State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Charanjit Singh on 20 January, 2017
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.848 of 2015
Date of Institution: 27.07.2015
Order reserved on:18.01.2017
Date of Decision : 20.01.2017
1. Life Insurance Corporation of India, Divisional Office 4-5
District Shopping Complex, Ranjit Avenue, Amritsar through its
Sr. Divisional Manager/Principal Officer.
2. Life Insurance Corporation of India, Jeevan Jyoti Building,
Sarhali Road, Tarn Taran through its Sr. Branch
Manager/Principal Officer.
.....Appellants/opposite parties
Versus
Charanjit Singh son of S. Puran Singh, resident of Village and Post
Office Baath, Tehsil and District Tarn Taran.
.....Respondent/complainant
First Appeal against order dated
22.06.2015 passed by the District
Consumer Disputes Redressal Forum,
Tarn Taran.
Quorum:-
Shri J. S. Klar, Presiding Judicial Member
Shri J.S. Gill, Member Shri H.S. Guram, Member Present:-
For the appellants : Sh. Piyush Sharma, Advocate For the respondent : None ................................................ J.S KLAR, PRESIDING JUDICIAL MEMBER :-
The appellants have directed this appeal against order dated 22.06.2015 of District Consumer Disputes Redressal Forum Tarn Taran, vide which, complaint of the complainant was accepted by directing OPs to make the payment of Rs.1 lakh; to further pay Rs.11,000/- as consolidated amount of compensation which includes First Appeal No.848 of 2015 2 counsel fee and litigation expenses. Appellants of this appeal are OPs and respondent of this appeal is complainant in the original complaint before the District Forum and they be referred as such hereinafter for the sake of convenience.
2. The complainant instituted the complaint under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that his wife Surjit Kaur with good stout body, obtained insurance policy from OPs namely Bima Gold Policy bearing policy no.473427557, valid from 22.04.2012 onwards. Regular premiums were paid on 25.04.2012, 24.11.2012, 20.05.2013 and on 26.11.2013 and the next premium was to be paid in April, 2014. Surjit Kaur life assured wife of complainant died on 11.01.2014 as natural death. The complainant being legal heir and beneficiary of the policy lodged insurance claim with OPs supported by documents. The complainant was amazed to find letter dated 21.10.2014, repudiating the insurance claim of the complainant. The complainant further pleaded that requisite check up was carried out of life assured, when she took the policy and she was not suffering from any disease. The repudiation of the insurance claim lodged by the complainant after death of his wife Surjit Kaur has been challenged by the complainant in the complaint. Deficiency in service has been alleged by the complainant against the OPs. The complainant prayed that OPs be directed to pay the assured amount of Rs.1 lakh of Surjit Kaur life assured to him with interest @24% per annum from the date of her death till actual payment, besides First Appeal No.848 of 2015 3 Rs.50,000/- as compensation to the complainant for mental harassment; to pay Rs.5000/- as litigation expenses; and to pay Rs.11,000/- as counsel fee.
3. Upon notice, OPs appeared and filed written reply and contested the complaint of the complainant vehemently. It was averred that complaint is not maintainable, because Surjit Kaur life assured willfully and fraudulently withheld the correct information regarding her state of health, when she took the policy no.473427557 with date of commencement of policy as 23.04.2012. The diseased life assured Surjit Kaur (hereinafter referred as DLA) was not keeping good health prior to date of proposal. She remained admitted in Fortis Escorts Hospital Department of Nephrology and was treated between 14.10.2011 and 21.10.2011, as a case of Medical Renal Disease- CRF, Coronary Artery Disease, LV Dysfunction and Hypertension. She died on 11.01.2014 within 2 years of taking the policy. She did not disclose the material facts, when she took the policy regarding her state of health and withheld the material information. The complaint has been filed to grab the public money by the complainant only. Any deficiency in service was vehemently denied by OPs. It was pleaded that misrepresentation was involved in this case and the contract of insurance was rightly declared null and void by the OPs, as per provisions of Section 17 and 18 of the Indian Contract Act, 1872. As per section 45 of the Insurance Act, 1938, the policy shall be void in case, any material information has been withheld by the DLA when he/she took the First Appeal No.848 of 2015 4 policy. The contract of insurance is based on the principle of uberrima fides and DLA was supposed to disclose the material information to the insurer at the time of taking the policy. On merits, the fact of taking the policy from OP by Surjit Kaur was not disputed. It was admitted that DLA expired on 11.01.2014. It was emphatically pleaded that she was treated between 14.10.2011 to 21.10.2011 as a case of medical renal disease- CRF, coronary Artery disease, LV dysfunction and hypertension. She knowingly gave false answers to questionnaire no.11(a), 11(b), 11(c), 11(d), 11(e) and 11(i) of the proposal form. The OPs prayed for dismissal of the complaint.
4. The complainant tendered in evidence affidavit Ex.C-1 alongwith documents Ex.C-2 to C-8 and closed the evidence. As against it, OPs tendered in evidence affidavit with documents Ex.OPs/1 to Ex.OPs/9 and closed the evidence. On conclusion of evidence and arguments, the District Forum accepted the complaint of the complainant as detailed in the order. Aggrieved by the order of the District Forum, the OPs, now appellants have filed this appeal against the same.
5. We have heard the learned counsel for the parties and have also examined the record of the case. The entire controversy revolves around this fact in this case whether life assured was suffering from renal disease- CRF, coronary Artery disease, LV dysfunction and hypertension before taking the policy in this case. The question for adjudication is whether she fraudulently concealed the material information from the OPs, when she took the policy or First Appeal No.848 of 2015 5 not. It is not disputed fact that Surjit Kaur wife of complainant was assured with OPs by virtue of above policy. Similarly, the point of payment of premium is also not disputed fact in this case. We are to concentrate on this point for adjudication of this appeal as to whether the life assured deliberately concealed the material information regarding her state of health, when she filled the proposal form in this case or not.
6. The core point of controversy can be determined by reference to evidence adduced on the record by the parties. Ex.C-1 is the affidavit of complainant Charanjit Singh in support of his averments. He testified in his affidavit that life assured was healthy, when she took the policy from OPs. She died on 11.01.2014 as nature death. He reiterated that the repudiation of the contract of insurance by OPs is tainted by unfair practice only. Ex.C-3 is the death certificate of Surjit Kaur proving her death on 11.01.2014. Proposal deposit receipt is Ex.C-4 dated 25.04.2012 of Rs.4077/-. Ex.C-5 to Ex.C-7 are renewal premium receipts. Ex.C-8 is the death claim under policy in dispute of Surjit Kaur DLA. This is the repudiation of the insurance claim by OPs on the ground that the life assured since diseased suppressed the material fact with regard to her illness, when she entered into contract of insurance with OPs. The OPs led in evidence affidavit Ex.OPs/1 of Yogender Singh Sidodia, Manager Legal and CRM. He testified that Surjit Kaur DLA remained admitted in Fortis Escorts Hospital for the period between 14.10.2011 and 21.10.2011, as a case of medical renal disease- First Appeal No.848 of 2015 6 CRF, coronary artery disease, LV dysfunction and hypertension. He further testified that she expired within 2 years period of taking the policy. He stated that the per conditions or privileges of the policy contract printed on the back of the policy bond, in para no.5 under the heading 'forfeiture in certain events', Section 45 of Insurance Act, 1938 authorizes the Insurance Company to repudiate the contract of insurance, in case any material information has been fraudulently suppressed by the life assured at the time of filling the proposal form. Ex.OPs/2 is the proposal form for insurance by the life assured. In the questionnaire no.11(a) to 11(e) and 11(i), life assured stated that she suffered from no disease, when she filled up the proposal form. She also signed the declaration with proposal form attached with it. The proposal form filled in by the complainant has been carefully examined by us. Ex.OPs/3 is the document produced by the OPs regarding the claim under above policy that she was admitted in hospital from 14.10.2011 to 21.10.2011, on 01.10.2012 and from 03.12.2012 to 05.12.2012. She suppressed the material information from the OPs, when she took the contract of insurance from OPs. Claim inquiry report is Ex.OPs/4. Ex.OPs/5 is the statement of claimant. Ex.OPs/6 is the discharge summary of Surjit Kaur life assured issued by Fortis Escorts Hospital department of Nephrology, showing her date of admission 19.0.2.2013 and date of discharge as 20.02.2013 and department of cardiology showing her date of admission 14.10.2011 to 21.10.2011 and recorded the diagnosis as "medical renal disease- CRF, coronary artery disease, LV First Appeal No.848 of 2015 7 dysfunction (EF 30%) hypertension. We cannot refuse to rely upon the report of Fortis Escort Hospital, which is renowned hospital in health matters and we do not find any ground to reject the discharge summary dated 21.10.2011 of life assured. Consequently, we hold that life assured Surjit Kaur was a patient of medical renal disease- CRF, coronary artery disease, LV dysfunction (EF 30%) hypertension on 14.11.2011 before taking the insurance policy. She was aware of the above referred health problems, when she entered into the contract of insurance in this case with OPs. She fraudulently suppressed the above material information with regard to her state of health and gave wrong answers in the proposal form to secure the benefit of insurance. The contract of insurance is based on the principle of uberrima fides. Whosoever enters into the contract of insurance is supposed to tell the correct information to the insurance company, so that it could make up its mind whether to accept the contract or reject the same. Section 45 of the Insurance Act further authorizes the insurance companies to repudiate the Contract of Insurance, where the consent of the insurance companies has been obtained by means of fraudulent material information. In view of law laid down by the National Commission in case titled as "Life Insurance Corporation of India & others Vs. Nita Bhardwaj"
2014(1)CPC-438 and the law laid down in "P.C. Chako Vs. Chairman, LIC of India" IV(2007)CLT(SC)229 by the Apex Court and law laid down by the Apex Court in "Satwant Kaur Sandhu Vs. New India Assurance Company" (Legal Digest, April 2010 page First Appeal No.848 of 2015 8
1) Scale 2009 8 SCC// 2009 IV CPJ-8 SC, we hold the repudiation of the insurance contract by insurance company/OPs is justifiable in this case. The contract of insurance has to be interpreted sensu-
stricto; we cannot interpolate anything in the contract of insurance, as the parties are strictly bound by the terms and conditions of the contract of insurance. Clause 12 of the terms and conditions of the insurance policy authorizes the insurance company to repudiate the contract of insurance under Section 45 of the Insurance Act, 1938, in case of suppression of any material information fraudulently by the proposer. The order of the District Forum under challenge in this appeal is not sustainable in the eye of law in our opinion.
7. As a result of our above discussion, we accept the appeal of the appellant and set aside the order of the District Forum dated 22.06.2015. Resultantly the complaint of the complainant stands dismissed.
8. The appellants had deposited the amount of Rs.25,000/- with this Commission at the time of filing the appeal and further deposited the amount of Rs.54,415/- in compliance of order of this Commission. Both these amounts alongwith interest, which accrued thereon, if any, be remitted by the Registry to appellant no.1 by way of a crossed cheque/demand draft after the expiry of 45 days.
9. Arguments in this appeal were heard on 18.01.2017 and the order was reserved on 18.01.2017. Copies of the orders be communicated to the parties as per rules.
First Appeal No.848 of 2015 9
10. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(J. S. KLAR) PRESIDING JUDICIAL MEMBER (J.S. GILL) MEMBER (H.S. GURAM) MEMBER January 20, 2017 (MM)