DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA

C.C. No. 322 of 07-05-2014

Decided on 12-06-2015

Amandeep Kaur aged about 31 years widow of Late Sh. Gurpreet Singh S/o Hari Sigh, R/o Poohla, Tehsil and District Bathinda.

Anmol Singh aged about 8 years, minor son of Gurpreet Singh, S/o Hari Singh, through his real mother Amandeep Kaur widow of Gurpreet Singh being his next friend and natural guardian, R/o Poohla, Tehsil and District Bathinda.

…...Complainants

Versus

Life Insurance Corporation of India, Bibi Wala Road, Bathinda, through its Branch Manager.

Life Insurance Corporation of India, Jeewan Parkash, Divisional Office, Urban Estate, Phase-1, Dugri, Ludhiana 141002, through its Divisional Manager

Avtar Singh S/o Baldev Singh, LIC Agent, R/o V. Poohla, Tehsil & District Bathinda.

.......Opposite parties

Complaint under Section 12 of the Consumer Protection Act, 1986.

Quorum :

Sh. M.P.Singh Pahwa, President

Sh. Sukhwinder Kaur, Member

Sh. Jarnail Singh, Member

Present :

For the Complainant : Sh. Vinod Garg, counsel for complainant.

For the opposite parties : Sh. Sanjay Goyal, counsel for OPs 1 & 2

OP No. 3 exparte

O R D E R

M.P.Singh Pahwa, President

Complainants named above, filed this complaint under Section 12 of the consumer Protection Act, 1986 (here-in-after referred to as 'Act').

Briefly stated, the case of the complainants is that the opposite parties including opposite party No. 3 approached deceased Gurpreet Singh at Village Poohla and allured him to purchase Life Insurance Policies of opposite parties. The officials of the opposite parties took signatures of deceased Gurpreet Singh and Amandeep Kaur complainant on blank papers and printed forms, without disclosing any contents and obtained premium thereof. The complainant and Gurpreet Singh (since deceased) were got medically examined by the opposite parties by calling in their office at Bathinda. Both Gurpreet Singh and Amandeep Kaur were got medically checked by the empannelled doctors of opposite parties to their satisfaction, regarding medical conditions and status of health of Gurpreet Singh and Amandeep Kaur.

It is also pleaded that Gurpreet Singh also disclosed the opposite parties that he is in service. The opposite parties intimated the complainant Amandeep Kaur and Gurpreet Singh that they will verify the service leave record and medical record, if any, submitted by Gurpreet Singh with his employer. Gurpreet Singh was allured to purchase Insurance policy No. 302221106 on 28-10-2011 for Rs. 5.00 Lacs from the opposite parties under table 179-20. Amandeep Kaur, complainant was also allured to purchase Policy No. 302220374 under plan 179-20 dated 28-10-2011 for Rs. 5.00 Lacs from the opposite parties. The opposite parties issued policies in this regard. The opposite parties fixed premiums of Rs. 18,971/- and Rs. 18,187/- respectively as annual premiums of the policies of Gurpreet Singh and Amandeep Kaur. Gurpreet Singh paid second premium due against his policy in October, 2012.

It is alleged that Gurpreet Singh was quite healthy and fit and was regularly attending his duties. He suddenly suffered illness in March, 2013 and was admitted in D.M.C. Ludhiana on 13-3-2013 and died on 13-3-2013 due to massive bleeding and shock.

It is alleged that complainant lodged claim with the opposite parties against Insurance policy No. 302221106 in the name of Gurpreet Singh, but after a long delay, claim of the complainants was repudiated vide letter dated 5-2-14 for the reason that statements given by deceased in the proposal form were found false regarding health of Gurpreet Singh and he suffered from Alcoholic Liver Disease from 8-4-2011 to 23-4-2011.

It is stated that complainant No. 1 is nominee under the policy. She is entitled to file the complaint. It is alleged that repudiation of claim of the complainants is illegal, null and void inter-alia on the grounds that (i) proposal form had not been filled by Gurpreet Singh, rather the same was filled by the officials of opposite parties, including opposite party No. 3, who filled the same as per their desire and wishes to issue the policy to deceased Gurpreet Singh one way or the other in order to get the business

(ii) That it is to the knowledge of the opposite parties that Gurpreet Singh was in service and they also verified medical history and record in his service before issuing the insurance policy and satisfied themselves about health of Gurpreet Singh

(iii) That the opposite parties thoroughly got checked deceased Gurpreet Singh about his health and only thereafter policy was issued (iv) That Gurpreet Singh continuously served in his job even upto the last day of his death

(v) That deceased was admitted in DMC only on 13-3-13 and died on the same day, due to sudden massive bleeding and shock

(vi) That the Opposite parties never joined the complainants in investigation done, therefore, complainant could not get an opportunity to explain that deceased did not get any treatment for any alleged disease of ALD from 8-4-2011 till the date of death. The opposite parties have not collected any record of actual admission or treatment from 8-4-2011 till the date of death, as no treatment was taken by deceased nor he was admitted anywhere during the period (vii) That the opposite parties have paid claim of Rs. 2.00 Lacs against policy taken in 2006 in the name of Gurpreet Singh.

It is alleged that due to non-payment of claim, the complainants have suffered mental agony, pains and sufferings. The opposite parties have failed to provide proper and efficient service . On this backdrop of facts, the complainants claimed entire claim amount against the policy alongwith compensation to the tune of Rs. 1.00 Lac and Rs. 10,000/- as litigation expenses.

Upon notice, opposite parties No. 1 & 2 appeared through counsel and contested the claim, whereas opposite party No. 3 did not turn up and he was proceeded against exparte.

Opposite parties No. 1 & 2 in their joint written version raised legal objections that complainants have no cause of action to file the present complaint; tht complainants have not approached this Forum with clean hands; that complaint against opposite parties is frivolous and without any merit. The allegations of deficiency in service levelled against opposite parties are false and baseless.

On merits also, the opposite parties No. 1 & 2 controverted all the material averments. It is denied that deceased insured was ever allured by the opposite parties for purchasing insurance policy or signatures of deceased and complainant Amandeep Kaur were obtained on any blank papers and printed Forms. It is further added that insured was literate person and he was not expected to sign documents without knowing contents. It is further pleaded that before taking insurance policy, deceased insured was suffering from Alcoholic Liver Disease but this fact was never disclosed by deceased insured in his proposal Form and concealed the same. The policy was got issued by concealing true facts about health of the insured and by misrepresentation and wrong statement in the proposal form. The contract of insurance is out come of faith and bonafides of parties. If insured attempts to defraud the insurer by concealing real state of health, the contract would be frustrated. It is also pleaded that before the date of proposal, the deceased insured was diagnosed as suffering from Alcoholic Lever Disease for which he had taken treatment from the hospital from 8-4-2011 to 23-4-2011 but he did not disclose the same and concealed the material information in the proposal form. He gave wrong answers regarding his health.

In nutshell, stand of the opposite parties No. 1 & 2 is that the deceased insured got issued policy by concealing material facts and by withholding information regarding his health and due to this reason, his claim has been repudiated. It is denied that repudiation is illegal, null and void on the grounds taken by the complainant. In the end, opposite parties No. 1 & 2 prayed for dismissal of complaint.

Both the parties were afforded opportunity to produce evidence. In support of their claim, complainants tendered into evidence affidavits (Ex. C-1 & Ex. C-6), copy of payment receipt (Ex. C-2), copies of insurance policy (Ex. C-3 & Ex. C-4), copy of letter dated 5-2-14 ( Ex. C-5), copy of certificate of employer (Ex. C-7), copies of payment vouchers (Ex. C-8 & Ex. C-9), copy of claimant statement (Ex. C-10), copy of letter (Ex. C-11), copy of claim inquiry report (Ex. C-12), copy of receipt (Ex. C-13) and copy of passbook (Ex. C-14).

In order to rebut this evidence, opposite parties No. 1 & 2 have tendered into evidence copy of repudiation letter (Ex. OP-1/1), copy of claim inquiry report (Ex. OP-1/2), copy of Form No. 3816 (Ex. OP-1/3), copy of Proposal Form (Ex. OP-1/4), copy of leave record (Ex. OP-1/5), copy of OPD slip (OP-1/6), copy of certificate of employer (Ex . OP-1/7), copy of summary slip of DMC, Ludhiana (Ex. OP-1/8), copy of office order (Ex. OP-1/9), copy of leave application (Ex. OP-1/10), copy of Form No. 3816 (Ex. OP-1/11), affidavit of Sh. S P Singh (Ex. OP-1/12), copy of insurance policy ( Ex. OP-1/13). Complainant and opposite parties No. 1 & 2 have also submitted written submissions.

We have heard learned counsel for the parties and gone through the record and written submissions of the parties.

It is submitted by learned counsel for the complainants that it is not disputed that Gurpreet Singh was insured with the opposite parties. Death of Gurpreet Singh is also not disputed. The insurance claim is declined vide letter dated 5-2-14. The only ground for repudiation of claim is that deceased has made wrong statement in the proposal form and withheld correct information. He has concealed exact information regarding his health at the time of effecting insurance. As per opposite parties, deceased was suffering from Alcoholic Lever Disease but no concrete evidence has been collected by the opposite parties to come to this conclusion. Other evidence proved that Gurpreet Singh remained hale and hearty till the date of his death. He had gone to his duty even the day before his death. The opposite parties were to prove on the basis of record that deceased Gurpreet Singh was suffering from any disease, but no concrete record has been produced. The decision is based on conjunctures and surmises. No opinion from any specific doctor or hospital has been collected about the diagnoses of the deceased. Ofcourse in OPD slip Ex. OP-1/6, disease of the deceased is mentioned as 'Alcoholic Liver Disease' but what is the basis of this entry, is not mentioned. No disease was diagnosed before mentioning this fact in prescription slip OP-1/6. The doctor who has mentioned the 'complaint of decease as 'ALD' is also not examined to corroborate this fact. There is no record of any test or diagnosis showing Alcoholic Liver Disease or any other disease suffered by Gurpreet Singh.

It is further submitted by the learned counsel for the complainants that ofcourse Gurpreet Singh has availed leave from 8-4-2011 on medical grounds but there is no record of any treatment. There is also no record of diagnosis of any disease. Merely availing medical leave does not amount to proof any disease justifying repudiation of claim. The opposite parties have also produced record of DMC & Hospital Ex. OP-1/8. Ofcourse in the column of diagnoses 'ALD cirrhosis' is mentioned but how this disease is diagnosed is not mentioned. No other laboratory tests are produced on record to corroborate this fact. There is also no reference of previous history of 'ALD' In case Gurpreet Singh was already suffering from any such type of disease, there would have been reports to this effect of any treating doctor and produced at DMC & Hospital to facilitate proper treatment.

It is further submitted by the learned counsel for the complainants that medical examination was also got conducted before issuance of policy of Gurpreet Singh but the examination is not brought on record by the opposite parties. The adverse inference is to be drawn for this reason and it is to be inferred that Gurpreet Singh was not suffering from any disease at the time of effecting insurance. Deceased Gurpreet Singh has also mentioned that he is in service as teacher. The opposite parties have also checked the service record before issuance of policy. The medical condition of the deceased could have been easily detected from the service record. Gurpreet Singh has never availed any reimbursement from his employer. He remained in service till 11-3-2013 i.e. couple of days before his death.

It is also submitted by the learned counsel for the complainants that complainants were never joined in the investigation. The claim was recommended vide letter Ex. C-8, but later on, it was illegally repudiated.

It is further submitted by the learned counsel for the complainant that proposal form was filled by opposite party No. 3 namely Avtar Singh. He is resident of village Poohla. Gurpreet Singh was also resident of village Poohla. In case Gurpreet Singh was suffering from any disease, then this fact must have been in the notice of Avtar Singh, being co-villager. The said Avtar Sigh has not come forward to support opposite parties No. 2 & 3 or to rebut the evidence of complainants. Although action was recommended by opposite parties No. 1 & 2 against opposite party No. 3 vide Ex. C-11, but no record is produced to prove that any action has been taken against opposite party No. 3. Therefore, Ex. C-11 is created evidence to justify repudiation of claim of the complainants. As such, there is deficiency in service as well as unfair trade practice on the part of the opposite parties. The complainants are entitled to compensation in addition to amount claimed under the policy with interest.

In support of his submissions, learned counsel for the complainants has cited (i) 2001(1) CLT 162 case titled Life Insurance Corporation of India and Others Vs. Asha Goel and another wherein three conditions were laid down by the Hon'ble Supreme Court to justify repudiation on the ground of suppression of material facts. (ii) 1991(Civil Court Cases )166 case titled Life Insurance Corporation of India Vs. Smt. G M Channabasamma wherein it was observed that in case of suppression of material facts, burden of proof is on the Insurance Corporation. (iii) 2014(1) CLT 220 case titled ICICI Lombard General Insurance Co. Ltd., Vs. Jasbir Singh wherein adverse inference was drawn for withholding the record. (iv) 2013(1) CLT 614 case titled Life Insurance Corporation of India , Jallandhar and others Vs. Jaswinder Kaur wherein opposite parties failed to prove treatment record. It was observed that in the absence of record of the hospital. Other statements are not reliable.

Learned counsel for the complainants also cited 2013(2) CPJ 60 case titled Life Insurance Corporation of India & Anr. Vs. Raj Kumar Sharma, 2012(1) CPJ (NC) 84 case titled Tarlok Chand Khanna Vs. United India Insurance Co. Ltd., 2008(1) CPJ (NC) 501 case titled National Insurance Co. Ltd. Vs. Raj Narain and AIR 1994 (SC) 787 case titled Lucknow Development Authority Vs. M K Gupta, to support above submissions.

On the other hand, learned counsel for opposite parties No. 1 & 2 has submitted that contract of insurance is based on 'Uberrimae fidei' meaning a contract of utmost good faith on the part of the insured. Therefore, the insured is required to disclose correct information to the best of his knowledge but in this case, Gurpreet Singh insured has intentionally and actively concealed the material information regarding state of his health. Ex. OP-1/4 is proposal form for insurance. It is material document. Insured was required to specifically mention if he was suffering from ailment pertaining to Liver, Stomach, Heart, Lungs, Kidney, Branch or Nervous System but his reply was in negative. He was also specifically asked had he received medical advice/treatment in connection with Hepatitis 'B' and his answer was in negative. The documents on record will prove that Gurpreet Singh was suffering from ailment 'ALD' and this fact was in his knowledge before getting himself insured. Ex. OP-1/6 is the prescription slip qua Gurpreet Singh. It proves that on 8-4-2011, he took treatment for 'Alcoholic Lever Disease'. Ex. OP-1/5 is the extract from the service record which shows that Gurpreet Singh also remained on medical leave from 19-4-2011 to 23-4-2011. Ofcourse the name of disease is not mentioned but still it is proved that he was suffering from disease which required medical leave also. Gurpreet Singh has died on 13-3-13 and on that very day, he got treatment from DMC & Hospital, Ludhiana. Summary of treatment is on the file as Ex. OP-1/8. As per this document also 'ALD Cirrhosis' was diagnosed. The details of reports are also mentioned on this document. This document is signed by Amandeep Kaur, complainant No. 1 also. This fact further corroborates that Gurpreet Singh was suffering from 'Alcoholic Lever Disease'. As such, there was concealment of material facts on the part of the insured. The order of repudiation is justified.

It is further submitted by the leaned counsel for opposite parties No. 1 & 2 that complainants have not approached this Forum with clean hand. It is specifically mentioned that Gurpreet Singh died on 13-3-13 due to 'massive bleeding and shock' but there is no evidence to prove this fact. Similarly Ex. OP-1/11 is Form No. 3816 which was prepared during investigations. As per report of DMC & Hospital, Ludhiana, Gurpreet Singh was suffering from ALD. It is specifically mentioned that he was discharged against medical advice. This fact also shows that death of Gurpreet Singh was not due to bleeding and shock as alleged by complainants. Rather he was got discharged against medical advice. Summary of treatment is also signed by complainant Amandeep Kaur, herself. All these facts shows that not only disease Gurpreet Singh but complainants were also aware of the 'Alcoholic Lever Disease' being suffered by Gurpreet Singh.

At the last limb of his submissions learned counsel for opposite parties No. 1 & 2 submitted that complainants have impugned order dated 5-2-14 vide which claim was repudiated. Copy of the order is on the file as Ex. OP-1/1. It was made clear to the complainants that if they disagree with the decision and if they feel that opposite parties have not considered any particular facts and circumstances, they were afforded opportunity to send their representation within three months for reconsideration of claim to their Zonal Office but the complainants have also not availed remedy. From all angles, there is no deficiency in service on the part of the opposite parties.

To support his submissions, learned counsel for opposite party Nos. 1 & 2 cited (i) 2006(1) CPC 364 titled as Goparatnam & Ors. Vs. LIC of India & Ors., wherein it was observed that violation of terms of contract by any party ousts its claim against other and repudiation of claim was authorised. (ii) 2000(1) CPC 167 titled as Life Insurance Corporation of India Vs. Smt. Naranjan Kaur wherein cause of death was ailment of Aids and insured was a chronic alcoholic. This fact was concealed by insured at the time when policy was taken. Repudiation of claim on the ground of concealment of real facts was justified. (iii) 2009(1) CPC 527 titled as Life Insurance Corporation of India & Ors., Vs. Sharda Devi wherein it was observed that if merely doctor had not noticed any disease of insured at the time of filling up of proposal form or he had given a good health report,it does not mean that insured was not suffering from any disease. (iv) 2014(2) CPC 76 titled as A Sujata (Smt) Vs. Life Insurance Corporation of India & Anr. wherein insured was suffering of Cirrhosis of Lever and was on hemodialysis. It was observed that he did not disclose the fact of a pre-existing disease in violation of contract of insurance and repudiation of claim was upheld.

Learned counsel for opposite parties No. 1 & 2 also cited 2012(3) CPC 175 titled as L.I.C. Of India & Ors. Vs. Anupama & Ors. (Smt.) in support of his submissions.

We have carefully gone through the record and have considered the rival contentions.

Hon'ble National Commission, New Delhi in the case of Komal Sharma and Ors. Vs. Life Insurance Corporation & Ors. (Supra) extracted observations of Hon'ble Apex Court recorded in the case Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., 2009(IV) CPJ 6 (NC) and reproduced as under :-

“12.....A medi-claim policy is a non-life insurance policy meant to assure the policy holder in respect of certain expenses pertaining to injury, accidents or hospitalizations. Nonetheless, it is a contract of insurance falling in the category of contract 'uberrimae fidei' meaning a contract of utmost good faith, on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Ofcourse, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment.”

Therefore from the above observations, it is amply clear that a contract of insurance is a contact of utmost good faith. The process for entering into contract of insurance starts with filling up proposal form. In this case also, deceased Gurpreet Singh filled up proposal form, copy of which is Ex. OP-1/4. In this form specific information was sought that if insured remained absent from place of work on grounds of health during the last five years and the reply was in negative. It was specifically asked whether insured suffered from any ailments pertaining to Liver, Stomach, Lungs, Kidney, Brain or Nervous System and again the reply was in negative. In the column of 'Usual State of Health' answer was 'Good'. Therefore, it is clear that at the time of seeking insurance, the insured has categorically stated that he is not suffering from any disease or he has never remained absent from duty. The proposal form was filled up on 20-11-13. The opposite parties have brought on record service record of deceased Gurpreet Singh which contains entries regarding availing of medical leave from 19-4-11 to 23-4-2011. This medical leave was availed certainly before filling up proposal form i.e. within period of five years. The opposite parties have also produced leave application submitted by Gurpreet Singh for availing medical leave from 19-4-2011 to 23-4-2011 and this leave application was supported with medical certificate got issued by Dr. Ravi Kant, Civil Hospital, Mehraj.

Now, it is to be seen whether deceased Gurpreet Singh was having knowledge about any Lever disease at the time of filling up proposal form. OP-1/6 is the OPD slip dated 8-4-2011 regarding decease Gurpreet Singh. In this document also, deceased has complained of 'Alcoholic Liver Disease'. Ex. OP-1/8 is the DAMA Summary issued by DMC & Hospital, Ludhiana, from where Gurpreet Singh has taken treatment on his last day i.e. 13-3-2013. This document also proves that deceased was diagnosed 'ALD Cirrhosis'. Columns of Form No. 3816 Ex. OP-1/11 were filled by DMC & Hospital, Ludhiana, regarding treatment and as per this document also, deceased was suffering from 'ALD'. It was also reported that on 13-3-2013, the deceased was discharged against medical advice. The summary Ex. OP-1/8 was also signed by Amandeep Kaur, one of the complainant and widow of Gurpreet Singh. This fact also shows that family members of Gurpreet Singh were also aware of the fact that he is suffering from Liver disease. In this way, it can be safely concluded that Gurpreet Singh has suppressed material facts by not disclosing disease at the time of filling up proposal form.

The claim is declined vide repudiation letter dated 5-2-14 Ex. OP-1/1. As per this letter, the main ground for repudiation of claim is that deceased withheld correct information regarding his health at the time of effecting insurance. At the time of repudiating the claim, it was also made clear that in case claimants disagree with decision and feel that opposite parties have not considered any particular facts and circumstance, they may send their representation within three months for re-consideration of their claim. Admittedly, no representation was moved by the complainants.

In view of what has been discussed above, we do not find any illegality in the letter dated 5-2-14, vide which the claim of the complainants has been repudiated. As such, this complaint fails and is hereby dismissed with no order as to costs.

The complaint could not be decided within the statutory period due to heavy pendency of cases.

Copy of order be sent to the parties concerned free of cost and file be consigned to the record.

Announced :

12-06-2015

(M.P.Singh Pahwa )

President

(Sukhwinder Kaur)

Member

(Jarnail Singh )

Member