Andhra Pradesh

East Godwari-II at Rajahmundry

CC/10/2015

B.V. U. M. Syamala Rao - Complainant(s)

Versus

The Divisional Manager, LIC of India, - Opp.Party(s)

D. Appa Rao

08 Jan 2016

ORDER

                                                                                                Date of filing:   05.02.2015

                                                                                                Date of Order: 08.01.2016

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

          PRESENT:   Sri A. Madhusudana Rao, M.Com., B.L.,  .. President (FAC)

                                Sri S.Bhaskar Rao, M.A., B.L., D.P.M.,    .. Member

                               

              Friday, the 8^th day of January, 2016

 

C.C.No.10 /2015

Between:-

 

B.V.U.M. Syamala Rao, S/o. Krishna,

Aged about 46 years, r/o. D.No.79-23-1/2,

Mallina Nagar, Flat No.A-1, Sai Priya Residency,

J.N. Road, Rajahmundry.                                                                                      …        Complainant

 

                                    And

 

1)  The Divisional Manager, L.I.C. of India,

      Near Vijaya Talkies, Main Road, Rajahmundry,

      E.G. District.

 

2)  The Zonal Manager, L.I.C. of India,

      South Central Zonal Office, Saifabad,

      Hyderabad – 500 463.                                                                                    …        Opposite parties

 

 

            This case coming on 01.01.2016 for final hearing before this Forum in the presence of Sri D. Apparao, Advocate for the complainant and Sri B. Srinivasa Rao, Advocate for the 1^st & 2^nd opposite parties, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Sri A. Madhusudana Rao, Member and President (FAC)] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the opposite parties 1 and 2 to pay the claim amount of Rs.10,00,000/- with interest @ 24% p.a. from the date of claim till the payment by setting aside the repudiation order passed by the opposite parties; to pay damages of Rs.2,00,000/- for mental agony and award costs of the complaint.

2.         The case of the complainant is as follows:-  It is submitted that the complainant is a brother of late Bojanki Srinivasa Rao, who took the policy bearing No.802904122 for an amount of Rs.10,00,000/- under the plan and term 153-20, Doc.No.26-08-2002, D.O. Revival dt.4.1.2013 and the complainant is the nominee.  At the time of taking policy, late B. Srinivasa Rao was examined by the panel doctors of the insurance company and on their satisfaction, they issued the policy.  After the death of said B. Srinivasa Rao, the complainant, who is the nominee of the policy has submitted claim petition before the opposite parties.  After receipt of the same, the opposite parties without giving reasonable opportunity, repudiated the claim on 29.3.2014 stating that the deceased was suffering from ENT problem.Against the send repudiation order, the complainant preferred appeal before the 2^nd opposite party.The appellant authority confirmed the lower authority of order of repudiation and hence, the complainant have no other go except to file the complaint before the Forum on the ground that the repudiation order is not valid and the same is not in accordance with law.  Hence, the complaint.

3.         The 1^st opposite party filed its written version and the same was adopted by the 2^nd opposite party and denied all the allegations made by the complainant. This opposite party submits that the policy No.802904122 was issued to Sri Bojanki Srinivasa Rao with date of commencement 26.8.2002 for a sum assured of Rs.10,00,000/- under T & T 153-20, Anmol Jeevan which is pure term insurance policy and B. Srinivasa Rao died due to Ischemic heart disease on 25.2.2013 at Sree Hospitals, Rajahmundry. This policy was a pure term policy with low premium for high sum assured and the lapsed policy due to non- payment of 8/2012 premium revived on 4.1.2013 by submitting personal statement of health dt.4.1.2013 basing on the answers given by PSH by deceased life assured (DLA).  This opposite party after receiving the death intimation and enquiry was conducted and the opposite party came to know that DLA Sri BS Rao suffered from chronic ear problem in both ears consulted many ENT Hospitals i.e. SCR ENT specialty Hospitals, Hyderabad on 1.3.2012, Twin City speech and hearing center, Hyderabad on 1.3.2012 and as per their case sheet, DLA had history of accident 5 years back and history of watery discharge, History of hearing loss (HOH) in both ears and he also consulted Tapani Hospitals, Rajahmundry on 11.6.2012.  DLA has underwent treatment prior to revival and the deceased life assured  did not mention anything about these treatment in his personal statement of health dt.4.1.2013 and had he disclosed these facts, this opposite party would have called for other special reports to decide the acceptability or otherwise of the policy at revival stage itself and due to suppression of the above material facts, this opposite party could not arrive at a correct decision at revival stage and DLA has applied for revival with a malafied intention and the claim was repudiated by the opposite party.  This opposite party submits that as per the case sheet of Twin city speech and hearing center dt.1.3.2012 life assured had history of accident five years back history of watery discharge, history of hearing loss (HOH) in both ears and the deceased life assured not mentioned any of these facts in personal statement of health (PSH) dt.4.1.2013 and declared that he is in good health and as this is nothing but suppression of material facts only and hence, the claim was repudiated. The questions in the revival form and the answers given by him were produced as follows:

Q.No.s	Questions	Answers given by life assured
2(a)	Have ever suffered from any illness/disease requiring treatment for more than one week?	No
c)	Did you undergo ECG, X ray, Screening Blood, Urine or stool examination?	No
4.	Are you at present in sound health?	Yes
VIII	Did you ever have any accident or injury	No

 

There is credible documentary evidence that the insured had been suffering from non- Hodgkin’s Lymphoma and had taken treatment for the same, whereas in the insurance proposal form, he had clearly denied that he had consulted a medical practitioner for any ailment requiring treatment for more than a week or if he had been admitted to any hospital or a nursing home for treatment etc. during the last 5 years. The above answers were false that the corporation has reasons to believe that the life assured suppressed material facts about his health. The material record discloses that the life assured had made incorrect statement and with held incorrect information from the opposite party regarding his health at the time of revival of the policy.  On this ground this opposite party repudiated the claim vide letter dt.29.3.2014.  Hence, there is no deficiency of service on the part of the opposite parties and the complaint is liable to be dismissed with costs.

4.         The proof affidavit filed by the complainant and Exs.A1 to A3 have been marked. The 1^st opposite party filed proof affidavit and Exs.B1 to B15 have been marked. The opposite parties filed written arguments.

5.         Heard both sides.

6.         Points raised for consideration are:

 

 1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

         

 

7.  POINT Nos.1 & 2:  On perusal of the record, we observed that the present complainant is the brother and nominee of deceased life assured by name Bojanki Srinivasa Rao, who obtained policy bearing No.802904122 for Rs.10,00,000/- commenced on 26.8.2002 and the same was cancelled by the opposite parties vide Ex.B4 and revived on 4.1.2013 on payment of the required premium and the present complainant is the nominee vide Ex.A1 = Ex.B1. The complainant alleged that at the time of obtaining the policy and revival, the deceased life assured was in good health as per Ex.A2 = Ex.B5 health statement dt.4.1.2013. The said deceased life assured died on 25.2.2013 within short period of revival of the policy due to heart attack and the same was informed to the opposite parties vide Ex.B6 letter. After the death of the policyholder, the nominee submitted claim statement under Ex.B2 along with Ex.B3 medical attendant’s certificate, hospital treatment under Ex.B7 and Burial Certificate under Ex.B8. The insurance company repudiated the claim on 29.3.2014 and alleged that the policyholder gave misstatements and withheld material information as the DLA is suffering from the ENT problem vide Ex.A3 = Ex.B13. On that, the present complainant approached the 2^nd opposite party appellate authority, who confirmed the repudiation order issued by the lower authority vide Ex.B14 and further asked the complainant to approach the Central office for claim settlement under Ex.B15 letter.  

            The opposite parties contended that the deceased life assured approached SVR ENT Specialty Hospital, Hyderabad on 1.3.2012 and diagnosed for HOH problem under Ex.B9, and sent to the Twin City Speech & Hearing Centre for tests and as per the Ex.B10 audiometry report, the DLA had moderately severe mixed hearing loss in right ear and profound mixed hearing loss in the left ear and he was treated there for two days. Again the DLA approached Tapani Hospital, Rajahmundry on 5.4.2012 under Ex.B11, where the DLA was diagnosed severely deafened due to infection and treated. The DLA approached Tapani Hospital on 11.6.2012 under Ex.B12 and treated for pain, fever and hard of hearing and further visited the doctor on 12.6.2012, 13.6.2012 and 17.6.2012.

            It is observed from the repudiation letter dt.29.3.2014, the insurance company stated that the policy was lapsed due to non-payment of half yearly premium due on 26.8.2012 and the same was revived on 4.1.2013 for the full sum assured on the strength of the personal statement regarding health made by the diseased at the time of proposal for revival on 3.12.2012. In the said personal statement of health completed by the diseased, he had answered the following questions as stated below:

Since the date of proposal for the above mentioned policy

 

 

Questions                                                                                            Answers

2 (a) Have you ever suffered from any illness/disease

         requiring treatment for more than a week?                                 No.

 

   (c) Did you undergo ECG, X-ray, Screening, Blood,

         Urine or stool examination?                                                       No.

 

4.     Are you at present in sound health?                                            Yes.

 

VIII  Did you ever  have any accident or injury?                                -

 

But, the opposite parties contended that they have evidence and reasons to show that the life assured had met with an accident and had severe ENT problem since 5 years, for which they had consulted a medical man and had taken treatment, but the deceased life assured did not disclose the above facts in the said personal statement and so, the claim of the nominee is repudiated.

We observed that as per Ex.B9 of S.V.R. ENT Specialty Hospital, Hyderabad dt.1.3.2012, the deceased life assured approached with hard of hearing complaint with a history of watery discharge and the investigation revealed CT pus, the doctor referred the DLA for tests to Twin City Speech and Hearing Centre, Hyderabad and as per their report, the DLA had history of accident five years back, history of watery discharge and HOH in both ears. They diagnosed moderately severe mixed hearing loss in the right ear and profound mixed hearing loss in left ear. The final opinion is given as bilateral indicative of middle ear pathology, accordingly, Dr. Vijay Kumar of the SVR ENT Hospital prescribed medicines. The DLA again approached Tapani Hospital, Rajahmundry on 5.4.2012 and there, the doctor noted the patient’s history as severely deafened due to infection and prescribed hearing aid trial for temporary relief which is feasible besides medication. After that, the DLA once again approached the Tapani Hospital on 11.6.2012 as the DLA suffered pain, fever and hard of hearing and the doctor prescribed some antibiotics. The DLA further attended to the hospital for checkup on 12.6.2012, 13.6.2012 and 17.6.2012.

As per the medical science, we observed in hard of hearing cases, hearing loss has multiple causes including ageing, genetic problem, perinatal problem and acquired causes like noise and disease. A common condition that the results in hearing loss is chronic ear infection like infection of the ear canal or ear drum and half of hearing loss is preventable by immunization. The types of hearing loss are unilateral/bilateral, conductive or others. In case of HOH, sensitivity varies according to the frequency of sounds. In the present case, the complainant suffered 50 to 70 DB HZ. While infection of ear, usually causes sensorineural hearing loss which is secondary or concomitant to a serious systematic infection. Hard of hearing usually reserved for people who have relative insensitivity to sound in the speech frequencies whereas in total deafness, no sounds at all. In HOH cases, effusion will be from the middle ear. So, hard of hearing is due to infection and it is different from total loss of hearing. Further, the DLA was treated as outpatient and was never admitted in the hospital for more than a week for the treatment of HOH problem, which will not shorten the life of the DLA. In the present case, this problem to the DLA was arised during the time of earlier policy was in force, which was lapsed on 26.8.2012 and was revived on 4.1.2013 after revival representation from the DLA on 3.12.2012 and by that date, the DLA was cured for the problem of hard of hearing.

Further, there is no documentary evidence filed by the opposite parties insurance company though they stated that they have evidence that the DLA had met with an accident. The opposite parties could not file any evidence with regard to the said accident as to what kind of accident it is, where and when it was happened and what was the treatment administered to the DLA during the time of accident. Further, no treatment certificate issued by the doctor, who attended on the DLA after the accident. We are of the view that the accident information was recorded by the doctor while treating the DLA for HOH and was not present at the time of accident. Even if we consider that the accident was happened, it was 5 year old incident by the time of HOH problem arised to the DLA on 1.3.2012 and by the time of proposal for revival of policy i.e. 3.12.2012 more than 5 years time was elapsed and there is no need to inform the same to the insurer. Further, the DLA was examined by the panel doctor at the time of submission of proposal for policy and the said doctor could observe, the scars of the wounds, if any, on the body of the deceased life assured or any bodily deformity, if the DLA really met with an accident. There is no column with regard to accident or injury in the health statement given by the proposer at the time of revival of the policy. We further observed that there is no column in the proposal form with regard to ENT problem to be filled by the proposer and we cannot say that the DLA was died either because of the ear problem or the earlier accident that lead to the death of the DLA due to cardiac arrest. The ear problem of the DLA was cured at the time of revival of policy and so, the DLA can be said to be in good health at the time of proposal for revival of policy within a short period of lapse of the policy obtained during 2002.

As per the insurance law, facts or circumstances, which ought to be disclosed is any fact which tends to suggest that the life of the insured is likely to fall short of the average duration. The border line between what is material and what is not material is often so faint or dim that there is always a danger of one being taken for the other. Therefore, in order to avoid the danger on has to be careful in drawing a distinction between what is illness or material change in health and what is an ordinary simple disorder. A disorder is not one tending to shorten life simply from the circumstance that the assured dies from it. A warranty of good health can never mean that the man has not in him seeds of some disorder. We are all born with seeds of mortality in us. No embargo, therefore, can be placed on the insured in not declaring occasional physical disturbances of a trivial nature.                                  

            The complainant relied on the following decisions:

1. L.I.C. of India & others Vs. Smt. Surekha Rameshrao Mankar: 2011 NCJ 944 (NC), in which it was held that “if infection have been cured and in no way related to the death of insuree, then repudiation of insurance claim cannot be said sustainable;
2.  Life Insurance Corporation of India Vs. Nathu Lal Sain & others: III (2013) CPJ 74 (Raj.), in which it was held that agent of the company is required to explain all details and conditions of insurance policy sought by the customer, common man is not supposed to know all niceties and technicalities of law. Policies should not be issued and repudiated in such casual mechanical manner;
3. Life Insurance Corporation of India Vs. Baljit Kaur: I (2013) CPJ 465 (NC), in which it was held that the questions asked to the insured and replied by him as referred by the respondent or also not having any material significance which points out towards material suppression of facts on the part of the insured as fever cannot be considered a disease by itself, it is just a symptom and can be due to several causes;
4. Life Insurance Corporation of India Vs. Smt. Priya Sharma & others: 2012 NCJ 870 (NC), in which it was held that onus to prove that insured was suffering from pre-existing disease is on the insurance company without proving or adducing evidence, repudiation of claim is liable to be rejected. In the present case, the DLA died of cardiac arrest within one day and there is no evidence adduced by the insurance company that is treating he was under treatment for the same prior to revival of the policy;
5. Meena Devi Vs. Director General/Additional Director General & another: I (2014) CPJ 36 (NC), in which it was held that life assured while obtaining the insurance policy under obligation to disclose several material aspect with respect to his/her life. In the present case, ear problem is not one of the disease regarding which, opinion has been sought, concealment of material fact not proved;
6. Bajaj Allianz Life Insurance Co. Ltd., & others Vs. Raj Kumar: III (2014) CPJ 221 (NC), in which it was held that the authorized doctor of insurance company examined insured, assessed fitness and after complete satisfaction policy was issued. Therefore, repudiation of claim of complainant is wrong; and
7. Aviva Life Insurance, Claim Department & others Vs. Sharanjit Kaur: IV (2014) CPJ 124 (Punj.), in which it was held that a mistaken statement about a material fact made honestly that he is, with belief in its truth will not affect the validity of the contract. Even in the present case, the panel doctor of the opposite parties found no disorder in the insured health when he medically examined the DLA at the time of revival of insurance policy by the insured. In case of, the diseases easily controllable with conservative medicines and showing these diseases is not a justifiable ground to repudiate the claim.

The above said decisions are applicable to the facts and circumstances of the case on hand.

 

The opposite parties relied on the following decisions:

 

1. Panna Devi Vs. LIC of India: III (2003) CPJ 15 (NC), in which it was held that it is abundantly clear that the doctor is recording what the insured tells to him, it is not the result of any test, examination. If a person withholds any information, a doctor would not know it unless it is visible
2. LIC of India Vs. Mithoolal Naik: AIR (1962) SC 841, in which it was held that the life assured is not absolved of his duty to disclose the complete details of his health problem;
3. LIC of India Vs. Minu Kalita: III (2002) CPJ 10 (NC), in which it was held that the petitioner is not to know by an examination of the medical officer, it was for the respondent to give the correct information on his health;
4. PC Chacko Vs. LIC of India: (2008) 1 SCC 321, 
5. Manager, LICI, Bangalore Vs. Muddu Lakshmi: RP No.4770/2013,
6. LIC of India Vs. Murala Siva Parvathi: RP No.602/2009,
7. LIC of India Vs. Smt. N.P. Nagarathna: RP No.3201/2007, in which it was held that
8. Harshad J Shah Vs. LIC of India: AIR (1997) SC 2459,
9. Radhamma Vs. LIC of India: RP No.1072/97, NCDRC,
10. LIC of India Vs. Gangamma: 2002 (3) CPR 24 (NC),
11. United Insurance Company Ltd., Vs. Bhushan Sachdeva: AIR 2002 SC 662,
12. Shahida Khatoon Vs. LIC of India & other of UPSCDRC, Lucknow,
13. 2003 CPJ 135, NC and
14. 2003 CPJ 15, NC, with regard to suppression of material facts.

 

All the above said decisions are relied on by the opposite parties insurance company are different on the present case details, which lead to the insurance claims and cannot be applied for the facts and circumstances of the present complaint.

 

            In the present case, the opposite parties insurance company failed to prove the said accident mentioned while undergoing treatment for HOH under some other doctor at Hyderabad. Further, the HOH is a temporary illness and not to be taken as a serious disease that lead to the death of the DLA who died of cardiac arrest as per the treating doctor. We observed that the doctor, who treated during the time of the death of the DLA, further stated that there is no other disease or illness which preceded, coexisted with the ailment at the time of patients admission into the hospital as ‘No’.

            The insurance company being sole arbitrator to determine the validity of the contract of insurance and to determine its own liability has taken the full advantage of unreasonable, unconsciousble  and unilateral provisions of the contract to repudiate the claim after the death of the DLA citing the reasons as deliberate misstatements and withheld material information with regard to DLA’s health, though the policy was issued in the year 2002 and continued up to August 2012 and applied for revival 3.12.2012 due to non-payment of half yearly premium due in the month of August, 2012.

            With the discussion held supra and after perusal of the citations filed by both the parties, we are in the considered view that the opposite parties insurance company is liable to pay the assured amount of Rs.10,00,000/- with interest @ 9% p.a. to the present complainant i.e. the nominee of the policy. As the insurance company failed to prove their allegations of misstatements and withhold of material information by the deceased life assured. However, the complainant is not entitled for any compensation or other reliefs asked for except the costs of this complaint.      

 

8.   POINT No.3:  In the result, the complaint is allowed, directing the opposite parties to pay Rs.10,00,000/- (Rupees ten lakhs only) towards the assured amount vide life insurance policy obtained by the deceased life assured with interest @ 9% p.a. from the date of complaint i.e. 05.02.2015 till realization to the complainant. We further direct the opposite parties to pay Rs.5,000/- towards costs of this complaint to the complainant.  Time for compliance is two months from the date of this order.

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the  8^th day of January, 2016.

    

                 Sd/-xxx                                                                                    Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                         FOR OPPOSITE PARTIES: None.

 

DOCUMENTS MARKED

FOR COMPLAINANT:

 

Ex.A1    Renewal premium receipt dt.4.1.2013.

Ex.A2    Statement of questionnaire submitted by the policyholder.

Ex.A3    Repudiation proceedings dt.29.3.2014.

 

FOR OPPOSITE PARTIES:-  

 

Ex.B1    Original proposal form No.300(E) submitted by B. Srinivasa Rao – 4 sheets.

Ex.B2    Claimant certificate form 3783 (revd.) dated 2013 submitted by BVUM Syamala

  Rao.

Ex.B3    Medical attendants certificate form No.3784 dated April 2013 certified.

Ex.B4    Original policy bond under policy No.802904122 – 2 sheets.

Ex.B5    Personal statement on health dated 04.01.2013 submitted by B. Srinivasa Rao.

Ex.B6    Letter dt.30.4.2013 submitted by B. Srinivasa Rao.

Ex.B7    Certificate of Hospital treatment form No.3816 dt.22.4.2013 certified by Dr. Reddy

    Prasad.

Ex.B8    Certificate of Identity and Burial or Cremation of B. Srinivasa Rao.

Ex.B9    Copy of diagnosis report from SVR ENT Speciality Hospital dt.1.3.2012 of            

              B. Srinivasa Rao – 2 sheets.

Ex.B10  Copy of report from Twin City Speech and Hearing Center dt.1.3.2012 of               

              B. Srinivasa Rao – 2 sheets.

Ex.B11  Copy of patient record from Tapani Hospital dated 5.4.2012 of B. Srinivasa Rao –   

              2 sheets.

Ex.B12  Copy of patient record from Tapani Hospital dated 11.6.2012 of B. Srinivasa Rao - 

               2 sheets.

Ex.B13  Copy of letter addressed to BVUM Rao dated 29.3.2014 from Sr. Divisional

              Manager, LIC, Rajahmundry.

Ex.B14  Copy of letter addressed to Sr. Divisional Manager, LIC, Rajahmundry dated

  27.9.2014 by Asst. Secretary, LIC, Hyderabad upholding the repudiation of death  

  claim preferred under policy No.802904122.

Ex.B15  Copy of letter addressed to BVUM Syamala Rao dated 20.10.2014 by Sr. Divisional

              Manager, LIC, Rajahmundry informing the decision of Zonal Office Claims Dispute

    Redressal Committee to uphold the repudiation.

                 Sd/-xxx                                                                                      Sd/-xxx

              MEMBER                                                                              PRESIDENT(FAC)