BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD
F.A.No. 973 OF 2012 AGAINST C.C.NO.83 OF 2012 DISTRICT CONSUMER FORUM SRIKAKULAM
Between
1. Shriram Life Insurance Co. Ltd.,
rep. by its Managing Director
Regd. & Administrative Office
at 3-4-478, 3rd Floor Anand Estate
Liberty Road, Opp: Indian Bank
Himayatnagar, Hyderabad-029
2. The Branch Manager
Shriram Life Insurance Co.Ltd.,
New Bridge Road, Near Andhra Bank
RCB, Srikakulam Town & Dist.
Appellants/opposite parties
A N D
Yellumahanti Rama Krishna Patro
H/o late Y.Bhavani S/o Seetarama Patro
aged 39 years, Opp.Kota Durga Temple
Palakonda, Srikakulam Dist.
A.P.-440
Respondent/complainant
Counsel for the Appellant M/s Rajashekar Thallapaly
Counsel for the Respondent M/s Aravala Rama Rao
QUORUM: SRI R.LAKSHMINARSIMHA RAO, HON’BLE MEMBER
&
SRI S.BHUJANGA RAO , HON’BLE MEMBER
THURSDAY THE TWENTY SECOND DAY OF AUGUST
TWO THOUSAND THIRTEEN
Oral Order ( As per R.Lakshminarsimha Rao, Member)
***
1. The opposite parties no.1 and 2 are the appellants. The appeal is challenge to the order of the District Forum whereby the opposite parties are directed to pay a sum of `1,00,000/- with interest, damages and costs.
2. The respondent is the husband of Yellumahanti Bhavani who during her life time obtained Unit Linked Life insurance policy bearing number LN110900103254 for the sum assured of `2,00,000/-. The insurance policy commenced from 28.08.2009 and the insured died on 11.08.2010 and after the death of the insured, the respondent submitted claim form and relevant documents to the appellant-insurance company. The appellant-insurance company informed the respondent through their letter dated 28.10.2010 that her claim was repudiated on the premise that the insured suppressed the fact that she suffered from abdominal pain at the time of submitting the proposal.
3. The respondent submitted that his children became orphans due to the death of their mother and the appellants pressurized him to sign all papers and the letter dated 25.3.2011 and they paid through cheque a sum of `one lakh as exgratia, which was handed over to the respondent brother. The respondent made his protest in the month of May 2011 and claimed for balance amount of `one lakh and he got issued notice through his counsel on 5.4.2003 and thereafter filed the complaint.
4. The appellants resisted the claim on the premise that they accepted to cover risk on the life of insured basing on information provided by the insured. It is contended that the claim was repudiated and thereafter the respondent through his letter dated 14.3.2011 requested the appellant to consider his case on humanitarian grounds and acting upon his request the appellants informed through letter dated 25.3.2011 that the claim was considered as exgratia payment and in response to the letter the respondent addressed letter dated 28.3.2011 accepting for exgratia payment whereupon the appellants processed the claim for exgratia payment.
5. The appellants submitted that the respondent executed declaration cum indemnity bond on 26.4.2011 without any protest and received cheque dated 17.4.2011 for an amount of `one lakh. It is contended that after receiving the exgratia payment, the respondent got issued notice on baseless allegations for which the appellants had given reply and that there has been no deficiency in service on the part of the appellant.
6. The respondent filed her affidavit and the documents, Exs.A1 to A7. On behalf of the appellants, the Assistant Manager of the second appellant insurance company filed his affidavit and the documents, Exs.B1 to B12.
7. The District Forum has allowed the complaint on the premise that the appellants failed to prove the deceased was suffering from the disease prior to taking the policy and the disease was cause of her death as also that repudiation of the claim is not valid.
8. Aggrieved by the order of the District Forum, the opposite parties no.1 and 2 filed appeal contending that the insured concealed the fact that she was suffering from abdominal pain for about five years and she was diagnosed as a case of chronic calcific pancreatetize in the year 2005 and ever since she was on regular treatment. It is contended that the respondent had not filed any document to show the cause of death of the insured and that the respondent voluntarily accepted for settlement of claim and received a sum of `1,00,000/- as exgratia as also executed declaration cum indemnity bond in favour of the appellants. It is contended that the respondent received the cheque on 17.4.2011 and made further claim after a gap of few days thereof.
9. The point for consideration is whether the appellant has proved that the insured has suppressed any material fact as regards his health condition at the time of submitting the proposal?
10. The insured obtained “Unit Linked Life insurance policy bearing number LN110900103254 from the appellants for sum assured of `2,00,000/- and she appointed the respondent, as her nominee for the purpose of benefits under the insurance policy. The insured died on 11.08.2010 The contention of the appellants is that the insured suppressed that she was suffering from abdominal pain prior to taking the insurance policy.
11. The respondent lodged claim on 8.9.2010 enclosed thereto, insurance policy and death certificate of his wife. In the letter dated 8.9.2010, the respondent referred to the abdominal pain of his wife since 5.8.2010 and she was admitted in Indus Hospital, Visakhapatnam where she died while undergoing treatment on 11.8.2010. The appellant insurance company contends that basing on information furnished by the insured they have issued the insurance policy. It is not denied nor disputed the appellant subjected the insured to medical examination for coming to conclusion whether to accept the proposal.
12. The contention of the insurance company is that the insured suppressed the fact that she was suffering from abdominal pain for about five years prior to taking the insurance policy and on request made by the respondent it had agreed to settle the claim for `1,00,000/- as exgratia and the respondent accepted settlement of claim for `1,00,000/- by receiving the cheque for the same amount without making any protest and as such the respondent is estopped from making further claim for the balance amount.
13. The learned counsel for the respondent has submitted that the deceased left behind her the respondent and their two minor children and that the same is stated in the complaint. He has submitted that the names of the children are Y.Nitin Patro, aged about 11 years and Y.Chandrasekhar Patro, aged about 6 years and that inadvertently their names could not be mentioned in the complaint.
14. A claimant after executing discharge voucher cannot raise further claim unless he is able to show settlement of the claim by the insurance company by exercising undue influence, fraud or coercion. The letter dated 8.9.2010 addressed to the appellant insurance company would disclose duration abdominal pain suffered by the insured was from 5.8.2010 whereas the insurance policy was obtained on 28.8.2009. Thus, it is incumbent upon the appellant insurance company to show that the insured suffered from abdominal pain prior to the date of submission of proposal. It is pertinent to note that the appellant has not stated as to which disease, the insured suffered from and the investigation report also does not speak of any disease the deceased ever suffered from. The appellant is not sure of any concealment of fact by the insured as regards her health. In the circumstances, the appellant insurance company failed to establish that it had not exercised undue influence upon the respondent for settlement of the claim for a sum of Rs.one lakh as against the sum assured `2,00,000/- lakhs.
15. Counsel for the appellant has contended that though respondent having agreed for receiving the sum of Rs.1,00,000/- as exgratia towards final settlement of his claim, the respondent cannot seek for the balance sum assured under the insurance policy. He has relied upon the decisions of the Hon’ble National Commission in New India Assurance Co., Ltd., Vs KM Babu Reddy, IV (2012) CPJ 354 (NC), TATA AIG Life Insurance Company Limited vs Orissa State Cooperative Bank Limited and Another IV (2012) CPJ 310 (NC) and Laxmi Devi Kakhani Vs Oriental Insurance Company Limited, IV (2012) CPJ 483.
16. In Babu Reddy’s case (supra), the District Forum dismissed the complaint on the premise that the insured concealed the fact that he had undergone coronary bypass grafting and the State Commission allowed the appeal. The National Commission allowed the revision preferred by the insurance company observing that contract of insurance is based on utmost good faith of parties and the policy was obtained by fraudulent representation made by the insured.
17. In TATA AIG’s decision, the insured suppressed the fact that he was suffering from chronicle renal failure and died within six months from the time of obtaining insurance policy. The insurance company placed on record the medical history of the insured such as prescription and biochemistry reports showing the insured suffering from diabetic foot and swelling of the feet etc.
18. Laxmi Devi’s is a case where execution of discharge voucher was held to be a bar for the complainant to proceed with the claim. In the circumstances where the complainant failed to show any fraud, misrepresentation or undue influence exercised by the insurance company upon him. It was held that privity of contract between the complainant and the insurance company comes to an end the movement complainant accepted refund of the amount unconditionally and got the cheque encashed.
19. In the case on hand, the appellant insurance company failed to prove that the insured was suffering from certain disease and she had undergone treatment therefor as also she had suppressed the factum of her suffering from a definite disease at the time of submitting the proposal or before the appellant had issued the insurance policy.
20. Any defence resorted by the appellant insurance company should be based on the platform of investigator’s report which in turn has to be supported by medical record. No medical evidence has been placed on record by the appellant insurance company to show that the insured suffered from abdominal pain and she was under treatment therefor, about five years prior to issuing the insurance policy. The appellant insurance company has not shown any reason for payment of the claim amount as exgratia despite there being no medical evidence whatsoever. The appellant being an insurance company and in a dominating position had taken advantage of the helpless condition of two little children of the deceased insured and settled the matter for `1,00,000/- with the respondent.
21. For the foregoing reasons, this Commission is of the view that the amount of `1,00,000/- was being paid already to the respondent, the two minor children of the deceased insured, Y.Nitin Patro, aged about 11 years and Y.Chandrasekhar Patro, aged about 6 years are entitled to the balance amount of `1,00,000/- and in the circumstances the order of the District Forum is liable to be modified insofar as the recipient of the insurance benefit is concerned. The two minor children of the respondent and the deceased insured are entitled to the amount and not the respondent who had already received the amount of `1,00,000/- from the appellant insurance company.
22. In the result the appeal is dismissed modifying the order of the District Forum as regards the recipient of the insurance policy benefit. The amount on being deposited by the appellant insurance company before it, the District Forum shall deposit it on the name of the two minor children of the insured viz., 1.Y.Nitin Patro, aged about 11 years and 2. Y.Chandrasekhar Patro, aged about 6 years in any Nationalized Bank till they attain majority. The respondent is permitted to withdraw quarterly interest accrued on the amount. There shall be no separate order as to costs. Time for compliance four weeks.
MEMBER
MEMBER
Dt.22.08.2013
కె.ఎం.కె*
