National Consumer Disputes Redressal
Life Insurance Corporation Of India vs Smt. Hira Devi on 9 April, 2010
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 4048 OF 2009 (Against the order dated 21.07.2009 in Appeal No. 1319/2008 of the Rajasthan State Consumer Disputes Redressal Commission, Jaipur) 1. Life Insurance Corporation of India Insurance Building, Bima Marg Mumbai. 2. Life Insurance Corporation of India Yogakshema, Jeevan Bima Marg, Central Office, Post Box No. 19553 Mumbai-400021 (Maharashtra) 3. Life Insurance Corporation of India Divisional Office, Jeevan Prakash Post Box No. 66, Jaipur Road Bikaner, Rajasthan 4. Life Insurance Corporation of India Divisional Office, Jeevan Prakash Bhawani Singh Road Jaipur All through Mr. K.L. Virmani Assistant Secretary Life Insurance Corporation of India Central Office (Legal Cell) H-39, Connaught Place New Delhi-110 001 Petitioners Versus Smt. Hira Devi W/o Late Shri Likhma Ram Sinver R/o Choontisra, Tehsil & Distt. Nagaur Rajasthan-341 001 Respondent BEFORE: HON'BLE MR. JUSTICE ASHOK BHAN, PRESIDENT HON'BLE MR. S.K. NAIK, MEMBER For Petitioners : Ms. Diksha Ahuja for Mr. Mohinder Singh, Advocate For Respondent : Mr. Prem Kumar Chugh, Advocate Pronounced on 9th April, 2010 ORDER
Per S.K. Naik, Member Life Insurance Corporation of India-opposite party have filed this revision petition to challenge the order dated 21st of July, 2009 of the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (State Commission for short), who dismissed their appeal assailing the order of the District Consumer Disputes Redressal Forum, Nagaur, Rajasthan (District Forum for short). The District Forum by its order dated 24th of June, 2008 has allowed the complaint and directed the petitioner-Life Insurance Corporation of India to pay the insured amount of Rs.2,10,000/- along with all benefits under the policy as also to pay interest on this amount from 7th of June, 2007, the date of filing of the complaint, @ 10% per annum. In addition, a cost of Rs.2000/-
too was assessed.
Facts of the case, briefly stated, are that, husband of the respondent-complainant had obtained an insurance policy of the petitioner-Life Insurance Corporation of India for an insured amount of Rs.2,10,000/- on 1st of October, 2004. He, however, expired on 1st of January, 2005 i.e. within a period of three months from the date of obtaining the policy. Information with regard to his death was given by the respondent-complainant to the Branch Manager, Life Insurance Corporation of India, Nagaur.
He was also requested to process the case relating to the claim of the complainant, who was the nominee of the deceased life assured. Vide letter dated 21st of March, 2005, however, the complainant was informed that her claim cannot be accepted as the Life Assured in the proposal form had stated his age to be 44 years whereas as per the available certificate his age was 53 years. The respondent-complainant thereafter filed appeals before the Divisional Manager, Life Insurance Corporation of India, Bikaner, petitioner no.3 herein, who also reiterated the repudiation. Second appeal also was preferred before the Executive Director, Yogakshema, Jivan Bima Marg, Mumbai, petitioner no.2 herein, but of no avail. She thereafter filed a consumer complaint before the District Forum, which was accepted resulting in a direction to the petitioner-Life Insurance Corporation of India to pay the insured amount in terms as stated to earlier. An appeal that was preferred by the petitioner-Life Insurance Corporation of India before the State Commission too was rejected. Aggrieved against these concurrent orders of the fora below that the Life Insurance Corporation of India have filed this revision petition before us.
We have heard the learned counsel for the parties and have carefully perused the records of the case. We need not labour much to reiterate the settled position of law that insurance is a contract based on utmost good faith. It requires no emphasis that when any information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information. It is expected of the contracting parties on either sides to give truthful account of details in the contract. This proposition of law stands finally settled at the level of the Honble Supreme Court and has been respectfully applied by this Commission in a catena of decisions; to quote a few we may refer to the cases of Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. [2009 INDLAW SC 856], Asha Garg & Ors Vs. United India Insurance Co. Ltd. & Ors. [IV (2005) CPJ 269 (NC)] and National Insurance Company Ltd. Vs. Bipul Kundu [1986-2005 CONSUMER 9694 (NS)].
In the case in hand, the moot point for consideration was as to whether the age of the Life Assured was 44 years as claimed by the petitioner-Life Insurance Corporation of India on the basis of a certificate obtained from the Principal of Government Secondary School, Nagaur, in which it has been stated that as per the records of the school, the deceased was born on 5th of March, 1952 or to believe the date of birth 10.02.1961, as reflected in the driving license. While both the fora below have taken the view that since the Life Insurance Corporation of India itself had accepted the date of birth as recorded in the driving license, they could not subsequently go behind their own record and discard the date of birth as stated in the driving license.
This view of both the fora below is completely erroneous for the simple reason that the certificate issued by the Principal of the Government Secondary School with regard to the date of birth of the Life Assured will indeed have a overriding evidentiary value than the date of birth on the driving license which is entered on the basis of the application of applicant and is neither based on any birth certificate nor a certificate from an educational institution.
In this case, we do not find any rebuttal that the certificate issued by the Principal of Government Secondary School is either false or it does not belong to the Life Assured.
Further, the fora below have failed to consider that the Life Assured expired within a period of three months from the date of obtaining the policy for a sum of Rs.2,10,000/- and under Section 45 of the Insurance Act, 1938 the petitioner-Life Insurance Corporation of India was fully entitled to investigate the early claim. Their contention that had the Life Assured stated his correct age, which was 53 at the time of obtaining the policy, they would have subjected him to a rigorous medical test as per their underwriting manual, which would have included BECG and FBS, and in the process the ailment for which the Life Assured suffered resulting in his death would have been detected, cannot be completely ignored.
In this respect, it is relevant to quote an assureds duty which has been summarized in MacGillivray on Insurance Law (Tenth Edition) as under :
the assured must disclose to the insurer all facts material to an insurers appraisal of the risk which are known or deemed to be known by the assured but neither known nor deemed to be known by the insurer. Breach of this duty by the assured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms.
Thus, the possibility of the Life Assured understating his age to avoid a rigorous medical examination cannot be completely ruled out.
Over all, therefore, while giving precedence to the date of birth as certified by the Principal of the Government Secondary School from the school records over that of the driving license and the other attending circumstances, we hold that both the fora below have committed an irregularity inasmuch as they have erroneously placed their reliance on the date of birth mentioned in the driving license and their orders are, therefore, set aside. The revision petition is hereby accepted resulting in the dismissal of the complaint. There would, however, be no order as to cost.
Sd/-
(ASHOK BHAN, J.) PRESIDENT Sd/-
(S.K. NAIK) MEMBER Mukesh