State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Smt. Ranjit Kaur on 19 November, 2013
FIRST ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.1865 of 2010.
Date of Institution: 25.10.2010.
Date of Decision: 19.11.2013.
1. Life Insurance Corporation of India, Divn. Office, Sector 17-B,
Chandigarh.
2. Life Insurance Corporation of India, Model Town, Kapurthala.
.....Appellants.
Versus
Smt. Ranjit Kaur W/o late Sh. Jaspal Singh S/o Sh. Darshan Singh,
R/o VPO Sidhwan Dona, District Kapurthala.
...Respondent.
First Appeal against the order dated
15.09.2010 passed by the District
Consumer Disputes Redressal Forum,
Kapurthala.
Before:-
Shri Inderjit Kaushik, Presiding Judicial Member.
Shri Vinod Kumar Gupta, Member.
...................................
Present:- Sh. Sandeep Bhardwaj, Advocate, counsel for the appellants.
Sh. Munish Gulati, Advocate, counsel for the respondent.
---------------------------------------- INDERJIT KAUSHIK, PRESIDING JUDICIAL MEMBER:-
This order will dispose of the two (2) appeals i.e. F.A. No.1865 of 2010 (Life Insurance Corporation of India & Anr. Vs Smt. Ranjit Kaur) and F.A. No.1866 of 2010 (Smt. Ranjit Kaur Vs Life Insurance Corporation of India) as both the appeals are directed against the same order dated 15.09.2010 passed by the First Appeal No.1865 of 2010 2 learned District Consumer Disputes Redressal Forum, Kapurthala (in short "the District Forum"). Facts are taken from F.A. No.1019 of 2010 and the parties would be referred by their status in this appeal.
2. Facts in brief are that Smt. Ranjit Kaur, respondent/complainant (hereinafter called as "the respondent") filed a complaint under section 12 of the Consumer Protection Act, 1986 (in short, "the Act") against the appellants, pleading that her husband Sh. Jaspal Singh took five insurance policies bearing No.132386385, 132386008, 132386044, 132386383 and 132385978.
3. Sh. Jaspal Singh suffered heart attack on 11.08.2008 and died on the same day. Immediately, the respondent lodged the claim with appellant no.2 and submitted all the necessary documents. Appellant no.2 assured that the claim will be paid within 15 days but till date, the same has not been paid. The respondent visited the office of appellant no.2 a number of times, but the matter was lingered on one pretext or the other and non-payment of the same amounts to deficiency in service on the part of appellant no.2.
4. It was prayed that appellant no.2 may be directed to pay Rs.15.00 lacs as claim amount along with interest @ 18% p.a. and to pay Rs.50,000/- as compensation for mental tension and physical harassment and Rs.25,000/- as litigation expenses.
5. In the written version filed on behalf of appellant no.2, preliminary objections were raised that the complaint is not maintainable, as the life assured concealed material facts at the time of making the proposal and the complaint deserves dismissal. Life assured Jaspal Singh breached the principle of utmost good faith while replying to the questions in the proposal form. The appellant is bound to pay the genuine and legal claims and not otherwise. At the time of First Appeal No.1865 of 2010 3 entering into contract of insurance, the deceased life assured (in short "DLA") concealed the true information about the details of the existing policies, including the United Linked Policies Plan. The DLA has filled five different proposal forms and had taken five policies for a sum of Rs.3.00 lac each from appellant no.2 i.e. three policies on 13.08.2007 bearing Nos. 132386008, 132386044 and 132385978 and two policies on 14.08.2007 bearing Nos.132386383 and 13386385 under the same plan and scheme of appellant no.2. The DLA had not disclosed the same to appellant no.2 in order to save and escape from the medical tests. Had he disclosed all other proposals, then the decision would have been otherwise. He should have also undergone various tests i.e. ECG, Haemogram, SBT-12, RUA medical tests, compulsorily required. The DLA had inconsistent income of Rs.1.00 lac to Rs.4.00 lacs and premium of payment under all the polices was Rs.3.00 lacs. Keeping in view these facts, the claim was repudiated. No interest is payable on the premium of the policy and there is no deficiency in service.
6. On merits, taking of the policies and death of the DLA was admitted. Lodging of claim was also admitted. 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.
7. Parties led evidence in support of their respective contentions by way of affidavits and documents.
8. 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 DLA was medically examined by Dr. P.S. Aujla, before acceptance of the policies, and he is the registered First Appeal No.1865 of 2010 4 medical examiner of the appellants at Kapurthala. In proposal forms Ex.R-1 to Ex.R-5, Dr. P.S. Aujla gave the certificate that the proposals were signed in his presence, after admitting all the answers to the questions no.6 and onwards of the proposal form and the same were correctly recorded. It was the duty of the doctor, who was appointed by the appellants, to examine each and every insured person medically from all angles and to conduct all medical and clinical examinations of the insured person. The DLA was told to sign by the authority on the dotted lines and the agent, who has filled the proposal form, has not given the certificate that he has disclosed the contents to the insured person. There is no history of death in the early age. His father died at the age of 76 and his mother is alive and is more than 80 years old and his brother and sisters are also alive. The complaint was accepted and the appellant was directed to pay a sum of Rs.15.00 lacs i.e. the sum of Rs.3.00 lacs for each insurance policy to the legal heirs of the deceased i.e. his mother, if alive, wife, son and daughter, along with interest @ 8% p.a. from the date of repudiation till realization. Rs.2,000/- was awarded as costs of complaint.
9. Aggrieved by the impugned order dated 15.09.2010, the appellants have come up in the present appeal, for setting aside of the impugned order.
10. Whereas, the respondent/complainant has filed cross appeal i.e. F.A. No.1866 of 2010 (Smt. Ranjit Kaur Vs Life Insurance Corporation of India), for enhancement of compensation.
11. 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. First Appeal No.1865 of 2010 5
12. The appeal was filed on the grounds that the District Forum has not read the evidence correctly. The principle of utmost good faith was not considered. The DLA concealed the material fact of his taking five policies, or else he would have been subjected to vigorous medical tests. The income of the DLA was between Rs.1.00 lac to Rs.4.00 lacs per annum, but the premium was Rs.3.00 lacs per annum which he could not pay. The suppression of material fact violates the terms and conditions and principle of utmost good faith and as per the settled law, the respondent is not entitled to any claim and the appeal may be accepted and the impugned order under appeal may be set aside.
13. On the other hand, the respondent/complainant has filed cross appeal, with a prayer to modify the impugned order and to grant interest @ 8% from the date of death of the DLA and not from the date of repudiation and to enhance the compensation.
14. We have considered the respective versions of the parties as given in the appeals and have thoroughly scanned the entire record and other material placed on the file.
15. The proposal forms Ex.R-1 to Ex.R-5 were filled within two days, i.e. three proposal forms were filled on one day and two proposal forms, on the second day. Dr. P.S. Aujla signed the certificate and LIC agent also signed. As per the declaration, the DLA gave the consent for undergoing medical examinations/tests, including test for HIV, as required by the Corporation. It was for the doctor, who examined the DLA to prescribe the tests and he was to point out if there were more than one proposal forms, but he never did so. He should have intimated the appellants that the DLA has signed five proposal forms for taking five different policies, but that was not done. It appears that First Appeal No.1865 of 2010 6 the agent filled the forms and obtained the signatures of DLA and put before Dr. P.S. Aujla, who also signed it without bothering to do his duty. The proposal forms are in English and there is no certificate that the contents were explained to the DLA. The appellant through its agent has accepted all the proposals and issued the policies and collected the premium. Three proposal forms were filled on one day and two on the second day and it cannot be said that this fact was not within the knowledge of the authorities of the appellants, but no one objected to it, nor any proposal was returned. The fact remains that the agent and the authorities of the appellants were interested at that time only to collect the premium and issued the policies, but when the question of payment of claim arose, then all of a sudden, the principle of utmost good faith and other objections were taken. The order passed by the District Forum is detailed and speaking and there is no ground to interfere with the same.
16. The District Forum has awarded the interest from the date of repudiation of the claim and the same is correct and there is no ground to modify the impugned order under appeal.
17. The order of the District Forum is legal and valid so far as the payment of the insured amount is concerned, but the District Forum, without there being any evidence about the legal heirs of DLA Jaspal Singh, has passed the order on the basis of conjectures and surmises. Regarding mother also, it has been written 'if alive', whereas the respondent is nominee of the DLA in all the policies in question and she is entitled to receive the entire amount, but as she is also a custodian of this amount on behalf of the legal heirs, therefore, it is the moral and legal duty of the respondent to distribute this amount in equal shares to the other LRs of Jaspal Singh, DLA, if any. It is also First Appeal No.1865 of 2010 7 made clear that the LRs, if any, of deceased Jaspal Singh, can recover the share of his or her from this amount from the respondent, in case the respondent, of her own, does not distribute the same as per the law.
18. In view of above discussion, the appeal filed by the appellant (F.A. No.1865 of 2010) is dismissed and the impugned order under appeal dated 15.09.2010 passed by the District Forum is affirmed and upheld, subject to above modification. No order as to costs.
19. The appellants had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the respondent/complainant 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.
20. Remaining amount as per the order of the District Forum shall be paid by the appellants to the respondent/complainant within 45 days of the receipt of copy of the order.
First Appeal No.1866 of 2010:-
21. In view of the reasons and discussion held in F.A. No.1865 of 2010 (Life Insurance Corporation of India & Anr. Vs Smt. Ranjit Kaur), the F.A. No.1866 of 2010 (Smt. Ranjit Kaur Vs Life Insurance Corporation of India) is dismissed. No order as to costs.
22. The arguments in both these appeals were heard on 06.11.2013 and the orders were reserved. Now the orders be communicated to the parties.
First Appeal No.1865 of 2010 8
23. The appeals could not be decided within the stipulated timeframe due to heavy pendency of court cases.
24. Copy of the order be placed in F.A. No.1866 of 2010 (Smt. Ranjit Kaur Vs Life Insurance Corporation of India).
(Inderjit Kaushik) Presiding Judicial Member (Vinod Kumar Gupta) Member November 19, 2013.
(Gurmeet S)