State Consumer Disputes Redressal Commission
Davinder Kaur @ Jagwinder Kaur vs Sbi Life Insurance Company Limited on 8 October, 2013
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.465 of 2010.
Date of Institution: 25.03.2010.
Date of Decision: 08.10.2013.
1. Davinder Kaur @ Jagwinder Kaur wd/o of late Sh. Iqbal Singh;
2. Khushwinder Singh S/o late Sh. Iqbal Singh;
Both resident of Village Balam Garh, District Muktsar.
.....Appellants.
Versus
1. SBI Life Insurance Company Limited through its Chairman-cum-
Managing Director, 2nd Floor, Kapas Bhawan, Plot No.3-A,
Sector-10, CBD Belapur, Navi Mumbai-400614.
2. SBI Life Insurance Company, through its Branch Manager, 83/1,
Liberty Chowk, Guru Kanshi Marg, Gupta Complex, Bathinda-
151001.
3. State Bank of Patiala through its Branch Manager, Raman Mandi,
Tehsil Talwandi, District Bathinda.
...Respondents.
First Appeal against the order dated
23.12.2009 passed by the District
Consumer Disputes Redressal Forum,
Bathinda.
Before:-
Shri Inderjit Kaushik, Presiding Judicial Member.
Shri Jasbir Singh Gill, Member.
...................................
Present:- Sh. Hitesh Sood, Advocate, counsel for the appellants.
Ms Jaimini Tiwari, Advocate for Sh. Rajneesh Malhotra, Advocate, counsel for respondents no.1 & 2.
Respondent no.3 Exparte.
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INDERJIT KAUSHIK, PRESIDING JUDICIAL MEMBER:-
Smt. Davinder Kaur @ Jagwinder Kaur and another, appellants/complainants (In short "the appellants") have filed this First Appeal No.465 of 2010 2 appeal against the order dated 23.12.2009 passed by the learned District Consumer Disputes Redressal Forum, Bathinda (in short "the District Forum").
2. Facts in brief are that the appellants filed a complaint under section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the respondents/opposite parties (hereinafter called as "the respondents"), making the averments that appellant no.1 is the widow and appellant no.2 is the son of late Sh. Iqbal Singh and they are the legal heirs of deceased Sh. Iqbal Singh. Said Iqbal Singh took a Master Insurance Policy No.860000555509, by paying Rs.7,592/- to respondent no.1 through respondent no.2. The period of the policy was from 01.12.2006 to 01.12.2016. Respondent no.2 is also agent of respondent no.1. Both the respondents are liable jointly and severally.
3. On 05.08.2007, said Iqbal Singh got up from charpoy for taking water, but he suddenly fell down due to fit and his forehead struck against the wooden plank of the cot and he died within a few minutes. Appellant no.1 filed the claim papers with respondent no.2 and respondent no.2 forwarded the same to respondent no.1, but the payment of the insurance was not made. A legal notice was served on 16.07.2008 on the respondents and respondent no.1 filed the reply dated 24.07.2008 and through the reply dated 24.07.2008, respondent no.1 repudiated the claim of the appellants on the grounds that prior to the insurance, the insured was suffering from renal cell carcinoma, but the same was not disclosed at the time of taking the policy. This ground is taken by the respondent just to repudiate the claim. The repudiation amounts to unfair trade practice as well as deficiency in service.
First Appeal No.465 of 2010 3
4. It was prayed that the respondents may be directed to pay Rs.3.00 lacs i.e. the insurance amount, Rs.50,000/- as compensation and Rs.5,500/- as litigation expenses.
5. In the written version filed on behalf of respondents no. 1 & 2, preliminary objections were taken that the contract of insurance is a contract of utmost good faith and in the present case, the deceased life assured (in short "DLA") committed the breach of this principle and the complaint is liable to be dismissed. There is no deficiency in service or negligence on the part of respondent no.3. The DLA committed a fraud with an intention to obtain insurance cover, by suppressing the ailment of renal cell carcinoma and the contract is void. As per Section-45 of the Insurance Act, 1938, the insurer has to prove the suppression of fact only when the policy is called in question after two years on the date on which it is affected. In the present case, the policy resulted in death claim within eight months and five days and the repudiation action has been taken within two years and Section 45 is not applicable and the repudiation is just and legal. The complaint has been filed with malafide intention and to harass the answering respondent. As per the law, the respondents are within their right to repudiate the claim.
6. On merits, it was submitted that the DLA applied for Swadhan Group Insurance Scheme under Master Policy No.86000055509. The risk commenced on 01.12.2006 for a sum assured of Rs.3.00 lacs. In the group insurance, the privity of contract is between the Master Policy Holder and the insurer. Individual members are issued certificate of insurance. For getting the insurance cover, life assured has to submit the declaration of good health along with other details in the membership form, confirming that he or she is in sound state of health and does not suffer from any illness or critical illness. First Appeal No.465 of 2010 4 Declaration of good health is the sole basis of deciding the eligibility as to whether a member can be granted an insurance cover or not.
7. In the membership form for Swadhan Group Insurance Scheme, the DLA signed the declaration for good health and declared that he is not suffering from any illness. The DLA died on 05.08.2007 and investigation was conducted. It was revealed in the investigation that the DLA was suffering from renal cell carcinoma prior to the date of enrollment in the insurance cover. As per discharge summary of Dayanand Medical College & Hospital (DMCH), Ludhiana, the DLA was admitted on 28.01.2006 and discharged on 15.02.2006 and was diagnosed for renal cell carcinoma prior to signing of membership form- cum-declaration of good health on 28.09.2006. The material facts were suppressed and the same was fraudulent suppression and the claim was rightly repudiated. Other similar pleas as taken in preliminary objections were repeated and denying allegations of the complaint, it was prayed that the complaint may be dismissed with costs.
8. Respondent no.3 did not contest the complaint and was proceeded against exparte.
9. Contesting parties led evidence in support of their respective contentions by way of affidavits and documents.
10. After going through the documents and material placed on file and after hearing the learned counsel for the parties, the learned District Forum observed that the deceased was guilty of suppressing the material fact/disease at the time of obtaining the insurance policy and the claim was rightly repudiated and the complaint was dismissed.
11. Aggrieved by the impugned order dated 23.12.2009, the appellants have come up in appeal.
First Appeal No.465 of 2010 5
12. We have gone through the pleadings of the parties, perused the record of the learned District Forum and have heard the arguments advanced by the learned counsel for the parties, except respondent no.3 who has not contested the appeal and was proceeded against exparte.
13. The appeal was filed on the grounds that there is no nexus between the cause of death and ailment, because the DLA did not die of the alleged ailment, but accidentally by striking against the wooden pole of the cot. No fact was concealed. Respondent no.3 has not turned up in the court to state true and actual facts and was proceeded against exparte and adverse inference could be drawn against respondent no.3. No doctor of the DMC was examined nor any evidence was led regarding the discharge certificate. Simply placing on record the documents are not sufficient. No affidavit of the investigator was filed. Principle of utmost good faith is applicable to both the parties. The respondents have taken the signatures of the deceased on blank papers without disclosing the contents. The death occurred in the house and no postmortem was preferred. The declaration was rightly made, but the District Forum has not considered the same. The order passed by the District Forum is not sustainable and liable to be set aside and the appeal may be allowed.
14. On the other hand, the counsel for respondents no.1 & 2 has contended that the impugned order passed by the District Forum is legal and valid and there is no ground to interfere with the same and the appeal may be dismissed.
15. We have considered the respective version/submissions of the parties and have minutely scrutinized the entire record. First Appeal No.465 of 2010 6
16. The DLA took the Master Insurance Policy and certificate of insurance Ex.C-4 was issued to him on 24.12.2006. The reply dated 24.07.2008 was filed to the notice of the appellants and in this, the reasons for repudiation were given. Ex.R-1 is the Group Swadhan Master Policy issued by SBI Life Insurance and under clause-10 "Forfeiture", it was provided as follows:-
"10. Forfeiture:-
Any insurance effected hereunder shall be rendered null and void and all moneys paid in respect of that assurance shall belong to the Company, if
a) any conditions herein mentioned, or any endorsements made or any variations evidenced by exchange of documents hereto are contravened; or
b) it is found that a statement made
- in the Member Data given to the Company; or
- in any other document leading to the issue of the Master Policy;
or
- in any other document necessary to keep the Master Policy in force was inaccurate, or false, or not made in good faith, or any material matter or fact was suppressed, then and in every such case (but subject to the provisions of Section 45 of the Insurance Act, 1938) and all claims to any benefit under this Master Policy shall cease, excepting in so far as whatever relief may be granted as per the law."
17. The DLA filed the proposal form Ex.R-3 and under the head 'Declaration for Good Health", declared as follows:-
"I declare that I am in sound health, do not have any physical defect/deformity, and perform my routine activities independently. First Appeal No.465 of 2010 7 I have never suffered or have been suffering from diabetes hypertension (blood pressure) or have not been hospitalized for any ailment during the last 3 years for critical illness @ or a condition requiring medical treatment for a critical illness as on date.
@ Critical illness is defined as follows:- The life to be insured should not:- have suffered or be suffering from cancer, be taking treatment for heart disease, have undergone/or have been advised medically to undergo chest/heart surgery/surgery requiring full anesthesia within the following six months, have kidney and/or liver failure, have suffered or be suffering from stroke, paralysis or any mental illness, have note undergone any major surgery requiring full anesthesia during the last 12 months, have suffered or be suffering from AIDS or venereal diseases.
- - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - -
I hereby declare that the above statements are true and complete in every respect and that I have not withheld or omitted to give any information that may influence my admission into the Group Insurance Scheme of SBI Life Insurance Co. Ltd. I hereby agree that the declaration shall form the basis of any admission into the Group Insurance Scheme, and If any untrue averment be contained therein, I, my heirs, executors, administrators and assignees shall not be entitled to receive any benefits under the Group Insurance Scheme."
18. From the above conditions and declaration, it is clear that any insurance affected shall be rendered null and void in case it is First Appeal No.465 of 2010 8 found that a statement made was inaccurate or false or not made in good faith or any material matter was suppressed. The declaration of good health was made on 28.10.2006 and the deceased declared him to be fit and in good health and not suffering from any disease or critical illness and particularly, the cancer. The appellants have not placed on record any document pertaining to the illness of DLA, but the respondent have brought on record the investigation conducted by investigator Sh. M.L. Bhatia Ex.R-4 and investigator in the concluding para, reported that the DLA remained admitted in DMC from 28.01.2006 to 15.02.2006 which is before the risk date. Thereafter, the respondents obtained the discharge card Ex.R-5 from DMC & Hospital, Ludhiana and the certificate of hospital treatment Ex.R-6 as per which the DLA was admitted on 28.01.2006 and the disease diagnosed was 'renal cell carcinoma'. This was a material information regarding the health of the DLA and the DLA knew about it, but he intentionally and knowingly withheld the information and gave declaration, knowing well that he is making the declaration against the record and is suppressing the material fact of having suffered cancer of renal.
19. The Hon'ble Supreme Court interpreted the terms "material fact" in the judgment reported as Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., 2009 CTJ 956 (Supreme Court) (CP) as under:-
"17. The terms "material fact" is not defined in the Act and, therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be "material'.First Appeal No.465 of 2010 9
20. In view of above discussion and the law laid down, since the deceased life assured had suppressed material facts while filing the proposal form, therefore, the respondents were entitled to repudiate the insurance claim. The order passed by the District Forum is detailed and speaking and needs not to be interfered with.
21. Accordingly, the appeal is dismissed and the impugned order under appeal dated 23.12.2009 passed by the District Forum is affirmed and upheld. No order as to costs.
22. The arguments in this appeal were heard on 27.09.2013 and the order was reserved. Now the order be communicated to the parties.
23. The appeal could not be decided within the stipulated timeframe due to heavy pendency of court cases.
(Inderjit Kaushik) Presiding Judicial Member (Jasbir Singh Gill) Member October 08, 2013.
(Gurmeet S)