National Consumer Disputes Redressal
D. Chandran Through Lrs. vs Branch Manager, Lic Claims Department & ... on 12 July, 2019
Author: R.K. Agrawal
Bench: R.K. Agrawal
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2283 OF 2015 (Against the Order dated 30/04/2015 in Appeal No. 441/2012 of the State Commission Tamil Nadu) 1. D. CHANDRAN THROUGH LRS. SB. DEVA NESA NADAR, NO.137, PUDURPANDIAPURAM, TUTICORIN-2 TAMILNADU ...........Petitioner(s) Versus 1. BRANCH MANAGER, LIC CLAIMS DEPARTMENT & ANR. PALAYARNKOTTAI, TIRUNELVELI-627002 TAMIL NADU 2. THE REGIONAL MANAGER, LIC OF INDIA(CRM) SOUTHERN ZONAL OFFICER,ANNA SALAI CHENNAI TAMIL NADU ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE R.K. AGRAWAL,PRESIDENT HON'BLE MRS. M. SHREESHA,MEMBER For the Petitioner : Mr. C.M. Manishanker, Sr. Advocate for Mr. S. Gajaphati Krishnan, Advocate. For the Respondent : Mr. M.B. Raghavan, Advocate.
Dated : 12 Jul 2019 ORDER Per Mrs. M. Shreesha, Member
Challenge in this Revision Petition under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act") is to the order dated 30.04.2015 passed by the Tamil Nadu State Consumer Disputes Redressal Commission, Madurai Bench (for short "the State Commission") in First Appeal No. 441 and 522 of 2012 . By the impugned order, the State Commission has allowed the Appeal preferred by the Branch Manager and Regional Manager of the LIC Claims Department (hereinafter referred to as "LIC") and set aside the order of the District Consumer Disputes Redressal Forum Tiruneveli (for short "the District Forum") passed in CC No. 165 & 166 of 2010. By the impugned order, the State Commission has directed the Complainant to approach the Civil Court for settlement of the claim against LIC, if so desire.
2. As both the present Revision Petitions pertain to the same Life Assured and the respective Complainants are his father and mother respectively and the facts are similar they are being disposed of vide this common order.
3. The facts in brief are that the Complainant is father of the deceased Arunprabhu (hereinafter referred to as "the Life assured") and he has taken two policies bearing No. 32115458 and 321302620 in the name of the Life Assured. Policy No. 32115458 was proposed by Mr. D. Chandran, father of the Life Assured, for a sum of Rs.12,00,000/- and the same is subject matter of CC No. 165/2010 and Policy No. 321302620 was proposed by Smt. C. Nilavathy, mother of the Life Assured, for a sum assured of Rs. 8,00,000/- and the same is subject matter of CC No. 166/2010. The first policy, proposed by father of the Life Assured, commenced from 28.03.2002 and was to mature on 28.03.2017 and the second policy, proposed by mother of the Life Assured commenced from 23.07.2002 and was to mature on 23.07.2017. It is averred that the Life Assured died on 30.10.2004 unnaturally and a criminal case under Section 304 IPC was registered at police station, Chennai. When the Complainant made a claim for the amounts under the said policies, he was informed that CBCID Report was required to decide for the settlement of the claim. In this connection LIC sent a letter dated 27.03.2006 to the Complainant and the Complainant vide letter dated 25.08.2009 submitted the CBCID Report. Thereafter LIC demanded the Transfer and Conduct Certificates of the Life Assured and vide letter dated 29.10.2009 the same was provided to LIC. The Complainant averred that despite submitting all the necessary documents, LIC did not settle the claim on one pretext or the other in spite of the Complainant sending repeated reminders vide letters dated 10.11.2009 and 05.12.2009. Hence the Complaint seeking the following reliefs:-
"1. Opposite Parties be directed to settle the policy claim of Rs. 12,00,000/- to the Complainant;
2. Opposite Parties be directed to pay Rs. 5,00,000/- (Rupees Five Lakhs) being damages to the Complainant on account of deficiency in service and
3. Opposite Parties be directed to pay the costs for the proceedings and
4. Such other relief or reliefs be awarded that the District Forum deems fit and proper in the facts and circumstance of the case."
4. LIC filed their reply before the District Forum stating that the Life Assured was an alcohol and drug addict even at the time of submitting the proposal form and that he was under the influence of liquor and drug during redemption and, therefore, discontinued his engineering studies at Sathyabama Engineering College, Chennai where he studied during the year 2003 and joined B.Com at V.O.C. Arts evening college in the year 2004 and the same was suppressed prior to obtaining the policy. It was averred that the Contract of Insurance is a contract of Uberrimma Fide i.e. of 'Utmost Good Faith' and it is the duty of the proposer to disclose all facts and information relating to the health of the Life Assured. It was further averred that had the Complainant furnished the information regarding the habits and health condition of the Life Assured, LIC would have either declined the proposal for insurance or would have called for detailed medical tests and it is only because the Complainant suppressed the facts of drug addiction habit of the Life Assured that LIC did not settle the claim and hence there is no deficiency of service on their behalf.
5. The District Forum based on the evidence adduced allowed the Complaint directing LIC to pay the insurance claim amount of Rs.12,00,000/- to the Complainant in CC No. 165/2010 and Rs. 8,00,000/- in CC No.166/2010 along with interest @ 6% from the date of the Complaint till the date of realization of the amount along with Rs. 30,000/- towards compensation and Rs. 5000/- towards costs within a period of two months from the date of the order.
6. Aggrieved by the said Order, LIC preferred an Appeal before the State Commission, which, while allowing the Appeal observed as follows:-
8. We have carefully considered both sides written arguments and also gone through the documents relied on by the appellants before this Commission by way of additional evidence. It is the admitted case of both sides that the complainant taken the life insurance policy in favour of his son Arun Prabhu during the year 2002 as per the document Ex A1 and subsequently the life assured, policy holder Arun Prabhu was died on 30.10.2004 at Chennai in an unnatural manner for which a criminal case was registered in Crime N.1150/2004 under Section 304 IPC by the D1 Triplicane Police Station, Chennai. But, in the case of natural death of the policy holder, the Legal Heirs of the policy holder will automatically get the benefits of the policy but in this case, the death was caused due to unnatural circumstances and on perusal of the documents relied on by the appellant before this Commission which are not produced before the District Forum under Exhibits B1 to B4 relates to criminal case registered in this matter in which the investigation and the details of evidence concerned with the case and the judgment in S.C No. 237/2009 rendered by Additional District & Sessions Judge, Fast Track Court-V, Chennai-1, which details discloses that the policy holder Arun Prabhu was drug addict and on the date of crime on 30.10.2004, "venki @ Venkatesan broke open two ampoules (4ml) of Tidigestic drug and mixed it with a half tablet of Celin in brandy bottle cap and heated the mix with a lighted match stick and after cooling down he had injected the drug on the left hand of Arun Prabhu. He himself reportedly had a dose of one ampoule in the same manner. Arun Prabhu who was found fainted never woke up thereafter. Siva and Chandrasekaran failed in their attempt to wake him up in the morning of 31.10.2004 and called upon Venki @ Venkatasan to the room. He tried in vain his best to resuscitate and retrieve his life and declared that Arun Prabhu had kicked his bucket already." From these details furnished by the police in the final report, submitted before the court under Ex B1 and subsequently as per the other documents Exhibits B2 to B4 by way of Forensic report, witness examination and other details, the trial court also believing the version of the police report, the court convicted the concerned Accused as per the judgment copy under Ex B4. Under these circumstances, it is clear that the policy holder was died in unnatural way because of over doses of Tidiestic drugs and also the deceased was in the habit of taking Celin drug tablet. The policy was taken during the year 2002 and death occurred in the year 2004 i.e., after two years and as per the provision under section 45 of the Insurance Act, if any suspicion arose regarding the death of the policy holder even after completion of two years the Insurance Company has got the right to investigate the matter to decide the nature of death and in this case it was established that the policy holder even before the policy proposal submitted was in the habit of taking drugs and thereby the material facts were suppressed in the proposal submitted for the policy and if the facts were not suppressed, the insurance company either would have rejected the policy or allowed the policy with enhanced premium and in those circumstances, we are of the view that the policy holder and proposer have suppressed the material facts and thereby the insurance company is entitled to reject the claim. The insurance company contended that the claim could be decided only in civil court in such cases as per the terms and conditions of the policy. Under the terms and conditions of the policy under Ex A1, in condition No.5, it is submitted as follows:
"forfeiture in certain events:- In case the premium shall not be duly paid or in case any condition therein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal, personal statement, declaration and connected documents or any materials information is withheld, then and in every such case but, subject to the provisions of section 45 of the Insurance Act, 1938, wherever applicable, this policy shall be void and all claims to any benefit in virtue hereof shall cease and determine and all monies that have been paid in consequence hereof shall belong to the Corporation excepting always in so far as relief is provided in terms of the privileges herein contained or may be lawfully granted by Corporation."
In this case, it is clear that there was violation of condition of the policy by suppressing the material fats and thereby we are of the view that the complainant cannot get any benefit from the insurance company on the basis of death of the complainant's son, Arun Prabhu. On perusal of the District Forum order, it is found that since the appellants/ opposite parties have failed to file their proof affidavit before the District Forum even though filed their written version and not filed any documents before the District Forum and thereby the District Forum seems to have allowed the complaint on that basis only by relying upon the complainant side documents alone whereas now before this Commission by way of additional evidence by producing documents under Exhibits B1 to B4 the opposite parties have established the cause of death of the policy holder and proved the suppression of material facts and thereby we are of the view that the order of the District Forum is liable to be set aside by allowing this Appeal; however, the complainant is entitled to approach the Civil Court in order to settle the dispute with the opposite parties regarding the claim.
9. In the result, the appeal is allowed by setting aside the order of the District Forum, Tirunelveli passed in C.C. No. 165/2010, dated 04.07.2011 with liberty to the complainant to approach the Civil Court for the settlement of the claim against the opposite parties if so desired. No order as to cost in this appeal. (Emphasis Supplied).
7. Learned Senior Counsel appearing for the Revision Petitioner submitted that there is no evidence on record that the Life Assured had suppressed material facts regarding his health condition; that the Additional District & Sessions Court in SC No. 237/2009 on the file of XIII Metropolitan Magistrate, Egmore, Chennai has observed that 'though Arun Prabhu was having drug habit the defence has failed to establish it'; that the accused were found guilty and sentenced to undergo imprisonment for life for the murder of Mr.Arun Prabhu; that the claim was never repudiated; that LIC in their Medical Examiner's Confidential Report has noted that the general appearance of the Life Assured was healthy; that there was no adverse feature in health or habit, past or present, of the Life Assured which was considered 'Relevant' and further that the Forensic Report specifies that the fatal dose of Buprenorphine for an adult is about 18 mg and Life Assured was given injection using a 5 ml syringe and for the Life Assured to have had 18 mg of Buprenorphine, the syringe should have been injected at least 8 to 10 times.
8. Learned Counsel appearing for LIC vehemently contended that both the District & Sessions Judge and the High Court have observed that the Life Assured was in the habit of taking drugs; that as Mr. Venkant Raj Kumar, a school mate of the Life Assured has stated that Life Assured was in the habit of taking drugs and that he had advised him to avoid the habit and that it is only on account of overdosage of the drug that the Life Assured had died and the District & Sessions Judge had sentenced both the accused for committing murder of the Life Assured by injecting him with extra dosage of the drug. Learned Counsel submitted that the State Commission has rightly relegated the matter to Civil Court as the Consumer Forum do not have the wherewithal to adjudicate matters of such nature. He relied on the Judgement of Hon'ble Supreme Court in Oriental Insurance Company Ltd. Vs. Munimahesh Patel IV (2006) CPJ 1(SC) in which it was laid down that the proceedings before the Consumer Fora are of summary nature and, therefore, the Consumer Fora do not have jurisdiction to deal with that case. The factual matrix of that case is different from the facts of this case as the citation relied upon by the Learned Counsel is in respect to the disputed factual position regarding forgery of documentation. In the instant case there is no such dispute regarding documentation and the only point for consideration is whether LIC was justified in not settling the claim of the Complainant.
9. The material on record evidences that one policy was issued for a sum assured of Rs. 12 Lakhs covering the period from 28.03.2002, the date of maturity being 28.03.2017 and the other from 23.07.2002 and was to mature on 23.07.2017; that the record shows that it is an Endowment Insurance Policy with profits and in the event of death before the date of maturity, the nominee is entitled to the sum assured plus vested bonus. It is pertinent to note that the Proposal Form acquired by the Complainant under RTI Act, 2005 on 11.03.2016 evidences that the date of birth of the Life Assured was 03.04.1985, 'nearing 16 years' and the Complainant, who is the father of the Life Assured, has signed as Proposer as the Life Assured was under 18 years of age. The contention of the Learned Counsel appearing for LIC that the material regarding drug habit of the Life Assured was willfully suppressed prior to the taking of the policy and that he was a college drop-out, in the company of anti-social elements, is untenable in the light of the view of the fact that the life assured was only 16 years old at the time of signing of the Proposal Form and the Proposal Form was signed on 21.09.01 by the Complainant/Proposer as the Life Assured was a minor. The incident occurred on 30.10.2004 almost three years subsequent to the signing of the Proposal Form. The LIC Policy is dated 28.03.2002 and the Medical Examiner Confidential Report dated 24.09.2001 shows that the general appearance of the Life Assured was ' healthy ' and that there is 'no adverse feature in health or habit, past or present, which was considered Relevant.' (Emphasis Supplied).
10. It is significant to mention that though the Claim was made by the Complainant subsequent to the death of the Life Assured on 30.10.2004 and the CBCID Report was asked for on 27.03.2006 and the same was sent to the LIC on 25.08.2009 and subsequent reminders were sent on 10.11.2009 and on 05.12.2009, yet LIC had neither replied to the letters nor repudiated the claim forcing the Complainant to file this Complaint.
11. The Hon'ble Supreme Court in Galada Power & Telecommunication Limited Vs. United India Insurance Company Ltd. & Anr. (2016) 14 SCC 161 has observed that the Insurance Company cannot travel beyond their grounds of repudiation. In the instant case as the claim was not formally repudiated we place reliance on the averments made in the Written Version to adjudicate as to whether the non-settlement of the claim by the Insurance Company is justified. IRDA, Regulations, 9(2) and 9 (5) stipulate that a Surveyor be appointed and the report should be filed within 30 days of the appointment of the Surveyor and after the report is given, the Insurance Company ought to either settle or reject the claim within a period of 30 days. Both these Regulations were nor adhered to by the Insurance Company.
12. It is an admitted fact that the Life Assured died of drug overdose for which both the accused who had perpetuated the crime have been sentenced on charge of murder and, therefore, the contention of the Counsel appearing for LIC that the Life Assured was in the habit of taking drugs and the same was suppressed prior to taking of the policy, is untenable. There is absolutely no evidence on record to substantiate this contention. Merely because the Life Assured died of drug overdose it cannot be construed that the Complainant who signed as a proposer for the Life Assured and had taken the Policy when the Life Assured was 16 years old, was in the knowledge or otherwise of the drug taking habit of the Life Assured, if any. To reiterate, there is nothing on record to establish that the Life Assured was taking drugs at the age of 16 years prior to the issuance of the policy and at the time of signing of the proposal form. Learned Counsel for LIC vehemently contended that the Life Assured had dropped out of engineering college only because of this habit. We do not hesitate to mention here that merely because the student dropped out of Engineering course and chose to study B.Com., viewed from any angle, it cannot be construed that it was only because he was in the company of bad elements. The Life Assured has exercised his choice of changing his stream from Engineering to B.Com. At the cost of repetition, we may mention that the material on record does not evidence that the Insurance Company has discharged its onus as stipulated under Section 45 of the Insurance Act, 1938 for establishing that there was any wilful suppression. The act of LIC in waiting for the CBCID Report and not conducting any independent investigation and not replying to the communication of the Complainant with respect to the settlement or otherwise of the claim, is per se, deficiency. The proceedings in the criminal case are not binding on the question of deficiency of service to be adjudicated by the Consumer Fora. Be that as it may, both the accused have been sentenced for murder of the Life Assured.
13. The observations made by the State Commission that the matter has to be relegated to a Civil Court is erroneous keeping in view the decision of the Hon'ble Supreme Court in Dr. J.J. Merchant & Ors. Vs. Shrinath Chaturvedi (2002) 6 SCC 635, wherein the Hon'ble Apex Court inter-alia observed as under:-
"Further, under the Act the National Commission is required to be headed by a retired Judge of this Court and the State Commission is required to be headed by a retired High Court Judge. They are competent to decide complicated issues of law or facts. Hence, it would not be proper to hold that in cases where negligence of experts is alleged, consumers should be directed to approach the Civil Court.
It was next contended that such complicated questions of facts cannot be decided in summary proceedings. In our view, this submission also requires to be rejected because under the Act, for summary or speedy trial, exhaustive procedure in conformity with the principles of natural justice is provided. Therefore, merely because it is mentioned that Commission or Forum is required to have summary trial would hardly be a ground for directing the consumer to approach the Civil Court. For trial to be just and reasonable long drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary. It should be kept in mind that legislature has provided alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground. It would also be totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of facts are required to be dealt with or decided. The Act provides sufficient safeguards."
14. The facts of the present case do not deal with forgery or any complicated questions of fact or law to relegate the matter to a Civil Court.
15. For all the afore-noted reasons, we are of the considered view that there is deficiency of service on behalf of the Insurance Company not only in not following Regulation 9 of Insurance Regulatory & Development Authority (Protection of Policy Holders' Interest) Regulations, 2002 by neither repudiating nor settling the claim but also in concluding, without conducting any investigation, or appointing any Surveyor, that the Life Assured was in the habit of taking drugs prior to the issuance of the Policy without any documentary evidence to substantiate any such material and wilful suppression by the Complainant. Therefore, we find it a fit case to allow these Revision Petitions and set aside the order of the State Commission and restore the order of the District Forum.
16. Hence the present Revision Petitions are allowed with costs of Rs.10000/ to be paid by LIC to each Complainant/Revision Petitioner.
......................J R.K. AGRAWAL PRESIDENT ...................... M. SHREESHA MEMBER