National Consumer Disputes Redressal
Birla Sun Life Insurance Co. Ltd. vs Ankit & Anr. on 7 May, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1778 OF 2011 (Against the Order dated 17/01/2011 in Appeal No. 2007/2007 of the State Commission Haryana) 1. BIRLA SUN LIFE INSURANCE CO. LTD. Biral Sun life Lnsurence Co ltd. Having Registered office at 15th and 16th floor , one india bulls centre tower, Jupiter Mill Compund 841, Senapati mill marg. elphinston road. Mumbai ...........Petitioner(s) Versus 1. ANKIT & ANR. Minor,Son of Kawnal Singh Resident of 2623, New housing Board colony, Panipat ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER HON'BLE MR. DR. B.C. GUPTA, MEMBER For the Petitioner : Ms. Meenakshi Dogra, Advocate For the Respondent : Mr. S.S. Duhan, Advocate Dated : 07 May 2015 ORDER In this Revision petition filed under Section 21(b) of the Consumer Protection Act,1986 (for short, 'Act') by Petitioner/ Opposite Party, there is challenge to order dated 17.01.2011 passed by State Consumer Disputes Redressal Commission, Haryana, Panchkula (for short, 'State Commission') in (First Appeal No.2007 of 2007).
2. Brief facts are that Smt. Sunita Rani, mother of Respondent No.1 and wife of Respondent No.2 had taken a life insurance policy for the sum of Rs.10,00,000/- from the petitioner. The life insured died on 13.6.2005 at Panipat. The respondents submitted their claim to the petitioner upon which petitioner demanded certain documents vide letter dated 30.06.2005. Respondents submitted all the documents on 11.7.2005 and 21.7.2006, but petitioner repudiated the claim of respondents, vide their letter dated 24.11.2005. Thus, challenging the legality of the repudiation letter, respondents filed consumer complaint before the District Consumer Disputes Redressal Forum, Panipat (for short, 'District Forum').
3. In the written statement, petitioner justified the repudiation letter dated 24.11.2005 on the ground, that deceased had not disclosed her insurance policy from HDFC Standard Life Insurance Co. Ltd. Respondents sent claim statement dated 8.7.2005 to settle the death claim. Petitioner investigated the matter and found that deceased in application form dated 25.2.2005 had knowingly left the column blank against the relevant Question No. VIIIA. The extract of question is that;
"(a) Is there any application submitted or pending or do you have any other insurance policies in effect with BSLI or any other insurer, if yes, give details."
4. It is further stated, that life assured had stated in the application form, that she was self employed and was proprietor of trading business earning annual income of Rs. 78,000/- The deceased had also applied for insurance policy of HDFC Standard Insurance Company Limited on 24.2.2004, for sum of Rs.15,00,000/-.The suppression of above said facts was material for petitioner, to underwrite the maximum risk to be covered on the life of the life assured. Had petitioner known about the said facts, it would have not issued the term plan of Rs.10 lacs to the life assured. It was the duty of the insured to disclose all the material facts. Therefore, the claim was repudiated and petitioner had refunded the total premium paid by the life assured, vide cheque no.590197 dated 10.11.2005 to the respondents. Hence, complaint merit dismissal.
5. District l Forum vide order dated 07.06.2007, dismissed the complaint.
6. Being Aggrieved, respondents filed appeal before the State Commission, which allowed the same vide impugned order.
7. We have heard the learned counsel for the parties and gone through the record.
8. It is submitted by learned counsel for the petitioner, that it is a settled law, that if it is proved that deceased-life assured or proposer had concealed material facts in the proposal form, then claim can be repudiated by the insurer. In the present case, the life assured had not disclosed the correct details of her income and insurance history. If she had disclosed the information correctly, then petitioner would not have issued the said policy. Since, life assured had concealed/suppressed the material facts, which were well within her knowledge, as such petitioner has a right to repudiate the claim of the respondents, under Section 45 of the Insurance Act, 1938.
9. In support, learned counsel for petitioner has relied upon following decisions of this Commission;
(i) Dineshbhai Chandarana & Anr. Vs. Life Insurance Corporation & Anr, 2010 (4) CLT, 563 and
(ii) LIC of India and Anr. Vs. Vidya Devi and Anr, 2012 (3) CPC, 339.
10. On the other hand, it is submitted by learned counsel for respondents, that all the necessary documents were submitted to Petitioner's Company. The claim had been repudiated on wrong grounds by the petitioner.
11. The State Commission in impugned order observed;
"Case called several times since morning but none has appeared on behalf of the respondents. This appeal relates to the year 2007. Keeping in view the heavy pendency of appeals/complaints in this Commission, we do not think it appropriate to adjourn this appeal indefinitely, and therefore, we proceed to decide this appeal after hearing counsel for the appellants and going through the case file.
As per the record placed on the file, the proposal form contained various queries to which the life assured had responded. In the written statement, the Ops submitted that the life assured knowingly left the column blank against the relevant questions VIII A in the proposal form. Thus, it is clear on the record that question VIII A is without answer. As per the proposal form Question No. 1(E) pointed out that income of the Life Assured and to the said query, the life assured had given answer that she was self employed with annual income of Rs.78,000/- and during the investigation conducted by the surveyor of the Insurance Company it was found that the life assured was a house wife.
As per the record a close scrutiny of the question given in the VIII A reveals that on the date of submitting the proposal form dated 25.2.2004 the life assured had given blank answer which is reproduced as under;
[[ " Is there any application submitted or pending or do you have any other insurance policies in effect with BSLI or any other insurer? If "Yes" give details________Blank) Undisputedly, the life assured was not having any policy on the date of submitting proposal form and if some policy was taken by her subsequent to the policy in question, such a thought may originate at any time of her own or on the advice of some relations, friend and well wisher who may be interested in the life of assured. Moreover, such a clause VIII (A) of the policy prohibits an insured person from taking any other policy which is against the public policy. Any insured person's circumstances may change after taking the policy.
Similarly, in answer to the question given in clause 1(E) which is with respect to details of employment of the life to be assured, the same is reproduced as under;
Name of the employer Self employed Nature of Business Trading of H/c Goods Designation Prop.
Nature of duties Administrative Years of employees 2 Annual Income(Rs.) 78,000/-
If not earning state parents' spouse's Annual income (Rs.) ________(blank) The above details to the question given in clause 1(E) reveal that the life assured was self- employed earning Rs.78,000/- from trading at her house No.2623 in Sector-11-12, HUDA, Panipat. She further drew out attention to the claim preferred by the complainant with the Insurance Company wherein the life assured has been described as house wife. Thus, according to the counsel the disclosure about the income of the deceased of Rs. 78,000/- per annum is falsified by the claim form submitted by the complainant.
We have considered this aspect and are of the view that even a housewife can conduct a trading while staying in the house. Any lady even if she is working or serving or doing business, can be housewife after the business hours. She cannot be held to be not serving merely when the husband has described her as a house wife while preferring the claim. Thus, the opposite parties-respondents have tried to repudiate the claim without any sound reason.
In this modern era of rising prices of the essential commodities, most of the housewives do some extra work at her than their domestic work i.e. knitting, stitching, embroidery etc. and earn to meet with their household expenses. This fact finds supports from the answer record in the proposal form in Column 1(E) in which the column of 'Employment' the answer has been recorded as 'Self Employed-Trading'.
It is not a case of the respondents that Sunita Rani had been made to understand each and every clause of the policy, rather, it is a case where Sunita Rani has been made to sign on the proposal form where sign of 'x' is recorded. The entire form has been filled up by the company's Agency in capital letters, whereas Sunita Rani has put her signatures in small letters. It has also not come on record that the entire terms and conditions of the policy had been read over to Sunita Rani by the agent nor affidavit of agent has been tendered by the opposite parties in this regard. Even the certificate appended therein is only in the printed form which cannot be taken to believe that the entire policy was read over to the insured. The form is in English and the interpretation of the clauses of the proposal form has a great significance which perhaps was not read over to her either by her agent or by any official of the Company. The facts and circumstances appeared in the present case tilts the balance of justice towards the Insurance company. A consumer cannot be denied the right which has been vested in him/her simply on the ground of technicalities. The State Commission has to weigh the measure in favour of the consumer by ignoring the technicalities.
Even if the column was left blank, and this by itself was sufficient ground for the Ops to repudiate the claim, the Ops should not have accepted the premium. Once the OP accepted the premium and issued the policy despite column being blank, after happening entitling the legal heirs to the claim the proceeds of the policy, OP cannot be permitted to repudiate that one of the column was left blank, therefore they had no reason to repudiate the claim.
[ Learned District Forum ignoring all these aspects mentioned above. Therefore, impugned order cannot be sustained and is set aside. The appeal is allowed. The opposite parties are directed to pay the payment of insurance policy accruing upon death of assured alongwith interest @ 9% from the date of repudiation till the date of realization."
12. It is an admitted fact that one of the columns of the proposal form, was left blank. Now the question arise for consideration is, as to whether leaving one column of the proposal form blank, amounts to concealment of the material facts.
13. Petitioner has tried to put the entire blame on the life assured, for leaving that 'column' blank. However, no explanation is forth coming from the petitioner side, as to why it accepted the blank "column" proposal form. Admittedly, Petitioner's Company had issued the Insurance Policy on the basis of that blank 'column' as per the proposal form. It is thus clear, that Petitioner's Company was also negligent in issuing the insurance policy on the basis of that 'blank' column. Now it does not lie in the mouth of the Petitioner's Company to shift the entire blame on the life assured who is no more alive. Be that as it may, petitioner has nowhere stated, as to what action it had taken against its officials, who without carefully examining and scrutinizing the proposal form, issued the policy in question to the life assured. It is a known fact, that in our country all duties and obligations are cast upon the citizens/ consumers. The Government Officials as well as Officials of Public Sector Companies, are not accountable for their lapses as well as mistakes which are committed by them in discharge of their duties.
14. Lastly, it is to be seen is as to whether leaving a 'column' blank in the proposal form, would amount to concealment of the material facts. The answer is obviously 'No'. It can be taken as an omission/mistake on the part of the life assured, but in no manner it can be said to be the "concealment of material facts".
15. None of the decision (Supra) relied upon by learned counsel for the petitioner, are applicable to the facts of the present case.
16. We do not find any jurisdictional error on the part of the State Commission in allowing the appeal of the respondents. Accordingly, present petition having no merits, stands dismissed with cost of Rs.10,000/-(Rupees Ten Thousand only).
17. Petitioner is directed to deposit the cost by way of demand draft, in the name of "Consumer Legal Aid Account" of this Commission within four weeks from today.
18. In case, petitioner fails to deposit the cost within the prescribed period, then it shall also be liable to pay interest @ 9% p.a., till realization.
19. List on 3rd July, 2015 for compliance.03/07/2015 ......................J V.B. GUPTA PRESIDING MEMBER ...................... DR. B.C. GUPTA MEMBER