State Consumer Disputes Redressal Commission
Neel Kamal vs Metlife India Insurance Co. Ltd. on 12 August, 2011
26-08-2011 --- order doo 12-08-2011 IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 12-08-2011 Case No.C-09/163 MRS NEEL KAMAL, - COMPLAINANT W/o Late Mr. Ombir Singh, R/O C-9/1, Sukhchain Marg, DLF Phase-I, Gurgaon Versus METLIFE INDIA INSURANCE CO. LTD., - OPPOSITE PARTY 1ST Floor, Himalaya House, 23, Kasutrba Gandhi Marg, New Delhi - 110001 CORAM MS. KANWAL INDER PRESIDING MEMBER MS SALMA NOOR ... MEMBER Kanwal Inder ORDER
1. Vide this complaint direction is sought against OP to pay to the complainant Rs.75 lakhs with interest @18% p.a., Rs.24 lakhs as compensation and Rs.25,000/- as litigation cost.
2. The case is being contested by the OP who has filed written statement to which complainant filed rejoinder.
3. The parties have led evidence by way of affidavits and have addressed arguments.
We have gone through record.
4. There is no dispute regarding the facts that husband of the complainant Sri Ombir Singh obtained policy No.1200700395019 dated 11-10-2007 for term of 59 years having face value of Rs.75 lakhs on paying Rs.5 lakhs as insurance premium. The complainant submitted claim statement before the OP stating that her husband/insured was murdered on 06-10-2008 and submitted documents required for processing claim. However, vide letter dated 16-03-2009 the claim was repudiated but DD for Rs.2,65,470/- was sent to her as fund value paid under the policy. The claim has been repudiated stating that the policy is vitiated by suppression and misrepresentation and is void abinitio, mentioning that investigation was arranged due to proximity of the death from the date of insurance which is confirmed after exhaustive enquiries and verification that the deceased was being prosecuted for offence of cheating under Section 420, 467, 468 of I.P.C. in CC No. 10389/2005 in Crime No. 314/05 before Chief Judicial Magistrate, Noida which was not disclosed in the Proposal.
As per Investigation Report Police had seized 1000MT of steel rods which are in Police custody. However the said proceeding was not disclosed in the application despite specific question in this regard vide Question No. 5.1 (4), and for the purpose of substantiating income stated in the Application, the deceased had submitted two sets of Audited accounts for the years ending 31-03-2006 and 31-03-2007 purported to have been signed by Chartered Accountant Mr. Navin Chander Goel. However during investigation, the Chartered Accountant has denied certifying the accounts for the year ending 31-03-2007. Hence the accounts upto 31-03-2007 do not bear genuine signature/seal of the Chartered Accountant. It is stated that there has been suppression and misrepresentation in the application for insurance on crucial and material fact on the basis of which the policy was obtained (Annexure OP-8).
5. The complainant has come up with this complaint alleging that there is deficiency in rendering service on the part of OP by not releasing the claim amount on frivolous ground though it had accepted premium amount of Rs. Five lakhs from the insured. The allegations are that the application form was in fact filled by the Financial Advisor of the OP and insured merely signed the same. Even otherwise omission on the part of the Financial Advisor to disclose the said matter could not be termed as non-disclosure of material fact. The criminal matter which is referred to in the repudiation letter is in fact a matter relating to Trade Mark Infringement against the Company of which insured was one of the Directors and the case was registered under Section 467/468 of IPC and Section 103/104 of Trade Marks Act. The application form for taking policy was filled by the Financial Advisor. The accounts were duly audited by the CA and had been duly filed with Income Tax authorities.
6. These allegations and contentions of the complainant have been denied by the OP who has pleaded that the claim submitted by the complainant was rightly repudiated as the deceased life assured had suppressed and misrepresented material facts. An educated person like the deceased, life assured cannot be permitted to disown the liability and responsibility for the statement made in a form signed by him. He had suppressed the facts that cases were pending against him, he was charge sheeted and being tried for various offences under Indian Penal Code despite specific question in this regard vide Question No. 5.1(4) (Annexure OP-8). The CA Mr. Navin Chandra Goyal has issued letter (OP-7) that he had not audited the account of the company of the deceased for the year ending 31-03-2007. Contract of life insurance is a contract of utmost good faith wherein the proposer/life assured is under an obligation to disclose all the facts pertaining to him in the proposal form. The claim was rightly repudiated as the deceaseds life was assured with suppressed facts, misrepresented material facts rendering the policy void abinitio. The insured deceased had stated in application Annexure OP-1 that he was Director of Golden Rathi Star Industries Ltd having substantial annual income and in support thereof submitted audited financial statement of the company for the year 2006-07 and 2007-08 certified by M/s Navin Chandra & Co. CAs but it has been found that accounts for the year ending 31-03-2007 are not genuine but contained forged signatures of the CA. For policy of such value the income and financial position have a vital bearing on the decision of the OP. Similarly antecedents of the applicant including the fact whether he had any criminal proceedings against him are also very crucial and relevant facts and specific queries in this regard are raised in the application. The OP before deciding to provide coverage is entitled to know of the details regarding habits and antecedents of the applicant so as to be in a position to properly verify the risk and decide whether to provide life cover or not.
7. In the rejoinder the complainant denied the contentions raised in written statement and reiterated her case as set up in the complaint. She has inter alia stated that due to omission on the part of the Financial Advisor, one of the terms i.e. para 5.1.(4) of the application was inadvertently wrongly mentioned by the Financial Advisor, which omission in neither material nor pertaining to the fact.
Mere inadvertent of not informing that case relating to infringement of Trade Mark cannot be termed as non-disclosure of material facts. On the basis of the very balance sheet, the deceased was assessed for income tax and fell within income bracket for assuring his life for a sum of Rs.75 lakhs.
8. As per case pleaded by the parties it is to be seen that it is admitted facts of the parties that wrong information has been supplied in the clause 5.1(4) of the application form submitted and signed by the deceased life insured. Photocopy of that application is available on record as annexure OP-1. Query in clause 5.1.(4) is Have you ever been convicted or involved in criminal cases or have any case pending against you. Reply to this is no. While as per admission of the complainant herself criminal case u/s 467/468 IPC and Section 103/104 Trade Marks Act was registered and pending against the deceased. It is further significant to note that in rejoinder she mentions about the pendancy of a civil case bearing civil suit No. 1424/2003 pending before Honble High Court of Delhi as well. Thus admittedly wrong statement has been made in the application submitted for obtaining the insurance policy, which contains declaration of the proposer that he has furnished information after fully understanding the contents thereof and has made true and accurate disclosure of all the facts and has not withheld any information.
9. As per case pleaded by the complainant herself, the deceased was the Director of an Income Tax payee Company. It is nowhere the case of the complainant that the insured was illiterate or had not read or was not allowed to read the contents of his application. Hence even if her contentions were to be accepted, that the form was filled up by the Financial Advisor this will not come to her rescue as the proposer had agreed that if any untrue statement is contained in this application, the policy contract shall be null and void. It has further come on record that the insured had submitted account for the years ending 31st March 2007 audited by Naveen Chandra & Co., but Naveen Chandra & Co has denied having audited the said account as per the letter dated 24-02-2009 (OP-7). Thus there was misrepresentation and suppression of facts by the insured while applying for purchase of the policy in question. The said information was relevant and required by the OP to consider proposal for accepting policy of that value. Hence it cannot be termed as not material. Honble Supreme Court in case Appeal (Civil) 5322 of 2007 titled P.C. Chacko and another vs Chairman LIC has ruled that if a person mentions a wrong statement with knowledge of consequence therefor, he would ordinarily be estopped from pleading that even if such a fact had been disclosed, it would not have made any material change; a deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law. It has been laid down that one great principle of law is that a contract of insurance is based upon utmost good faith Uberrima fides; While the parties entered into a contract of insurance the same shall, subject to statutory interdict, be governed by the ordinary law of contract; The principles underlying the doctrine of disclosure and the rule of good faith oblige the proposer to answer every question put to him with complete honesty and honesty implies truthfulness; the topics of nondisclosure or misrepresentation are practically the positive and negative aspects of the same thing; This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the court carried the bargaining powers of the contracting parties; It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/proposal form, the respondents had acted unjustifiably or the conditions imposed are unconstitutional. Same is the case here. In this case as well, there is no such plea. Even in AIR 1991 Delhi 171 relied upon by Ld. Counsel for complainant it has been held that under the general law of insurance, an insurer can avoid a policy if he proves that there has been misrepresentation or concealment of material fact by the assured; What is material is that which would influence the mind of a prudent insurer in deciding whether or not to take the risk, and if so, at what premium. In AIR 1960 Calcutta 696 it has been held that non-disclosure of material facts leads to avoidance of policy. Similarly in AIR 1961 Punjab 253 it has been ruled that non-disclosure of a material factor is regarded as fatal to the validity of the insurance contract. In the case under consideration, there has been suppression and misrepresentation of material facts and hence this contract of insurance cannot be enforced.
10. For the reasons stated above, we come to the conclusion that the complainant has failed to make up any case of deficiency in service on the part of the OP in repudiating her claim. Therefore this complaint is dismissed.
11. A copy of this order as per the statutory requirements be provided to the parties free of charge.
12. This file be consigned to Record room after needful is done.
(KANWAL INDER) PRESIDING MEMBER (SALMA NOOR) MEMBER av