Order by:

Sh.Amrinder Singh Sidhu, President

1.           The complainant has filed the instant complaint under section 35 of the Consumer Protection Act, 2019 on the allegations that in July 2018, the complainant's wife opened an account with opposite party No.1 and after that an agent of opposite party No.2 which have tie up with each other to earn the profits simultaneously approached her and allured to purchase their insurance product and being allured by agent of the opposite parties, wife of the complainant namely Mandeep Kaur purchased two Life Insurance Policy from opposite parties and he deposited requisite premium for Sum Assured of Rs.22,97,400/- for the aforesaid life insurance policies and accordingly, the opposite party issued policies No.01456349 and 01475378 and the premium was payable annually. However, no terms and conditions were ever issued to the deceased life assured and the complainant. In the above said insurance policy, the complainant was appointed as nominee by her wife. Unfortunately, wife of the complainant died a natural death on 22.02.2019. Thereafter, intimation regarding the death of wife of complainant was given to the opposite parties. The life assured was leading a perfectly healthy and normal life prior to the death. Thereafter, the complainant being nominee in the aforesaid insurance policy declared by his wife, lodged an insurance claim of Rs.22,97,400/- and submitted all the original documents required by the opposite parties for settlement of aforesaid lawful claim of the complainant. The officials of opposite parties assured the complainant that his lawful claim shall be settled at the earliest. The factum of the said death was duly registered with the Registrar Births & Death, Punjab. After the death of the life assured, the Complainant lodged the claim with the Opposite party through its head office for the release of Sum Assured, duly complying with the procedure laid down by the company. Complainant is an illiterate person and only know how to sign in punjabi, so at the time of lodging of claim the entire documents were filled up by the officials of opposite parties agent who sold the policy and he disclosed entire correct facts to the officials of the opposite parties and supplied whatever documents were asked for. The Complainant kept contacting the office of the opposite parties to know the status of the claim on account of death of his wife, but the Complainant has been given nothing besides false assurances that his case is under process and he shall have the insurance amount released soon. The opposite parties are therefore, only delaying the claim of the Complainant on one pretext or the other. Moreover, the claim was lodged in the 2019 after death with the opposite parties and as per IRDA Guidelines, the opposite party has only 90 days from the date of lodging the claim to decide the claim. However, for reasons best known to the opposite parties, the opposite parties have not sent any information with regard to the status of claim of the claimant and such fact clearly shows the malafide intention of the opposite parties. The complainant repeatedly approached and requested opposite party to settle his claim and to make the payment, but they handed over one letter dated 26.08.2019 that his claim rejected with false assertions made in said letter and stated in the letter that the wife of the complainant had pre-existing deceased, hence the claim is not payable which is against the true facts rather the opposite party just to get undue benefits by rejecting the genuine claim and decide the claim under the policy on false and wrong facts. Aforesaid repudiation of the claim by the opposite party is illegal, null and void, against law and facts and the same is not binding upon the complainant. Further alleges that all the columns of the proposal form were filled by agent of the opposite party on his own, at the time of obtaining aforesaid insurance policies, wife of the complainant has never concealed any fact from the opposite parties. Further alleges that the opposite party provide the letter only with regard to rejection of the claim and has not provided any document rather repudiated the claim of the complainant illegally and arbitrarily, for which the opposite party has no right to do so and further the opposite parties are under bounden duty as per insurance law to provide entire documents on which their decision had taken but they did not do so. After receiving information with regard to rejection of the claim, the complainant approached many a times with the request to withdraw the aforesaid illegal and arbitrary repudiation and to make the payment of the insurance claim of the complainant, but with no effect, rather the opposite party flatly refused for the same. Hence this complaint. Vide instant complaint, the complainant has sought the following reliefs.

a)       Opposite Parties may be directed to pay claim of the complainant for an amount of Rs.22,97,400/- on account of death of the wife of complainant.

b)      And any other relief to which this Hon’ble Consumer Commission, Moga may deem fit be granted in the interest of justice and equity.       

2.       Opposite Party No.1 appeared through counsel and contested the complaint by filing  the written version taking preliminary objections therein inter alia that the complainant has got no cause of action and locus-standi to file the present complaint. This Court has got no jurisdiction entertain, try and decide the present complaint. The present complaint is bad for mis-joinder of parties. The answering OP i.e. AU Small Finance Bank It has got no concern with the issuing of any alleged policy and its payment and as such the complaint is liable to be dismissed against the answering opposite party. The instant complaint is false, malicious, incorrect and with malafide intent and is nothing but an abuse of the process of law and is an attempt to waste the precious time of this Commission, as the same has been filed by the complainant just to avail undue advantage. The complaint is thus liable to be dismissed. From perusal of the instant complaint, it would be observed that averments made therein are vague, baseless and with malafide intent. The complainant has made misconceived and baseless allegations of deficiency services without any documentary evidence in support of his allegations made in the complaint. The complaint filed by the complainant does not fall within the definition of a 'consumer dispute' under the Consumer Protection Act, 1986 as there is neither any unfair trade practice adopted by the answering opposite parties nor any deficiency in service being established against the answering opposite parties, hence the averments and/or allegations made therein are frivolous baseless and misconceived and the complaint is liable for rejection and the same may kindly be rejected totality. The instant complaint is neither maintainable in law nor on facts and the same is liable to be dismissed in limine. The complainant has knowingly filed a false, frivolous and vexatious complaint against the answering opposite parties to harass the answering opposite parties and as such the answering opposite parties are entitled to special/ compensatory costs from the complainant. On merits, it is submitted that that there is an Corporate Agency Agreement dated 2^nd April, 2018 between Future Generali India Life Insurance Company Ltd. (FGI Life) and AU Smal Finance Bank Ltd. As per the said corporate agency arrangement AU Small Finance Bank Ltd. is procuring and servicing life insurance business for an on behalf of FGI Life and to provide various services to the customers and policyholders of FGI Life relation to distribution of life insurance business Further, AU Small Finance Bank Ltd. is registered under Insurance Regulatory & Development Authority c India vide registration No. CA0515 w.e.f. 31.08.2017 to 30.08.2020. So, AU Small Finance Bank has procuring the services for and on behalf of FGI Life. Remaining facts mentioned in the complaint are also denied and a prayer for dismissal of the complaint has been made.

3.       Opposite party no.2 appeared through counsel and contested the complaint by filing written reply version taking preliminary objections therein inter alia that the complaint filed by the Complainant is not maintainable. The Complainant has suppressed material facts from this Commission and as such the complaint is liable to be dismissed. The Complainant has tried to challenge the veracity of the decision of the Company to repudiate the claim. The Company has repudiated the claim under the said policy by a speaking order, which lists out the specific reasons for the decision. By no stretch of imagination the said decision can be brought under the umbrella of "Deficiency in Services". The Complainant should approach the Civil Courts in order to challenge the veracity of the decision of the Company to repudiate the claim. The Life Assured, at the time of filling up the proposal forms, did not disclose the correct information about her health, and he deliberately and fraudulently failed to disclose that she was under-going Hemodialysis since January 2018 due to Chronic Renal Failure which was detected November 2017 i.e. prior to the date on which application for insurance was signed. The said medical history was much prior to the applications for the policies which was not disclosed in the proposal forms. The Life Assured passed away on 22^nd February 2019 within 7 months from the date of commencement of the Policy No. 01456349 and within 3 months from the date of commencement of the Policy No. 01475378 and as such the Company has rightly repudiated the claims preferred by the Complainant. Insurance contracts are contracts based on "Utmost Good Faith". As per the contract, the insurer is bound to honour the claim under the policy, provided that the Life Assured at the time of applying for the policy, had disclosed all relevant information accurately with regard to her health, habits, employment, etc. which are the basis on which the insurer decides to cover the said life and at what rates. Since the Life Assured did not perform her duty to disclose all material information truthfully and correctly, the contract of insurance between the Company and the Life Assured is a void contact. Life insurance claim payouts are made from the pool of funds of many consumers of the services of an insurance company. Hence, to honour an illegitimate claim, would mean doing injustice to other genuine Policyholders. Hence, even entertaining the said case would be against the principles of natural justice and this would not be in the interest of consumers of services of a life insurance company. The Life Assured had fraudulently concealed material facts which were necessary to be disclosed at the time of taking insurance, thereby rendering the contract of insurance void-ab-initio and inoperative, which is the reason for the claims being repudiated. It is further submitted that it is a well settled principle of law that person who fills up anything on a signed document has status of 'amanuensis' only and cannot be treated as author of document. At the time of scribing (without admitting) the person who scribes (amanuensis) is treated as representative of person who has signed document and not the representative of the Company, thus after signing the document the person cannot release from signed document and lead anything which is contrary to terms stated in written document. Therefore, the present claim is devoid of substance and deserves dismissal. The complaint is devoid of any material particulars, and has been filed merely to harass and gain undue advantage and unjustified monies from the Respondent, and hence the complaint deserves to be dismissed in limine. It is submitted that the complaint has been filed with ulterior motive and malafide intention, to cause harassment and prejudice to the Respondent. Further, it is submitted that the proposal form is not merely a document to be signed and submitted for formality. It is the basis for the contract of insurance. It is the mode of providing information to the insurer so as to enable them to exercise a lawful right to evaluate the life before providing its services by covering the said life. Thus the subject matter for the above policy itself is proved to be initiated by a fraudulent act, and therefore, the said policies were declared void by the Company, and consequently, no benefit or amount under the said policy becomes payable, as the Life Assured was guilty of suggestio vari supresso falsi. The Complainant has failed to set up a nexus between the damages claimed in the present complaint and the damages actually suffered by him. For obtaining the policies in question, the policy holder had availed the services of an independent Broker i.e. AU Small Finance Bank Limited. An Insurance Broker is an independent entity licensed by Insurance Regulatory & Development Authority (IRDA), who advise their customers on their insurance needs and thereafter arrange insurance policy from any insurance company as per their own judgment and as per the customer's choice. It is to be noted that the Insurance Companies do not enjoy any administrative control over the Insurance Brokers. All Insurance brokers are governed by the provisions of IRDA (Insurance Brokers) Regulations, 2013 (As amended from time to time) and IRDA also entertain applications against Insurance Brokers. It is a settled principle of law that at the time of filling-up the proposal form, the agent acts as agent of insured and not of insurance company. The Complainant has concealed and suppressed the material and relevant facts of the case. The Complainant is guilty of suggestio vari supresso falsi. Since, the subject policy is an outcome of fraud and misrepresentation therefore the claim of the Complainant was rightly repudiated. The Respondent humbly submits before this Hon'ble Forum the following case decisions in support of the above contentions:

Export Credit Guarantee Corporation of India Ltd Vs. Garg Sons International 2013 (1) SCALE 410, Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs. United India Insurance Co. Ltd. [(2010) 10 SCC 5671, Reliance Life Insurance Co. Ltd. Vs. Madhavacharya (Revision Petition No. 211 of 2009). General Assurance Society Limited Vs. Chandumull Jain & Anr (1966) 3 SCR 500.

          Further alleges that the policies under question i.e. Policy Bearing Number 01475378 and 01456349 were issued by the Opposite Party Company on the basis of the information provided by the Life Assured in the proposal forms dated 06-11-2018 and 21/07/2018 respectively. The details of which is mentioned in para no.1 of Facts of the Case in written reply. The Life assured has provided a declaration under the proposal forms confirming that she has gone through and under the product as published by the Company that were handed over to her along with the proposal forms, and that the contents of the proposal forms have been fully explained to her and that she has fully understood the significance of the proposed contract. In order to help the Complainant understand the contents of the proposal as well as the terms and conditions of the policy and since the Complainant had signed the documents in a vernacular language, Mr. Ranjit Singh and Balwinder Singh acted as the scribe who explained all the details pertaining to the policy to the Complainant in the language that was well understood by her and both the scribe as well as the Complainant have accented to the said fact by placing their signatures on the proposal form. The Life Assured had answered the relevant questions in the proposal form in the negative, thereby indicating that he was medically fit and healthy on the date of application. The detail of which is mentioned in title Facts of the Case in para no.3 of the written reply. In accordance to Regulation 8(1) and 10(1) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interest) Regulation, 2017, a copy of the proposal forms duly signed by the Life Assured was sent to the Life Assured along with the policy documents thereby giving an opportunity to the Life Assured to re-examine the replies recorded in the proposal forms and get the details rectified in case of any discrepancy (ies) in the proposal form. Further, the Life Assured was duly informed vide the policy terms and conditions, that in case she is not satisfied with the policy or the terms and conditions, then she had the option to return/cancel the policy within the Free Look Period, i.e. within 15 days from the date of receipt of policy documents. However Life Assured retained the Policy Documents and did not raise any objection towards the policy or with respect to the material facts stated in the proposal form. Thereafter, the Complainant lodged death claim intimation which was received by the Company on 14-05-2013, stating that the Life Assured had passed away on 22-02-2019, within 7 months from the date of commencement of the Policy No. 01456349 and within 3 months from the date of commencement of the Policy No. 01475378 and hence, the Company proceeded to investigate the said claim, as permitted by the IRDA (Protection of Policyholders' Interests) Regulations. That the Company, on receiving a death claim intimation, it was intimated by the Investigators that the Life Assured, at the time of filling up the proposal forms, did not disclose the correct information about her health, and he deliberately and fraudulently failed to disclose that she was under going Hemodialysis since January 2018 due to Chronic Renal Failure which was detected November 2017 prior to the date on which application for insurance was signed. The said medical history was much prior to the application for the policy which was not disclosed in the proposal form. From the stated circumstances, it is evident that the Life Assured had given wrong information and suppressed material facts from the Company, in order to fraudulently obtain the subject policies from the Company. During investigation the record of Civil Hospital, Moga which is the most renowned Hospital of the region it came to the knowledge of the Respondents that Life Assured was undergoing Haemodialysis Since 03 November 2018. Life Assured in the proposal form had deliberately and fraudulently given wrong answers to all the relevant questions regarding her health and prior medical history, despite being aware of the same, and despite being aware of her obligation to disclose the same in the proposal form. The Company relied on and believed that the information given by the Life Assured in the proposal form was true and correct in all aspects. Had the Company known that the Life Assured had not disclosed her correct health, and lifestyle details in the proposal form, then the Company would have declined the proposal upfront. Insurance is a contract of utmost good faith and from the documents on record it is clearly evident that there has been a clear breach of this by the Life Assured. Hence, in view of the above, the Company had, vide letters dated 26.08.2019, repudiated the claims of the. The Life Assured had also put her signature on the Declaration in the proposal forms stating that she has understood the nature of questions and importance of disclosing correctly all material information. The present complaint is an abuse of the process of law and is liable to be dismissed in accordance with the Consumer Protection Act. Remaining facts mentioned in the complaint are also denied and prayer for dismissal of the complaint has been made.

4.       In order to  prove  his  case, the complainant has tendered into evidence his affidavit Ex.C1, additional affidavit Ex.C2 alongwith copies of documents Ex.C3 to Ex.C11.

5.       On the other hand,  to rebut the evidence of the complainant,  Opposite Party No.1 tendered  in evidence the  affidavit of Sh.Kumar Bansal, Legal Manager Ex.OP1/1 alongwith copies of documents Ex.OP1/2 to Ex.OP1/8. Whereas, Opposite Party No.2 tendered in evidence affidavit of Smt.Reena Kamath, Manager Legal Ex.OP2/1 alongwith copies of documents Ex.OP2/2 to Ex.OP2/9.

6.       During the course of arguments, ld.counsel for the Complainant as well as Opposite Parties have mainly reiterated the facts as narrated in the complaint as well as in written reply respectively. We have perused the rival contentions of the parties and also gone through the record on file. The contention of the complainant is that being allured by agent of the opposite parties, wife of the complainant namely Mandeep Kaur purchased two Life Insurance Policy from opposite parties and he deposited requisite premium for Sum Assured of Rs.22,97,400/- for the aforesaid life insurance policies and accordingly, the opposite party issued policies No.01456349 and 01475378 and the premium was payable annually. However, no terms and conditions were ever issued to the deceased life assured and the complainant. In the above said insurance policy, the complainant was appointed as nominee by her wife. Unfortunately, wife of the complainant died a natural death on 22.02.2019. Thereafter, the complainant being nominee in the aforesaid insurance policy lodged an insurance claim of Rs.22,97,400/- and submitted all the original documents required by the opposite parties for settlement claim. The complainant repeatedly approached and requested opposite party to settle his claim, however, the rejected the claim of the complainant, vide letter dated 26.08.2019 with false assertions made in said letter that wife of the complainant had pre-existing deceased, hence the claim is not payable. Aforesaid repudiation of the claim by the opposite party is illegal, null and void, against law.

7.       The contention of ld. counsel for the opposite party no.1 is that there is an Corporate Agency Agreement dated 2^nd April, 2018 between Future Generali India Life Insurance Company Ltd. (FGI Life) and AU Smal Finance Bank Ltd. As per the said corporate agency arrangement AU Small Finance Bank Ltd. is procuring and servicing life insurance business for an on behalf of FGI Life and to provide various services to the customers and policyholders of FGI Life relation to distribution of life insurance business Further, AU Small Finance Bank Ltd. is registered under Insurance Regulatory & Development Authority c India vide registration No. CA0515 w.e.f. 31.08.2017 to 30.08.2020. So, AU Small Finance Bank has procuring the services for and on behalf of FGI Life.

8.       On the other hand, ld. counsel for the opposite party no.2 has repelled the contention of the complainant on the ground that polices bearing no.01475378 and 01456349 were issued by opposite parties on the basis of the information provide by Life Assured in proposal Forms dated 6.11.2018 and 21.07.2018 respectively. The life assured passed away on 22.02.2019 within 7 months from the date of commencement of the Policy no.01456349 and within 3 months from the date of commencement of policy no.01475378. Thereafter complainant lodged the death claim of his wife which was received by the company on 14.05.2019. Company proceeded to investigate the said claim and it was intimated by the investigator that the life assured at the time of filling up the proposal forms did not disclosed the correct information about her health, she failed to disclose that she was under-going Hemodialysis since January 2018 due to Chronic Renal Failure. During investigation the record of Civil Hospital, Moga it came to the knowledge of the opposite parties that life assured was undergoing Heamodialysis (copy of death claim investigation report is Ex.OP2/6 and medical record of Civil Hospital Moga is Ex.OP2/7). Life assured deliberately and fraudulently failed to disclose that she was under-going Hemodialysis since January 2018 due to Chronic Renal Failure which was detected in November, 2017 i.e. prior to the date on which application for insurance was signed. Life assured in the proposal form had deliberately and fraudulently given wrong answers to all the relevant questions regarding her health and prior medical history. Life assured had put her signature on the Declaration in the proposal forms stating that she has understood the nature of questions and importance of disclosing correctly all material information, despite this the life assured suppressed the material facts from opposite parties. Since the life assured made a false statement in the proposals form whereby she did not disclose the past history of herself. Since the complainant intentionally and willfully did not disclose in the proposal forms about her past history. Had this information been provided to the Opposite Party at the time of applying for the insurance policy, hence, the Opposite Party No.2 rightly rejected the claim of the complainant. In this regard, Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No. 434 of 2017 titled as Shriram Life Insruance Company Limnited Vs. K.Viraja  decided on 15^th January, 2020 has  held that the Insurance contracts are governed by the Principle of ‘UBERRIMA FIDE” and the proposer applying for insurance is expected to correctly furnish all the material information regarding his health, family history, personal medical history, income etc. Policyholder failed to disclose his pre-proposal health ailment of hypertension. According, the State Commission Order was set aside and the complaint dismissed.   Furthermore, Hon’ble Supreme Court of India in Civil Appeal No.8701 of 1997 decided on 02.11.1999 titled as Ravneet Singh Bagga Vs. M/s.KLM Royal Dutch Airlines has held that a Bonafide decision in good faith and a bona fide dispute is not covered within the term of ‘deficiency in service and only inefficiency, lack of due c are, absence of bona fide, rashness, haste or omission like acts on the part of the agency rendering services under a contract may be held guilty of deficiency in rendering service.  Further Section 45 of the Insurance Act permits an insurer to cancel a life insurance policy in case a material concealment is made even if it does not amount to fraud. On the other hand, the ruling P.Vankat Naidu Vs.  Branch Manager, Life Insurance Corporation of India, Kurnool and another cited by the ld.counsel for the complainant is not applicable to the facts of the present case.

9.       Keeping in view the aforesaid facts and circumstances and replying upon the judgements of Hon’ble Supreme Court of India as well as Hon’ble National Commission, New Delhi (supra), we are of the view that the complainant has failed to prove any deficiency in service on the part of the Opposite Parties.

10.       In view of the above discussions, there is no merit in  the complaint and the same stands dismissed. Keeping in view the aforesaid facts and circumstances, the parties are left to bear their own costs. Copies of the order be furnished to the parties free of cost. File be consigned to record room after compliance.

11.       Reason for delay in deciding the complaint.

          This complaint could not be decided within the prescribed period because the State Government has not appointed any of the Whole Time Members in this Commission for about 3 years i.e. w.e.f. 15.09.2018 till 27.08.2021 as well as due to pandemic of COVID-19.

Announced in Open Commission