NEW DELHI DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

M BLOCK, 1ST FLOOR, VIKAS BHAWAN, I P ESTATE, NEW DELHI-110002

C.C.No.50/2012

Sh. Joginder Singh,

S/o Late  Sh. Tika Ram,

R/o Flat No.347, SF-II,

Shalimar Garden, Extension-I,

Sahibabad, Distt. Ghaziabad.

                             ….Complainant

Vs.

Life Insurance Corporation of India,

Through its Branch Manager(Claim),

Divisional Office-I,

25, K.G. Marg, New Delhi-1.

  Opposite Party

NIPUR CHANDNA, MEMBER

O R D E R

The complainant has filed the present complaint against the OP under section 12 of Consumer Protection Act, 1986.  The gist of the complaint is that on 15.3.2008, the complainant’s mother namely Smt. Shish Kaur had availed the policy No.115384498, Type-ORD, Plan/Trm/Pter-165/16/16 death benefit sum assured under main plan and accident benefit sum assured of Rs.5,00,000/- with the OP. The premium of the said policy was of Rs.12,130/-(half yearly) and the date of maturity is 15.3.2024, the complainant is a nominee of the above said policy. Smt. Shish Kaur has deposited the premium of Rs.36,000/- and she expired on 5.4.2009.  The complainant informed about the death of his mother to the OP vide letter dt. 22.4.2009 along with her death certificate and policy bond.  The OP assured him that after some formalities, they would release the claim amount within one month. Vide letters dt. 19.7.2010 and 23.11.2010, the OP demanded the relevant documents regarding the claim, and same have been submitted by the complainant with application dt. 3.12.2010 and requested to the OP to consider his claim but the OP gave no response in this regard. The complainant visited several times at the office of the OP and he sent a legal notice dt. 4.3.2011 but all in vain.  Complainant, therefore, approached this Forum for redressal of his grievance. 

2.     Complaint has been contested by OP.  In its written statement, OP has stated that there is no deficiency in service on its part.  It is further stated that the deceased/policy holder had concealed the material facts in the proposal form regarding her annual income, source of income, family history and children.  It is stated that the deceased had made deliberate mis-statement and withheld material information from the OP regarding her health, hence in terms of policy contract, OP is not liable for any payment under the above policy.  It is further stated that the present death claim is an early claim, arisen within two years from the commencement of insurance policy.  OP made necessary investigation  from the different addresses four times, which reveal that the above policy was obtained fraudulently by concealing material facts by the deceased life assured. The reports also reveals that income tax returns of the DLA have been filed after the death of life assured Ms. Shish Kaur i.e. on 22.1.2010 for the assessment year 2009-10,  whereas the deceased was expired on 5.4.2009.  It is crystal clear that business in the name of deceased life assured was actually run by the claimant.  It is also revealed that the deceased was not residing in Delhi, it means that the policy was taken fraudulently after concealing material facts.  Therefore, the claim of the complainant was rightly repudiated and prayed for  dismissal of present complaint.

3.     Both the parties have filed their evidences  by way of affidavit,

4.     We have heard argument advance at the Bar and have perused the record.

5.     The sole question to be adjudicated in the present case is whether the OP Co. is justified in repudiating the claim of the complainant on the ground that the life assured had concealed the material facts in the proposal form regarding her annual income, source of income and  family history before taking insurance policy. 

6.     Admittedly, the policy was issued to the complainant  on15.3.2008 for a sum assured of Rs.5,00,000/-.  As per the proposal form the DLA had shown herself as a self employee running the general store by name Ashish Shop, whereas, during the investigation, it was revealed that the complainant was running the shoe shop in the name of DLA.  DLA had mentioned her address as E-11, Sec.52, Noida, whereas the investigation report placed on record by the OP Co. shows that the RWA of   E-11, Sec.52, Noida failed to recognize the DLA, even the DLA was not known by anyone in Timarpur as well as Shastri Park as stated by the complainant while purchasing the policy.  Moreover, after investigation  it was found that she was residing at village Chhur, District Meerut which is proved by OP by placing on record the copy of the ration card issued by the concerned authority. 

7.    In view of the above facts, we are of the considered view that the policy in question was purchased by DLA by concealing the material facts regarding  her annual income, source of income and  family history before taking insurance policy. 

8.     Due to Non-Disclosure” of the true and correct facts at the proposal stage by the DLA amounts to misleading the OP Insurance Co., resulting in the violation and infringement of the terms of contract between the parties, hence the repudiation is justified. 

9.     The contracts of insurance are contracts of uberrima fides and every material fact is required to be disclosed. In United India Page 11 of 13 Insurance Co. Ltd. v. M.K.J. Corpn., III (1996) CPJ 8 (SC), a two Judge Bench of Hon‟ble Supreme Court has observed: “It is a fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, „similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured‟.”

10.    In Satwant Kaur Sandhu v New India Assurance Company reported in IV (2009) CPJ 8 (SC), Hon‟ble Supreme Court has observed that in a contract of insurance, the expression “material fact” is to be understood in general terms, to mean as any fact which would influence the mind of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate its liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith– uberrimae fidei. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that Page 12 of 13 fact and his believing the contrary. It has also been emphasized that it is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not.

11.    In PC Chacko and Anr. v. Chairman, Life Insurance Corporation of India & Ors. (2008) 1 SCC 321, the Hon‟ble Supreme Court has upheld the repudiation of the contract of insurance on the ground of non-disclosure and mis-statement in the proposal form to the various questions to which the answers were given by the insured.

12.    In the present case, the material on record discussed above clearly establishes that the  policy in question was purchased by DLA by concealing the material facts regarding  her annual income, source of income and  family history before taking insurance policy.  Material on record  proves that policy was obtained by concealment of material facts. In the facts and circumstances of the present case, we are of the  considered view that the OP was justified in repudiating the claim.

13.    In view of the above discussion, we find not merits in the present compliant, same is hereby dismissed.

A copy of this order each be sent to both the parties free of cost by post. This final order be sent to server (www.confonet.nic.in ). File be consigned to Record Room.

Announced in open Forum on 13/11/2019.

(ARUN KUMAR ARYA)

          PRESIDENT

(NIPUR CHANDNA)                                                  (H M VYAS)

       MEMBER                                                                MEMBER