State Consumer Disputes Redressal Commission
Mrs. Leno Lhouvisier Zinyu vs Max New York Life Insurance Company Ltd. on 20 May, 2023
NAGALAND STATE CONSUMER DISPUTES REDRESSAL COMMISSION
KOHIMA, NAGALAND
CC 1/2015
Mrs. Leno Lhouvisier Zinyü
Wife of Late Thomas Jasokie Zinyü
Lerie Chazou Colony,
Kohima - 797001, Nagaland.
Mobile No. 9436060982
...Complainant
-vs-
1.The Chairman, Max Life Insurance Company Ltd.
Max House (3rd Floor), 1, Dr. Jha Marg, Okhla, New Delhi - 110020
2. The Managing Director & CEO Max Life Insurance Company Ltd.
11th Floor, DLF Square Building, Jacaranda Marg, DLF City Phase II, Gurgaon - 122002, Haryana.
3. The Officer-in-Charge/Manager, Claim Support Unit, Max Life Insurance Company Ltd.
Operation Center, Plot No. 90-A, Udyog Vihar, Sector 18, Gurgaon - 122015, Haryana.
4. The Branch Head/Manager (Agent), Axis Bank Ltd., Kohima Branch, UT Complex, Opp UBC Church, Kohima - 797001, Nagaland.
Insurance/Corporate Agent ...Opposite Parties Present:
For the Complainant: (K. H. SAVI) Advocate For the Opposite Party: (MAMANG SINGSON) Advocate Date of Hearing:
Date of Order:
The present complaint has been filed by Mrs. Leno Lhouvisier Zinyü whose husband had taken a life insurance policy with the Max New York Life Insurance Company and filled a proposal form dated 23.07.2011 bearing No. 796180719. The husband of the petitioner Mr. Thomas Jasokie Zinyü "Deceased Life Insurance" or DLA for an assured sum of ₹50,00,000/- (Rupees Fifty Lakhs only). The DLA died on 04.12.2012 and claim was intimated to the opposite party. However, the claim was repudiated by the opposite party on the ground that there was material suppression of facts in the proposal form.
Appearing for the Complainant, learned Counsel Mr. K. H. Savi appears and submits as follows:
Your Lordship and learned Member, at the outset kindly allow me to narrate 'Facts of the present case', Max Life Insurance Co. Ltd is a corporate (Opp. Parties No. 1, 2 & 3) into the business of Life Insurance having its registered office at New Delhi and has branches across India. They have an Agent in Kohima namely AXIS BANK LTD KOHIMA (Opp. Party No. 4 as corporate/insurance Agent) and was operating in Kohima offering and accepting policy on behalf of the Opposite Parties (Opposite Party No. 1, 2 & 3). Originally the Insurance name was "Max New York Life Insurance Company Limited" and it continues till such time the present complaint petition was filed and later on it has changed to "Max Life Insurance Company Ltd." Accordingly, the complainant has filed an application to change the name of Opposite Parties, particularly No. 1, 2 & 3 to Max Life Insurance Company Ltd. and the Hon'ble Commission was pleased to consider the said application. All the annual Premium are deposited to the Axis Bank Ltd. Kohima Branch, Kohima, Nagaland (Agent 1 Bank). Accordingly, their Agent (Opp. Party No. 4) approached and offered policy to the Policy Holder late Thomas Jasokie Zinyü (hereinafter referred to as the "Deceased Life Insured" or "DLA") who was also a customer of Axis Bank Ltd, UT Complex, Kohima with account No. 909010031892358.
The moment Policy Holder (late Thomas Jasokie Zinyü/DLA) had apply for the policy brought and offered to him by their Agent (Opp. Party No. 4), the Agent/Opp. Party No. 4 instructed him to file up the form as per the Life Insurance Policy Documents along with a medical assessment prior to the issued of policy. Since then the Insurance/corporate Agent Opp. Party No. 4 took the initiative and entirely led and guided the complainant/policy holder to get done all necessary formalities including health fitness as the policy has to be accepted solely subjected to a thorough physical examination where a medical assessment has to be done at the company's approved expert hospital by its empaneled doctors. And to ensure health fitness, a medical assessment was carried on Thomas Jasokie Zinyü(DLA/Policy Holder) conducted by Max company's approved Expert at Windrobe Hospital, Guwahati by its empaneled doctors in the person of Dr. Tridib Baruah, MBBS, MD, on 10th August, 2011 and had gone through a thorough Physical Examination. The blood pressure was recorded 120/80 mmhg. The DLA/Policy Holder had underwent batteries of tests, that included the blood tests, urine analysis, bio-chem, stress test, ECG and others. The report of these tests were all within normal limits, verifying a good health condition and accordingly the DLA had filed the form where a set of questionnaire pertaining to medical and life style details to be insured. A thorough physical examination where 2 a medical assessment was conducted was solely under the guidance of Opp. Party No. 4/Agent.
Subsequently an acknowledgement in a form of a letter dated 03.09.2011 under the subject - 'Medical Reports for your insurance policy' was served to Policy Holder (late Thomas Jasokie Zinyü). The said letter further mentioned 'In line with the same enclosed are the medical reports for the investigations that you underwent as a part of our insurance assessment progress'. Detailed medical reports and forms were enclosed herewith the abovementioned letter. Another letter vide dated 25.08.2011 was issued by Chairman Analjit Singh agrees to pay the Benefits under this Policy on the happening of the Insured Event while this Policy is in force. The Managing Director & CEO issued a letter dated 26.08 2011 thanking for choosing as life insurance partner. The Policy Holder/DLA's proposer was accepted and acknowledge receipt of his annual premium of Rs.5 lacs. The Policy Holder/DLA had paid another annual premium in the following year and therefore, he had paid 2 annual premium amounting to Rs.10,00,000/- (Rupees Ten lakhs) only before his death. To the satisfaction of the positive medical assessment report, Max New York Life Insurance Company Ltd sold Max New York Life Fast Tract(5PAY), a Unit Linked Non Participating Insurance Policy (ULIP), Policy No. 796180719 to Thomas Jasokie Zinyü, with an assured Sum of Rs.50,00,000/- (Rupees Fifty Lakhs) only on 23rd August, 2011. In the event of death of Life insured, the Company shall pay an amount equal to Sum Assured plus Fund Value prevailing as on the date of receipt of intimation of death. The Complainant is the lawful wife of late Thomas Yasokie Zinyü (Policy Holder/DLA) and also the Nominee of the policy 3 holder where her husband life was insured on 23rd August, 2011 and again her husband (Policy Holder) died on 4th December, 2012.
A copy of medical report dated 03.09.2011 along with detailed Medical Examination Report furnished by Max New York Life Insurance Company Limited (old name and now changed to Max Life Insurance Company Ltd.), A copy of ACKNOWLEDGEMENT OF RECEIPT OF POLICY (policy number, policy holder, life insured are mentioned), A copy of letter dated 25.08.2011 issued Chairman Analjit Singh agrees to pay the benefits under this Policy on the happening of the Insured Event while this Policy is in force, A copy of letter dated 26.08.2011 issued by Managing Director & CEO thanking for choosing as life insurance partner, are herewith annexed and marked as ANNEXURE - 'IA', 'IB', 'IC', and 'ID' respectively.
As per Life Insurance Policy Document: ('The Schedule' TYPE OF POLICY
- Unit Linked-Non Participating, Life Insurance OFFICE - AXIS BANK LTD, Kohima as herewith annexed as - "ANNEXURE - C" Page 19 t0 30 of the Complaint Petition).
1. DEFINITIONS AND INTERPRETATION (Page/23): 1.1 w) "Sum Assured" means the guaranteed amount payable on death of Life Insured as specified in the Schedule but not less than 105% of the Premiums received by the Company.
43. BENEFITS (Page/24): 3.1 Death Benefit: In the event of death of Life Insured, the Company shall pay an amount equal to Sum Assured plus Fund Value prevailing as on the date of receipt of intimation of death of Us. The SUM ASSURED as specified in the Schedule is Rs.50,00,000/- (Rupees Fifty Lakhs) in the event of death of Life Insured. And not less than 105% of the Premiums received by the Company, here the Company had already received 2(two) annual premiums i.e., Rs. 10 lacs of which the complainant/claimant is entitled to receive the Premiums already been paid plus 5% i.e., Rs. 50,000/- (Rupees Fifty Thousand). However, the Company had credited only Rs.9,46,288.28 on 17 Dec 2013 which was less than the Premiums been paid and not by way of not less than 105% of the Premium received by the Company. Even in the Premiums been paid the complainant receive less by the sum of Rs. 53,711.72 (Rupees Fifty three thousand seven hundred eleven & seventy two paise) and the complainant is entitled to receive the remaining sum amounting to Rs. 53,711.72. Accordingly, the claims of complainant's monetary claims are as follows (as entitled): -
i. Sum Assured in the event of death of Life insured = Rs. 50,00,000.00 ii. 5% of Rs. 10 lacs = Rs. 50,000.00 iii. less receive of 2 annual Premiums been paid = Rs. 53,711.72 Compensation claims: -
iv. Mental agony = Rs. 5,00,000.00
v. Legal expenses & others = Rs. 2,00,000.00
5
Therefore, the TOTAL CLAIMS is Rs. 58,03,711.72 (Rupees Fifty eight lakhs three thousand seven hundred eleven & seventy two paise) only. The present Complaint was filed within the jurisdiction of the State Commission (Section 17) and as per the Consumer Protection Rules an amount of Rs.4000/- (Rupees Four thousand) only in Demand Draft in favour of the Registrar, Nagaland State Consumer Disputes Redressal Commission was also herewith enclosed for the abovementioned claims.
Your Lordship and learned Member, my humble and sincere submission, this is a case where 'medical examination' was conducted prior to the issue of the said policy and the consideration of the Policy was solely subjected to the satisfaction of medical examination report. The corporate/insurance company (Opp. Party No. l, 2 & 3)'s empaneled doctor had conducted medical examination 'prior to consideration' and the policy was issued Solely to the satisfaction of the Insurance Company as per the medical report of the proposer/DLA.
ISSUE NO. 1 : Is there any dispute about medical examination prior to the issuing of policy?
Answer : 'NO'. There was no dispute about medical examination prior to the issuing of policy. The medical assessment was carried On Thomas Jasokie Zinyü/DLA conducted by Max company's approved Expert at Windrobe Hospital, Guwahati by its empaneled doctors in the person of Dr. Tridib Baruah, MBBS, MD, on 10th August, 2011 and the "DLA" had gone through a thorough Physical Examination. The blood pressure was recorded 120/80 mmhg, The DLA/Policy Holder had underwent batteries of tests, that included the blood tests, urine analysis, bio-chem, stress 6 test, ECG and others. The reports of these tests were all within normal limits, verifying a good health condition. Accordingly, the policy was issued solely to the satisfaction of medical report. The Written Statement submitted by the Insurance Company Agent/Opp. Party No. 4 did not deny its role as a corporate insurance agent in guiding the DLA for the entire conduct of medical examination nor other opposite parties deny in regard to medical examination report. And in addition to that the learned counsel representing Opp. Party No. 1, 2 & 3 had admitted in the open court on 1st July, 2022 that there was medical examination prior to the issued of policy.
ISSUE NO. 2: Is there any suppression of material facts, fraud, & misrepresentation on the part of the Complainant?
Answer : 'NO'. There was no suppression of material facts, fraud, and misrepresentation on the part of Complainant as the present case was solely subjected to the medical report where Max company's approved Expert at Windrobe Hospital, Guwahati by its empaneled doctors in the person of Dr. Tridib Baruah, MBBS, MD had conducted medical examination on 10th August, 2011 prior to the issued of policy and the DLA/Policy Holder had gone through a thorough Physical Examination. The policy was issued solely on the satisfaction of medical report.
ISSUE NO. 3: Was it relevant and applicable to the present case the report of SRK Investigation Services Pvt. Ltd. conducted after the death of Policy Holder (late Thomas Jasokie Zinyü/DLA)?
Answer : 'NO'. The report of SRK Investigation Services Pvt. Ltd, conducted after the death of Policy Holder/DLA is not relevant in the 7 present case as the said Policy was issued solely subjected to medical examination report prior to the issued of the said policy. However, after the death of Policy Holder the Opposite Parties No. l, 2 & 3 hired the service of SRK Investigation Services Pvt. Ltd to investigate the health conditions of the Policy Holder and it was reported that due to the several diseases which was existing since prior to the proposal of the said policy, the health condition of the Life Assured (Policy Holder) deteriorated and died on 04.12.2012. The said report had also alleged that the Policy Holder (Deceased Life Insured or DLA) did not disclosed the existing suffering from several diseases since prior to the proposal of the said policy and termed it as "suppression of material facts". The report of SRK Investigation Services Pvt. Ltd conducted after the death of Policy Holder is irrelevant in the present case as this is a case where 'medical examination' was conducted prior the issued of the said policy and the consideration of the said Policy solely depends on the satisfaction of medical examination report. The main contention of Opposite Parties No. l, 2 & 3 is simply non-disclosure of materials facts.
HUMBLE SUBMISSION:
Your Lordship and learned Member kindly allow me to place before you my humble submission. At the outset allow me to mention that the counsels have agreed amongst ourselves to submit WRITTEN ARGUMENT to avoid verbal argument or submission in the open court and for which my learned counsel representing Opposite Parties l, 2 & 3 had already filed "Written Argument" and myself representing the complainant is doing the same. I may not repeat the facts of the case but kindly allow me to substantiate the abovementioned ISSUES and humble prayers.8
Your Lordship and learned member, my humble submission is -- "this is a case where 'medical examination' was conducted prior to the issued of the said policy". The medical assessment was carried on Deceased Life Insured (Policy Holder) conducted by Max company's approved Expert at Windrobe Hospital, Guwahati by its empanelled doctors in the person of Dr. Tridib Baruah, MBBS, MD, on 10th August, 2011 and the DLA had gone through a thorough Physical Examination. The blood pressure was recorded 120/80 mmhg, The DLA/policy holder had underwent batteries of tests, that included the blood tests, urine analysis, bio-chem, stress test, ECG and others. The reports of these tests were all within normal limits, verifying a good health condition. And the detailed medical report was also produced to the Policy Holder. Accordingly, the said policy was issued solely to the satisfaction of medical report. And there was/is no dispute about medical examination prior to the issuing of the said policy. The Written Statement submitted by the Insurance Company Agent/Opp. Party No. 4 who took the sole initiative in the entire process of medical examination did not deny its role as an agent in guiding the DLA for the conduct of medical examination. And even the learned counsel representing Opp. Party No. 1, 2 & 3 had also admitted in the open court on 1st July 2022 that there was medical examination prior to the issued of policy. The Complainant denied any act of 'suppression of material facts, fraud, & misrepresentation' on her part as the present case was solely subjected to the medical report where Max company's approved Expert at Windrobe Hospital, Guwahati by its empaneled doctors in the person of Dr. Tridib Baruah, MBBS, MD had conducted medical examination on 10th August, 2011 prior to the issued of the said policy and the DLA had gone through a thorough 9 Physical Examination. The policy was issued solely to the satisfaction of medical report. The Complainant denied the entire allegation based on the report of SRK Investigation Services Pvt. Ltd. conducted after the death of Policy Holder (late Thomas Jasokie Zinyü) as it is not relevant nor applicable to the present case as the said Policy was issued solely based on the report of medical examination conducted prior to the issued of the said policy. However, the Opposite Party No. 1, 2 & 3 had completely ignore the medical report conducted by Max Insurance company's approved expert at Wintrobe Hospital, Guwahati conducted by its own empaneled doctors in the person of Doctor Tridib Baruah, MBBS, MD before the policy was issued as it was subjected to health fitness. And on the consideration of the medical report, the Insurance Company (opposite party No. l, 2 & 3) was satisfied about the medical condition of the proposer, and on such satisfaction it has issued the policy. Therefore, the report from SRK Investigation Services Pvt. Ltd. conducted after the death of Policy Holder (late Thomas Jasokie Zinyü) was/is not relevant in the present case as the said Policy was issued solely based on medical examination report prior to the issued of the said policy. The SRK Investigation Services Pvt. Ltd. did not meet or interview the Opposite Party No.4 (the Insurance company Agent) for the reason best known to them. However, the SRK Investigation Services Pvt. Ltd., would have learn about the condition of the present Insurance Policy had they met or interview the said Insurance company Agent (Opp. Party No.4) where Policy was issued solely on medical examination report conducted by the said Insurance company prior to the issue of Policy to the Proposer. And the Written Statement submitted by the Insurance Company Agent/Opp. Party No. 4 did not deny the said medical examination report done prior 10 to the issue of the said policy nor the other opposite parties. And even the learned counsel representing Opp. Party No. 1, 2 & 3 had admitted in the open court on 1st July 2022 that there was medical examination prior to the issue of policy.
Your Lordship and learned Member, this is my humble prayer in order to substantiate the abovementioned facts of the present case, I may be allow to place before you a relevant decided case namely -- "Manmohan Nanda (Appellant) VS. United India Assurance Co. Ltd, and ANR(Respondents)" -- In the Supreme Court of India Civil Appellate Jurisdiction Civil Appeal N. 8386/2015.
1. This appeal assails order dated 22nd May, 2015, passed by the National Consumer Disputes Redressal Commission in Consumer Complaint No. 92/2010 by which the complaint filed by the appellant was dismissed.
2. The facts in a nutshell are that the appellant had sought an overseas mediclaim policy- B (hereinafter referred to as "mediclaim policy) as he intended to travel to the United States of America("USA") to attend the wedding of his sister-in-law's daughter. The appellant was medically examined at the instance of respondent No. 1 insurance company prior to the consideration of his request for insurance of a mediclaim policy. On his examination, the report categorically noted that the appellant had diabetes - type II (also known as diabetes mellitus). No Other adverse medical condition was found.
3. In the medical exam report, a specific query was sought as to whether any abnormalities were observed in the electrocardiogram test 11 of the appellant. There was another query regarding any possible illness or disease for which the appellant may require medical treatment in the ensuring trip to the USA. To both these queries, Dr. Jitendra Jain, the doctor who examined the appellant had answered "normal" and "no"
respectively. The representatives of the respondent insurer on receipt of the medical report assured the appellant that on verification of the same the policy would be issued.
4. The insurer thereafter accepted the proposal form and issued the Overseas Mediciaim Business and Holiday Policy bearing Policy Number 190100/46/09 44/70000008 valid from 19th May 2009 to 1st June, 2009, to the appellant.
However, the appellant felt weak and started sweating after reaching USA and got admitted into Medical Centre. On 19th August, 2009 the appellant sent a letter annexing all bills in original as well as the discharge Summary to the Divisional Manager of respondent No. 1 at their Bhopal office. The same letter was also sent to respondent No. 2. On 22nd August, 2009. However, the appellant received a letter from respondent No. 2 stating that his claim had been repudiated as the appellant had a history of hyperlipidaemia and diabetes and the policy did not cover pre- existing conditions and complications arising therefrom. Being aggrieved, the appellant filed a complaint before the National Commission. Subsequently, the National Commission dismissed the complaint filed by the appellant on the ground of non-disclosure of material facts. Hence this appeal by the claimant.
12The relevant portion started from Page-43 onwards on the consideration of the aforesaid judgments. Kindly allow me to mention the Page-44 of
(v) The insurance company has the right to seek details regarding medical condition. If any, of the proposer by getting the proposer examined by one if its empaneled doctors. If, on the consideration of the medical report, the insurance company is satisfied about the medical condition of the proposer and there is no risk of pre-existing illness, and on such satisfaction it has issued the policy, it cannot thereafter, contend that there was a possible pre-existing illness or sickness which has led to the claim being made by the insured and for that person repudiate the claim.
(vi) The insurer must be able to assess the likely risks that may arise from the status of health and existing disease, if any, disclosed by the insurer in the proposal form before issuing the insurance policy. Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition which was disclosed has led to a particular risk in respect of which the claim has been made by the insured.
(vii) In other words, a prudent insurer has to gauge the possible risk that the policy would have to cover and accordingly decide to either accept the proposal form and issue a policy or decline to do so. Such an exercise is dependent on the queries made in the proposal form and the answer to the said queries given by the proposer.
13As mentioned in Page 56 & 57 of Para 71. The appeal is allowed in the following terms:
(i) The respondents are directed to indemnify the appellant regarding the expenses incured by him towards his medical treatment within a period of one month from the date of receipt of a copy of this judgement with interest at the rate of 6% per annum from the date of filing the claim petition before the Commission till realization.
(iii) The appellant is also entitled to Rs. 1,00,000/- payable by the respondents towards the cost of litigation.
A copy of Civil Appeal No. 8386/2015 (judgement dated 6th December, 2021, New Delhi) is herewith annexed as "ANNEXURE = 1E"
Your Lordship and learned Member, my humble submission here is the present case and the cited case (Manmohan Nanda vs. United India Assurance Co. Ltd & Anr) has the similarly situated facts and even the main contention of the Opposite Parties is same such as allegation of non- disclosure of facts prior to the issue of policy and even the National Commission dismissed the complaint filed by the appellant on the ground of non-disclosure of materials facts. However, this is a case where 'medical examination' was conducted prior to the issue of the said policy and the consideration of the Policy solely depends on the satisfaction of medical examination report. The corporate/insurance company (Opp. Party No. 1, 2 & 3)'s empaneled doctor had conducted medical examination 'prior to consideration' and the policy was issued solely to the 14 satisfaction of the Insurance Company as per the medical report of the proposer/DLA. And even in the case of Manmohan Nanda vs United India Assurance Co. Ltd. & Anr, the Hon'ble Court allowed the appeal holding that the Commission was not right in dismissing the complaint stating that the repudiation of the policy by the respondent insurance company was illegal and not in accordance with law.
PRAYER:-
It is, therefore, most respectfully prayed that this Hon'ble Commission may be pleased to:-
a) Award the SUM ASSURED of Rs.50,00,000/- (Rupees Fifty lakhs as entitled) in favour of Complainant/claimant and against the Opposite Parties together with interest at 12% p.a. w.e.f 26.06.2013 till full realization of the said amount.
b) Award the sum of Rs. 50,000/- (as entitled) of the 5% of Rs. 10 lacs i.e., the 2 annual Premiums.
c) Award the sum of Rs. 53,711.72 (as entitled) for the less sum of amount receive of the 2 annual Premiums.
d) Award compensation of Rs. 5 lacs for the sufferings out of mental agony and Rs. 2 lacs for legal expenses or cost of the suit/complaint & others in favour of the complainant and against the opposite parties, and pass such other and further order(s) as may be deemed fit and proper on the facts and in the circumstances of this case.15
Appearing for the opposite parties no. 1, 2 and 3, Mr. Mamang Singson (Adv) submits that the Complaint Petition has no merits and must be dismissed in limine. He submits that:
1. That the Complainant has no privity of contract with the Chairman/ Managing Director/ CEO, Branch In-charge/ Manager or any other employee of the Opposite party personally and the cause of action, if any, lies against the Company and not against the Chairman/ Managing Director/ CEO, Branch In-charge/ Manager or any other employee in his personal capacity. In this way the complainant has improperly and unnecessarily impleaded in the complaint the Chairman/ Managing Director/ CEO and Branch In-charge/ Manager of the Max New York Life Insurance Co. Ltd. who are not the necessary or proper party, and the complaint is frivolous and vexatious and as such his name is required to be struck off from the title of the complaint. The complainant has sought Redressal of his grievances from Max New York Life Insurance Co. Ltd. which is a company registered under the Companies Act, 1956, and is itself a legal entity and a juristic person in law and is endowed with certain rights and privileges. As such Complaint against Chairman/ Managing Director/ CEO and Branch In-charge/ Manager of the Max New York Life Insurance Co. Ltd. is not maintainable and is liable to be dismissed.
2. That the instant Complaint is false, malicious and incorrect and is nothing but an abuse of the process of law and it is an attempt to waste the precious time of this Hon'ble Commission, as the same has been filed by the Complainant just to avail undue advantage. The 16 Complaint is thus liable to be dismissed under Section 26 of the Consumer Protection Act, 1986 (hereinafter referred to as the "Act").
3. That the above Complaint is neither maintainable in law nor on facts and the same is liable to be dismissed in limine.
4. That the Complainant has not approached this Hon'ble Commission with clean hands and suppressed the material facts before this Hon'ble Commission. It is further submitted that the Claim made by the Complainant was repudiated by the Opposite Party for reason of mis-
representation of material facts by the DLA in the Proposal Form. It is submitted that the Supreme Court of India in the case of Satwant Kaur Sandhu v. New India Assurance Company Ltd. (2009) 8 SCC 316 has referred the term "Proposal Form" as defined under the Insurance Regulatory and Development Authority, 2002 as a "Form" to be filled in by the proposer for insurance, for furnishing all material information required by the insurer to decide whether to accept or decline, to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted, and observed that in a contract of Insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is "material fact". If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. It is submitted that the Complainant has no "locus standi" to claim any alleged sum assured, as the insurance policy was obtained by the DLA by mis-representation of material facts in order to defraud the Opposite Party. The contract of Insurance is void, and not tenable in 17 the eyes of law as it is entered by DLA to defraud the Opposite Party. In these circumstances, the Complaint is liable to be dismissed in limine.
5. That it is most humbly submitted before the Hon'ble Commission to dismiss in the Complaint in limine as it is a fact that the DLA was suffering from Chronic Liver disease, Hypertension and CAD (Bilary, stricture with Obstructed Biliary Stent, Cholangities and Septicemia, Non-insuline dependent diabetes mellitus with Ketosis and morbid Obesity) prior to filling and signing of the Proposal based on which the said policy was issued in its present form, thereby the claim was rightly repudiated on grounds of suppression of material facts at the time of making the Proposal.
6. That the Opposite Party' at the very beginning states that there has been no negligence or deficiency in service whatsoever, on part of the Opposite Party in dealing with the concerned Policy, thus, the present Complaint is liable to be dismissed by this Learned Commission on this ground alone.
7. That it is most humbly submitted that the instant Complaint lacks a cause of action. Therefore, this Complaint is liable to be dismissed on want of the cause of action.
8. That in Life Insurance Corporation of lndia & Ors. v. Asha Goel (Smt.) & Anr. (2001) SCC 160 wherein the Apex Court has held as under:
"The contract of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) 18 must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts 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 and or suppression of material facts, the Policy can be called into question. For determination of the question whether there has been any suppression of material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the reason intending to take the policy and it could not be ascertained by reasonable inquiry by a prudent person."
9. That without prejudice to above stated contentions, the Opposite Party submits the correct facts and details of the case, which are follows:
I. That after duly deliberating and understanding, all the terms and conditions of the 'Max New York Life Fast Track (5 pay)' Plan, Mr. Thomas Jasokie Zinyu, (hereinafter referred to as the "Deceased Life Insured" or "DLA") filled up a Proposal Form dated 23.07.2011 bearing no. 796180719. In the Proposal Form, the DLA gave all relevant details and information in the prescribed form, for an assured sum of Rs. 50,00,000/- (Rupees Fifty Lakhs Only). Under the said Policy, an annual targeted premium of Rs.
5,00,000/- (Rupees Five Lakhs) was paid annually for a period of 5 years with the policy term of 10 years. A copy of the said Proposal Form is annexed herewith as Annexure OP -l.
19II. That the Proposal Form contained a section penaining to Medical and Life Style details of the Life to be Insured wherein a set of questionnaire was given and following questions were answered in negative by the DLA. For ready reference the same are reproduced herein below:
3. Have you ever investigated, treated or diagnosed with any of the following conditions, if yes, please provide details including the doctors name and the date (or attach relevant questionnaire):
iii) Diabetes.
...No.
iii) Liver disorder like cirrhosis, hepatitis, jaundice, disorder of the stomach, gall bladder or intestine, ulcer, colitis, gall stones, indigestion ...No. III. That based on the information and declaration provided by the DLA in the proposal form (Annexure OP-1) the Policy bearing no. 796180719 was issued to the DLA. The said Policy documents along with the Proposal Form, Policy Schedule were forthwith dispatched to the DLA on commencement of the Policy. Copy of the Policy Schedule along with the Policy terms and conditions are annexed herewith as Annexure OP - 2.
IV. That, the Opposite Party received a claim dated 20.06.2013 under the said Policy on account of DLA's death on 04.12.2012 which 20 was later followed by Claimant's Statement and Death Certificate. Copies of the Claim Intimation, Claimant's Statement and Death Certificate are collectively annexed herewith as Annexure OP-3 (colly).
V. That as the claim being an early claim and also after perusal of the documents submitted by the Complainant, the Opposite party got an investigation from SRK Investigation Services Pvt. Ltd. to settle the claim as per terms and conditions of the policy Contract and during the course of the investigation, it was found that the DLA was suffering from Chronic Liver Disease, Hypertension and CAD (Biliary, stricture with Obstructed Biliary Stent, Cholangities
-- and Septicemia, Non-insulin dependent diabetes mellitus with Ketosis and morbid Obesity), much prior to filling of the Proposal Form and he had been taking treatment from Bethel Medical Center, Kohima for the same. The DLA was admitted to the Bethel Medical Center, Kohima for the said disease July 2007, which is evident from the discharge summary of the Bethel Medical Center dated 21.07.2007, however, the said fact was not disclosed by DLA at the time of making the Proposal in respect of the said policy. It is submitted that due to the said disease which was existing since prior to proposal of the said policy, the condition of the Life Assured deteriorated on 28.10.2012 and the family members took him to Bethel Medical Center where the DLA was examined and was admitted. The condition of the Life Insured did not improve and he died during treatment on 04.12.2012. Copies of the Medical records along with discharge summary of Bethel 21 Medical Center, Kohima dated 21.07.2007 is annexed herewith and marked as Annexure OP-4. Copy of the investigation report is annexed herewith as Annexure OP-5. Investigator's Affidavit is annexed herewith and marked as Annexure OP-6.
VI. That based on the aforementioned records of the DLA received, the Opposite Party repudiated the claim of the Complainant on grounds of suppression of material facts at the time of making the Proposal based on which the said Policy was issued in its present form. It is submitted that the DLA was suffering from Chronic Liver Disease, Hypertension and CAD (Biliary, stricture with Obstructed Biliary Stent, Cholangities and Septicemia, Non-insulin dependent diabetes mellitus with Ketosis and morbid Obesity) much prior to filling and signing the Proposal Form based on Which the said Policy was issued in its present Form. The same was also intimated to the Complainant vide repudiation letter dated 17.12.2013. Copy of the said letter dated 17.12.2013 is annexed herewith as Annexure OP-7.
10. That suppression of actual health condition amounted to suppression of material facts and hence the Contract of insurance (policy) is liable to be rescinded as per section 45 of the Insurance Act, 1938 and no benefit is payable. Section 45 of Insurance Act, 1938 is reproduce herewith for the perusal of this Hon'ble Commission:
Section 45 of Insurance Act, 1938:
No policy Of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of 22 commencement of this Act and no policy Of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the Policyholder and that the Policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose: Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.
11. That as per the Indian Contract Act, 1872, one of the essential elements for a valid contract is free consent. When consent to an agreement is caused by fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused as the same is not a free consent. As per Section 17 of the Indian Contract Act, 1872, the term "Fraud" has been defined as --
"Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent 23 to deceive another pally thereto of his agent, or to induce him to enter into the contract:
1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
2) the active concealment of a fact by one having knowledge or belief of the fact;
3) a promise made without any intention of performing it
4) any other act fitted to deceive;
5) any such act or omission as the law specially declares to be
fraudulent.
Section 18 or the Indian Contract Act. 1872 defines "Misrepresentation"
as "Misrepresentation" defined -
"Misrepresentation" means and includes -
1) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true
2) any breach, of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice or to the prejudice of any one claiming under him;24
3) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.
12. It is highlighted that the contract of insurance being of utmost good faith, DLA was under an obligation to disclose the said material medical details in the Proposal Form which was necessary to be answered for the purpose determining the risk under the said Policy were intentionally answered in negative by DLA. It is submitted that the said Policy was obtained by suppression and mis-representation of facts. It is submitted that had it been the Opposite Party aware of his health status at the time of signing of the Application for insurance the said Policy would not have been issued to the DLA at the first place. Thus, the Opposite Parties have rightly repudiated the claim of the Complainant on the ground of suppression of material facts by the DLA at the time of filling up of the Proposal Form, based on which the said policy was issued by the Opposite Party to the DLA in its present form.
13. It is submitted that the Hon'ble Supreme Court of India in United India Insurance Co. Ltd. v. MKJ Corporation (1996) 6 SCC 428 has held 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 him ignorance of that fact and his believing to the contrary. To the similar effect is the judgment of the Hon'ble Supreme Court in Modern Insulators Ltd. v. Oriental Insurance Co. Ltd. (2000) 2 SCC 734.
2514. That the Ld. District Consumer Commission had failed to appreciate the Judgment Life Insurance Corporation of India Vs Smt. Surekha Shankar Jadhav NC, RP 2130 of 2007 dated 31.7.2012 where it was held that the insurance company can repudiate a claim in case of non-disclosure of pre-existing disease or any material information and the same may or may not be the exact cause of death of the deceased life assured.
15. That the Judgment Divisional Manager, LIC of India & Ors. Vs Smt. Anupama & Ors. NC, RP 3794-3796 0F 2007 dated 17.4.2012 where in Hon'ble National Commission whereby it has been held that while repudiating a death claim, doctors affidavit not necessary/mandatory to be produced before the District Commission and non-production of the same cannot become a reason to allow the complaint.
16. That it is most humbly submitted that non-disclosure of the material fact by DLA is a sufficient ground for repudiation of the said policy. The same been retreated in the case of LIC of India Vs Sampat Devi III (2006) CPJ 32 wherein the Court observed follows:
"In our concerned opinion there are certain diseases such as kidney, heart and brain, heart and brain and they are connected with the life span of a person and if any mis-statement is made in respect of such type by the person seeking insurance, in such case it can be believed that knowingly the person taking out the insurance was made mis- statement."26
On the lines of the above mentioned in the case of V. Nalini Vs LIC of India and Anr I (2008) CPJ 144 State Commission of Tamil Nadu, held the suppression of a serious aliment pertaining to heart, brain or kidney make the repudiated of claim justified. As in the present dispute Disease and had undergone treatment for the same prior to the issuance of the Policy, reason sufficient enough the repudiate the claim under the said DLA was suffering from hypertensive of Chronic Kidney Policy.
Hence, there cannot be any complaint of deficiency of service and unfair trade practice against the Opposite Party by the Complainant and the instant complaint deserves to be dismissed with cost.
17. It is submitted that in LIC Vs. Mamta (revision petition no. 3223 Of 2010) as well as in Amresh Reddy Vs. Max Life Insurance Co. Ltd. (revision petition no. 610 of 2012), the National Commission relying upon Satwant k. Sandhu Vs. New India Assurance Co. Ltd. & P C Chacko & Anr. Vs. Chairman, Life Insurance Corporation of India & Ors., held that the company cannot be faulted for repudiating the claim on the ground that the insurance policy was obtained by concealment of previous ailment of the life assured.
PRAYER It is therefore most respectfully prayed that since the Complainant has failed to make out a prima facie case against the Opposite Party. Hence, for the reasons stated above, the reliefs sought for by the Complainant in his Complaint are denied as false, unsustainable and without any merits 27 and the Complainant be put to strict proof of the same. It is submitted that the Complainant has no adjudicable grievance against this Opposite Party and the Complainant has failed to prove any cause of action or prima facie in the Complaint against the Opposite Party and therefore, failed to set up any case for any reliefs as such, hence the Complaint filed by the Complainant may kindly be dismissed with costs.
We have heard the learned counsels for the Complainant and the learned counsel for the opposite parties. On considering the arguments forwarded by the parties it is plain to see that there is no denial by the Complainant that material facts as required to be revealed in the proposal form was suppressed. The only issue that Complainant raises is that the Doctor of the opposite party examined the DLA and certified him to be physically fit in all aspects to take the policy. Otherwise, the Complainant does not deny that the deceased indicated that he had no medical complications which are life threatening, such as, diabetes, liver disease, CAD, kidney, obesity and gall bladder problems, prior to filling up the proposal form.
The Complainant argues that the deficiency whatever in the proposal form with respect to medical condition of the DLA has no bearing for the reason that the opposite party's medical team has already investigated the DLA and found him to be normal in all respects.
The question before us is
1. "Whether the certificate of fitness issued by the Doctor of the opposite party maybe treated as an estoppel to debar the opposite party from repudiating the claim of the DLA/Complainant?"
282. "Does obtaining clean medical certificate discharge the DLA to faithfully disclose his previous medical history which is a factor for determining the acceptance or rejection of the insurance proposal by the opposite party?"
The facts narrated by the opposite party is that the DLA filled the proposal form on 23.07.2011 and was accepted. His policy was 79618071 Max New York Life Insurance. The DLA died on 04.12.2013 7 A.M. due to cardiac arrest at Bethel Medical Center, Kohima. The cause of death was investigated and it was revealed that he was treated since 2007 with several ailments which includes obesity, hypertension, chronic liver disease, diabetes, CAD, renal failure and gall bladder problem. The annexure of OP-1 from page 50 to 93. When claim for the insurance was filled, the opposite party employed the SRK Investigation Service Pvt. Ltd. to investigate into the cause of the death and medical history of the DLA.
The investigation report was filed on 2nd September, 2015. The relevant portion of the report reads:
"4. That I confirm, the investigation was done thoroughly and accordingly the facts have been narrated. During investigation from vicinity check and last attending hospital Bethel Medical Centre, Kohima, we come to know that DLA had been suffering from cholangitis and septicemia with morbid obesity since 2007.
5. That we have collected discharge summary of 2007 from Bethel Medical Centre, Kohima which shows the life assured's pre- proposal illness."29
From the above medical report, it is clear that the DLA had pre- proposal illness. Cholangitis is the infection of bile ducts. For the same reason biliary stent was put. Septicemia is a life threatening complication of infection. It can cause damage to multiple organ system, leading them to fail and even result in death.
Obesity is a condition when the Body Mass Index is greater than
30. Morbid obesity is clinically termed as "severe obesity being more than 100 pounds overweight, or having BMI of 40 or higher.
All the above illnesses are life threatening. Added to this, discharge summary contained at page 63 of the O.P annexure dated 5th October, 2012 reads:
Diagnosis : Chronic Liver Disease
RCC - Post Right Nephrectomy
HTN with CAD
CRF on H
Traumatic Injury - Left Knee.
The DLA was also suffering from chronic liver disease and he had right kidney removed. He had CAD which are all life threatening illness. He was also suffering from diabetes.
With the above pre-proposal illness, unfortunately the DLA while filling the proposal form which is contained at page 22 of the O.P's annexure replied in the negative to the relevant queries which are relevant for the O.P to accept or reject the proposal.
30Have you ever been investigated, treated or diagnosed with any of the following condition, if yes, please provide details including the doctors name and date (or attach relevant questionnaire):
iii) Diabetes - No
iii) Liver disorder like cirrhosis, hepatitis, jaundice, disorder of the stomach, gall bladder or intestine, ulcer, colitis, gall stone, indigestion. - No From the above findings and records, it is clear that the Complainant has not come before the Commission with clean hands. One is to reveal the medical history truthfully to get benefit of the assured scheme.
Therefore, we have come to the conclusion that the certificate of fitness issued by the doctor does not discharge the DLA from revealing his pre-proposal medical conditions.
Coming to the question whether the O.P is estopped from pleading that the DLA had pre-proposal illness let us examine the facts in hand.
There is no denial by the Complainant that the DLA had pre- proposal diseases which are:
1. Kidney was removed (right kidney)
2. He has biliary stent
3. C.A.D with hypertension
4. He had morbid obesity
5. He had chronic liver disease
6. He was diabetic 31 All the above have been shown in the investigative report by the O.P. There is no denial at all by the opposite parties. that they had thoroughly checked the DLA prior to the issue of the proposal form. If the DLA has so many complicated health issues how could the O.P. issue clean medical certificate to the Complainant? Even layman can understand that there is something extremely wrong with the medical report. The report is cent percent opposite to what the investigative report has been placed before us. The following are untrustworthy report which cannot be believed even by the standards of layman's understanding of medical condition:
1. Stress test as contained at page 50 of the claim petition records as normal. A person who has kidney removed, fitted with biliary stent, morbid obesity, C.A.D with hypertension cannot give normal stress result.
2. His lipid profile, LFT, shows normal reading. He had serious liver disease and the result is unbelievable. (Page 49) CP
3. He has shown to have no surgical scars. A patient who has kidney removed and put biliary stent must have scar. It is not possible without incisions and surgery. Report is unbelievable. (Page 46) CP We have something unpleasant going on here. Such report is not possible if not fabricated intentionally. The question before us is whether the O.P. can furnish false medical report and later on claim that the DLA had several pre-proposal diseases which are life threatening? The answer is NO. The O.P. is estopped from arguing that the DLA had pre-proposal diseases.32
The maxim uberrimae fidei demands a higher standard of good faith between the parties not only to the Assured.
MacGillivray on the insurance law, 13th Edition has surmised it as under:
"...the assured must disclose to the insurer all facts material to an insurer's appraisal of the risk which are known or deemed to be known by the assured but neither known or deemed to be known by the insurer. Breach of this duty by the assured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms."
The above explanation makes it clear that the insurer must be induced by the declaration. The insurer already knew that the DLA had several medical issues but opted to give a clean medical report which is unbelievable. Therefore, we can presume that the medical report was so given to later on defraud the assured. We can safely conclude that the O.P was not influenced by the reports filed by the DLA in the proposal form.
We find that neither party has come to the Commission with clean hands. We see the DEVIL AND THE SERPENT SHAKE HANDS.
In a situation when both the parties are untruthful, two options are left to the Commission.
1. To let the parties, settle their own disputes and not entertain the petition.
33