State Consumer Disputes Redressal Commission
Aviva Life Insurance, Claim Department ... vs Sharanjit Kaur on 5 June, 2014
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.1943 of 2010.
Date of Institution: 10.11.2010.
Date of Decision: 05.06.2014.
1. Aviva Life Insurance, Claim Department, Aviva Tower, Sector
Road, Opp. Party Golf Course, DLF Phase-5, Sector 23,
Gurgaon, Haryana.
2. Aviva Life Insurance, Regd. Office, 2nd Floor, Parkash Deep
Building, 7 Tolstoy Marg, New Delhi.
3. The Branch Manager, Aviva Life Insurance, Branch Canara
Bank Building, Mall Road, Bathinda.
4. The Branch Manager, Aviva Life Insurance, SCO 32, 2nd Floor,
Pal Plaza, B Block, Ranjit Avenue, Amritsar.
.....Appellants/Opposite Parties.
Versus
Sharanjit Kaur wife of late Sh. Jagminder Singh Jakkar, R/o C-2203,
Ranjit Avenue, Amritsar.
....Respondent/Complainant.
First Appeal against the order dated
10.06.2010 passed by the District
Consumer Disputes Redressal Forum,
Amritsar.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member.
Shri Jasbir Singh Gill, Member.
Present:-
For the appellants : Sh. Sandeep Suri, Advocate.
First Appeal No.1943 of 2010 2
For the respondent: Sh. Rajesh Bhatia, Advocate.
.............................................. J. S. KLAR, PRESIDING JUDICIAL MEMBER:-
The instant appeal has been preferred by the appellants, who were opposite parties in the original proceedings in the complaint (hereinafter referred to as "the opposite parties") against the impugned order dated 10.06.2010 passed by the District Consumer Disputes Redressal Forum, Amritsar (in short, "the District Forum").
2. The brief facts of the complaint are that respondent of this appeal, who is complainant, to be referred as such hereinafter, filed a complaint u/s 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the opposite parties, on the allegations that Joginder Singh Jakkar, since deceased, husband of the complainant procured a life insurance policy vide No.LSP1638372 from the opposite parties in the year 2007 and total sum assured was Rs.5 lacs. First premium of said policy of Rs.50,000/- was duly paid by late husband of the complainant (the insured in this case) and complainant was appointed as nominee therein. Husband of complainant died on 15.03.2008 at Amritsar and he was self employed person and he was earning his livelihood by way of self employment at the time of his demise. Husband of complainant had good health at the time of filling the proposal form for insurance policy. Husband of the complainant also prepared policy for his wife in the year 2006 for a sum of Rs.5 lacs and premium of Rs.50,000/- First Appeal No.1943 of 2010 3 thereon was to be paid annually to the opposite parties in the year 2006. After the death of her husband, complainant being nominee of her husband lodged the claim with the opposite parties by supplying the necessary documents like death certificate, hospital discharge certificate in original to them. The complainant is an aged lady and her children are dependent upon her. The opposite parties repudiated the genuine claim of the complainant, necessitating the filing of the present complaint. The complainant has prayed in this case that a direction be issued to the opposite parties to pay an amount of Rs.5 lacs for which the policy was taken, along with interest @ 18% p.a., besides payment of Rs.11,000/- as litigation expenses and Rs.1 lac as compensation for mental harassment.
3. The brief written reply of the opposite parties is that the insured was suffering from hypertension and he concealed this fact from the opposite parties at the time of filling up his proposal form for taking the insurance policy. On account of concealment of this fact of hypertension ailment by the insured, the insurance claim was rightly repudiated by the opposite parties. The false statement made in the proposal by the insured form renders the contract of insurance null and void. The insured has failed to disclose the material facts in the proposal form at the time of taking the policy. In the column of questionnaire to the effect, if the proposer was suffering from high blood pressure, angina, heart attack, stroke or any other disorder of heart or circulation, the insured replied in the negative. This was the material concealment of fact by the insured from the opposite parties which led to the repudiation of this contract of insurance First Appeal No.1943 of 2010 4 between the two. It was denied that the total sum insured was Rs.5 lacs, rather the total sum insured was Rs.2.50 under the policy. The policy holder died on 15.03.2008. Since the insured was suffering from the disorder of hypertension when he took the policy, he concealed this fact by suppressing it, therefore, it led to repudiation of the claim of insurance by the opposite parties. The opposite parties prayed for dismissal of the complaint on these points.
4. The complainant tendered in evidence her own affidavit Ex.C-1 along with letter issued by opposite party dated 26.12.2008 Ex.C-2, certificate issued by the hospital Ex.C-3, Medical Examiner's report of doctor of opposite parties supplied by the opposite parties in the column Ex.C-4 to Ex.C-9, renewal premium receipts Ex.C-10 and Ex.C-11. In rebuttal of it, the opposite parties tendered in evidence affidavit of Pankaj Saini, Asstt. Manager Ex.R-1, Ex.R-2 copy of insurance policy, Ex.R-3 policy schedule, Ex.R-4 checklist of documents submitted by the claimant, Ex.R-4 is also marked in duplicate which is UTI Mutual Fund produced by the opposite parties along with medical record of insured, Ex.R-5 history sheet of the insured, Ex.R-6 is the requisition of certain documents by the opposite parties from the complainant, Ex.R-7 the documents of the complainant supplying some information. Ex.R-7 is the hypertension disorder questionnaire produced by the opposite parties and Ex.R-8 is the letter of repudiation of claim. On conclusion of evidence and arguments, the District Forum accepted the complaint of the complainant by virtue of impugned order and directed the opposite parties to pay the amount of Rs.5 lacs along with interest @ 6% p.a. First Appeal No.1943 of 2010 5 to the complainant along with Rs.2,000/- as litigation expenses. Aggrieved by the impugned order, the opposite parties have preferred the present appeal.
5. We have heard learned counsel for the parties at considerable length and have also examined the record of the case. The factum of taking insurance policy by the husband of the complainant being insured from the opposite parties is an indisputable fact in this case. Similarly, the fact that an amount of Rs.50,000/- was paid as premium by insured is not disputed. The point of complainant being nominee of her husband's insurance policy is also an admitted fact. The point for adjudication as canvassed by the counsel for appellants in the appeal is that the insured was suffering from health disorder of hypertension for the last 8 years and he has suppressed this fact at the time of taking up the policy. The insured answered it as Nil in the questionnaire when asked, he was suffering from hypertension, angina or heart ailment or any other disorder of blood circulation. History sheet of policy holder was taken from Hartej Maternity & Nursing Home where he was admitted and it is shown that he was suffering from hypertension for the last 8 years. Even the certificate issued by Dr. Rakesh Arora dated 24.08.2008 has recorded that the insured was suffering from hypertension before his death. This material fact has been suppressed by not disclosing it by the insured in the insurance policy and hence, it rendered the contract of insurance null and void. It was also submitted that the coverage for the insurance was for Rs.2.50 lacs and not Rs.5 lacs.
First Appeal No.1943 of 2010 6
6. Some evidence is required to be examined by us to conclude the controversy raging in this case. The affidavit of the complainant Ex.C-1 has been tendered in this case to the effect that the genuine claim of the complainant has been repudiated pertaining to her late husband by the opposite parties without any valid reason. This matter has been contended in the complaint as well as in the affidavit sworn by Sharanjit Kaur complainant vide Ex.C1 on record. Ex.C-2 is the repudiation of claim by the opposite parties. Ex.C-3 is the certificate of Hartej Maternity and Nursing Home to the effect that Joginder Singh Jakkar, insured remained admitted in the hospital from 12.03.2008 to 15.03.2008 and expired on 15.03.2008 due to sudden cardiac arrest. He was suffering from chest pain and was diagnosed to have hypertension. Ex.C-4 is the document of opposite parties which has been brought on record by the complainant to the effect that Dr. Paramjit Singh, who is doctor of the opposite parties, medically examined the insured at the time of taking the insurance policy by the insured and he found no disorder in the health of the insured at that time. Even the blood pressure of the insured was recorded normal by Dr. Paramjit Singh vide Ex.C-4 to Ex.C-7 on the record. Ex.C-8 is the Pathological Diagnostic Centre's report .
7. In rebuttal of it, the opposite parties relied upon affidavit of Sh. Pankaj Saini, Asstt. Branch manager to the effect that the insured was suffering from disorder of hypertension, but he did not disclose this material fact when he took the insurance policy. He replied in negative to the specific question, if he was suffering from high blood pressure, angina, heart stroke or any other disorder of First Appeal No.1943 of 2010 7 heart or circulation. He suppressed this material fact at the time of taking the policy. This is the misstatement and suppression of material fact, which rendered the contract of insurance null and void. The sum assured was Rs.2.50 lacs and Sharanjit Kaur was nominee of the insured in the insurance policy. On December 17, 2008, the opposite parties received death claim along with policy document and medical treatment record from the complainant and processed the same. The deceased was admitted in Hartej Maternity & Nursing Home and he was found suffering from hypertension and has been taking medication therefor. Copy of history sheet of the insured, since deceased, is Ex.R-5. On December 26, 2008, the opposite parties received a letter along with hypertension questionnaire dated 24th December, 2008 duly filled by Dr. Rakesh Arora, SMO, Civil Hospital, Abohar. The answer had been that the insured had been suffering from hypertension for 8 years. The documents relied upon by the opposite parties are Ex.R-2 i.e. insurance policy, detail of insurance policy Ex.R-3, policy schedule Ex.R-4, checklist of documents submitted by claimant and other medical history of the insured from Hartej Hospital is on the record along with certificate of the doctor. Ex.R-5 is the history sheet of the insured. Ex.R-6 is the requisition to demand certain further documents. Ex.R-7 is the reply of the complainant regarding hypertension disorder questionnaire. Ex.R-8 is the repudiation of the claim.
8. Now the core point which emerges for disposal before this Commission is whether a person, who is suffering from hypertension and does not disclose it in the proposal form, it First Appeal No.1943 of 2010 8 tantamounts to non-disclosure of material facts or not? On this point, the appellants have referred to the law laid down by this Commission in case "Life Insurance Corporation of India Vs Piari Devi & Ors.", II (2008) CPJ-156, wherein it has been held that the insured died within 10 months of taking the policy. The insured was a patient of Myocardial Infarction since 1996, which fact was not disclosed, while taking up the insurance policy. History of disease was given by the deceased himself at the time of admission in the hospital. It was observed that this major disease which was not disclose in the proposal form by the insured amounts to fraudulent suppression of material facts. The above cited authority is distinguishable from the facts of this case. In the cited authority, the insured was suffering from serious disease of Myocardial Infarction since 1996 and non-disclosure of which invalidated the contract of insurance. This authority would not help the appellants in view of different facts of this case. Similarly, the appellants referred to law laid down in "V. Nalina Vs. LIC of India & Ors." I (2008) CPJ-144"
by Tamil Nadu State Consumer Disputes Redressal Commission to the effect that suppression of material fact by the insured tantamounts to justification for repudiation of the claim by the insurer. No exception can be taken to this effect that if a person was suffering from some major and serious disease and he does not disclose it in the proposal form, then it tantamounts to suppression of material fact which justified the repudiation of claim by the insurance company as the contract of insurance is premised on the principle of utmost good faith. But herein, we find that hypertension has been First Appeal No.1943 of 2010 9 taken as a ground by the opposite parties to seek invalidation of this contract of insurance. Firstly, Dr. Paramjit Singh, a panelist doctor of the opposite parties himself medially examined the insured at the time of taking the insurance policy by the insured. He found no disorder of any hypertension in the insured at that time. This fact is evident on the record from Ex.C-4 to Ex.C-6.These documents are quite vital to determine the point in issue in this case. The opposite parties cannot back out from the report of their own doctor Ex.C-4 to Ex.C-6 on the record in this case. The opposite parties also relied upon law laid down in "M/s Aviva Life Insurance Company India Ltd. Vs Manohar Boghawat" Revision Petition No.3694 of 2011, decided on 21st January, 2013 by the Hon'ble National Commission on this point. This judgment is to the effect that where the insured was suffering from cirrhosis caused by chronic alcoholism and he has not disclosed these material facts, when he took the insurance policy, it was held to be a valid ground to repudiate the claim. This authority is again distinguishable in this case because in the cited authority, the insured was suffering from serious disease of cirrhosis and he had intentionally suppressed this fact.
9. On the other hand, our own Hon'ble High Court has held in Civil Writ Petition No.20040 of 2008 decided on 17.12.2008 "Max New York Life Ins. Co. Ltd. Vs Insurance Ombudsman, Chandigarh & Anr.", that where the claim is repudiated on the ground of illness of hypertension of insured, but no supporting document could be furnished to substantiate the statement by the opposite party on the basis of hospital treatment certificate, it was First Appeal No.1943 of 2010 10 not justified. In this authority, it has been stated that there is proof of insured having suffering from hypertension. It has been further observed by our Hon'ble High Court that the hypertension is a disease which can escape the attention of a person and is required to be diagnosed by experts only. The duty to disclose is limited to the facts within the knowledge of the insured alone. A mistaken statement about a material fact made honestly, that is, with belief in its truth, will not affect the validity of the contract. Herein, the panelist doctor of the opposite parties Dr. Paramjit Singh found no disorder of hypertension in the insured's health when he medically examined him at the time of taking the insurance policy by the insured. Even otherwise, there is no affidavit on the record of the doctor where he was admitted, supported by documents produced by the opposite parties that the insured was suffering from hypertension for the last 8 years, assuming it to be a disease. The answers to the questions are representations and false representation will not operate to vitiate the contract or avoid the policy unless the fact is actually material or clearly intended to be made material by the agreement between the parties. The insurer can avoid the policy only by proving that the statement is false or fraudulent or that it was false and material to the risk. Our own Hon'ble High Court has further held in case "Veena Sharma Vs. Life Insurance Corporation of India" 1999 (1) R.C.R. (Civil) 646 that mere non-mentioning of insured being a patient of hypertension did not amount to suppression of material facts, so as to entitle the respondent to repudiate the claim. As already mentioned above, this Commission strongly relies upon the report of First Appeal No.1943 of 2010 11 Dr. Paramjit Singh Ex.C-4 to Ex.C-6 on the record, the doctor of the opposite parties, vide which he medically examined the insured and found no traces of hypertension in him, when he took the insurance policy. Even otherwise, the hypertension could escape the notice of a person unless it is detected by an expert. It cannot be said that the insured had deliberately concealed the material fact from the insurer, so as to render the contract of insurance invalid. We are further fortified by the view of State Consumer Commission of Himachal Pradesh in "ICICI Lombard General Ins. Co. Ltd. Vs Jasbir Singh", reported in 2014 (1) CLT-220, wherein it has been held that hypertension is a life style disease and is easily controllable with conservative medicines and is not a justifiable ground to repudiate the contract of insurance. Due reliance has also been placed in the above referred authority by the Himachal State Consumer Commission on law laid down by the Hon'ble National Commission in "Bajaj Allianz General Ins. Co.Ltd. Vs Valsa Jose", IV (2012) CPJ-839 (NC).On the basis of above referred law, we hold that the repudiation of insurance contract by the opposite parties was not justifiable on the ground of suppression of disease of hypertension as hypertension is a life style disease easily controllable with conservation medication.
10. The next submission of the appellants is that the insurance policy was Rs.2.50 lacs and not for Rs.5 lacs. We find merit in this submission of the opposite parties. Vide Ex.R-2, insurance policy, the sum assured was of Rs.2.50 lacs and not Rs.5 lacs. The District Forum overlooked this material point and preferred First Appeal No.1943 of 2010 12 to pay the amount of Rs.5 lacs along with interest from the date of repudiation till its payment instead of insured amount of Rs.2.50 lacs. The order of the District Forum under appeal is modified pronto to the effect that the opposite parties are directed to pay Rs.2.50 lacs, which is the sum assured in the policy, instead of Rs.5 lacs to the complainant, as awarded by the District Forum in the impugned order.
11. Accordingly, the opposite parties are directed to pay Rs.2.50 lacs to the complainant along with interest @ 9% p.a. from the date of repudiation till realization. The order of the District Forum regarding amount of litigation expenses is not disturbed in this appeal. Except the above modification in the impugned order of District Forum, the appeal is partly accepted.
12. The appellants had deposited the amount of Rs.25,000/- with this Commission at the time of filing of the appeal and another sum of Rs.1 lac vide receipt dated 17.02.2011 in compliance with the order dated 22.11.2010 passed by this Commission. Both these amount with interest accrued thereon, if any, be remitted by the registry to the complainant, nor respondent in appeal, by way of a crossed cheque/ demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants. Remaining amount as per this order shall be paid by the appellants to the complainant within 45 days of receipt of copy of the order.
13. Arguments in this appeal were heard on 04.06.2014 and the order was reserved. Now the order be communicated to the First Appeal No.1943 of 2010 13 parties. The appeal could not be decided within the stipulated period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (JASBIR SINGH GILL) MEMBER June 05, 2014.
(Gurmeet S) Referred to Reporter (J. S. KLAR) PRESIDING JUDICIAL MEMBER