State Consumer Disputes Redressal Commission
Bhavanaben Jayantaji Thakarda vs Icici Pru. Life Ins.Co.Ltd on 17 May, 2023
Details DD MM YY
Date of Judgment 17 05 2023
Date of filing 30 11 2022
Duration 17 05 -
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION
GUJARAT STATE, AHMEDABAD.
Court No. 1
First Appeal No.848/2022
Bhavnaben Jayantiji Thakarda
Age:32, Occ. Farmer, Religion: Hindu
Add. 148, ThakardaNivas, Bhavangadh,
Vadali, Sabarkantha. ...Appellant
Vs
ICICI Prudential Life Insurance Co. Ltd.
Add. Unit 1A & 2A,
Raheza Tipko Plaza,
Rani sati Marg,
Malad (East) Mumbai 400097. ...Respondent
APPEARANCE : S. J. Mansuri, Ld. Adv. for the appellant
CORAM : Hon'ble Ms. A. C. Raval, Presiding Member
Hon'ble Ms. P. R. Shah, Member Order by Hon'ble Ms. P. R. Shah, Member.
1. The appellant has filed this appeal under section 41 of the Consumer Protection Act, 2019 (for short the CP Act), being aggrieved by and dissatisfied with the judgment and order dt.20.10.2022 passed by the Ld. Consumer Dispute Redressal Commission, Sabarkantha (for short CDRC Sabarkantha) in the Consumer Complaint No. 150/2021.
2. Heard Ld. Advocate Mr. S. J. Mansuri for the appellant.
Considering the facts of the case, this commission deem fit not to issue the notice to respondent. Therefore no notice has been issued to respondent.
Akshay A-848-2022 Page 1 of 10Order under Challenge
3. The Ld. district commission has dismissed the complaint vide its order dt.20.11.2022 in consumer complaint no. 150/2021 and has further directed the complainant to pay Rs. 5,000/- to the opponent.
Facts of the case
4. The complainant's husband (hereinafter referred to as DLA) had bought a ICICI Pru Savings Suraksha policy online through Invictus Insurance broking service Pvt. Ltd. and was issued a policy with the no. 36918280 with sum assured of Rs. 7,50,000/- and the amount payable on death under this policy was Rs. 23,62,203/-.. According to the complainant her husband, the DLA, had undergone medical examination and also had provided financial information after which the opponents had issued the policy on 04/04/2019. The complainant states that her husband had paid the due premium of Rs.75,000/-. Complainant's husband died on 07/08/2019 due to a sudden heart attack. The complainant informed the insurance company and lodged the claim. The opponent insurance company repudiated the claim on the ground that the information relating to the complainant's husband's business and income stated in the proposal form was incorrect and also the complainant's husband had suppressed the information of other policies. Therefore the complainant filed the complaint before the Ld. District Commission.
Arguments of the appellant
5. The appellant has denied the ground taken by the opponent that DLA had given incorrect information with respect to his income. The DLA had submitted his income tax return for the years 2018- 2019 and 2019-2020, with the account statement. In these documents the income shown is Rs.5,00,000/- therefore there is no suppression of information. It has been further stated that the Ld. District Commission's observation that the DLA's income is Akshay A-848-2022 Page 2 of 10 Rs.1,22,360/- is incorrect because the income tax return shows that the gross income of the DLA was Rs.5,05,362/-.
5.1 The complainant states that on the date of the proposal the DLA had no other policies and on 28/03/2019, the DLA had taken the opponents policy together with HDFC life insurance policy through the same agent Invictus insurance broking service Pvt. Ltd., Mumbai. Further on 28/03/2019, the policy from Max life insurance was issued, however on the same day it was rejected. Therefore the LA had not mentioned it in the proposal form. However according to the complainant, this fact has not been considered by the Ld. District Commission.
5.2 Further the complainant states that the LA had died suddenly of a heart attack at a young age, and therefore there was no PM done. The complainant had submitted the death certificate. It is contended that the Ld. District Commission has observed the death of the LA to be a suspicious death without any valid reason.
5.3 The appellant has prayed that the order of the Ld. District Commission should be quashed and set aside and the appellant should be awarded the claim of Rs.23,62,204/payable on death under the policy ,from the date of the complaint with 9% interest.
Merits of the case
6. Repudiation letter is produced at page 41-42: wherein it is stated as under:
In this connection, we wish to state that the Company had received the proposal for insurance on March 28, 2019 along with a duly signed Customer Declaration Form (CDF) confirming the truthfulness and correctness of the details provided in the online proposal form and that any mis-statement or suppression or non-disclosure of material information will lead to rejection. of the claim. Relying on the replies/declarations provided in the proposal for insurance, the proposal was accepted and policy bearing number 36918280 was issued on April 04, 2019. We have enclosed the copy of the proposal form for your immediate reference.Akshay A-848-2022 Page 3 of 10
Please note that the insurance business operates on the principle of utmost good faith and the company relies on the details provided by the Life Assured to evaluate the risk.
While underwriting the above proposal, the company believed /relied on the replies to specific questions (reproduce below) in the proposal for insurance dated March 28, 2019 which were answered as given below:
Proposed/Life Assured Personal Details Occupation Self Employed- Businessman Organization type Others Annual Income INR 500,000/-
Previous Policy Details Do you hold any Life Insurance Policy (ies) other than ICICI No Prudential The Company received the claim intimation on September 06, 2019 informing of the alleged death of your husband Mr. Jayantiji Thakarda ("herein after referred to as "the Life Assured") on August 07, 2019.
The Company conducted investigation to verify on the bonafides of the claim. Our investigation has established that the Life Assured had provided incorrect information about his income and occupation in the proposal for insurance dated March 28, 2019. In fact, our investigation has established that Life Assured was not "Self Employed- Businessman". It is also noted that the Life Assured had over stated his income in the proposal for insurance.
Amongst others, details of life insurance policies held is also a key factor considered at the time of risk assessment of the insurance proposal. Our investigation has established that multiple policies were applied / taken on the life of the Life Assured to a tune of - Rs. 37.7 Lacs (including the aforesaid policy). Out of which Rs. 30.2 Lacs was prior to issuance of the aforesaid policy.
In view of the above mentioned facts, the Company concludes that it has sufficient reasons to believe that the information furnished in the proposal for insurance was incorrect and misleading and was furnished purely with an intent to induce the Company to issue a life insurance policy.
7. There is no dispute that the opponent had issued a policy no.
36918280 dated 04/04/2019 to the life assured and the death of the LA occurred during the subsistence of the policy. The opponent refunded the premium of Rs.78,375/- paid by the LA. The opponent Akshay A-848-2022 Page 4 of 10 has repudiated the claim of the complainant mainly on 2 grounds (1) suppression of material facts relating to income and business, (2) non-disclosure of other policies.
8. Suppression of material facts relating to income and business
(a) Occupation The opponent alleges that the DLA had obtained the subject policy by suppressing and misrepresenting the material information regarding his occupation, income and other policy details in the proposal form at the time of obtaining the said policy. Since death of the LA occurred within just 4 months from the date of issuance of policy, the same fell into the category of a early claim and therefore the claim investigation was conducted. The proposal form submitted by the DLA clearly shows that the DLA was asked specific question regarding his occupation and income which was misrepresented and was asked details of previous policies to which the DLA marked "NO" and thus knowingly and fraudulently suppressed material facts. It is submitted that the opponents would not have issued the policy had they been informed of the correct information. The opponents have rightly repudiated the claim and as there was violation of terms and policy conditions.
8.1 It is stated by the opponent that during the investigation, the nominee of complainant confirmed that DLA was a agriculturist and has shown proof of the land record of the father of the LA in order to prove that DLA was doing agriculture work in his father's land which shows that he was not a business person as disclosed in the proposal form.
8.2 The complainant has not provided any evidence contradicting this contention of the opponent and therefore the contention of the opponent that the DLA has incorrectly mentioned his occupation and thus there is breach of principle of utmost good faith in the insurance contract holds ground.
Akshay A-848-2022 Page 5 of 10(b) Income suppression 8.3 The complainant states that as per the submitted income tax return of 2018-2019 and 2019-2020, the gross income shown is Rs.5,00,000/-. So there is no material suppression of facts. The opponent rebuts this submission of the appellant on the ground that the ITR return shows agriculture income as Rs. 1,22,360/- only and therefore has alleged that the LA had disclosed only Rs. 1,20,000/- as agriculture income and the remaining income in the ITR was merely shown in order to obtain high sum insured policies.
8.4 It is pertinent to note here that this Commission had directed the complainant to provide the details of the Deduction under Section Chapter VI-A Section 80C ELSS Rs.1,50,000/-. The rojkaam for the same is reproduced below:
9-12-2022 એ તેઓ . તેઓ સુનાળણી માટે મુદત માાંગે છે . ના ળકી શ્રી હાજર .ે. આળકળેરા sec.80-c હેઠલ રૂ ૧.,૫૦,૦૦૦ બાદ ીધા છે તે સેના છે તેની વળગતો રજૂ -/ .કરળા મુદત માાંગે છે 2/1/2023એ ના ળકી શ્રી હાજર .ે ., તેઓ રૂ ૧.,૫૦,૦૦૦ ની -/ાળતી રજુ કરળા સમય માાંગે છે.
17/2/2023એના ળકી શ્રી હાજર .ે ., તેઓ ાળતી ની મુદ્દત માાંગળા રજુઆત કરે છે.
17/2/2023 એ ના ળકી શ્રી.ે.VC થી હાજર.તેઓ સુનાળણી માટે મુદ્દત માાંગે છે .
15/3/2023 એ ના ળકી શ્રી હાજર .ે ., તેઓ સુનાળણી માટે મુદત માાંગે છે અગાઉ મુદ્દત આેી છેછે લ્ી મુદત આળામાાં આળે છે ..
From the above Rojkaam, it is clearly established that despite this commission granting time to the complainant to produce the details of the investment made and deduction availed under 80C as shown in the ITRs., complainant has failed to produce the same before this commission. This raises suspicion as to whether the complainant has actually made investment of Rs 1,50,000/-as stated in the ITRs and fails to support the stand taken by the complainant that the Akshay A-848-2022 Page 6 of 10 income shown in the ITR is correct. Therefore the opponent is successful in proving that there is material suppression of facts by the DLA on the income and occupation.
8.5 The opponent has relied on the following judgment to support their case.
Reliance Life Insurance Co. Ltd. & Anr. Vs Rekhaben Nareshbhai Rathod, in Civil Appeal no. 4261/2019 the Hon'ble Apex Court has duly observed that the expression 'material' in context of insurance policy can be defined as any contingency or event that may have an impact upon the risk appetite or willingness of the insurer to provide insurance cover. It was rightly appreciated by Hon'ble apex court that it is not for the life assured to decide whether any fact sought in material or not as it follows the test if materiality that prudent insurer would have considered that any particular circumstances was a material fact.
Non-disclosure of other policies
9. The complainant had submitted that on 28/03/2019 the date of the proposal the LA did not hold any other policies. On 28/03/2019, the LA had taken policy from the opponents and HDFC life insurance from the same agent Invictus insurance broking service Pvt. Ltd, Mumbai and Max insurance policy on the same day. The policy was rejected and thus according to complainant since there was no other policy at the time of proposal, there was no suppression of material facts of holding other policies as alleged by the opponent.
9.1 The opponents have produced details of the other policies held by the complainant on page 72 of WS wherein it is shown that the DLA had a Max insurance policy no. 599064920 and HDFC policy no. 21341155. It is also further stated by the opponent that the complainant has filed the complaint in the commission on 23/07/2021 to claim the sum insured from the opponent and on the same day the complainant has also filed another complaint against HDFC Life in respect to the claim repudiated by them. This Akshay A-848-2022 Page 7 of 10 establishes the case of the opponent that complainant is holding more than one policy and yet had not disclosed this information in the proposal form.
9.2 The complainant has not produced any cogent evidence to prove his case. There is no evidence on record by the complainant that LA was not holding other policies as alleged by the opponent and therefore had not declared in the proposal form.
9.3 The complainant has also not controverted the contention of the opponent that a complaint has been filed by the complainant against HDFC life insurance company on the same day of filing of the complaint in the Commission to claim award against repudiation.
9.4 The opponent's case that the DLA had applied for multiple policies prior to the issuance of the opponent's policy is thus sustained. The opponent's contention that there is material suppression on part of the DLA on the ground of another policy is established.
9.5 The opponent has relied on the following judgments.
United India Insurance Co. Ltd. Vs. M.K.J. Corporation, 1996 the Supreme Court has observed that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith forbids either party from non- disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary.
Reliance Life Insurance Co. Ltd Vs Madhavacharya (Revision Petition no: 211 of 2009). Wherein it was held by the National Commission that "Since the insurance between the insurer and the insured is a contract between the parties, the terms of the agreement including applicability of the provision and also its exclusion had to be strictly construed to determine the extent of the liability of the insurer." Therefore, it is to be noted that the Respondent has not done anything against the terms and conditions of the subject policy.
Both the above cases are supporting the contentions of the opponent.
Akshay A-848-2022 Page 8 of 10Suspicious death
10. It is the case of the complainant that the LA had died suddenly of a heart attack at a young age and therefore there was no PM done. The complaint had submitted the death certificate and denied that are any reasons to suspect the death of the LA. The opponents have contended that the complainant has failed to produce any details of the last attending doctor or the doctor who had disclosed the death of the LA and since the LA had died within 4 months of the policy at young age the investigations undertaken by the opponents revealed that the LA was an alcoholic and had uncontrolled Diabetes. It appears as if the death of LA was expected, as a planned purchase of 3 insurance policies with large sum assured was made on 28/3/2019 and 29/3/2019 is established and the LA died within a short period of 4 months of the policy supports the repudiation of claim by the opponent.
11. It is true that the fact of the misrepresentation, fraud and non-
disclosure and the impact of Section 45 of the insurance policy was clearly mentioned in the policy terms and conditions. The opponents have been able to establish that there was breach of policy terms and conditions. The DLA has suppressed material facts and breached Section 45 the principle of utmost good faith of the insurance contract as the complainant had the knowledge of the income and other policies and yet intentionally suppressed this material information from the opponents. Based on the above discussion and observations, the grounds taken by the opponent to repudiate the complainant's claim are tenable.
12. No liability on the insurance company can be fastened as the complainant has failed to establish that there was any deficiency in service on the part of the opponents in repudiating the complainant's claim. We are therefore of the opinion that the order of the Ld. District Commission is fair, just, reasonable and correct in the eye of law and requires no interference and hereby confirm Akshay A-848-2022 Page 9 of 10 the order of the Ld. District Commission. In the interest of justice, we pass the following order.
ORDER
1. Appeal no. 848/2022 is hereby dismissed at the stage of admission.
2. The order of the Ld. District Commission, Sabarkantha at Himmatnagar dated 20/10/2022 in complaint no. 150/2021 is hereby confirmed.
3. No order as to costs.
4. Registry is directed to send certified copy of this judgment to the parties free of cost. Registry is further directed to send copy of this judgment to the District Commission Vadodara through E-mail in PDF format for taking necessary action.
Pronounced in open court today on 17/05/2023.
[Ms. P. R. Shah] [Ms. A. C. Raval]
Member Presiding Member
Akshay A-848-2022 Page 10 of 10