State Consumer Disputes Redressal Commission
Reliance Life Insurance Co.Ltd., Regd. ... vs 1. M.Veeralaxmi @ Kovvuri Veeralakshmi ... on 3 January, 2014
BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD F.A.No.229 OF 2013 AGAINST C.C.NO. 47 OF 2012 DISTRICT FORUM RAJAHMUNDRY Between: 1. President/Head of Central Operations Undertaking Reliance Life Insurance Co.Ltd., Regd. Off: H Block 1st Floor Dhirubhai Ambani Knowledge City, Mumbai-710, Maharasthra 2. Branch Manager Reliance Life Insurance Co.Ltd., D.No.12-22-16, Main Road, Ayyapuram Rajahmundry-104 Appellants/opposite parties no.1 and 2 A N D 1. M.Veeralaxmi @ Kovvuri Veeralakshmi W/o Satya Srinivas Reddy D.No.5-173, Chinnavinayaka Temple Street, Anaparthi Village of Anaparthi Mandal, EG District 2. Kovvuri Satya Srinivas Reddy D.No.5-173, Chinnavinayaka Temple Street Anaparthi Village of Anaparthi Mandal E.G.District AP Respondents/complainants Counsel for the Appellant M/s Deepak Sabharwal & Associates Counsel for the Respondents M/s S.Satyanarayana (R2) QUORUM: SRI R.LAKSHMINARASIMHA RAO, HONBLE I/C PRESIDENT SRI THOTA ASHOK KUMAR HONBLE MEMBER
AND SRI S.BHUJANGA RAO, HONBLE MEMBER FRIDAY THE THIRD DAY OF JANUARY TWO THOUSAND FOURTEEN Oral Order (As per Sri R.Lakshminarasimha Rao, Honble I/c President) ***
1. The opposite parties are appellants. The first respondent filed complaint seeking for direction to the appellants to pay the sum assured under life insurance policy bearing number 16364089 with interest thereon and costs.
2. The first respondent obtained life insurance policy for premium term of 30 years under contract number 16364089 appointing the second respondent as her nominee. The appellants on receipt of premium amount of `3,280/-
issued insurance policy in favour of the first respondent on 17.02.2010. The first respondent died on 12.04.2010. The second respondent submitted claim which was repudiated on the ground that the first respondent suffered from Ewings sarcoma, a rare disease in which cancer cells are found in bone or soft tissue and non-disclosure of cancer was material to issuance of the insurance policy. The appellants were proceeded exparte.
3. The second respondent filed his affidavit and the affidavit of Abbayi Sarakula and the documents, ExA1 to A12.
4. The District Forum allowed the complaint on the premise of the appellants failure to participate in the proceedings and their failure to contest the case by filing written version and adducing evidence in support of the repudiation of the claim.
5. The opposite parties have filed appeal contending that the claim investigation revealed that the insured suffered from Ewings Sarcoma prior to taking the life insurance policy and she did not disclose the disease in the proposal form which is the basis of the contract of insurance and as such the contract is void. The appellant issued reply to the notice of the respondent. It is contended that at the time of making proposal the conditions and privileges of the policy were made available to the insured which speak of policy being void in case the particulars furnished by the insured proved to be incorrect and affects the original terms of acceptance of the contract.
6. It is contended that the insured was aware and in knowledge that she had a preexisting ailment and without disclosing the disease, she procured the life insurance policy. The repudiation of the claim was on a consideration of the record collected by the investigator. It is contended that the notice was issued by the District Forum of less than 30 days and there is non-compliance of Section 13(1) of the Consumer Protection Act.
7. The learned counsel for the appellant and the respondent no.2 filed written arguments.
8. The point for consideration are:
i) Whether the District Forum has not granted 30 days time in compliance of Section 13(1) of the Consumer Protection Act?
ii) Whether the insured suffered from cancer, viz.Ewings Sarcoma and suppressed the fact in the proposal form?
iii) Whether repudiation of the claim is justifiable?
iv) To what relief?
9. POINT No.1: The appellants issued risk insurance policy bearing number 16364089 in favour of the first respondent and the 17.02.2010 on receiving the premium of `3,280/-. The first respondent died on 12.04.2010.
The second respondent submitted claim which was repudiated on the ground that the first respondent suffered from Ewings sarcoma, a rare disease in which cancer cells are found in bone or soft tissue and non-disclosure of cancer was material to issuance of the insurance policy.
10. The respondent -insurance company repudiated the claim on the premise that the insured suppressed the fact that she was suffering from Ewings Sarcoma. The second respondents wife mother submitted proposal that she was not suffering from any disease. The contention of the second respondent is that his wife was hale and healthy and she has not suffered from cancer at the time of taking the insurance policy.
11. The learned counsel for the respondent has contended that the appellant failed to prove that the deceased suppressed that she was suffering from cancer. He relied on the following decisions:
1. The Life Insurance Corporation of India v. Bhagadi Chandravathamma reported in AIR 1971 A.P. 4 (V 58 C 6)
2. The Life Insurance Corporation of India v. Smt G.M.Channabasamma reported in 1991(1) Supreme Court Cases 357
3. Krapa Vidyavathi and Others v.
Life Insurance Corporation of India reported in 2012 (2) ALT 438
12. The appellant repudiated the claim on 25.08.2010 on the ground that the insured suffered from Ewings Sarcoma and she suppressed the disease she was suffering from, at the time of obtaining the insurance policy. The respondent has not produced repudiation letter before the District Forum.
13. The learned counsel for the appellant has submitted that without pleadings any evidence produced before this Commission may lead to another round of litigation between the parties and he has submitted that the claim was repudiated based on medical record and investigators report. In its reply dated 4.06.2012 the appellant refers to the letter of repudiation dated 25.08.2010 and hospitalization of the insured in regard to treatment of Ewings sarcoma as under:
That we respond to the contents of paragraph nos. 4&5 and state that we have already addressed the concerns fo your client through our letter dated 25/08/2010 wherein we have repudiated the claim on the ground that the deceased was hospitalized on 26/11/2008 and was diagnosed for Ewings sarcoma (rare disease in which cancer cells are found in the bone or in soft tissue) and this fact was not disclosed in the proposal submitted on 16/02/2010 for the above policy.
14. In the grounds of appeal, it is stated that the appellant has filed investigators report. However, the document is not found in the record. The decisions and their applicability would be considered by the District Forum as the appellant seeking to produce the documents at appellate stage.
15. In the light of the District Forum allowing the complaint only on failure of the appellant to challenge the claim and the appellants readiness to contest the case based on evidence as also in view of there being no written version filed by the appellant, this Commission is of the view that the matter need be remitted back to the District Forum, however for the laches on the part of the appellant, holding the appellant liable to pay a sum of `5,000/-
to the respondent.
16. In the result, the appeal is allowed setting aside the order of the District Forum directing the appellant/complainant to pay costs of `5,000/-to the respondent/appellant and file written version along with documents by 30.01.2014. Failing which the appeal stands dismissed. The District Forum shall decide the matter within two months. The office is directed to furnish copy of the order to the parties by 10.01.2014.
I/c PRESIDENT MEMBER MEMBER Dt.03.01.2014 కె.ఎం.కె.*