State Consumer Disputes Redressal Commission
Smt. Gujrabai W/O. Dhansing Rathod vs 1. Branch Manager, Life Insurance Co. ... on 29 June, 2011
1 F.A.No.:92-07
STATE CONSUMER DISPUTE REDRESSAL COMMISSION,
MUMBAI, CIRCUIT BENCH AT AURANGABAD.
Date of filing : 07.02.2007
Date of Order: 29.06.2011
FIRST APPEAL NO.: 92 OF 2007
IN COMPLAINT CASE NO.: 77 OF 2005
DISTRICT CONSUMER FORUM: JALNA.
Smt. Gujrabai w/o. Dhansing Rathod
R/o. Savargaon Teli, Tq. Lonar,
Dist. Buldhana, at present
C/o. Sachin Pralhad Rathod, Newasekar Nagar,
Behind Hotel Dawat,
Mantha Road, Jalna. ...Appellant
-Versus-
1. Branch Manager,
Life Insurance Co. Ltd.,
Office at Santoshi Mata Road,
Jalna.
2. Senior Divisional Manager,
Life Insurance Corporation,
Divisional Office, Jeevan Prakash, Gandhinagar,
P.B. No.23, Hingoli Road, Naned. ...Respondents
... Respondent
Coram : Mrs. Uma S.Bora, Hon`ble Presiding Member.
Shri. K. B. Gawali, Hon'ble Member.
Present: Adv. Shri. G. B. Kulkarni, for the appellant.
Adv. Shri. R. N. Sonune for the respondent.
2 F.A.No.:92-07- :: ORAL ORDER ::-
Per Shri. K. B. Gawali, Hon'ble Member.
1. The present appeal is field by Smt. Gujrabai w/o. Dhansing Rathod who was the original complainant before the Forum.
Respondent No.1 is the Branch Manager, Life Insurance Corporation of India, Jalna, whereas the Respondent No.2 is the Sr. Divisional Manager, Life Insurance Corporation of India, Nanded. Both were original opponent nos. 1 & 2 before the District Forum.
2. The present appellant is the mother of the deceased Ashok s/o. Dhansing Rathod who was policy holder of respondent's corporation. The deceased Ashok Rathod had obtained two insurance policies from the respondent i.e. i) Endowment Policy (with profit) bearing no. 982879875 (Non-Medical) for the sum assured Rs.1,00,000/- under plan and terms 14-15 with date of commencement as 10.07.2000 having mode of payment of premium as quarterly amounting to Rs.1255/- and ii) Medical Policy namely "Jeevanmitra" (double covered endowment plan with profit and with accident benefit) bearing no. 982820241 under the plan and term 133- 30, with quarterly premium installment of Rs. 3101/- having commencement date as 22.07.2000. The sum assured under this policy was Rs. 2,95,000/-. The appellant was the nominee of the policy holder in both the policies. It is contended that these policies were obtained by the deceased son of the appellant at the instance of the agent of respondent company namely Shri. N.N.Jayale. The first 3 F.A.No.:92-07 installments of premium of both the policies i.e. Rs.1255/- and 3155/- were paid on 30.07.2000 in cash to the agent of the respondents and have also obtained the receipts. It is further submitted that on 18.07.2000 her son Ashok Rathod died due to heard attack. His death was shocking to her. Following the death of her son she submitted a claim proposal for the insurance amount in respect of both the policies to the respondents, vide her application dated 20.11.2000. However her claim was repudiated by the respondents vide their letter dated 04.06.2003 on the false grounds of suppression and misrepresentation of material facts. The appellant therefore had issued notice dated 30.08.2003 and 12.11.203 to the respondent through her advocate. However the respondents did not sanctioned her claim and therefore she had to approach to the District Forum. Accordingly, she filed the complaint dated 18.08.2005 before District Forum seeking direction to the respondents to pay total compensation of Rs. 10,01,000/- including the policy amount, the amount towards mental agony & cost of the complaint etc.
3. The respondents appeared before the Forum and resisted the claim. In their written say dated 25.10.2005 filed before the Forum they have contended that policy holder while submitting the proposals of insurance policies had suppressed the material facts about his own health and about family history as well as misrepresented the material facts regarding his income and occupation. It was contended that in the proposal the policy holder has submitted that his status of health was in good condition 4 F.A.No.:92-07 however, during investigation it was found that he was already suffering from high fever with rigors and was under going treatment of Dr. Usha Mehta of M/s. Neel Medical, Vasai Road, Thane. The medical certificate to that effect has been submitted by the respondents. It was further submitted that the information regarding occupation was falsely given in the proposal stating therein that he is having occupation of farming and Kiranna shop however during investigation it was found that he was only a daily wager. Secondly, as regards the income also he provided false information in the proposal mentioning therein that he is having annual income is Rs. 40,000/- from agriculture and Rs. 75,000/- from Kirana shop. As regards the family history the information given in the proposals regarding surviving brother was mentioned eight brothers, whereas in investigation it was observed that he was having only six brothers and two was already died. As regards the second policy having insured sum of Rs. 2,95,000/- additional ground for repudiation is taken that the proposal of the said policy was received by the respondents on 22.07.2000 and accordingly the date of commencement of policy is 22.07.2000 i.e. after the death of the deceased and therefore it was held that there was no valid contract between the corporation and the life assured , thus the respondents have contended that the complainants claim is not valid and the same be dismissed.
4. After perusal of record and hearing the parties the District Forum, Jalna has partly allowed the complaint vide its 5 F.A.No.:92-07 impugned judgment and order and directed the respondents to pay Rs. 1,00,000/- to the complainant/present appellant in respect of policy no. 982879875 along with the interest @ 9 % p.a. from 20.12.2003. The claim under the second policy bearing no. 982820241 has however been disallowed on the ground that the date of commencement of the said policy is 22.07.2000 i.e. after the date of death i.e. 18.07.2000 of the insured.
5. Aggrieved by this judgment and order original complainant came in to appeal in this Commission.
6. Notices were issued to the respondents as well as the appellant. Adv. Shri. G. B. Kulkarni appeared for the appellant whereas Shri. R. N. Sonune appeared for the respondent. Advocate for the appellant has filed written points of argument on 16.06.2010. Matter was finally heard on 14.06.2011 when both the counsels were present and have made their oral submissions. The learned counsel for the appellant Shri. G.B. Kulkarni submitted that the deceased son of the appellant Ashok Dhansing Rathod had submitted the proposal of first policy having insured sum of Rs. 1,00,000/- on 28.06.2000 to the agent of the respondents and the proposal in respect of the second policy having insured sum of Rs.2,95,000/- was submitted to the same agent on 30.06.2000. It is further contended by the leaned counsel for the appellant that first premium amount of both the above said policies i.e. Rs.1255/- and Rs. 3155/- respectively were paid in cash to the respondents on 03.07.2000 only. It is alleged that although the amount of first premium was paid on the same day i.e. 6 F.A.No.:92-07 on 03.07.2000 and the proposal of both the policies were submitted on 28.06.2000 and 30.06.2000 yet the respondents have issued first policy with the commencement date as 10.07.2000 whereas the second policy having commencement date as 22.07.2000. It is the specific allegation of the appellant that the second policy he received late due to the delay on the part of respondents. It is contended by the learned counsel the risk of the insurance policy starts from the date of first premium deposited with the Insurance Company and not from the date of issue of the policy. In support of his contention he has relied on the following citations:
i) AIR 1986 Kerala- 250 LIC of India, Trivendrum Vs. Kanal Amma, in which it is held that, insurance contract came into existence on the date of payment of first premium.
ii) 2010 (IV) Mh.L.J. New India Assurance Company Ltd., Vs. Sushilabad w/o. Ghanshyam Anerao and others, in which Hon'ble Justice K.J. Chandiwal held that, effective date of insurance policy is the date on which payment in cash is accepted by the Insurance Company and the risk will be applicable on that date. In view of the ratio given in above said citation the learned counsel for the appellant have contended that in the present case also the payment of the first premium is paid and accepted by the Insurance Company vide receipt dated 03.07.2000 i.e. before the policy holder was died. He therefore alleged that the Forum below has failed to consider this vital aspect and wrongly dismissed the claim to the extent of second policy only because its date of commencement is 7 F.A.No.:92-07 after the death of the policy holder. In addition of the above citation he also drawn our attention to the Sec. 64 (V) (B) of the Insurance Act, 1943 and contended that in view of the provision of section the risk of the Insurance Company commences on the payment of the premium either in cash or by cheque. In view of this the learned counsel prayed that appeal be allowed and judgment and order passed by the District Forum to the extent of second policy be quashed and set aside.
7. We have perused the record before us carefully as well as considered the oral submissions as put for worth by both the counsels. The main question before us to decide is to whether; the respondent Insurance Company has wrongly repudiated the claim as contended by the complainant. As mentioned above the respondent Insurance Company has repudiated the claim of the complainant to the extent of Insurance policy having insurance amount of Rs. 1,00,000/- on the ground of misrepresentation of the material facts about occupation and income and suppression of material facts about own health of the policy holder and his family history. These grounds of repudiation of claim have not been proved by any cogent evidence. It is observed that as per 7/12 extract available on record policy holder is having agricultural land in Gut No. 125/1 of village Devanagar Tq. Lonar. Secondly, regarding the occupation as mentioned in the proposal of insurance has running as Kiran Shop. There is registration certificate on record as issued by the Labour Commissioner under the Shop Act, in which it is mentioned that the 8 F.A.No.:92-07 Ashok Dhansing Rathod is the owner of Kirana Shop at Kanhaiyanagar, Jalna. In view of this there is no misrepresentation of material fact regarding occupation. As regards the material fact about health of the policy holder the certificate issued by Dr. Usha Mehta has contended by the appellant that it was in respect of only a nominal fever and that it is not supported by any affidavit. Therefore, the same certificate can not be the ground for repudiation of the claim as it does not disclose any suppression of material fact. It is thus observed that the respondents have repudiated the claim to the extent of insurance policy in which sum assured is Rs. 1,00,000/- on flimsy grounds. There is no clear evidence to establish that there was any material suppression of the facts as alleged by the respondents. Therefore, the District Forum has rightly allowed the claim of the complainant/appellant to the extent of this policy.
8. However, as regards the second policy in which insured sum is Rs.2,95,000/-. The repudiation is made by the respondents on the ground of date of commencement of the said policy being at the letter date of the death of the policy holder. This ground is not acceptable. The District Forum on this ground only has wrongly disallowed the claim. In view of the ratio given in the above said citation it is very much clear that the risk of the insurer starts from the date of acceptance of the first premium towards insurance policy. In both the policies under reference the first insurance premium paid on 03.07.2000 in cash and the receipts to that effect have also been issued by the respondents, therefore, although in case of second 9 F.A.No.:92-07 policy the date of commencement is after the death of the deceased policy holder, the risk had already commenced from 03.07.2000.
9. In view of these observations, we are of the view that the respondents have wrongly repudiated both the insurance claims of the appellant and the District Forum has wrongly disallowed the insurance claim to the extent of insurance policy bearing no. 982820241 having insured sum of Rs. 2,95,000/-. We are therefore inclined to quash and set aside the order of the District Forum to the extent of clause 3 and also modify the said order as regards the date of commencement of the interest. Insurance claim of the appellant was repudiated by the respondent no.2 vide letter dated 4th June, 2003 however, in the impugned judgment the date of repudiation is given as 20.12.2003 and while allowing the insurance claim in respect of policy no. 982879875 of insured sum Rs. 1,00,000/- the rate of interest is allowed from the said date which is not correct. Since the date of repudiation is 04.06.2003. The rate of interest will have to be allowed from the same date.
In the result we pass following order.
-:: ORDER ::-
1. Appeal is partly allowed.
2. Judgment and order passed by the Forum to the extent of claue-3 is hereby quashed and set aside.
3. Respondents are directed to pay to the appellant Rs. 1,00,000/- under policy bearing No. 982879875 and 10 F.A.No.:92-07 Rs. 2,95,000/- under policy no. 982829241 along with the interest @ 9 % p.a. from 4th June, 2003.
4. No order as to cost.
(K. B. Gawali) (Mrs.Uma S. Bora)
Member Presiding Member
Kalyankar