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Life Insurance Corp. of India v. Ramesh Chandra Kansodan
Factual and Procedural Background
The appeal arises from an order dated 31.07.2009 passed by the District Forum, Dehradun in consumer complaint No. 108 of 2004. The complainant, Sh. Ramesh Chandra Kansodan, represented the interest of his deceased son, late Sh. Rupesh Gupta, who had obtained four life insurance policies from the appellant insurance company. The dispute centered on policy No. 271202382, with an assured sum of Rs. 2,00,000/-. After the life assured's death on 24.02.2003, the complainant notified the insurance company on 29.06.2003. While the company paid claims on two policies, it repudiated the claim on policy No. 271202382, alleging suppression of information about previous policies by the life assured. The complainant filed a consumer complaint alleging deficiency of service. The District Forum allowed the complaint and directed payment with interest. The insurance company appealed against this order. During the appeal, the original complainant passed away and his legal heirs were substituted as respondents.
Legal Issues Presented
- Whether the insurance company was justified in repudiating the claim on the ground that the life assured withheld information regarding earlier insurance policies at the time of taking policy No. 271202382.
- Whether the insurance company could deny the claim on the ground that the life assured died by suicide within a short period after obtaining the policy.
- Whether there was deficiency in service on the part of the insurance company in repudiating the claim.
Arguments of the Parties
Insurance Company's Arguments
- The life assured did not disclose a prior insurance policy (No. 271141896 for Rs. 3,00,000) when taking the disputed policy.
- The life assured died by suicide within approximately three months of obtaining the policy, justifying repudiation of the claim.
- There was no deficiency in service by the insurance company in denying the claim.
Complainant's Arguments
- The insurance company had all information regarding the life assured’s policies, as all were taken from the same insurer.
- The proposal form was filled by the insurance company’s agent, and the life assured did disclose at least one earlier policy, making non-disclosure of others unjustified.
- The insurance company failed to provide any satisfactory reason or evidence for alleging suppression of information or suicide.
- The insurance company had paid claims on other policies despite raising similar pleas, thus estopped from denying the claim on this policy.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court examined the insurance company's contention that the claim was repudiated due to non-disclosure of an earlier policy. It noted that all policies were issued by the same insurer, who had access to all relevant information, undermining the claim of suppression. The court observed that the life assured had disclosed at least one prior policy in the proposal form, which was filled by the insurer's agent, negating any deliberate withholding of information. The insurance company also failed to establish that the life assured was suffering from any disease or ailment that would justify repudiation. Regarding the suicide plea, the court found no cogent evidence to prove that the death was due to suicide and noted that the insurance company had not repudiated the claim on this ground. Additionally, since the insurer had paid claims on other policies despite similar pleas, it was estopped from denying this claim on those grounds. Therefore, the court concluded that repudiation was unjustified and constituted deficiency in service by the insurance company. The District Forum's order allowing the complaint was upheld as legally sound and requiring no interference.
Holding and Implications
The court DISMISSED the appeal filed by the insurance company and upheld the order of the District Forum directing payment of Rs. 2,00,000/- along with interest at 7% per annum from the date of repudiation till payment.
The decision directly compels the insurance company to honor the claim under policy No. 271202382. No broader precedent was established beyond affirming that repudiation without satisfactory evidence of suppression or suicide constitutes deficiency in service.
(Per: Justice B.S. Verma, President): This appeal under Section 15 of the Consumer Protection Act, 1986 is directed against the order dated 31.07.2009 passed by the District Forum, Dehradun in consumer complaint No. 108 of 2004.
2. Briefly stated the facts giving rise to the appeal are that late Sh. Rupesh Gupta, the son of the complainant Sh. Ramesh Chandra Kansodan (who had also expired during the pendency of this appeal), during his lifetime, had obtained a life insurance policy bearing No. 271202382 for assured sum of Rs. 2,00,000/-. In addition to the said policy, the life assured also had three other life insurance policies for assured sum of Rs. 50,000/-; Rs. 3,00,000/- and Rs. 25,000/- respectively. The complainant was the nominee in the three life insurance policies obtained by the life assured. The life assured died on 24.02.2003, intimation whereof was given by the complainant to the insurance company through his letter dated 29.06.2003. The insurance company made payment in respect of two insurance policies, but denied the payment of policy No. 271202382 and the claim in regard to the said policy was repudiated by the insurance company on the ground that at the time of taking the insurance policy in question, the life assured had withheld the information regarding his previous policies. Thus, alleging deficiency in service on the part of the insurance company, the complainant filed a consumer complaint before the District Forum, Dehradun.
3. The insurance company filed written statement before the District Forum and pleaded that prior to taking the insurance policy in question, the deceased life assured had taken policy No. 271141896 for assured sum of Rs. 3,00,000/-, which fact was not disclosed by the life assured at the time of taking the insurance policy No. 271202382 in question; that the life assured had died on account of suicide within a period of about three months from taking the policy in question; that the claim of the complainant was rightly repudiated by the insurance company and that there is no deficiency in service on their part.
4. The District Forum after perusal of the evidence on record, allowed the consumer complaint vide impugned order dated 31.07.2009 and directed the insurance company to pay the insured amount of Rs. 2,00,000/- to the complainant together with interest @7% p.a. from the date of repudiation of the claim till payment. Aggrieved by the said order, the insurance company has filed the present appeal.
5. During the pendency of the appeal, the complainant Sh. Ramesh Chandra Kansodan expired on 13.11.2013 and, as such, his legal heirs were substituted in his place as respondent Nos. 1/1 and 1/2. We have heard the learned counsel for the parties and gone through the record.
6. So far as the plea taken by the insurance company that since the life assured had not disclosed the earlier insurance policy No. 271141896 at the time of submitting the proposal for the insurance policy in question and, as such, the claim was rightly turned down by the insurance company is concerned, it need to be stated that all the insurance policies were taken by the life assured from the appellant Life Insurance Corporation of India and the appellant insurance company had all the information with regard to the insurance policies obtained by the life assured during his lifetime. The insurance company has not put forward any satisfactory reason on the part of the life assured in suppressing the earlier insurance policy obtained by him and in not disclosing the same in the proposal form. The proposal form is always filled in by the agent of the insurance company. When in the proposal form, the life assured had mentioned his earlier policy No. 270912182 for assured sum of Rs. 50,000/-, there was no occasion for the life assured to withheld information with regard to his other insurance policy. Thus, we are of the view that the repudiation of the claim by the insurance company on the ground that in the proposal form, the life assured had withheld information with regard to his earlier insurance policy, was not justified and there was clearly deficiency in service on the part of the insurance company in denying the claim of the complainant. It is also important to mention here that it is not the case of the insurance company that the life assured was suffering from any disease and in order to get unlawful gain / benefit, he obtained the insurance policy in question, so that on his death, his nominee may be benefitted with the assured sum under the policy. Even otherwise, there is nothing on record to show that the life assured was suffering from any disease / ailment at the time of submitting the proposal form for the policy in question. Thus, we do not find any force in the stand of the insurance company that if the life assured would have disclosed his earlier policy No. 271141896 at the time of submitting the proposal for the policy in question, he would have been subjected to medical examination, which could have affected the decision of the insurance company regarding issuance of the insurance policy in question in favour of the life assured deceased.
7. So far as the another plea taken by the insurance company that since the life assured had died on account of suicide and hence the claim is not payable is concerned, it need to be stated that the insurance company has not filed any plausible / cogent evidence to show that the life assured had committed suicide. This apart, it is also important to mention here that the insurance company has not repudiated the claim on the ground that the life assured had committed suicide. However, since the insurance company has failed to prove that the life assured had died on account of committing suicide and there is nothing on record to prove the said fact and hence the insurance company can not deny the claim on the ground that the life assured had committed suicide. It is pertinent to mention here that in respect of other policies of the life assured also, same pleas were raised by the insurance company, but the insurance company has paid the insured amount under the said policies without any objection. Therefore, the insurance company is estopped from raising these pleas in the present case.
8. The District Forum has considered all the facts and circumstances of the case and has rightly allowed the consumer complaint per impugned order, which does not call for any interference and is fit to be maintained. The appeal lacks merit and is liable to be dismissed.
9. Appeal is dismissed. No order as to costs. (D.K. TYAGI) (JUSTICE B.S. VERMA)
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