her mother itself goes to show that the accused is the instrumental, and made diabolic plan, prepared evil designs, forged documents, used such forged documents for the purpose of cheating the insurance companies, knowingly and made false representation before various authorities for unlawful gain.
16. This Commission while deciding the similar claim lodged by the respondent against the National Insurance Company in FA 1080 of 2010 against the order in C.C.16/2010, passed by the same District Forum, i.e., District Forum, Sanga Reddy held as under:
when the assured admittedly did not inform the earlier policies that she had taken with the appellant insurance company or with other four insurance companies, a material suppression of the fact. The insurance company will collect the premium basing on the various factors viz., income, age, health condition, and other particulars of the assured. When the assured did not disclose the other policies, we reiterate that it amounts to suppression of material fact.
17. The suppression of material fact by the insured is frowned upon, by the Honble Supreme Court in catena of decisions.
18. In Mithoolal Nayak Vs. LIC of India AIR 1962 SC 814 it was held that an insurance policy is an agreement in utmost good faith between the insurer and insured and any breach of this agreement by suppressing material facts on the part of insured would result in repudiation of the claim by the insurer
19. The Honble Apex Court in the case Life Insurance Corporation of Inida & Another, Vs. Asha Goel (Smt) and another reported in (2001) 2 SCC page 160 has held that The duty to disclose material fact continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any mis-statements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material fact it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person (para 12).
20. When the material particulars disclosed by the assured were found to be suppressed, the insurance companies are within their right to repudiate the claims.
21. In Satwant Kaur Sandhu Vs. New India Assurance Company Limited [(2009) 8 SCC 316], the Honble Apex Court has held that insurance is a contract based on complete good faith and any suppression of material fact would be a breach of such contract and the insurer would be justified in repudiating the claim once such suppression is established.
22. This Commission in the aforementioned appeal, held To sum up the assured, wife of the complainant had suppressed the various policies taken by her. It amounts to suppression of material fact. The policies worth Rs. 1.21 crores stood in the name of the deceased for which the complainant is the beneficiary.
She is a government school teacher hardly drawing a salary of Rs. 10,000/-
per month. In the light of the above, we are of the opinion that the complainant is not entitled to the amount covered under the policy.
23. The claim lodged with the appellant insurance company and the claim under the aforementioned appeal arise out of the same cause of action and under the insurance policies obtained during the same time. We do not see any deficiency of service on the part of the appellant insurance company in repudiating the claim . The appeal deserves to be allowed.
24. In the result the appeal is allowed setting aside the order of the District Forum. Consequently the complaint is dismissed with costs computed at `2,000/-. Time for compliance four weeks.
Sd/-
MEMBER Sd/-
MEMBER Dt.09.04.2013 కె.ఎం.కె.*