STATE CONSUMER DISPUTES REDRESSAL COMMISSION

OF TELANGANA : AT HYDERABAD

CC NO.58 OF 2013

Between :

G.Kousalya W/o Narender,

Aged 58 years, Occ: Housewife,

R/o H.No.3-1-39/10/7,

Teachers’ Colony, Armoor,

Nizamabad district.

Complainant

And

1)       The Manager,

          LIC of India, Armoor branch,

          Nizamabad district.

2)       LIC of India, Divisional Office:

          Secunderabad, Jeevan Sagar,

          Indira Park, Hyderabad – 500 080.

3)       LIC of India,

          South Central Zone Office,

          Jeevan Prakash, 5-9-21,

          Secretariat Road, Hyderabad- 500 063.

Opposite parties

Counsel for the Complainant             :         Sri M.Goutham Reddy

Counsel for the Opposite parties       :         Sri Srinivas Karra

Coram                  :

Hon’ble Sri Justice B.N.Rao Nalla, President

&

Sri Patil Vithal Rao, Member

Tuesday, the Eleventh day of April

Two thousand Seventeen

Oral Order : (per Hon’ble Sri Justice B.N.Rao Nalla, President)

***

          This is a complaint filed by the Complainant seeking direction to the Opposite parties to pay the policy assured amount of Rs.50,00,000/- covered by policy No.604732976 plus bonus and other benefits under the Policy, to grant compensation for the mental agony and humiliation at Rs.15,00,000/-, to award costs of the complaint together with interest @ 36% p.a. and to pass such other order or orders as deemed fit and proper.

2.       It is the case of complainant that she is the mother of one Garipally Vinod Kumar, who obtained policy bearing No.604732976 from OP No.1 by paying the appropriate premium, for an assured sum of Rs.50,00,000/- which commenced on 28.04.2011.  While the policy was in force, the complainant’s son Garipally Vinod Kumar died on 03.11.2011 accidentally by drowning in Pochampad Kakatiya canal.  To that effect, Police, Balkonda registered a case in Cr.No.175/2011 on 04.11.2011 and caused inquest over the dead body of the deceased and further subjected the corpse of deceased for post mortem examination wherein the doctor opined the cause of accident as due to drowning.

3.       The complainant, as nominee, to the above policy, made claim with the Opposite parties, who in turn have repudiated the claim by letter bearing No.CLAIMS/R-1977 dated 30.03.2013 on the premise that the policy holder with a pre-meditated intention to defraud the Corporation has managed to obtain the policy with wrong information.  In fact, the complainant had submitted all the relevant documents as required and also the affidavits and declarations, duly notarized.  In spite of the same, the Opposite parties have failed to settle the claim for years together.  Hence, the complaint with the reliefs as stated, supra, at paragraph No.1.

4.       The Opposite parties filed their written version contending that the complaint is not maintainable either on facts or in law.  It further contended that in the proposal form, the deceased has mentioned his age as 34 years and occupation as business of Raja Rajeswara Traders at Armoor.  As per their underwriting standards, depending on the sum assured, the policy holder was subjected to medical examination.  As the proposer was over-weight and the sum assured under consideration was high, the proposal was referred to higher office by its Armoor branch office.  The Central Office, after examining the proposal, declined the proposal vide their decision dated 18.07.2011. 

5.       The deceased Vinod Kumar has submitted another proposal to their branch office at Armoor on 16.09.2011 and in the said proposal (proposal No.5336 of 2011), the proposer suppressed the material fact of submitting an earlier proposal to the Corporation and also the status of that proposal.  In the proposal submitted on 20.05.2011, the policy holder has given his name as Garipally Vinod Kumar and in the second proposal dated 16.09.2011, he has given his name as G.Vinod Kumar only.  Upon which, the branch office could not detect the earlier proposal submitted by the policy holder.  For the second proposal, the medical examination was done by one Dr.Venkat Rami Reddy of Health India TPA (third party administrator) services at Hyderabad.  Since the medical record of the proposer was within the acceptable level for the second proposal, the proposal was accepted and policy in question was issued in good faith. 

6.       The policy holder died on 03.11.2011 i.e., within one month of accepting the risk, however, the claim was submitted after a gap of nearly 11 months i.e., on 25.09.2012.  The complainant has not submitted the original policy bond as required; however, she submitted an indemnity bond and also the relevant documents.  The copies of FIR, PME are not attested.  The enquires of the Ops revealed that the death is due to drowning and the possibility of suicide was not ruled-out as the policy holder had financial debts beyond his financial limits.  In the news item published in the dailies and in the FIR, it was mentioned that the deceased policy holder was an agent of Margadarsi Chit Funds whereas, in the proposal, there was no mention of his occupation.

7.       As the life assured had obtained the policy by suppressing the declination of earlier proposal by the Corporation.  It is found that there is a possibility of involvement of agent along with the proposer in not disclosing the previous proposal and also introducing the party for medical examination at two different places.  Accordingly, they repudiated the claim by letter dated 30.03.2013.  The question of deficiency of service does not arise.  The policies are issued in good faith on the information provided in the proposal forms.  It is the duty of the Corporation to safeguard the public monies and act diligently while settling the early claims.  Hence, prayed to dismiss the complaint with costs.

8.       In order to prove his claim, the Complainant filed her affidavit evidence and Exs.A1 to A23.  On behalf of the Opposite parties, its Assistant Secretary (L& HPF) had filed his affidavit and the documents Ex.B1 to B17.

9.       The points that arise for consideration are :

i)        Whether there is any deficiency of service on the part of the Opposite parties and whether the Complainant is entitled for the reliefs, as prayed for?

ii)       To what relief ?

10.     POINT No.1: It is not in dispute that the Complainant is the mother of the deceased life assured as also the nominee to the policy in dispute.  It is also not in dispute that the policy was in force as on the date of death of the policy holder so also the death of the deceased policy holder.  The only dispute that remains is that the policy holder had suppressed the declination of the earlier policy.

11.     In support of her claim, the complainant exhibited as much as 23 documents.  Ex.A1 is the policy status report, Ex.A2 is the application made to the Ops seeking payment of policy benefits, Ex.A3 is the death certificate of the policy holder, Ex.A4 is the claimant’s statement, Ex.A5 is the certificate of hospital treatment, Ex.A6 is the medical attendant’s certificate, Ex.A7 is the certificate of identity and burial or cremation, Ex.A8 is the claimant’s requisition for claim form, Ex.A9 is the undertaking/indemnity executed by the complainant in favour of the Ops, Ex.A10 is the query form, Ex.A11 is the declaration made by the complainant, Ex.A12 are the copies of FIR, PME and Inquest panchanama showing the death of the deceased due to drowning, Ex.A13 is the final report filed by the Police, Balkonda, Ex.A14 is the family member certificate wherein the name of the complainant finds place as a mother of the deceased Garipally Vinod Kumar, Ex.A15 is the copy of news item, Ex.A16 is the legal notice caused by the complainant on the OP No.1, Ex.A17 are the proof of delivery of the notice caused on the Ops, Ex.A18 is the letter dated 02.02.2013 addressed by the Ops to the counsel for complainant, Ex.A19 is the copy of notice dated 12.02.2013 issued by the counsel for the complainant to the OP No.1, Ex.A20 are the original consignment notes, Ex.A21 is the repudiation letter, Ex.A22 is the cover under which Ex.A21 was sent, Ex.A23 is the copy of representation made by the complainant to the Ops.

12.     On other hand, the Ops exhibited as many as 17 documents in support of their claim.  Ex.B1 is the proposal for insurance on own life submitted by the life assured, dated 20.05.2011, Ex.B2 is the medical examiner’s confidential report dated 20.05.2011, Ex.B3 is the medical report of the deceased policy holder, Ex.B4 is the copy of policy decision communicated by the Ops, Ex.B5 is the proposal for insurance on own life, dated 16.09.2011, Ex.B6 is the medical examiner’s confidential report dated 16.09.2011, Ex.B7 are the medical reports of the deceased, Ex.B8 is claimant’s requisition for claim form, Ex.B9 is the certificate of identity and burial or cremation, Ex.B10 is the medical attendant’s certificate, Ex.B11 is the certificate of hospital treatment, Ex.B12 is the claimant’s statement, Ex.B13 is the death certificate of the deceased, Ex.B14 is the declaration made by the complainant to the Ops, Ex.B15 is the query form, Ex.B16 is the internal letter dated 08.02.2013 of the Ops, Ex.B17 is the policy in dispute.

13.     A perusal of Ex.B17 goes to show that the same is issued on the name of the deceased life assured for an assured sum of Rs.50,00,000/- in the month of November 2011 in pursuance of the proposal No.5336 dated 16.09.2011 and the name of the complainant herein is shown as nominee under Section-39 of the Insurance Act, 1938.  The date of commencement of the policy is shown as 28.04.2011 since the policy was issued with back-date.  Ex.A1 filed by the complainant goes to show that the policy was in force as on the date of death of the deceased life assured.  Ex.A12 the copies of FIR, PME and Inquest report goes to show that the deceased life assured died on 03.11.2011 due to drowning in the Kakatiya Canal of Pochampad having fell in the water due to slip.  The doctor who conducted the post-mortem examination over the corpse of the deceased opined the cause of death of the deceased life assured as due to “cardio-respiratory arrest due to drowning”.

14.     We may state that there is no quarrel as to the nature of death of the deceased.  The only dispute is that the deceased suppressed the declination of the policy in the proposal form.  No doubt the insurance contract is based on the principle of ‘Uberrima fides’.  The Opposite parties would contend that the deceased life assured had suppressed the factum of declination of the earlier policy.  As a matter of fact, the earlier policy was declined by the Opposite Parties Corporation on account of obesity and other physical measurements pertain to the deceased life assured.  The same deceased life assured had again submitted the proposal for insurance second time by physically going over to the office of OP No.1 in which circumstance, the person obtaining the policy was very much present and the physical appearance of the life assured could have been assessed by any prudent man.  For the reasons best known, the Opposite parties agent got examined the deceased life assured at Hyderabad on the very same day and admittedly, the policy was issued in the month of November 2011, after a wait of more than 45 days.  Now, the Opposite parties cannot turn round and contend that there was suppression and therefore the complainant was not entitled to the amount covered under the policy.   It is the bounden duty of the insurance company to let-in evidence to prove each and every defence taken by it, more so, when it had accepted the proposal and issued the policy after a wait of more than considerable period of (45) days.   The deceased would not have thought that he would die by such an accidental slip into the canal.  It has become a routine for the insurance companies to deny the just claims of poor consumers.  It is nobody’s money.

15.     The Opposite parties Corporation is controlled and owned by the government.   In the fitness of things, we may observe that it is high time that the insurance Companies like the Ops come out of the slumber and become more professional, particularly when the competition in the business is cut-throat rather than treating the cases in a cursory and casual manner as they are dealing with the public money.  Even otherwise, it is not the case of the Opposite parties that they issued the policy in a hurried and hasty manner.  Only when the complaint was filed by the complainant, it alleged that the required certificates and testimonials were not submitted duly attested and that the original policy bond is not furnished.  Evidently, the complainant had complied with the procedure as required for indemnifying the Opposite parties in case of loss of original policy bond.  In fact, the Complainant is not a party to the Ex.B17 contract.  She is the legal-heir of the deceased and nominee to the policy.  The terms and conditions would in no way bind on her.  The terms of contract cannot be fastened on the legal heir/nominee in order to repudiate the claim.  The insurance company having issued the policy after satisfying with due requirements of the policy, cannot complain of suppression of the declination of the earlier policy.  In this regard, we may state that the Opposite parties were in possession of all data of the policy holders with them and nothing prevented them from making investigation and declining the subsequent policy too.  Having accepted the proposal and issued the policy, the Opposite parties cannot turn round and contend that there is suppression on the part of the deceased policy holder.

16.     Instead of settling the claim fairly, the Opposite parties made the complainant to suffer from the last six years to mitigate her grievance before this Commission. We may state further that the Opposite parties is a large entity and it could litigate up to the highest court where poor legal-representatives of the deceased might not have wherewithal to fight.  Since the claim involved is huge amount, the Opposite parties appear to have taken such false and flimsy pleas.  We do not see any reason to disbelieve the claim of the complainant.  Except the allegation that there is suppression of declination of earlier policy, no evidence is brought on record by the Opposite parties to withhold the huge amount with them for these long years.  For the foregoing reasons, we answer the point No.1 framed for consideration at paragraph No.11, supra, in favour of the Complainant and against the Opposite parties. 

17.     POINT No.2 : In the result, we allow the complaint in part and direct the Opposite parties to pay a sum of Rs.50,00,000/- covered by policy bearing No.604732976 under Ex.B17 together with interest @ 9% per annum from the date of death i.e., 03.11.2011 till realisation together with costs of Rs.5,000/-.  The claim for other reliefs is discarded.  Time for compliance : four weeks.

PRESIDENT                                       MEMBER

Dated: 11.04.2017

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

For Complainant :                                        For Opposite parties :

Affidavit evidence of G.Kousalya                             Affidavit evidence of V.Vijaya Saradhi,

Complainant as PW1.                                    Assistant Secretary (L&HPF), on behalf

of the Opposite parties.

EXHIBITS MARKED

For Complainant :

Ex.A1 is copy of the status report of policy No.604732976.

Ex.A2 is copy of the representation made by the complainant dated 25.01.2012.

Ex.A3 is copy of the Death Certificate, dated 11.11.2011 pertain to the deceased, issued by the Tahsildar, Balkonda.

Ex.A4 is copy of claimant’s statement.

Ex.A5 is copy of the Certificate of Hospital treatment, issued by the Deputy Civil Surgeon, Government Civil Hospital, Balkonda.

Ex.A6 is copy of the Medical Attendant’s Certificate issued by the Deputy Civil Surgeon, Govt. Civil Hospital, Balkonda.

Ex.A7 is copy of Certificate of identity and burial or cremation.

Ex.A8 is copy of claimant’s requisition for claim form.

Ex.A9 is copy of affidavit (form No.3815) furnished by the complainant to the Ops.

Ex.A10 is copy of query form, dated 04.02.2013 answered by the complainant.

Ex.A11 is copy of declaration (form No.3510) dated 04.02.2013 furnished by the complainant to the Ops.

Ex.A12 is copy of First Information Report, dated 04.11.2011 on the file of Police Station, Balkonda; copy of Post Mortem Examination report dated 04.11.2011 and copy of Inquest Report dated 04.11.2011 pertain to the deceased.

Ex.A13 is copy of the Final report, dated 30.12.2011 filed by the Sub-Inspector of Police, Police Station, Balkonda.

Ex.A14 is copy of the family member certificate, dated 16.11.2011 issued by the Tahsildar, Armoor.

Ex.A15 is copy of the news item published in Newstoday, dated 04.11.2011.

Ex.A16 is copy of the legal notice, dated 22.01.2013 got issued by the complainant to the Opposite party No.1 marking copies to the Ops 2 and 3.

Ex.A17 are the original courier delivery proof (proof of delivery).

Ex.A18 is the reply dated 02.02.2013 given by the OP No.1 to the counsel for the complainant.

Ex.A19 is the copy of notice dated 12.02.2013 got issued through the counsel for complainant to the OP No.1 marking copies to the Ops 2 and 3.

Ex.A20 are the original consignment notes issued by the Professional Couriers, Nizamabad.

Ex.A21 is the repudiation letter dated 30.03.2013 issued by the Ops.

Ex.A22 is the registered cover of Ex.A21 letter, addressed by the Ops to the complainant.

Ex.A23 is the representation made by the Complainant to the Ops.

For Opposite parties :

Ex.B1 is the copy of proposal for insurance on own life, dated 20.05.2011, submitted by the deceased life assured.

Ex.B2 is the copy of Medical Examiner’s Confidential report, dated 20.05.2011.

Ex.B3 are the copies of medical reports of the deceased life assured, dated 20.05.2011.

Ex.B4 is the copy of Underwriting and Reinsurance Department, Proposal/policy decision.

Ex.B5 is the copy of proposal for insurance on own life, dated 16.09.2011 submitted by the deceased life assured.

Ex.B6 is the copy of Medical Examiner’s Confidential report, dated 16.09.2011.

Ex.B7 are the copies of medical reports  of the deceased life assured, dt.16.09.2011.

Ex.B8 is the copy of Claimant’s requisition for claim forms for consideration of death claim.

Ex.B9 is the copy of Certificate of identity and burial or cremation.

Ex.B10 is the copy of medical attendant’s certificate, dated 04.11.2011.

Ex.B11 is the copy of Certificate of Hospital treatment, dated 09.07.2012.

Ex.B12 is the copy of Claimant’s statement.

Ex.B13 is the copy of Death Certificate, dated 11.11.2011 issued by the Tahsildar, Balkonda.

Ex.B14 is the copy of Declaration, dated 25.09.2012 given by the complainant in favour of the Ops.

Ex.B15 is the copy of query form, dated 25.09.2012 answered by the complainant.

Ex.B16 is the copy of internal correspondence of the Ops, dated 08.02.2013.

Ex.B17 is the copy of Jeevan Anand (with profits) (with accident benefit) policy bearing No.604732976, issued in favour of the deceased life assured.

PRESIDENT                                       MEMBER

Dated: 11.04.2017