National Consumer Disputes Redressal
Smt. Sheela vs Life Insurance Corporation Of India on 3 August, 2011
OP 10/1998 NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1257 OF 2011 [Against the order dated 21.01.2011 in Appeal No. 994/2008 of the State Consumer Disputes Redressal Commission, Delhi] Smt. Sheela W/o Late Shri Parminder Singh R/o H.No. 39, Village Barwala Delhi-110039 Petitioner Versus Life Insurance Corporation of India Branch Sr. No. 112 N-69, Connaught Circus New Delhi-110001 Respondent Before : HONBLE MR. JUSTICE R.C. JAIN, PRESIDING MEMBER HONBLE MR. S.K. NAIK, MEMBERS For the Petitioner : Mr. Mahipal Malik, Advocate Pronounced on : 3rd August, 2011 O R D E R
PER S.K. NAIK, MEMBER This revision petition is directed against the order dated 21st of January, 2011 of the State Consumer Disputes Redressal Commission, Delhi (for short the State Commission), vide which the State Commission has set aside the order dated 26th of August, 2008 of the District Consumer Disputes Redressal Forum, New Delhi (for short the District Forum), thereby dismissing the complaint of the petitioner.
Briefly stated, the facts of the case are that the husband of the petitioner/complainant Shri Parminder Singh had obtained a life insurance policy on 4th of May, 2006 from the respondent/LIC of India for a sum of Rs.8.00 Lakhs at a half yearly premium of Rs.26,333/-. However, at the time of taking the policy, he deposited Rs.25,000/- and the balance amount of Rs.1333/- was to be deposited later.
Unfortunately, Shri Parminder Singh died after three days on the 8th of May, 2006 due to sudden pain in the chest.
The petitioner/complainant being the nominee lodged a claim for the insured amount with the respondent/LIC of India, who, disallowing the claim, refunded the deposited amount of Rs.26,333/- on 10th of April, 2007. Aggrieved thereupon, the petitioner/complainant approached the District Forum by filing a consumer complaint. The complaint was resisted by the respondent/opposite party/LIC of India but the District Forum was not convinced with their defence and passed an order directing them to pay to the petitioner/complainant Rs.8.00 Lakhs being the insurance amount and in addition, a sum of Rs.1.00 Lakh as compensation for causing her mental agony and harassment and a cost of Rs.5000/-.
When the matter was taken up by the aggrieved opposite party/LIC of India before the State Commission in appeal, the impugned order has been passed setting aside the order of the District Forum resulting in dismissal of the complaint and that is how the complainant is before us in this revision petition.
We have heard Shri Mahipal Malik, learned counsel for the petitioner/complainant, on admission. He has tried to pick hole in the finding of the State Commission by contending that the State Commission has erroneously held that at the time of taking the policy the husband of the petitioner/complainant had deposited only Rs.25,000/- as against the required initial half yearly premium of Rs.26,333/- and the balance amount of Rs.1333/- had been deposited on the 10th of May, 2006, after the death of the life assured. According to him, the whole amount of Rs.26,333/- had been deposited at the time of submission of the proposal form. Had the deceased life assured deposited the premium amount in two different installments, the respondent/LIC of India should have produced two separate receipts, which is not the case. Referring to Annexure P-5 (page 33 of the paper-book), he contends that this document being the first premium receipt clearly states that it was for Rs.26,333/-.
We have noted the above argument of the learned counsel simply to be rejected as the petitioner/complainant herself in para-3 of the complaint has stated that The husband of the complainant, Sh. Parminder, also deposited Rs.25,000/- on 04.05.06 against the valid Proposal Deposit Receipt.
This is an admission by the petitioner/complainant that her husband had deposited initially Rs.25,000/-. The first premium receipt (supra) relied upon by the learned counsel is issued on the 10th of May, 2006 i.e. after the death of the husband of the petitioner/complainant, which was not disclosed to the respondent/LIC of India authorities and the balance amount of Rs.1333/- was deposited on this date i.e. on 10th of May, 2006 and, therefore, as alleged by the respondent/LIC of India the receipt for the full amount of Rs.26,333/- was issued on that date.
Another contention raised by the learned counsel is that as per the first premium receipt the risk to the life assured was covered w.e.f. 4th of May, 2006 and the policy document also had been issued. He, therefore, contends that the State Commission has erroneously set aside the order fully justified by the District Forum and prays that the order passed by the District Forum be restored.
We are not in agreement with his contention for the simple reason that firstly it is established beyond doubt that the life assured had not paid the full initial premium of Rs.26,333/- before his death and, therefore, no proposal had come into force. The fact that the balance amount of Rs.1333/- was deposited on the 10th of May, 2006 without informing that the life assured had expired on 8th of May, 2006 amount to a serious breach of the principle of Uberrima Fides. Similarly, the policy document was issued on the 19th of May, 2006 as the authorities of respondent/LIC of India were not informed about the death, otherwise they would not have issued the policy document for a dead person. As held by Honble Supreme Court in the case of Life Insurance Corporation of India Vs. Raja Vasireddy Komalavalli Kamba & Ors. [(1984) 2 SCC 719], mere filing a proposal for insurance and depositing the first premium with the LIC do not create a binding contract between the LIC and the proposer so as to enable the heirs of the proposer after his death to claim the amount covered by the proposed policy. Further, in the case of 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. In the case in hand, it has been established beyond doubt that the petitioner/complainant deliberately did not inform the respondent/LIC of India about the death of her husband, which amounts to a clear suppression of material fact. Therefore, the repudiation has been rightly justified by the State Commission.
We find no illegality or irregularity in the impugned order and the revision petition, accordingly, is dismissed with no order as to cost.
Sd/-
( R. C. JAIN, J. ) PRESIDING MEMBER Sd/-
(S.K. NAIK) (MEMBER) Mukesh