National Consumer Disputes Redressal
Lic Of India vs K. Purushothama on 17 August, 2006
Equivalent citations: IV(2006)CPJ64(NC)
ORDER
P.D. Shenoy, Member
1. Aggrieved by the order of the Karnataka State Consumer Disputes Redressal Commission, Bangalore dated 6.7.2005, the Life Insurance Corporation of India has filed this revision petition.
Facts of the case, in brief are as follows:
2. Mr. K. Purushothama is the respondent in this case. Complainant is the husband of the deceased Smt. Vishalakshi who was the holder of the LIC Policy for a sum of Rs. 1.00 lakh. This policy was issued on 12.2.1998. Smt Vishalakshi died on 27.9.1998 due to Malaria. Nominee of the husband of the deceased, the complainant submitted a claim form to the LIC authorities claiming the sum assured. The Divisional Office of LIC sent a reply dated 21.7.1999 repudiating the claim on the ground that the deceased Vishalakshi had provided incorrect and false information regarding the insurance policy held by her husband. The District Forum upheld the contention of the LIC and dismissed the complaint.
3. Dissatisfied with the order of the District Forum, the complainant filed an appeal before the State Commission. After hearing the parties, the State Commission allowed the appeal and directed the LIC to settle the claim of the complainant with other benefits in accordance with law. Submissions of the learned Counsel for the Revision Petitioner (LIC):
4. Smt Vishalakshi the insured had obtained a policy by furnishing the following information:
Details of Husband's Insurance:
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Policy Office Sum Table Present
Number of Cor- Assured & Status of
poration Term the policy
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61406348 695 14- 10,000
620359683 MULKI 14- 1,00,000
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5. When inquiry was conducted by the LIC after the death of the insured it revealed that "the proposer's husband had taken policy No. 61406348 for Rs. 10,000 and policy No. 61454885 for Rs. 5,000 and both policies had lapsed since 1989 and 1990 respectively". The learned Counsel submitted that the policy taken by the life assured in this case was a Housewife Policy and & Housewife Policy can be issued only to the extent of the life insurance policies held by the husband of the proposer. Opposite parties further contended that such a policy would not be issued unless her husband had a mathcing insurance on his life.
6. In this connection he has produced underwriting manual issued by the L.I.C wherein it is written on the cover strictly confidential. Pages 18 and 19 of this document relates to Insurance on "Female Adult Lives" under the category III (b) it is" mentioned as follows:
Married Women : Total insurance cover upto to a maximum of Rs. 7 lakh but not exceeding husband's insurance in force for full sum assured may be granted. The underwriter should however examine whether the income of her husband can support the total insurance on his own life as well as on his wife's life and on the lives of his dependent children, and also have regard to other aspects such as social status of the family, moral hazard, etc., before deciding the amount of insurance that can be granted on such a proposal.
7. He also submitted that she was suffering from Malaria at the time of issuance of policy and she died due to Malaria, hence, the amount is not payable because, for suppressing this material fact. However, he did not press this issue further. He also argued that insurance is based on utmost faith - Uberima fides. Hence the District Forum has rightly dismissed the complaint.
8. The insured had also made a declaration while signing the proposal form that the declaration shall form the basis of the policy. Submissions of the learned Counsel for the respondent:
9. The learned Counsel submitted that the Insurance Company has not produced this policy or the proposal form either before the District Forum or before the State Commission and for the first time they have produced the same before this Commission He submitted that the Distrct Forum's order is contradictory, and he drew our attention particularly to para 9 of the order which reads as under:
It is a matter of common knowledge that the LIC agents are mainly interested in securing as high business as possible because their remuneration depends on the quantum business introduced by them. At the stage of introduction of the business they are only interested in securing the new business and not interested in verifying the truth of the particulars given in the proposal forms. When the proposer knew English and had signed the proposal form in English which contains a declaration that the particulars stated in the proposal form are true blame for having given wrong particulars cannot be put on the LIC agent. Under such circumstances, we hold the opposite parties have repudiated the claim only after exercising due care and caution and after application of mind. We, therefore, do not find any ground to hold that opposite parties have committed deficiency of service in repudiating the claim. The complaint therefore, fails.
10. He vehemently argued that this proposal form was filled up by the agent and not by the policy holder. He also submitted that this policy was filled up in the last quarter of the financial year to get more business. The agent is responsible for whatever written in the proposal form and secured her signature in the proposal form. LIC agent has not disclosed the terms and conditions on which a house wife can obtain the policy. The clauses relating to the Insurance on Female Adult Lives and Clause III (b) pertaining to married woman who is a house wife was never disclosed to the insured by the policy agent. This is a great lapse on his part. The Insurance policy was taken in February 1998 and the insured expired on 27.7.1998 and to say that the complainant was suffering from Malaria at the time of taking the policy and the Malaria persisted till her death is far from truth.
11. The Insurance Company had seven long months after issuing the policy to cross-check the facts and figures given in the proposal form which they had not done. Therefore, the complaint may be allowed in full.
Findings:
12. It is true that the policy was issued in the month of February. The LIC agents can be seen moving from heaven to earth to secure the business during January to March i.e. last quarter of the last financial year. They also get a fat commission on the first premium. A bare perusal with the naked eye indicates that the handwriting of the person who has filled up the form is different from the signature of the person. Even the proposal form has been filled up in a hurry.
13. Complainant has filed an affidavit and has been examined before the District Forum, an affidavit has also been filed by the "Manager of the LIC office, but no affidavit has been filed by the LIC agent nor he has been cross-examined.
14. The proposal form also has the signature of the medical examiner. If she was suffering from Malaria at the time of taking the policy, this would have been known to the doctor.
15. Underwriting Manual which was produced by the learned Counsel for the Revision Petitioner before us is a strictly confidential material, which means that this manual is not meant for publication and it is used only for the LIC officers and agent. There is no evidence that the relevant Clause III(b) which is quoted above was ever disclosed to the insured by the agent. LIC authorities had seven months after the issuance of the policy to check up and cross-check the facts and figures given in the policy which they had failed to do so.
16. Accordingly, the revision petition fails and, therefore, it is dismissed. There shall be no order as to costs.