State Consumer Disputes Redressal Commission
Urmila Janwaliya vs Aegon Religare Life Insurance Company ... on 9 July, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 194 of 2013 Date of Institution : 13.05.2013 Date of Decision : 09.07.2013 Urmila Janwaliya w/o Late Sh.Atar Singh, r/o House No.845-C, Sector 33-B, Chandigarh. Appellant/complainant V e r s u s 1. Aegon Religare Life Insurance Company Ltd., SCO No.2417-2418, 2nd Floor, Sector 22-C, Chandigarh 160022, through its Branch Manager. 2. Aegon Religare Life Insurance Company Ltd., 2nd Floor, Paranjpe B Scheme, Subash Road, Near Garware House, Vile Parle (E), Mumbai, through its Managing Director. ....Respondent/Opposite Parties Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT. MR. DEV RAJ, MEMBER.
Argued by: Sh. Sandeep Suri, Advocate for the appellant.
Sh. Ramnik Gupta, Advocate for the respondents.
PER JUSTICE SHAM SUNDER (RETD.), PRESIDENT This appeal is directed against the order dated 23.11.2012, rendered by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant).
2. The facts, in brief, are that Mr.Nikunj Kumar Janwaliya, son of the complainant -(Smt.Urmila Janwaliya), purchased the Life Insurance Policy bearing No.101112745032 dated 06.12.2010, Annexure C-2 (Colly.) known as Aegon Religare Level Term Plan (UIN 138N003V01), for the sum insured of Rs.11,00,000/-, on the basis of proposal form dated 30.11.2010 Annexure C-1, filled in by him, in the presence of Mrs.Kawaljeet Kaur, Agent of Opposite Party No.1, on payment of first annual premium, to the tune of Rs.2,245/-. The complainant being the mother of Mr.Nikunj Kumar Janwaliya-(now deceased), was appointed as his nominee. On 14.12.2010, at around 12.30 noon, suddenly Mr.Nikunj Kumar Janwaliya, the life assured, felt chest pain and breathlessness, as a result whereof, he was taken to the Govt. Medical College and Hospital, Sector 32, Chandigarh, wherein he was admitted. He died around 4.30 AM, on 15.12.2010, when he was under treatment. The Doctors, on duty, declared the cause of death, as Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome).
3. The complainant being the mother and nominee of the life assured (now deceased), lodged the insurance claim with Opposite Party No.1, on 21.03.2011, but the same was repudiated, vide letter dated 27.04.2011 Annexure C-6, on the ground of non-disclosure of material facts, concerning his life style and past medical history by the life assured (now deceased). It was stated that, at the time of obtaining insurance, the proposer was required to be medically examined, by the medical examiner, approved by the Insurance Company, who had to give a confidential report to it (Insurance Company), and the premium amount was required to be paid thereafter. It was further stated that, once the proposal was accepted, a concluded contract of insurance came into existence. It was further stated that, at the time of making proposal of insurance, the life assured (now deceased), was neither having any knowledge of disease Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome), nor he was having any symptoms thereof. It was further stated that the life assured stated at the time of filling in the proposal form that he was taking four hard pegs of liquor, per week. It was further stated that, as such, repudiation of the claim of the complainant, in respect of his son (the life assured (now deceased), was illegal and arbitrary. It was further stated that the aforesaid acts of the Opposite Parties, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to pay the claim amount, to the tune of Rs.11 lacs; compensation, to the tune of Rs.1 lac, for mental agony and physical harassment; and cost of litigation, to the tune of Rs.22,000/-.
4. The Opposite Parties, in their joint written version, pleaded that the complainant did not fall within the definition of a consumer, and, as such, the Consumer Complaint was not maintainable. It was admitted that Mr.Nikunj Kumar Janwaliya, son of the complainant- Smt.Urmila Janwaliya, purchased the Life Insurance Policy bearing No.101112745032 dated 06.12.2010, Annexure C-2 of Aegon Religare Level Term Plan (UIN 138N003V01), for the sum insured, to the tune Rs.11,00,000/-, on the basis of proposal form dated 30.11.2010 Annexure C-1, on paying the first annual premium, to the tune of Rs.2,245/-. It was stated that even if, it was assumed that the life assured was required to be subjected to a medical examination, by the Company, before assessing the risk, under the proposal, for insurance, that did not absolve the policyholder of his obligation, from disclosing all the material facts, in the proposal form. It was further stated that, as per the guidelines mentioned at the top of the proposal form, it was made clear that the life assured, was not only required to disclose all the material facts, but also not to suppress the same. It was further stated that the life assured (now deceased), also gave a declaration, in the proposal form, that, in case of any misstatement or suppression of material information, the Company had a right to repudiate the claim, under the Policy. It was further stated that the life assured died, on 15.12.2010, at the age of 30 years, within 9 days, from the date of commencement of risk, due to Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome). It was further stated that the life assured (now deceased) deliberately misled the Opposite Parties, by concealing the material information, and furnishing false replies, while filling up the proposal form. It was further stated that before repudiating the claim, the Opposite Parties had taken medical opinion, from the independent Doctor, with regard to the nexus of drinking habits of the life assured (now deceased), and the cause of his death. It was further stated that according to the medical opinion Annexure-5, there was a direct nexus, between the drinking habits of the life assured (now deceased), and cause of death. It was further stated that Acute Pancreatitis, is largely due to chronic alcoholism and gall stones, and, as per medical record, the deceased was a chronic alcoholic. It was further stated that the claim of the complainant was repudiated, due to non-disclosure and suppression of material information, by the life assured. It was further stated that the repudiation of claim, by the Opposite Party was legal and valid and the same was communicated to him, vide letter dated 27.4.2011 Annexure-6. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.
5. The Parties led evidence, in support of their case.
6. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, dismissed the complaint, as stated above, on the ground, that the life assured was a chronic alcoholic, which resulted in his death, within nine days, from the commencement of risk, and within few hours of his admission, in the hospital, and he suppressed this material fact, from the Opposite Parties, at the time of filling in the proposal form, and, as such, the Policy stood vitiated. The District Forum also concluded that there was no deficiency, in rendering service, on the part of the Opposite Parties.
7. Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.
8. We have heard the Counsel for the parties, and, have gone through the evidence, and record of the case, carefully.
9. The Counsel for the appellant/complainant, submitted that, at the time of filling in the proposal form, the life assured (now deceased), in clear-cut terms, stated that he was taking four hard pegs of liquor, per week. He further submitted that the life assured (now deceased), thus, did not conceal the material fact or material information, from the Opposite Parties, at the time of purchase of the Insurance Policy. He further submitted that the life assured (now deceased), did not know, at the time of purchasing the Policy, that he was suffering from Acute Pancreatitis. He further submitted that even no previous medical evidence was produced, on record, by the Opposite Parties, to prove that the life assured (now deceased), was a chronic alcoholic, which resulted into Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome), leading to his death. He further submitted that Annexure C-5, the medical opinion, which was sought by the Opposite Parties, from the Doctor, and produced, on record, did not bear his signatures, nor was supported by his affidavit, and, as such, could not be relied upon. He further submitted that the repudiation of claim of the complainant, was, thus, illegal and arbitrary. He further submitted that the District Forum was wrong, in dismissing the complaint, filed by the complainant/mother of the life assured (now deceased).
10. On the other hand, the Counsel for the respondents/Opposite Parties, submitted that, it was the bounden duty of the life assured (now deceased), at the time of purchasing the Insurance Policy, to disclose the material fact that he was a chronic alcoholic, and suffering from Acute Pancreatitis, but he did not do so. He further submitted that the contract of insurance, being based on utmost good faith, suppression of material facts, vitiated the same. He further submitted that, as per the report/record of the Government Medical College and Hospital, Sector 32, Chandigarh, where the complainant was admitted, he was suffering from Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome), which was having a direct nexus with chronic alcoholism. He further submitted that the medical literature produced by the Opposite Parties, clearly proved that Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome), were normally due to chronic alcoholism. He further submitted that the claim of the complainant was, thus, rightly repudiated by the Opposite Parties. He further submitted that the order of the District Forum, being legal and valid, is liable to be upheld.
11. After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties and the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, for the reasons to be recorded, hereinafter. It has been repeatedly held that the contract of insurance falls in the category of contract of UBERRIMAE FIDEI meaning thereby, a contract of utmost good faith, between the parties. When information, on a specific aspect, is asked for, in the proposal form, the insured is under a solemn obligation, to make a true and full disclosure of the same (information), on the subject, which is within his knowledge. Of course, obligation to disclose, extends only to the facts, which are known to the assured, and not to what he ought to have known. The Hon`ble Supreme Court of India in United Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)= (1996) 6 SCC 428, laid down the principle of law, that it is a fundamental principle of Insurance Law, that utmost good faith must be observed, by the contracting parties. Good faith forbids either party from non-disclosure of the facts, which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing to the contrary. To the similar effect, the principle of law, was laid down in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000) SLT 323 = I (2000) CPJ 1 (SC) . In P.C. Chacko and Anr.
Vs. Chairman, Life Insurance Corporation of India and Ors, III(2008) CPJ 78 (SC), it was observed as under:-
11 Section 45 of the Insurance Act reads as under:-
45. Policy not to be called in question on ground of mis-statement after two years- No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal form.
12. Section 45 postulates repudiation of such policy within a period of two years. By reason of the aforementioned provision, a period of limitation of two years had, thus, been specified and on the expiry thereof the policy was not capable of being called in question, inter alia on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy holder or that the policy holder knew at the time of making it that the statement was false. Statute, therefore, itself provides for the limitation for valid repudiation of an insurance policy. It takes into account the social security aspect of the matter.
13.There are three conditions for application of Second Part of Section 45 of the Insurance Act which are:
(a) the statement must be on a material matter or must suppress facts which it was material to disclose;
(b) the suppression must be fraudulently made by the policy-holder; and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
12. The purpose of taking a Policy of insurance is not, in our opinion, very material. It may serve the purpose of social security, but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated, if a fraudulent act is discovered. The proposer must show that his intention was bonafide. It must appear from the face of the record. In a case of this nature, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered, may lead to the Policy being vitiated in law.
13. In Rampreeti Yadav Vs. U.P.Board of High School & Intermediate Education & Ors, V(2003) SCT 394= JT 2003 (Supplt.I) SC 25, the principle of law, laid down, was to the effect that it is well settled law that mis-representation itself amounts to fraud, in some cases.
14. Keeping in view the principle of law, laid down, in the aforesaid cases, now let us see, as to whether, in the instant case, the life assured (now deceased), at the time of taking the Insurance Policy, suppressed the material facts, or had made a wrong declaration or not. Admittedly, the life assured (now deceased), purchased the Insurance Policy, Annexure C-2, after filling in the proposal form copy whereof, is Annexure C-1. At page 10 of the proposal form, it was stated by the life assured (now deceased), that he was consuming four hard pegs of liquor, per week. It is, however, significant to mention here, that the life assured (now deceased), died within nine days, from the date of commencement of risk, i.e. from the date of issuance of Insurance Policy, and within a few hours, from the time of admission, in the hospital. It is evident, from Annexure C-1, proposal form that with regard to the questions, relating to the life style information, the life assured (now deceased), stated that he had been consuming four hard pegs of liquor, per week. Annexure C-3, is the record of the Government Medical College and Hospital, Sector 32, Chandigarh, where the life assured (now deceased), was admitted before his death. It is evident, from page 59 of the District Forum file, forming part of Annexure C-3 that as per the Doctors, the life assured/patient (now deceased), was a chronic alcoholic. It is further evident, from this document, that the life assured/patient (now deceased), was suffering from Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome). According to the death report Annexure C-4, the cause of death of the life assured/patient (now deceased), was Severe Acute Pancreatitis and Shock ARDS (Acute Respiratory Distress Syndrome).
15. No doubt, the Opposite Parties, obtained the opinion of the medical expert Annexure C-5, yet, the same is not signed by him (medical expert). However, it may be stated here, that, on the basis of the medical literature produced, on record, at page 132 of the District Forum file, it is evident, that the Acute Pancreatitis is inflammation of the pancreas that occurs suddenly and usually resolves in a few days, with treatment. It can be a life-threatening illness with severe complications. The most common cause of the Acute Pancreatitis is the presence of gallstones-small pebble like substances, made of hardened bile-that cause inflammation, in the pancreas, as they pass through the common bile duct. Another main cause of Acute Pancreatitis is alcoholic abuse. Alcoholic abuse and gallstone, are the two main causes, accounting for 80% to 90% of all cases of Acute Pancreatitis. It is further evident, from the medical literature that there is a co-relation between chronic alcoholism and acute pancreatitis, as it usually occurs, as a result of alcohol abuses or bile duct obstruction. According to the medical literature, at page 132 of the District Forum file, the major causes for Acute Pancreatitis are long-standing alcohol consumption and biliary stone disease. In developed Countries, the most common cause of Acute Pancreatitis is alcohol abuse. Chronic means that it lasts for a long time. It is a pathologic condition resulting from the habitual use of alcohol in excessive amounts. Since, the life assured/patient (now deceased), as per the medical record Annexure C-3, was a chronic alcoholic, and suffered from Acute Pancreatitis, due to that reason, he suppressed this material fact, at the time of filling in the proposal form. On the other hand, he stated that he was consuming only four hard pegs of liquor, per week. It is also evident, from the medical literature aforesaid, that a person, who takes two hard pegs of liquor, per day, which amount to 14 pegs per week, can be said to be at risk. Since, as per the medical record i.e. Annexure C-3, the life assured (since deceased) was a chronic alcoholic, it could be safely held that he was taking more than 14 pegs of hard liquor per week. It was, on account of this reason that he was suffering from acute pancreatitis, which was the main cause of his death. Thus, at the time of filling in the proposal form, the life assured (now deceased), gave wrong information and suppressed the material facts, with regard to his life style and quantum of consumption of alcohol. He also duly signed the declaration, as under:-
I/We hereby understand and agree that the replies to the questions in the proposal, the details furnished in the enclosed questionnaires, the reports of any medical examination, or laboratory tests, the proof of age of the Life to be Assured/Proposer and this declaration will be the basis of the contract of assurance between me/us ad AEGON Religare Life Insurance Company Limited (the Company) and that if any statement made in the proposal for insurance or to any medical examiner, or referee, or friend of the Life to be Assured, or in any other document leading to the issue of the policy is inaccurate or false, is on a material matter or facts which are material to disclose, or if any information provided or disclosure made by me/us at the time of proposal are in variance with my/our financial position or health condition, physical or mental, as the time of proposal or if any of the documents submitted by me/us is found to be fake or forged the contract that will be made in pursuance of this proposal shall be null and void and all premiums so far paid in respect of the said contract shall stand forfeited to the Company. I/We understand and declare that any statement, any information sought by the Company from any person authorized by me/us to provide such information, all declarations, affidavits and other statements made by me/us and relied upon by the Company to asses the risk on Life to be Assured under this proposal shall form the basis of the contract of assurance between myself/us and the Company and shall be the basis of assessment, assumption and acceptance of risk by the Company. I/We further agree that the premium payable as well as the sum assured (main as well as the additional benefits) may vary upon assessment of risk by the Company.
16. Though, the life assured (now deceased), was having knowledge that he was a chronic alcoholic and suffered from Acute Pancreatitis, yet he suppressed this material fact, while answering the questions, in the proposal form, it could be said that the contract of insurance, being based on utmost good faith, stood vitiated.
17. In our considered opinion, the Opposite Parties, legally and validly, repudiated the claim of the complainant, on account of the reason, that her son (the life assured (now deceased), at the time of filling in the proposal form, suppressed the material facts, and, as such, the Policy being based on fraud, stood vitiated. Therefore, the Opposite Parties, were neither deficient, in rendering service, nor indulged into unfair trade practice. The District Forum was also right, in holding so. The order of the District Forum, being legal and valid, is liable to be upheld.
18. No other point, was urged, by the Counsel for the parties.
19. In view of the above discussion, it is held that the order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.
20. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed with no order as to costs. The order of the District Forum is upheld.
21. Certified copies of this order, be sent to the parties, free of charge.
22. The file be consigned to Record Room, after completion.
Pronounced.
July 9, 2013 Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
(DEV RAJ) MEMBER Rg