State Consumer Disputes Redressal Commission
Sbi Life Insurance Company Ltd vs Smt. Lalitha Subhashrao Chidrawar on 9 January, 2014
1 FA/328/2008
Date of filing :25/03/2008
Date of order :09/01/2014
MAHARASHTRA STATE CONSUMER DISPUTE REDRESSAL
COMMISSION,MUMBAI, CIRCUIT BENCH AT AURANGABAD.
FIRST APPEAL NO. : 328 OF 2008
IN COMPLAINT CASE NO.: 226 OF 2007
DISTRICT CONSUMER FORUM : NANDED
1. SBI Life Insurance Company Ltd
Centra processing center plot No.3-A,
Sector 10 CBD Belapur,
Navi Mumbai 400614.
2. SBI Life Insurance Company Ltd
Shweta Appartment Shop No.1,
Near Hotel Domini 221,Tarabai Park,
Kolhapur. Appellants.
VERSUS
1. Smt. Lalitha Subhashrao Chidrawar
R/o.Sachin Nivas near Bhavani Temple,
Bhavaninagar Kandhar,
Dist. Nanded.
2. Balaji S Choudhari
M/s. Sun Group Multi Services
Ist floor Channawar building near Annabhau Sathe chowk,
Vidhyut bhavan, Nanded. Respondents.
CORAM : Mr.S.M.Shembole, Hon`ble Presiding Judicial Member.
Mrs.Uma Bora, Hon'ble Member.
Mr.K.B.Gawali, Hon`ble Member.
Present : Adv.Shri.Smt.Manjusha Deshpande for the appellant.
Adv.Shri.Narwade Patil for the respondent No. 1 is present.
None is present for the respondent No.2.
O R A L O R D E R Per. Mr. Mr.K.B.Gawali, Hon'ble Member.
01. This appeal is preferred by the original opponent Nos. 1 and 2 against the judgment and order dated 20/02/2008 passed by the District Consumer Forum in complaint case No. 226/2007 whereby the 2 FA/328/2008 complaint is partly allowed by holding appellants liable for deficiency in service. The respondent No. 1 is the original complainant, whereas the respondent No. 2 is the agent of appellants. For better understanding the appellant Nos. 1 and 2 hereinafter jointly termed as "Opponent insurance company ", the respondent No. 1 as the "complainant" and respondent No. 2 as the agent of opponent insurance company.
02. Facts giving rise to this appeal are as under :
That, the complainant is the mother of deceased Sachin Subhashrao Chidrawar . That, the deceased Sachin during his life time had obtained insurance policy No. 2402084501 from the opponent insurance company having the death benefit of Rs 5,00,000/- and critical illness of Rs 5,00,000/- w.e.f.from 12/01/2007. That, after having obtained the policy he died due to accident on 12/02/2007. Following his accidental death the insurance claim was submitted to the opponent insurance company . However, the same came to be repudiated vide letter dated 29/08/2007 on the ground that deceased was suffering from Mania and he suppressed that fact before issuing of policy. It was contended by the complainant that the deceased Sachin had obtained another insurance policy from the opponent insurance company and the insurance claim pertaining to the said policy amount Rs 2,89,671/- was also paid by the opponent insurance company . However, on the fallse ground her claim under the policy in question was repudiated and hence he filed claim with the District Consumer Forum seeking direction to the opponent insurance company to pay her the insurance amount of Rs 12,00,000/- along with interest @ 15 % p.a. from 12/01/2007. She also claimed Rs 10,000/- towards deficiency in service and cost of the complaint including Rs 2,00,000/- towards mental harassment and further Rs 10,000/- towards cost of the complaint etc.
3 FA/328/2008
03. The opponent insurance company appeared before the District Consumer Forum and resisted the claim by way of its written version. Although it has admitted to have issued the insurance policy by name Unit Plus Regular II having death benefit of Rs 5,00,000/- and critical illness benefit of Rs 5,00,000/- . It was contended that the opponent insurance company had contended that the deceased Sachin had submitted the insurance proposal on 29/09/2006. But thereafter on 28/11/2006 he made with an accident and was suffering from mania. However, he did not inform about his said accident and the said deceased. It was further contended that as per Sec. 64 (B) of Insurance Contract Act, 1938, the contract of insurance is not completed unless the insurance proposal is accepted. It was further contended that as per point 12 of annexure when the declaration is made by the proposer hereby he agreed to gave information about any adverse circumstances connected with the general health of the proposer before the issue of premium receipt and the insurance company etc. However, in the instance case the deceased suppressed the material fact of his health i.e. the incident of accident and his illness before the issue of policy documents. Therefore, the contract of insurance policy is void ab-initio. Thus it was contended that the complainant was not entitled for any insurance claim under the said policy and hence, it was rightly repudiated and there was no deficiency in service on the part of the insurance company. With these contentions it was requested to dismiss the complaint.
04. The District Consumer Forum after considering the evidence filed by both sides and after hearing the parties, has passed the impugned judgment and order directing opponent insurance company to pay to the insurance claim of Rs 10,00,000/- alongwith interest @ 6 % p.a. from 29/08/2007 till the realization of the entire amount. In addition it was also directed to pay to the complainant a compensation of Rs 25,000/- towards mental harassment and Rs 1,000/- as the cost of the complaint.
4 FA/328/2008
05. It is observed by the District Consumer Forum that the allegation of the opponent insurance company about suffering of the deceased Sachin of the disease of Mania has not been proved. It is further observed that after accident on 28/11/2006 deceased Sachin Chidrawar was admitted in the hospital of Dr. D.V.Joshi but there is no diagnosis i.e. deceased was suffering from Mania. Secondly, the District Consumer Forum has also referred to the certificate of Dr. Randive which clearly shows that the deceased Sachin had met with road accident by falling from the motorcycle on 28/11/2006 and had multiple injuries on his face which were successfully treated. It has also observed that the Tahsil Office, Kandhar and police station, Kandhar has made the panchanama in which it is mentioned that deceased Sachin was died by drowning in Manyad River in a state of mental disorder. However, there is no proof about the treatment regarding the mental disorder of the deceased Sachin. Thus in keeping with these observation the District Consumer Forum has passed the impugned judgment and order holding deficiency in service on the part of the opponent insurance company for not sanctioning the insurance claim of the complainant.
06. Aggrieved by the said impugned judgment and order, the present appeal is filed in this Commission by the opponent insurance company . This appeal came to be heard finally on 10/12/2013. None was present for the appellant. However, its counsel Smt. Manjusha Deshpande has already submitted written notes of arguments. Adv.Shri.Narwade Patil is present for the respondent No. 1 i.e. complainant and also submitted written notes of argument. None was present for the respondent No. 2 and he was already proceeded Ex-parte. We heard Adv.Shri.Narwade Patil appearing for the respondent No. 1 / complainant and the appeal was adjourned for judgment and order.
07. It is contended by Ld. counsel Smt. Deshpande appearing for the opponent insurance company that insurance policy is a contract which is based on utmost good faith wherein, it is the duty of the insured to 5 FA/328/2008 disclose correct fact concerning his health. However, he was suffering from Mania i.e. of unsound mind prior to the date of enrolment in to insurance cover which came tobe in effect from 12/01/2007. She specifically submitted that person suffering from Mania can not enter in to contract in which contract is vide -AB-initio she further contended that the deceased Sachin suppressed the material fact of his health which is a breach of terms and condition of the policy and therefore the insurance company is not at all liable to pay the insurance claim to the survivor of the insured. She therefore contended that, the District Consumer Forum without appreciating the evidence on record placed by the opponent insurance company in the right prospective and has wrongly concluded that the opponent insurance company has committed deficiency in service by rejecting insurance claim of the complainant and passed the impugned judgment and order, which requires to be set aside. In support of her contention she referred the judgment and order dated 15/01/2006 passed by the Hon'ble Apex Court in Civil Appeal No. 224/1959, wherein it is held that there need not be any nexus between the cause of death and the material fact suppressed. She further relied on the following case laws.
1. The judgment and order passed by the Hon'ble National Commission in Panni Devi -V/s- LIC III (2003) CPJ 15 (NC) in which it is held that the statement recorded in the normal course of discharge has to be given proper weight age and therefore contended that medical record in the present case is clear evidence of the existance of the said illness.
2. The judgment and order dated 10/07/2009 passed by the Hon'ble Supreme Court in case of Civil Appeal No. 2776 of 2002 Satwant Kaur Sandhu - V/s- New India Assurance Company Ltd, wherein it is held that the hospital report regarding the past history of illness should be relied upon even though the hospital giving the report has not treated the patient in the past.
6 FA/328/2008
10. On the other hand, Ld. counsel Shri. Narwade Patil submitted that the opponent insurance company has miserably failed to prove that deceased Sachin suppressed his mental disease. He further submitted that the medical certificate dated 09/05/2007 issued by Dr. Randive stated that the said deceased met with an accident on 28/11/2006 and the injury sustained by him were of minor nature. The certificate issued by Dr. Joshi also is vague and does not disclose that deceased Sachin was suffering from Mania. That, the report submitted by police authority stating that the deceased Sachin due to unsound mind had drown in Manyad river and dried due to drowning has not been supported by any documentary evidence. He therefore contended that by repudiating the legitimate insurance claim of the complainant the opponent insurance company has committed any deficiency in service and Dist. Consumer Forum has rightly allowed the complaint by way of impugned judgment and order which be confirmed.
He relied on the following case laws in support of his above said contentions 1 to 8.
1. National Insurance Company Ltd -V/s- Bipul Kundu reported in II (2005) 12 (NC)
2. National Insurance Company Ltd -V/s- Dr.Manik Kar, reported in I (2000) CPJ 292.
3. Madan Lal -V/s- LIC of India & Ors. II (2008) CPJ 67.
4. Madhu Jain -V/s- National Insurance Contended.Ltd II (2008) CPJ 137.
5. Murli Lal Poddar - V/s- United India Insurance Company Ltd II (2004) CPJ 68.
6. The Oriental Insurance Company Ltd -V/s- Ashok Rathi II (2004) CPJ 629.
7. Divisional Manager National Insurance Company Ltd -V/s-
Sukhdev Prasad Rana I (2001) CPJ 342.
8. Branch Manager LIC of India & Ors -V/s- S,mt. Jayalakshmi IV (2003) CPJ 346.
7 FA/328/2008
11. We have carefully gone through the record containing complaint of the complainant , written version filed by the opponent insurance company, the proposal form of the insurance policy, the correspondence made by the opponent insurance company with the deceased insured and written notes of arguments etc. There are two major questions which arises for our consideration.
1. Whether, the deficiency in service is proved against the opponent insurance company. ?
2. Whether, the impugned judgment and order passed by the Dist. Forum calls for our intervention ?
As regard the point No. 1 :-
11. It appears that insurance claim of the complainant is repudiated by the opponent insurance company on two major grounds that (a) The insured was suffering from the disease of Mania prior to the insurance policy and (b) Suppression of material fact about his health by the deceased insured. However, it is observed that there is no any cogent evidence to prove that the deceased Sachin was suffering from Mania as alleged by the insurance company . The only documents is the inquest panchanama made by the Tahsil office in which it is mentioned that while insured Sachin was wandering in a mental disturb stage he was drown in the Manyad river and died due to drowning . However, there is no any documentary proof to support the statement made in the said inquest panchanama . It is proved that after the accident dated 28/11/2006, the deceased Sachin had sustained multiple injuries but those injury were recovered as per certificate by Dr. M.B.Randive.
Further it is observed that deceased Sachin was admitted in the hospital of Dr.D.B.Joshi who is a expert in treating the mental disorder patient. However, there is no clear certificate issued by Dr.D.B.Joshi mentioning that the deceased was the patient of Mania and therefore only because 8 FA/328/2008 he was admitted in the said hospital during the period 20/12/2006 to 27/12/2006 it can not be presumed that he was suffering from the Mania. It is also worth tobe noted that as per the contention of the opponent insurance company that the insured had initially submitted the proposal for insurance policy on 29/09/2006 in which he had applied for the insurance sum of Rs 20,00,000/-. But as the insurance company was not in a position to sanction such policy under reference and was only in a position to sanction policy consisting of life cover for Rs 5,00,000/- and critical illness of Rs 5,00,000/-. In response to the letter of the opponent insurance company, the insured Sachin by his letter dated 05/01/2007 said to have given consent for reducing his claim upto Rs 5,00,000/- towards death claim and Rs 5,00,000/- towards critical illness claim . It is on the basis of this letter the opponent insurance company contended to have issued policy on 12/01/2007 to the deceased Sachin. It can be said otherwise that when insured Sachin has issued letter dated 05/01/2007, he can not be treated as the patient of Mania.
12. It is also pertinent to note that the opponent insurance company has quoted the point 12 of annexure -C in which it is made clear that before the issuance of insurance policy it is binding on the applicant to inform to the insurance company about any adverse circumstances connected with the health of the applicant. In fact the wording used is before the issue of premium receipt and not the insurance policy. In the present case the complainant had submitted DD of Rs 1,00,000/- to the opponent insurance company along with insurance proposal dated 29/09/2007. Therefore, this contention is also not exactly applicable as contended by the opponent insurance company . Thus considering all these aspects it can be said that the opponent insurance company without having any cogent proof about alleged disease of Mania to the insured but it had repudiated the claim of the complainant which amount to deficiency in service on its part which is rightly held by the District Consumer Forum.
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13. However, it manifests that the District Consumer Forum has not considered the terms and condition of the insurance policy while insurance policy. The insurance policy although consist of double benefit i.e accidental death benefit as well as critical illness benefit while granting the insurance claim, the accidental death as well as critical illness requires to be proved. In the present case, accidental death is proved. However, critical illness does not appear to have been proved. As per the clause 2 (a) of annexure -C-1 pertaining to the insurance policy in question, the list of critical illness is given. As per the list critical illness included cancer, coronary artery bypass surgery, heart attack, stroke and kidney failure, coronary surgery, coma, heart valve replacement, major organ transplant and paralysis, in which is clearly mentioned that the insurance company would not be liable to pay any insurance amount for the illness which are not included in the above list. Obviously in the present case the complainant was not affected by any of the diseases mentioned in the list and therefore insurance company can not be made liable to pay the insurance claim pertaining to the critical illness rider. We therefore of the considered view that the complainant is not entitled to receive insurance claim against the critical illness but only the death claim which is Rs 5,00,000/-. We have further observed that the compensation awarded by the District Consumer Forum towards mental harassment at Rs 25,000/- is excessive and unreasonable which can be reduced to Rs 10,000/-.
13. Hence, considering the above said observations we are inclined to partly allow the appeal by modifying impugned judgment and order . In the result, we pass the following order.
O R D E R
1. Appeal is partly allowed.
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2. The impugned judgment and order passed by the Dist. Forum is
hereby modified and substituted as under :
a. The appellant i.e. opponent insurance company is directed to pay
to the complainant an insurance sum of Rs 5,00,000/- along with interest @ 6 % p.a. from the date of repudiation of claim i.e. 29/11/2007 onwords till the realision of the entire amount within a period of 30 days.
b. The opponent insurance company is also directed to pay to the complainant a compensation of Rs 10,000/- towards mental harassment and Rs 1000/- towards cost of the complaint within a period of 30 days.
3. No order as to cost of this appeal.
4. Copies of the judgment and order be sent to both the parties.
K.B.Gawali Mrs.Uma Bora S.M.Shembole Member Member Presiding Judicial Member Patil A.H. Steno H.G.