Karnataka

Bellary

CC/4/2019

Smt K Hemalatha - Complainant(s)

Versus

The Branch Manager, LIC of India & Another - Opp.Party(s)

M Lokesh

21 Nov 2020

ORDER

FILED ON:	05-01-2019
ORDER ON:	21-11-2020

                                                                                                                                                                                                                                                                                                                                                                          

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AT BELLARY

 

C.C.No.4 of 2019 

 

  

   

 

   Present :-   

 

 

 

     (1)  Shri.A.H.Malaghan, B.com. LLB.(Spl),  …… President.

 

     (2)  Shri.H.Veera Shekar, B.A. LLb.(Spl),    ……. Member.

 

     (3)  Smt. Marla Shashikala, B.com. LLB.      .…… Member.

 

 

 

DATED THIS THE 21^st DAY OF NOVEMBER - 2020

 

 

COMPLAINANT/S               By-Shri.M.Lokesh, Advocate, Ballari.  //VS//	Smt. K.Hemalatha, W/o Late K.Suresh, Age: 48 Years, R/o Ward No26, Behind Select Function Hall, Cowl Bazaar, Ballari.
OPPOSITE PARTIES     By- Shri.Anil Kumar Kulkarni, Advocate, Ballari.	1. The Branch Manager, LIC of India, Branch II, Mothi Circle, Ballari-583101.     2. The Divisional Manager, LIC of India, Divisional Office, Station Road, Raichur-584101.

         

      

        

// O R D E R //

 

 

           

 

 

Per Shri. A.H.Malaghan.   

 

 

This is a complainant filed the complaint against the opposite parties U/Sec-12 of the Consumer Protection Act 1986.

 

 

 

 

                  2.    The facts of the case are that, the complainant’s husband late Sri. K.Suresh had made life insurance policy with the opposite parties vide Policy No.666051137, table No.165, for a period of 15 years, the said policy was commenced on 18-06-2013 for a sum assured of Rs.62,500/- and insured was paid the premiums quarterly of Rs.766/- from the date of policy till his death to Ops.  The complainant is the nominee under the said policy.  The complainant’s husband was hale and healthy at the time of obtaining the said insurance policy, the OPs have issued the said insurance policy after medical examination by their panel Doctor.   The said policy was lapsed. But later on it was revived on 22-07-2016 on payment of arrears of premium, penal charges, revival charges, after Medical examination by the OPs panel Doctor.  As such the said insurance policy was continued since from the date of commencement i.e., 18-06-2013 and valid upto the date of death of insured i.e.,                  02-03-2018.  The complainant has submitted her Claim Form along with all required documents namely original policy, all installments paid original receipts, death certificate to the OPs and the complainant has not kept the Xerox copies of the policy. The OPs after receipt of all the documents, repudiated the claim of the complainant on the ground that, “the deceased life assured was known case of Non Hodgkins Lymphoma and took treatment at Shankar Cancer Hospital & Research Centre before revival”.  The deceased was not taken any treatment as alleged in the repudiation letter dt:30-10-2018, hence the repudiation made by the OPs is illegal not sustainable in law.  The complainant is a poor lady living at the verge of poverty, she lost her husband at the young age, and the deceased was left with three minor children. The said reason for repudiating the claim of the complainant is not sustainable, which amounts to deficiency of service on the part of the OPs. Hence, the complaint prays to allow her complaint by granting reliefs claimed in it. 

 

           3.   After Commission notice, the OPs have appeared through their counsel and the OP.No.2 filed the written version which is adopted by the OP.No.1, in brief is as follows;

 

                  The OPs have specifically denies all the allegations made in the complaint, except those which are expressly admitted that; the deceased life assured had obtained policy bearing No.666051137 for sum assured of Rs.62,500/- from the OPs and the above policy was commenced on           18-06-2013 and that the complainant is nominee to the above policy. Admittedly, the deceased life assured has suppressed the material facts with regard to his health before revival of the above said policy.  The deceased life assured was known case of “HODGKIN LYMPHOMA” and took treatment for the same at Shankar Cancer Hospital & Research Centre earlier to the Revival of the above said policy.  As such the repudiation of claim under the above policy is based on cogent medical report.  The death claim on the disputed policy is not admissible; as such OPs Corporation is not liable to pay anything towards sum assured, bonus and interest.  The rejection of the claim by corporation is absolutely in order and confirms to the policy terms and conditions.  Hence, there is no deficiency of service and there is no cause of action to this complaint. 

 

            4.    The complainant, to prove her case filed her affidavit evidence as P.W.1 and got marked 04 documents as Ex.P-1 to Ex.P-4.   On behalf of the OP No.2 has filed his affidavit evidence as RW-1 got marked 18 documents as Ex.R-1 to Ex.R-18.  

 

       5.   The written argument filed by the complainant as well as Opposite Parties and heard the oral arguments on both sides.

  

   6.   Now, the following points that would arise for our           consideration in deciding the case are;

1.	Whether the complainant proved that, there is a deficiency in service on the part of the opposite parties in repudiating her claim?
2.	Whether the complainant is entitled for any reliefs prayed in the complaint?
3.	What order?

 

                             

 

 

 

7.     The findings on the above points are as under.  

 

        

Point No.1:	In the affirmative.
Point No.2:	Partly in the affirmative.
Point No.3:	As per final order.

 

 

 

   // R  E A S O N S //

Point No.1;-

 

 

8.    On the basis the pleadings of both parties it is admitted fact that, the DLA was having a life insurance policy No.666051137 issued by OP from 18-06-2013 and said policy has been subsequently revived from the OP by taking premium dues on 22-07-2016 and same is valid and effective till death of policy holder i.e. on 02-03-2018. 

   

 9.   On the basis of the above said facts, the learned counsel for complainant has argued that, when the risk of the policy, commences from 18-06-2013 irrespective of subsequent revival of the said policy, the period of commencement of risk of said policy shall be taken into consideration and the policy cannot be repudiated by invoking Sec 45 of Insurance Act.  But on the other hand the learned counsel of the OPs have denied the same and submitted that, the date of revival is to be considered as per the provision of the Sec 45 of Insurance Act. 

 

10.  It is further submitted by counsel for the complainant that, the DLA had no knowledge about pre-existing the deceased held by him and at the time of proposal the DLA has no health problems of any kind as alleged by the Ops.  Hence, the repudiation of claim on the ground of suppression of material facts as alleged in the repudiation letter is not justified in law and claim of the complainant cannot be repudiated on the above ground, as there are no documentary evidence is produced by the Ops to substantiate their defense.  Hence, the claim of the complainant is payable by Ops. 

 

11.  The learned counsel for the Ops has argued that, the policies are issued to the policy holder on the basis of the information furnished in their proposal form by believing the same as true and correct and the duty cost on the policy holder to submit true and correct facts on the question raised in the proposal form, otherwise, the contract of insurance between the parties shall be void from its inception, if subsequently revealed anything about false information or suppressions material fact by the declarant/policy holder.   But in this case the deceased policy holder has suppressed the true facts regarding preexisting disease held by him,  as he was suffering from “HODGKIN LYMPHOMA”  at the time of proposal/revival and has he taken treatment at Shankar Cancer Hospital and Research Centre earlier to revival of the said policy.  Hence, the claim of the complainant is repudiated based on the cogent Medical Report.  As such the question of deficiency of service on the part of the OPs does not arise.

 

12.  In pursuance of the above said facts, the complainant has produced her evidence affidavit as PW-1 and as produced 04 documents in her support of her claim.  Ex.P-1 is the 1^st premium receipt issued by Ops, ExP-2 is the repudiation letter issued by the Ops, Ex.P-3 is the death certificate of deceased Suresh and Ex.P-4 is the copy of Aadhar Card.  On the other hand the Ops have produced 18 documents in support of their defense. The Ex.R-1 is the policy copy issued in favour of Suresh, Ex.R-2 to Ex.R-5 are the treatment records of deceased Suresh issued by Sri Shankar Cancer Hospital and Research Centre, Ex.R-6 to Ex.R-8 are copies of radiation treatment summary, Ex.R-9 is certificate of Hospital treatment, Ex.R-10  to Ex.R-17 are the summary sheet copies of the deceased Suresh issued by VIMS, Ballari, Ex.R-18 is the certified copy of Aadhar card of deceased Suresh.

 

13.     Considering the medical documents produced by the Ops, particularly the medical treatment records of deceased Suresh, clearly speaks about the alleged treatment taken by the deceased subsequent to issue of the above said policy on 18-06-2013.  But as per the case of the Ops, the above said policy was renewed on 22-07-2016 by collecting the premium dues from policy holder.  The medical records pertaining to deceased policy holder are produced by the Ops, but they have not filed any affidavit of the person who issued the said certificate or treated him in the Hospital, So therefore, the authenticity of the said documents or its contents are not proved by the Ops by leading the evidence of the author of the said documents.  In our view mere production of said documents is not sufficient to prove the case of the Ops, because the onus to prove the said documents heavily on the Ops.  But in this case, the Ops have not taken any steps to prove their documents produced in this case.  Further, on perusal of the policy status it was issued on 18-06-2013  and subsequently same was revived on  22-07-2016 which was valid and effective till death of policy holder, meaning thereby, the policy was force at the time of death of policy holder. 

 

14.  We further noticed that, there are no records to show that, the Ops have conducted any investigation in this case for collecting the above said documents and to find out the alleged preexisting decease of the DLA.  Because the Ops have specifically contended that the policy holder was knowingly full well submitted the proposal form with declaration by suppressing his preexisting health conditions. But the said contention is not substantially proved by cogent evidence.  We further noticed that, admittedly the said policy was in force for about 05 years from the date issuance of the said policy including the revival period of said policy. 

 

15.  In this regard the learned counsels of the respective parties have argued conveniently for taking into consideration of commencement of risk of this policy.  Whereas the counsel for the complainant contended that, the risk of the policy start from its inception i.e., dt:18-06-2013, but the counsel for the Ops contended that, its risk is from the date of its revival i.e., dt:22-07-2016. 

 

16.  The learned counsel for the complainant has relied upon judgment of Hon’ble National Commission, reported in (2018) CJ 513 (NC) between SBI Life Insurance Company Vs. Baunath Tanti and another, wherein, the Hon’ble National Commission held: Insurance-Life Insurance-Repudiation of death claim on ground of suppression of preexisting ailment by life assured-complaint allowed by fora below- facts have been examined thoroughly by both Fora below and reassessment of facts cannot be undertaken at stage of revision petition- both fora below have given concurrent finding so for as suppression of information is concerned- In such, Scope under revision petition is very limited – this is not the case of the petitioner that DLA was suffering from Tubrculosis at the time of filing of proposal form implied order upheld.   

 

17.   By considering the said judgment it is held that, the documents produced by the Ops are not pertaining to the preexisting disease of policy holder prior to the date of his proposal form.  Hence, when the risk occurs from the date of commencement of the policy, subsequent development of the health condition of the policy holder will not affects on the risk of the Ops in respect of the subject policy.   Hence such being the case, the Ops cannot the reject the claim on the ground of suppression of preexisting disease of the policy holder.  (The decisions relied 1) Mithoolal Nayak v/s LIC of India AIR (1962) SC 814 and (2) LIC of India v/s Bharati AIR (1989) AP 39).

 

18.  In this regard the learned counsel for the Ops have relied upon the following citation in support of his defense.

 

1. Order passed Hon’ble National Commission in Revision Petition No.649/2005 between LIC of India Vs. Smt. M.Bhavani.

2.  Order passed Hon’ble National Commission in in Revision Petition No.2072/2008 between Shanker Soni Vs. LIC of India.

3. (2012) CJ 626 (NC) between LIC of India Vs. Kusum patro.

4.  (2017) CJ 254 (NC) between Chandratan Lahot and other Vs. Aviva Life Insurance.

5. Order passed by Hon’ble National Commission in Revision Peition No.2872 /2017  between LIC of India Vs. Kasani Gurjar.   

 

19.   On perusal of the above said judgment relied upon by the Ops, same are deals with suppression of material facts in different set of facts as compared to the case in hand.  In the said cases, the concealment of material facts have been proved by the insurance company, Under the circumstances the action taken by insurance companies on above grounds was justified by Hon’ble National Commission.  But in this case the concealment of material facts regarding preexisting disease of the policy holder was not established by the Ops, but they produced treatment records of the policy holder subsequent date of issuance of the policy.  Therefore, the same cannot be termed as suppression of preexisting disease of the policy holder.   Hence, the citation referred by the counsel for the Ops will not come to the aid of Ops. However, with due respect to their lordship, we have considered the principals laid down in the above said judgments while answering the points. 

 

20.     It is further noticed by us that, it is not case of the Ops that, the complainant has willfully and knowing full well has suppressed the material facts.  Under these circumstances we are of the view that, the Ops have failed to prove the repudiation action taken on concrete evidence by collecting the relevant documents relating to pre-existing ailments prior to date of commencement of the policy.  Hence, the repudiation of claim is liable to be quashed.  Therefore, for the reasons stated above, the action taken by the Ops for repudiating the claim of complainant is improper and illegal and same is amount to deficiency in service on the part of the Ops.  So in our view the complainant has proved the point No.1 and same is answered by us in the affirmative.             

 

 

Point No.2 :- 

 

            21.    The complainant has claimed the policy sum assured of Rs.62,500/- along with the compensation of Rs.20,000/- for deficiency of service and mentally agony etc.,  from the Ops.  But considering to the fact and circumstances of this case, the complainant is entitled the sum assured amount of the policy Rs.62,500/- and the Ops liable to pay the same to the complainant  as per the policy contract.  In addition to above claim, the complainant is entitled to Rs.10,000/- towards pain and sufferings and for deficiency in service etc, from the Ops.   Further, the complainant is entitled Rs.5,000/- towards cost of the litigation from the Ops.  Hence, both Ops are jointly and severally liable to pay  Rs.62,500/- + Rs.10,000/- + Rs.5,000/- totally Rs.77,500/- to the complainant.  Hence, in our view the above said award in just and proper and will meet the ends of justice of both the parties.  So, we answered the point No.2 in above terms partly in the affirmative.   Thus the following order. 

 

                   // ORDER //

 

The complaint filed by the complainant is allowed partly against Ops with cost.     

 

   The complainant is entitled to recover of Rs.77,500/-with interest @ 8% p.a. from the date of complaint till realization of the entire amount, from the Ops.  Both, Ops are jointly and severally liable to pay the said amount to the complainant with interest, within one month from the date of this order. 

 

Informed the parties accordingly,

 

 

                     

 

 

(Dictated to the Stenographer, typescript edited, corrected and then pronounced in the open court this 21st day of November-2020)

 

 

 

 

 

 

Smt.Marla Shashikala Lady Member, District Consumer Commission, Ballari.

Sri.H. Veera Shekar Member, District Consumer Commission, Ballari.

Sri. A.H. Malaghan President, District Consumer Commission, Ballari.