State Consumer Disputes Redressal Commission
Reliance Life Insurance vs Guntreddi Satyanaraya on 6 June, 2012
BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. FA 1355 of 2010 against C.C. 86/2010, Dist. Forum, Vizianagaram Between: 1) The Chairman & Managing Director Reliance Life Insurance Reliance House, No. 6, 6th Floor, Haddows Road Chennai, Tamil Nadu 2) Reliance Life Insurance Company Ltd. 6th Floor, Midas Wing, Sahar Plaza Andheri, Kurla Road Andheri (East), Mumbai-59. 3) The Branch Manager Reliance Life Insurance Company Ltd. 1st Floor T. Bhaskar Rao Complex Balajipeta Road, Bobbili. *** Appellants/ Opposite Parties And 1) Guntreddi Satyanaraya S/o. Late Swamy Naidu R/o. Sivvam Village Garuguubilli Mandal VizianagaramDist. *** Respondent/ Complainant 2) Smt. Mudidana Padma Advisor Code No. 11694471 Reliance Life Insurance Company Ltd. Balajipeta Road, Bobbili 3) Reliance Life Insurance Company Ltd. Advisor Code No. 20095924 SM Code NO. DMCH2 Balajipeta Road, Bobbili *** Respondents/ Ops 4 & 5 (R2 & R3 are only proforma parties) Counsel for the Appellants M/s. P. Ramachandran Counsel for the Respondent: M/s. U. Pratap Rao R1 CORAM: HONBLE SRI JUSTICE D. APPA RAO, PRESIDENT & SMT. M. SHREESHA, MEMBER
WEDNESDAY, THE SIXTH DAY OF JUNE TWO THOUSAND TWELVE Oral Order: ( Per Honble Justice D. Appa Rao, President) ***
1) This is an appeal preferred by the insurance company, the opposite party against the order of the Dist.
Forum directing it to pay Rs. 1,0,000/- covered under the policy with interest @ 9% p.a., from the date of complaint till the date of realization together with costs of Rs. 2,000/-.
2) The case of the complainant in brief is that his son late Ramesh Kumar had taken life insurance policy from the appellant insurance company. He paid premium on 5.3.2008 and 28.2.2009 for the consecutive years, and the insurance company also declared bonus for the year ending 31.3.2008. While so he unfortunately died on 28.10.2009. When the said fact was intimated, the insurance company repudiated the claim on the ground that he had suppressed his ailment. Since he was blind, he could not have suppressed his ailment regarding his health. The officials of the opposite party Nos. 3 to 5 were colluded together got his signature taken on proposal form for issuing the above policy. He cannot fill the proposal form nor could suppress any material. He became blind due to surgery underwent in the year 2002 for intra ventricular tumour. Having issued the policy without insisting certificate of health of the insured, the insurance company cannot repudiate the claim on the ground that there was suppression. Coloumn Nos. 28 and 29 pertain to health condition for the last five years. In that period there was no surgery nor encountered any problem. There was no suppression, and therefore prayed that basic sum be awarded together with interest, bonus, compensation and costs.
3) The insurance company resisted the case.
It alleged that the contract of insurance policy was void-ab-initio as the deceased had suppressed facts relating to his health at the time of obtaining the policy.
He suppressed that he had undergone surgery for tumour which had resulted in loss of eye sight. In view of suppression it was entitled to rescind the contract as per Section 45 of the Insurance Act. The deceased had taken endowment policy for basic sum of Rs. 1 lakh commencing from 9.3.2008. Though the policyholder was blind it was filled up by one of his people and after explaining the contents of the form he signed on it. There was no collusion between the employees in order to obtain the policy. In view of his age there was no need for medical check-up. The insurance contracts are based on good faith. The death was due to the disease suffered in the year 2002, and prior to that. The deceased had suppressed the disease and contrarily gave answers to the questions Nos. 28 & 29 amounting to suppression of material facts. In fact he underwent surgery for tumour in the year 2002 at Sri Satya Sai Institute of Medical Sciences, Bangalore. He was admitted as inpatient from 14.5.2002 to 12.6.2002. Death of the deceased took place within two years of the policy. Therefore repudiation was just and prayed for dismissal of the complaint with costs.
4) The complainant in proof of his case filed his affidavit evidence and got Exs. A1 to A10 marked while the insurance company filed Exs. B1 to B5.
5) The Dist. Forum after considering the evidence placed on record opined that admittedly the deceased was blind and he could not have filled up the proposal form for taking the policy, and that ailment suffered was prior to five years of taking of the policy, and there is no evidence that previous ailment led to his death, and therefore directed the insurance company to pay Rs. 1 lakh covered under the policy with interest @ 9% p.a., from the date of complaint till the date of realization together with costs of Rs. 2,000/-.
6) Aggrieved by the said decision, the insurance company preferred the appeal contending that the Dist. Forum did not appreciate either facts or law in correct perspective. It ought to have seen that the deceased has suppressed that he had underwent operation resulting in loss of eye sight in the year 2002, and finally succumbed on 28.10.2009. All this amounts to suppression of material fact, and therefore the complainant was not entitled to any amount covered under the policy.
7) The point that arises for consideration is whether the order of the Dist. Forum is vitiated by mis-appreciation of fact or law?
8) It is an undisputed fact that the deceased Ramesh Kumar son of the complainant worked as an attender in 2003 in Municipal High School vide Ex. A5 proceedings dt. 11.11.2003 issued by the Commissioner, Salur Municipality. It is also not in dispute earlier to it he underwent operation on 14.5.2002 for intra ventricular tumour at Sri Satya Sai Institute of Medical Sciences, Bangalore and was discharged on 12.6.2002 vide discharge summary Ex. B2. It is also not in dispute that he became blind at the time when he had taken policy on 5.3.2008 evidenced under physically handicapped questionnaire taken from the assured attested by Dr. A. Mohan Rao vide Ex. B3. This was countersigned by the authorised signatory of the insurance company and Ex. B5 Medical Certificate for the blind issued by competent authority of the Medical Board. At coloumn No. 3 of confidential report of the doctor he categorically mentioned that he was a blind person Having got the medical examination and satisfied with his health condition issued the policy as per terms and conditions mentioned in medical grid. Obviously having satisfied with his physical condition the policy was issued commencing from 5.3.2008 for a basic sum of Rs. 1 lakh. The insurance company not only collected Rs. 7,000/- as first premium on 5.3.2008 under Ex. A6 but also paid bonus evidenced under Ex. A7. The insurance company also collected Rs. 6,300/- towards premium for the subsequent period on 28.2.2009 evidenced under Ex. A8. He died on 28.10.2009 vide Ex. A2 death certificate. When the complainant, his father claimed the amount it was repudiated on the ground that the fact that he underwent surgery more than five years ago at Sri Satya Sai Institute of Medical Sciences, Bangalore was not disclosed and this amounts to suppression of material fact.
9) At the outset, we may state that ex-facie this repudiation was unjust. At the cost of repetition, we may state that at the time when the policy was taken he was blind. His signature was obtained on Ex. B1 medical grid certified by their own panel doctor as well as authorised persons of the insurance company. Had the doctor questioned as to how he became blind he would have disclosed that he had tumour and got it operated and later slowly he became blind. Now the insurance company alleges that it is for the insured to inform the surgery that he underwent more than five years prior to taking of the policy. He had suppressed the material facts while answering the question Nos. 28 & 29. They read as follows :
28. Are you currently taking any medicine or drugs, other than minor conditions (eg. Cold, and flu) either prescribed by a doctor or have you suffered from any illness, disorder, disability or injury during the past five years which has required any form of medical or specialised examination (including chest X-Rays, gynaecological investigations, pap smear, or blood tests), consultation, hospitalization or surgery?
Ans: No.
29. Do you suffer from any medical ailments e.g., diabetes, high blood pressure, cancer, respiratory disease, kidney or liver disease, stroke, any blood disorder, heart problems, hepatitis-B or C, TB, psychiatric disorder, depression, HIV/AIDS or a related infection?
Ans: No. Since the form was signed on 5.3.2008 and the operation he underwent was on 14.5.2002 more than five years when the insured gave answers stating No it cannot be said that he gave wrong answers. Whatever the ailment suffered was more than five years ago viz., the surgery that he underwent for the tumour. At any rate the medical record shows that tumour was benign later he became blind due to complications of this tumour.
However, this tumour has no nexus to his death.
We reiterate that at the time when policy was taken he was blind, and the said fact was known to the insurance company. It is not that he died due to operation or complications arising therefrom. He did not suppress his ailment.
Section 45 of Insurance Act postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia, on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy-holder or that the policy-holder knew at the time of making it that the statement was false. Statute, therefore, itself provides for the limitation for valid repudiation of an insurance policy. It takes into account the social security aspect of the matter.
There are three conditions for application of second part of Section 45 of the Insurance Act which are :
(a) the statement must be on a material matter or must suppress facts which it was material to disclose;
(b) the suppression must be fraudulently made by the policy-holder; and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
10) This is not a case where the insurance company could repudiate invoking Section 45 of the Insurance Act. The insurance company could not file any proof or certificate from the doctors to show that death was due to tumour operation that was conducted about five years ago at Sri Satya Sai Institute of Medical Sciences, Bangalore. It is settled law that there should be nexus between the ailment and the death.
11) We may also state that in LIC of India Vs. Dr. P. S. Agarwal reported in 2005 (1) ALT 22 (NC) (CPA) the National Commission after considering the facts in the said case opined that onus to prove that there was material concealment of any disease, which directly proved fatal, lies on insurance company to repudiate the claim. Plea of insurer that insured concealed material fact of disease cannot be accepted in such circumstances.
In another decision in LIC of India Vs. Badri Nageswarmma reported in 2005 (5) ALT 25 (NC) (CPA) the National Commission opined that the repudiation should not be made unless the insured had made false representation and suppressed material facts on the date of proposal. That was a case where the death was due to acute viral meninges encephalitis and secondary cause as diabetes mellitus. The contention of the insurance company was that he was suffering from TB on the date of proposal. The National Commission after going through the evidence opined that the doctor certificate produced by the corporation does not show that the deceased knew on the date of proposal that he was suffering from TB. Apart from it there was no nexus of ailment with the cause of death and that the repudiation was unjust. We may also add another decision of National Commission in Oriental Insurance Company Ltd., Vs. Asim J. Pandya reported in 2006 (2) ALD 29 (NC) wherein it was held that the insurance company should establish that there was nexus between the cause of death and the ailment suffered by the insured. It should be proximate.
12) Coming to the facts, the insurance company could not prove that the death was due to earlier surgery conducted more than five years ago resulting in death of the deceased. Since there was no coloumn in the proposal form to inform about the ailment suffered prior to more than five years, non-mentioning of earlier ailment cannot be a ground to repudiate the claim. Even otherwise there is no nexus between death and ailment suffered by him. The insurance company knew full well that the deceased became blind due to the operation still determined to issue a policy later they can turn round and say that the deceased had supressed the ailment. When the insurance company had repeatedly received the premia did not raise any objection. It cooly received it. But when it came to payment of the amount covered under the policy they have every objection. They are all untenable.
We do not see any mis-appreciation of fact or law by the Dist. Forum in this regard. We do not see any merits in the appeal.
13) In the result the appeal is dismissed with costs computed at Rs. 5,000/-. Time for compliance four weeks.
1) _______________________________ PRESIDENT
2) ________________________________ MEMBER 06/06/2012 *pnr UP LOAD O.K.