STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA :
At HYDERABAD
FA 314 of 2017
AGAINST
CC No. 142 of 2013, DISTRICT FORUM, WARANGAL
Between :
- The Branch Manager,
LIC of India, Hanmkonda Branch Office,
1 st Floor, Podduturi Complex,
Hanamkonda (P&M),
Warangal District.
- The Sr.Divisional Manager,
Life Insurance Corporation of India,
Divisional Office, Jeevan Prakesh,
Near Ambedkar Statue,
Balasamudram, Hanamkonda,
Warangal District. … … Appellants/opposite parties
And
Akkella Elisha, W/o late Kumaraswamy,
Age: 39 yrs, Occ:Household,
R/o Oorugonda (P & V),
Athmakur (M), Warangal District. … Respondent/Complainant
Counsel for the Appellants : Dr. Sofia Begum
Counsel for the Respondent : Sri K. Karunakar
Coram :
Honble Sri Justice B. N. Rao Nalla … President
And
Sri Patil Vithal Rao … Member
Tuesday, the Twentieth Day of February
Two Thousand Eighteen
Oral order : ( per Hon’ ble Sri Justice B.N.Rao Nalla, Hon’ble President )
***
1) This is an appeal filed under Section 15 of the Consumer Protection Act by the opposite parties/Insurance company praying this Commission to set aside the impugned order dated 31.01.2017 made in CC 142 of 2013 on the file of the DISTRICT FORUM, Warangal.
2) For the sake of convenience, the parties are described as arrayed in the complaint before the District Forum.
3). The case of the complainant, in brief, is that she is the wife of deceased life assured Kumaraswamy, who died on 18-08-2011 due to Heart Attack. During his lifetime, he obtained Jeevan Anand policy from opposite party No.1 vide policy No.687727395 for sum assured amount of Rs.1,00,000/- commenced from 28-09-2006, for which the complainant is the nominee. After the death of her husband, as nominee, when she submitted all requisite claim forms to opposite party No.1 claiming the death benefits of her husband under the above said policy, the opposite party No.2 repudiated the claim vide letter dt:09-03-2013 on false and flimsy grounds which amounts to deficiency of service on the part of the opposite parties. Hence, the complaint to direct the Opposite Parties to pay Rs.1,00,000/-, Rs.20,700/- towards vested bonus a per status report of the policy, interest @ 9% p.a. from 01-02-2012 to 16-08-2013 is Rs.13,875/-, travelling expenditure Rs.1,000/-, legal expenditure Rs.2,500/- and costs.
4). The opposite parties opposed the above complaint by way of written version, while admitting that the deceased Kumaraswamy obtained Policy from opposite party No.1 vide policy No.687727395 for sum assured amount of Rs.1,00,000/- commenced from 28-09-2006, for which the complainant is the nominee and the said life assured died on 18-08-2011, contended that the policy had lapsed for non payment of two half yearly premiums of 09/2010 and 03/2011 was got revived by the deceased life assured by submitting a personal statement regarding health duly executed by him on 02-08-2011. In the insurance parlance, Revival is treated as NOVATION i.e, Fresh Contract. The life assured furnished answers in his Personal Statement regarding health dated 02-08-2011 as under: Q.2: Since the date of your proposal for above mentioned policy: 1) Have you ever suffered from any illness/diseases requiring treatment for a week or more? Answer NO. 2) Did you ever have any Operation, Accident, or Injury? Answer NO. 3) Did you ever undergo ECG, X-Ray, Screening, Blood Urine or Stool Examination? Answer NO. Are you in sound health at present? Answer Yes. The claim had arisen within just 16 days of revival of the said policy, it came to light that the deceased life assured was hospitalized at 4.43 pm on 01-08-2011 i.e, just one day prior to the date of his signing on the personal statement regarding health dated 02-08-2011 and he was admitted into Rohini Super Specialty Hospitals, Hanamkonda under Regd.No.4728/2011.The deceased life assured made deliberate misstatement and withheld material information in his personal statement regarding health dated 02-08-2011. Hence, there is no deficiency of service on the part of the opposite parties and hence prayed for dismissal of the complaint.
5) During the course of enquiry before the District Forum, in order to prove her case, the complainant filed his evidence affidavit and got marked Ex.A1 to A-11 and the opposite parties filed evidence affidavit and got marked Ex. B1 to B3 and the forum marked case sheet as Ex.X-1.
6) The District Forum, after considering the material available on record, held and directed the opposite parties jointly and severally liable to deposit in this Forum a sum of Rs.1,00,000/- (Rs.One Lakh only) towards sum assured along with interest @7.5% p.a. from the date of filing of the complaint i.e, 16-08-2013 till the date of realization, to pay accrued bonus as per the policy and to pay Rs.5,000/- (Rs.Five thousand only) towards mental agony and costs within one month.
7) Aggrieved by the said order, the opposite parties preferred this appeal before this Commission.
8). Both sides have advanced their arguments reiterating the contents in the appeal grounds, rebuttal thereof along with written arguments. Heard both sides.
9) The points that arise for consideration are,
(i) Whether the impugned order as passed by the District Forum suffers from any error or irregularity or whether it is liable to be set aside, modified or interfered with, in any manner?
(ii) To what relief ?
10). Point No.1 :
There is no dispute that the respondent/complainant is the nominee and the wife of deceased life assured Kumaraswamy, who died on 18-08-2011 due to Heart Attack and during his lifetime, the complainant obtained Jeevan Anand policy from opposite party No.1 vide policy No.687727395 for sum assured amount of Rs.1,00,000/- commenced from 28-09-2006. When she submitted the claim, the appellants/opposite parties repudiated the same on 09.03.2013 on the ground of suppression material facts.
11) The contention of the respondent/complainant is that her claim was repudiated by the appellants Insurance company on the ground of mis-statement of the life assured with regard to the health condition at the time of revival of the policy which is false. On the other hand, the appellants Insurance company while admitting the repudiation of the claim contended that the deceased life assured was hospitalized at 4.43 pm on 01-08-2011 i.e, just one day prior to the date of his signing on the personal statement regarding health dated 02-08-2011 and he was admitted into Rohini Super Specialty Hospitals, Hanamkonda under Regd.No.4728/2011.The deceased life assured made deliberate misstatement and withheld material information in his personal statement regarding health condition.
12). The District Forum observed that the policy was commenced on 28.09.2006 and subsequently it was revived by the deceased on 02-08-2011 and the deceased life assured had submitted the revival policy on 29-07-2011 but he was hospitalized on 01-08-2011 under Ex.X-1 and the death occurred on 18-08-2011. The District Forum relied on the citation of Hon’ble National Consumer Disputes Redressal Commission, New Delhi in 2009 (2) CPR 406 between Life Insurance Corporation of India and another Vs Gowramma wherein it reveals that “Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is clear from the wording of the operative part of Section 45 that the period of two years for the purpose of the section has to be calculated from the date on which the policy was originally effected. The District Forum also relied on the decision in between LIC of India Vs Ashok 5 Maocha reported in (2011) 3 CPJ 418 (NC), where in it reveals that “Mere production of Ex.X-1 would not support the contention of the Opposite Parties, more particularly there is no affidavit of the said Doctor. No officer of the Insurance Company is examined to prove the authenticity of the medical treatment of hospital and also the medical certificate. It may be noted here that production of document is different from proof of the same. In case of repudiation of claim, the burden of proof heavily lies upon the Insurance Company. Except treatment record, no other evidence or material was placed to show that the deceased was suffering from such disease. As such mere allegation of concealment of material fact is not acceptable in absence of any evidence in support thereof and therefore the District Forum held that the repudiation of claim by the Opposite Parties is not justifiable”.
13). Counsel for the appellants’ Insurance company argued that revival is treated as NOVATION, i.e, a fresh contract and that Section 45 will start from the date of revival and not from the date of commencement of the policy. The said life assured signed the declaration for personal statement regarding health for CVA and Hemplegia at Rohini Super Specialty Hospitals, Hanamkonda on 02.08.2011, i.e, one day after hospitalization and the cause of death was due to heart attack was deliberate misstatement. Section 45 stipulates as “ Policy not to be called in question on ground of mis-statement after two years”. Here, policy means from the original policy, otherwise , it would have been mentioned as ‘ revival policy “. Here, the word ‘ Revive” means ‘ restore’. Revival of policy means, restore the old policy from its lapsed condition. The overwhelming majority of courts hold that the old contract is thereby reinstated and revived, and the new policy is merely a continuation of the old coverage. The same document evidences the new protection. The original policy was not changed and another new policy was not given in the place of old one. Without paying the due premium amounts, the policy would not be issued, in other words, the old policy continues. The premium rate remains the same, instead of increasing to the age at which the insurance is reinstated, it was not changed. Neither the terms and conditions of the policy were changed and the insured amount was not changed. Even as per the argument of the counsel for the appellants though the deceased life assured admitted in the hospital on 01.08.2011 but submitted the declaration on health on 02.08.2011, i.e., one day after hospitalization. Even though, the deceased life assured admitted on 01.08.2018, the hospital used to conduct some prescribed tests, it will take some time to come to a definite conclusion that the patient is suffering from so and so disease. No doctor/hospital would reveal the disease on the day of admission immediately without conducting tests under due procedure. After some LABORATORY TESTS that too after some time he might be known the disease and it cannot be expected on the day of admission he has knowledge of the disease. In those circumstances, we are not inclined to believe that the deceased policy holder has suppressed the disease. Further as relied on by the District Forum there is no corroborative evidence by any doctor in support of their contention. Further section 45(1) stipulates that “ No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later “. The original policy was issued on 28-09-2006 and it was lapsed for non payment of two half yearly premiums of 09/2010 and 03/2011, i.e., after three years of commencement of the policy and hence only on that ground itself the complaint is liable to be allowed.
14). After considering the foregoing facts and circumstances and also having regard to the contentions raised on both sides, this Commission is of the view that there is no infirmity or irregularity in the impugned order. There are no merits in the appeal and hence it is liable to be dismissed.
15). Point No. 2 :
In the result, the appeal is dismissed confirming the impugned order dated 31.01.2017 in CC 142 of 2013 passed by the District Forum, Warangal. There shall be no order as to costs. Time for compliance four weeks.
PRESIDENT MEMBER Dated : 20.02.2018..
