State Consumer Disputes Redressal Commission
Smt. Sunanda Dhananjay Lahoti vs The Metlife India Insurance Company Ltd on 13 May, 2014
Page 1 of 21
CC/33/2011 & cc/34/2011
CMAHARASHTRA STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, MUMBAI CIRCUIT BENCH AT AURANGABAD.
Date of filing : 12/12/2011
Date of order : 13/05/2014
COMPLAINT No : 33 of 2011
Smt. Sunanda Dhananjay Lahoti
R/o.C-15, Disha Nabhangan Apartment,
N-2 Cidco, Aurangabad. COMPLAINANT
VERSUS
1. The Metlife India Insurance Company Ltd
Through its General Manager (Claims),
Having its registered office at
Brigade Seshamahal 5 Vani Vilas road,
Basavanagudi, Bangalore 560 004.
2. The Branch Manager
Metlife India Insurance Company Ltd
Aurangabad branch 4th floor,
Plot No. 13000/01, H.S.Kandi Tower 2,
Opp.Jammu & Kashmir Bank,
Jalna road, Aurangabad. OPPONENTS
Present : Adv.Shri.A.A.Mukhedkar for the complainant.
Adv.Shri.P.S.Shinde for the opponent.
(2)
Date of filing : 12/12/2011
Date of order : 13/05/2014
COMPLAINT No : 34 of 2011
Smt. Sunanda Dhananjay Lahoti
R/o.C-15, Disha Nabhangan Apartment,
N-2 Cidco, Aurangabad. COMPLAINANT
Page 2 of 21
CC/33/2011 & cc/34/2011
VERSUS
1. The Metlife India Insurance Company Ltd
Through its General Manager (Claims),
Having its registered office at
Brigade Seshamahal 5 Vani Vilas road,
Basavanagudi, Bangalore 560 004.
2. The Branch Manager
Metlife India Insurance Company Ltd
Aurangabad branch 4th floor,
Plot No. 13000/01, H.S.Kandi Tower 2,
Opp.Jammu & Kashmir Bank,
Jalna road, Aurangabad. OPPONENTS
Present : Adv.Shri.A.A.Mukhedkar for the complainant.
Adv.Shri.P.S.Shinde for the opponent.
Coram : Mr.S.M.Shembole, Hon'ble Presiding Member.
Mr.K.B.Gawali, Hon'ble Member.
ORALORDER Per. Mr.K.B.Gawali, Hon'ble Member.
1. The complainant has filed both these complaint bearing Nos. 33/2011 and 34/2011 against the opponent Met Life Insurance Company Ltd, through its officers ( hereinafter termed as "
opponent insurance company") alleging deficiency in service in repudiating her insurance claims. The issue involved in these complaints is being the same we have decided to dispose off them by a common judgment and order.Page 3 of 21
CC/33/2011 & cc/34/2011 1(a). The factual aspects of these complaints in a nutshell are that, her husband namely Shri.Dhanjay Shankarlal Lahoti who expired on 29th of June 20120, had during his life time obtained two insurance policies from the opponent insurance company having its office at Aurangbad i.e. from opponent No. 2, the details of which are given as under.
Sr.No Policy No. date of policy Period of policy Maturity Annual
. proposal amount premium
01. 20289891 14/03/2010 27/03/2010 to 60,00,000/- Rs 6,00,000/-
27/03/2035
02. 20353447 26/05/2010 27/05/2010 to 50,00,000/- Rs 25,953.59
27/05/2020
1(b). It is submitted by the complainant that she is the nominee of the deceased insured in both the policies. It is contended that, the opponent insurance company had issued both these insurance policies in favour of deceased husband after having various fitness tests such as sugar test, kidney function test, lever function test, stress test, Australia and Antigen test i.e HBsAG etc. done from its recognized diagnostic center namely "Prabhavati diagnostics, Pune on 23/03/2010. That, as per the test report issued by "Prabhavati diagnostic" the health of her deceased husband was found normal and he was not suffering from any sort of illness. Thus, the opponent insurance company before issuing said insurance policy in favour of her deceased husband, had got satisfied about the good health of her husband.Page 4 of 21
CC/33/2011 & cc/34/2011 1©. That, the complainant further submitted that, after the death of her husband she had submitted insurance claim proposal on 11/08/2010 in respect of both the policies with the opponent insurance company. However, by its letter dated 09/11/2010 her claim was repudiated with liberty for representation against the said repudiation. Accordingly, by her letter dated 06/12/2010 she submitted her representation for re-examination of the matter regarding her policy claims but the same also came to be rejected by the opponent insurance company vide letter dated 17/02/2011.
1(d) It was submitted that her claims were repudiated by the opponent insurance company namely on three grounds. The first ground is that it had received medical report from "Sarda Centre for diabetes" dated 28/01/2010 in respect of complainant's diseased husband which was made at the instant of Kotak Mahindra Insurance Company. That, as per the said medical report her let husband was reported to be suffering from HBsAG "positive"
and the said fact was not disclose in policy applications while availing the said policies. The second ground is stated to be that her deceased husband did not disclosed other insurance policies which were held by him and third ground for repudiation of her claim is that her deceased husband with held the information about the rejection of his application for insurance policy by ICICI Prudential insurance company. It is contended by the complainant that, all the three grounds are false and baseless. She contended Page 5 of 21 CC/33/2011 & cc/34/2011 that the so called medical test report dated 28/01/2010 from Sarda diagnostic Centre for diabetes was never received by the deceased insured or by herself. Secondly at the time of filing of application for insurance policies with the opponent insurance company no other insurance policies were in force and hence the question of giving information about the same did not arise. As regard the third ground she submitted that the ICICI Prudential insurance company has never rejected the revial of the insurance policy of deceased husband but it was postponed for one year as due to injury received to his leg in the scooter accident, he could not satisfy the treadmill test which was asked by the said insurance company. She thus contended that, the opponent insurance company has malafidely rejected her both the claims without any justification. She therefore filed both these complaint separately in respect of her claims pertaining to the above said two policies, seeking direction to the opponent insurance company to pay her the insurance policy amount of both the policies i.e. Rs 60,00,000/- and Rs 50,00,000/- i.e. total Rs 1,10,00,000/- along with interest @ 12 % p.a. w.e.f. 11/08/2010 till actual payment of the compensation is made to the complainant. She has also sought total cost of the complaints at Rs 40,000/- i.e. Rs 20,000/- in respect of each of the complaint.
1(e) In support of her complaints she has submitted the following documents.
Page 6 of 21CC/33/2011 & cc/34/2011
1. Copies of policy application dated 14/03/2010 and 26/05/2010 along with cover note dated 27/03/2010 and 27/05/2010.
2. Copies of medical tests reports of her deceased husband namely Shri. Dhananjay Lahoti issued by Prabhavati diagnostics of Pune dated 23/03/2010.
3. Copies of the repudiation letter dated 09/11/2010 and 17/02/2011 issued by opponent insurance company.
4. Copy of the representation dated 06/12/2010 made to the opponent insurance company.
5. Letter by ICICI Prudential mentioning postponement of policy for one year and the letter by Bajaj Allainz sanctioning health claim dated 05/10/2010 along with claim form dated 05/10/2010.
6. Copy of passport of the complainant .
7. Copy of death certificate of her deceased husband issued by Apex hospital and by Aurangabad Muncipal Corporation on 15/07/2010.
2. After having perused the complaint along with documents as submitted by the complainant and also hearing the counsel Shri.Amit Mukhetkar for the complainant, both the complaints came to be admitted and notices were issued to both the opponents.
3(a) Both the opponents on behalf of the said insurance company had appeared before this Commission and by way of their written Page 7 of 21 CC/33/2011 & cc/34/2011 version resisted the claim of the complainant. Although they have admitted to have issued the said two insurance policies to the deceased husband of the complainant, they have denied other adverse contentions of the complainant. It is submitted that the husband of the complainant i.e. the life assured had given declaration at page 5 of the proposal form whereby he has declared to furnish necessary information correctly and no any information would be with-held etc. However, during the course of evaluation and assessment of the claim the opponents received medical report dated 28/01/2010 as prepared by Sarda Centre for diabetes which clearly indicated that the deceased insured had positive report of HBsAG and that the deceased insured died due to infective hepatitis. It is further submitted that, deceased life insured was availing insurance on his life from other insurance company i.e. Kotak Life Insurance and ICICI Prudential Life Insurance prior to filling up of the proposal form in respect of the insurance policies under reference. However, the said fact of insurance policies from other insurance companies was not disclosed by the deceased life insured. In part 2 (D) of the said proposal form the insured was required to provide the details of policy taken from opponent life insurance company as well as of other life insurance company. However, it is written as " no previous insurance policies". Thus incorrect information was given about his other policies. It is further submitted that, in part 3 on page 3 of the said proposal form the deceased insured has given incorrect information stating Page 8 of 21 CC/33/2011 & cc/34/2011 as "No" in respect of question "b" i.e. have you undergone ECG, x- ray, blood test or other tests.
3(b). It thus contended by the opponent that the complainant has suppressed the material fact about his health and also about other insurance policies which he had availed from other companies. It is also contended that insurance policy is a contract and its terms and conditions are binding upon both the complainant as well as opponent. However, the complainant failed to ad-her to the terms and conditions of the policy. Therefore, his both the claim were rightly repudiated by the opponent insurance company and there is no any deficiency in service on the part of it. It is therefore requested to dismiss both the complaints.
3©. In support of its contention the opponent insurance company has submitted the following documents.
1. Copies of the proposal forms as submitted by the deceased life insured in respect of both the policies.
2. The terms and conditions of the policies.
3. Copies of claim proposals.
4. Copy of the death certificate of the deceased life insured.
5. Test report dt. 28/01/2010 issued by "Sarda Centre for Diabetes and Self Care".
6. Letter dt. 02/06/2009 issued by Kotak Life Insurance Company to the deceased life insured.
Page 9 of 21CC/33/2011 & cc/34/2011
7. Letter dt. 28/12/2009 issued by ICICI prudential life insurance company issued to the deceased life insured.
8. Letters dt. 09/11/2010 and 17/02/2011 regarding repudiation of claims.
4(a) The complainant as well as the opponent have submitted their evidence affidavit and also written notes of arguments through their counsel. After having closed the evidence by both the parties, the complaints came to be heard together finally on 05/05/2014. Adv.A.A.Mukhedkar was present for the complainant whereas Adv.Shri.P.S.Shinde was present for the opponent.
4(b) The Ld. Counsel Shri. Mukhedkar has made almost the same averments as made by the complainant in her complaints. He however, specifically submitted that the opponent insurance company had issued both the insurance policies to the deceased husband of the complainant after getting all the prescribed test carried out from its empanelled pathology namely Prabhavati diagnostic, Pune on 23/03/2010. That, as per the medical test report issued by Prabhavati diagnostic, Pune it was revealed that the health of deceased life insured i.e. Shri.Dhanjay Lahoti was normal and he was not suffering from any short of illness. However, on the basis of medical report dated 28/01/2010 issued by one "Sarda Centre For diabetic and self care" which was never received by the deceased life insured the opponent insurance company has wrongly held that there was a suppression of material Page 10 of 21 CC/33/2011 & cc/34/2011 facts about the health of the deceased husband of the complainant and about other insurance policies etc. He further submitted that there was no any suppression of material fact regarding other insurance policies which were alleged to be held by the deceased insured. He contended that at the time of submitting the insurance proposal with the opponent insurance company no insurance policies from other insurance company were inforce. He also submitted that while submitting the proposal dated 26/05/2010 for insurance policy from the opponent insurance company, the deceased insured had given the information about the policy No. 20289891 for the insured sum of Rs 60,00,000/- obtained from the opponent insurance company in the relevant column of the said form. The Ld. Counsel Shri. Mukhedkar thus contended that, the opponent insurance company has repudiated the insurance claims of the complainant malafidely and arbitrarily without any basis, hence he requested to allow the complaint and to direct the opponent insurance company to pay the insurance sum in respect of both the policies to the complainant.
4© In support of his above said contention he relied on the following case laws.
i. LIC -V/s- Gurinder Kaur-III (2012) CPJ 597 (NC). ii LIC -V/s- Kali Deli Devda by Rajasthan State Consumer Disputes Redressal Commission- I (2012) CPJ 378. iii. Surinder Kaur and others -V/s- LIC of India and others by Hon'ble National Commission II (2005) CPJ 32 (NC).
Page 11 of 21CC/33/2011 & cc/34/2011 iv Sunita Agrawal -V/s- LIC and other delivered by State Commission M.P. - III (2005) CPJ 446.
v LIC of India -V/s- Asha Goyal delivered by Hon'ble Supreme Court- AIR (2001) Supreme Court 539.
4(d) On the other hand Ld. Counsel Shri. P.S.Shinde appearing for opponents 1 and 2 also made almost the same averments as made by the opponents in their written version. He however, specifically pointed out that the deceased life insured vide submitting the proposal form for the policies under reference had committed breach of the terms of the policies by suppressing the material fact about his health and also about the insurance policies which he had availed from other insurance companies such as Kodak Life Insurance and ICICI Prudential Life Insurance. As regard the alleged suppression of material facts about health, he referred to the medical test report dated 18/01/2010 and 28/01/2010, wherein it was noted that the deceased life insured had gone through such test. That from the report dated 28/01/2010 it was revealed that HBsAG test was found positive. However, in the relevant Colum of the proposal form the deceased insured gave the reply as "No test was carried out". The Ld. Counsel Shri. Shinde has also referred to the letter dated 26/12/2009 issued by Kodak Life Insurance and dated 28/12/2009 issued by ICICI Prudential Life Insurance and contended that these letters were regarding reinstatement of policy issued to the deceased life insured. He therefore contended that although the deceased life assured had Page 12 of 21 CC/33/2011 & cc/34/2011 availed other life insurance policies while giving information in the relevant coloum of the proposal, the deceased life insured gave false information as " No previous insurance policy". He thus contended that the deceased life insured with-held and suppressed material fact about his health and other insurance policies and thereby made breach of trust and therefore the complainant is not entitled for the policy claims and same are rightly repudiated by the opponent insurance company. Therefore, he requested to dismiss both the complaints with cost.
5. We have perused the record i.e. copy of the complaint, written version filed by the opponents, repudiation letters, medical repudiation letters issued by opponents, medical test report dated 23/03/2010 by Prabhavati diagnostics, Pune, report dt. 18/01/2010/28/01/2010 from Sards Centre for diabetics, evidence affidavit submitted by both the parties, written notes of arguments as submitted by Ld. Counsel Shri. By both the parties and other documents. Considering the aforesaid record also the oral arguments as advanced by Ld. Counsel of both sides, we have framed the following key issues for our consideration. We have also given our findings in respect of both these issues on the basis of reasons explained there under.
Sr.No. Issues Finding
01. Whether the complainant is a consumer of the Opponent insurance company and the dispute Raised by the the complainant is a "consumer Page 13 of 21 CC/33/2011 & cc/34/2011 dispute" ? In Affirmative
02. Whether the repudiation of the insurance claims of the complainant by the opponent insurance company is justified ? In affirmative
03. What order ? As per final order REASONS As to issue No. 1 :-
The opponent insurance company has contended that the present complaints does not fall within the definition of "consumer dispute". It is however, worth to be noted here that the opponent has not disputed the issuance of said insurance policy in favour of the deceased husband namely Dhanjay Lahoti and that the complainant is the "Nomaniee" i.e. the beneficiary of the said policies. It is well settled principle that the insurance policy is a contract and the complainant being a beneficiary of these policies, is a necessary party to the said contract. Hence, she is a "consumer" of the opponent insurance company and the dispute raised by her through her complaint is obviously "consumer dispute" as per the provisions of Consumer Protection Act".
As to issue No.2 Page 14 of 21 CC/33/2011 & cc/34/2011 2(i) The opponent insurance company has by its letters dated 09/11/2010 and 17/02/2011 has repudiated both the policy claims of the complainant. While rejecting the claim by its letter dated 09/11/2010, the opponent insurance company had intimated to the complainant that if she disagrees with the said rejection of claim she can make the representation within 30 days. Accordingly, the complainant by her letter dated 06/12/2010 made representation whereby she tried to justify her both the claims. However, the opponent insurance company by its letter dated 17/02/2011 denied to admit the said claim and hence the complaints are filed by the present complainant in this Commission.
2(ii). The major ground on the basis of which the opponent insurance company has repudiated the claims of the complainant are the non-discloser of material facts about the health and possession of other insurance policies at the time of submitting proposal for obtaining the policies under reference in respect of deceased life insured. The details of these material facts as given by the opponent insurance company are as under.
(a) Medical test report dated 28/01/2010 of the deceased insured i.e. Dhanjay Lahoti received from "Sarda Centre for diabetes and self care" which discloses that he was suffering from "HBsAG"
positive.
Page 15 of 21CC/33/2011 & cc/34/2011
(b) The details of previous insurance policies obtained from other insurance company by the deceased Dhanjay.
© The fact of rejection of insurance policy in Feb. 2010 by one of the insurance companies on medical ground.
It is averred by the opponent insurance company that the insurance contract is based on the principle of "utmost good faith"
and the policies are issued on the basis of information given in the application form. Therefore, suppression or misrepresentation of the material information made in the application form renders the contract voidable.
2 (iii)(a) We have therefore to verify whether the deceased husband of the complainant has suppressed the said material fact. As regards the suppression/non-disclosure of the medical test report dated 28/01/2010 issued by "Sarda Centre for diabetes" It is the contention of the complainant that, her husband had never received personally any such report. She has however, admitted that her husband had undergone medical test in January 2010 for revival of his policies from ICICI Prudential Life Insurance and Kotak Life Insurance. However, from the perusal of the proposal forms pertaining to both the policies under reference it is observed that the reply to question 3 (b) which reads as "During the past five year have you ever undergone ECG, x-ray, blood test or other test- is given as "No". The point is even if it is presumed that the deceased insured had not received the said test report from Sarda Page 16 of 21 CC/33/2011 & cc/34/2011 Centre for diabetes, the fact remains that he had undergone the medical test. It was therefore necessary on his part to give correct reply to the said question. On the basis of the said reply the opponent insurance company could have obtained the said medical test report before taking decision of issuing insurance policy under reference to the deceased insured. It is thus evident that the deceased life insured has given incorrect information about his health.
2(iii)(b) As regards the insurance policy of other insurance company, it is submitted by the complainant that they were not in force at the time of filing of proposal form for the policies under reference obtained from the opponent insurance company. However, as admitted by the complainant herself that the policies obtained from Kotak Mahindra and ICICI Prudential which were in a lapsed condition and their revival was in progress. It means those policies were in existence, though in a lapse condition. The letter dated 27/12/2009 and 28/12/2009 issued by Kotak Life Insurance and ICICI Life Insurance respectively, reveals that the revivals of these policies were in progress. Hence, it was the bounden duty of the decease life insured to disclos the details of these policies however, the deceased life insured has replied to the question "D" of the proposal form in respect of policy No. 20289891 as " No previous insurance policies"
It is further revealed from the policy schedule brought on the record of the complainant herself, that the deceased life insured Page 17 of 21 CC/33/2011 & cc/34/2011 was holding another policy obtained from Bajaj Allianz General insurance company Ltd which was in forced during 03/04/2010 to 02/04/2011. The deceased life insured while filing the proposal form dated 26/05/2010 for the policy from the opponent insurance company did not however, disclose the details of this policy and has furnished the details of only the policy No. 20289891 obtained on 27/03/2010 from the opponent insurance company. The information about these policies was therefore required to be given in Part. D- page 2 of the proposal form. It is thus clear that, the deceased life insured had suppressed the material information about the existence of the insurance policy obtained from other insurance company.
2(iii)© It is further revealed that the information about the rejection of revival of the existing insurance policy by the ICICI Prudential Insurance Company is said to be postponed, has also not been disclosed in said Part "D" of the proposal form.
2(iv) It is the contention of the complainant that the opponent insurance company has issued the polices only after satisfying from the medical report dated 23/03/2010 as issued by the Prabhavati Diagnostics. That the deceased life insured Dhanjay Lahoti was medically fit and hence, she is entitled to receive the claim amount. However, as per the terms and condition of the policy and as per the provision of Sec. 45 of the Insurance Act the person applying for insurance policy has to furnish correct Page 18 of 21 CC/33/2011 & cc/34/2011 information and as expected in the said proposal form. However, in the present case the deceased life insured had failed to disclose the said material information which amounts to suppression of the said fact pertaining to the health and other matters , which renders the insurance contract as voidable.
2(v) The case laws at Sr. Nos. 1 to 4 above as referred by the Ld. Counsel for the complainant are not applicable as the facts and circumstances are different from those which exist in the present case. Whereas the observations made and direction given by the Hon'ble Apex Court in case of "LIC of India and others -V/s- Ahsha Goyal and other (Supra)," it appears that the same have been followed by the opponent insurance company in the present case. In this citation it is held by the Hon'ble Apx Court that the matter of repudiation of policy should not be dealt with in a mechanical and in a routine manner but should be one of extreme care and caution. In the present case the opponent insurance company had given opportunity to represent the case for reexamination after the claims of the complainant were repudiated by letter dated 09/11/2010 and after giving through consideration to the representation made by the complainant her claims were finally repudiated by letter dated 17/02/2011. Hence, none of the citations as referred by the Ld. Counsel for the complainant supports his contention.
2(vi) In this regard we rely on the following citations:
Page 19 of 21CC/33/2011 & cc/34/2011 i. The judgment and order dated 04/04/2011 passed by Hon'ble National Commission in Revision Petiton No. 50/2011 in case of "Kajol through its guardian Smt.Chanderkanta -V/s- LIC of India". It is held by the Hon'ble National Commission that as there was a suppression of the material fact concerning health of the insured, the repudiation of the policy by the LIC was fully warranted and there was no deficiency in service in such repudiation.
ii. T.J.Chako and another -V/s- Chairman LIC of India and Anr reported in AIR 2008 Supreme Court 424" In this case it is held by the Hon'ble Supreme Court that the person making wrong statement with knowledge of consequence there for, stopped from pleading that even if such act has been disclosed, it would not have made any material change.
iii The judgment dated 10 July 2009 passed by Hon'ble Supreme Court of India in Civil Appeal No. 2776 of 2002 in respect of Satwant Kaur Sandhu -V/s- New Indian Assurance Company Ltd published in legal digest of April 2010. In this case it is held by Hon'ble Supreme Court that a policy can be repudiated if any material fact is suppressed and a material fact would mean any fact by that affect the decision of the insurance in accepting the risk.Page 20 of 21
CC/33/2011 & cc/34/2011 2 (vii) Thus the views held by the Hon'ble Apex Courts are fully applicable in the present case. The said fact which were withheld by the deceased life assured are material because they could have affected about the decision of issuance of policy in question. As per the medical test report of the deceased issued by "Sarda Diagnostic Centre for diabetes, the result of HBsAG is positive therefore although subsequently the test report dated 23/03/2010 issued by Prabhavati Diagnostic which is of empaneled pathology of the opponent insurance company is in negative, the insured is died due to Hepataties B. Hence, the death of a life insured has a link / connection with the earlier report issued by the Sarda Diagnostice Centre. But since the fact of said test report issued by Sarda Diagnostice Centre was not disclosed the policies in question were came to be issued.
2(vii) In view of the above said facts and observations it can be concluded that the deceased insured namely Dhanjay Laholti had obtained the policy under reference by suppressing and misrepresenting the material facts and therefore the complainant can not be entitled to receive the benefits of the said policies as claimed. Therefore, we find that the opponent insurance company has justified its decision of repudiating the claim of the complainant. Hence, the finding given in case of issue No. 2 is in affirmative.
Page 21 of 21CC/33/2011 & cc/34/2011 As to issue No. 3 : Considering the finding given in respect of issue No. 2 we have no option but to dismiss the complaint . In the result we pass the following order.
ORDER
1. Both the complainant bearing Nos. 33/2011 and 34/2011 are dismissed.
2. No order as to cost.
3. Copies of the judgment and order be sent to both the parties.
K.B.Gawali S.M.Shembole
Member Presiding Judicial Member
A.H.Patil
Steno H.G.