ORDER
PER MRS. M. SHREESHA,MEMBER
Challenge in this Revision Petition under Section 21(b) of the Consumer Protection Act, 1986 (in short the Act), is to the order dated 14.10.2011 in Appeal No. 1753 of 2010 passed by the Gujarat State Consumer Disputes Redressal Commission, Ahmedabad (in short the State Commission). By the impugned order, the State Commission has set aside the order of the District Consumer Disputes Redressal Forum, Bhavnagar (in short the District Forum) and directed the first and second Opposite Parties to pay the policy amount of ₹15,00,000/- with interest at 6% p.a. from the date of filling of the Complaint together with other benefits payable under the Policy.
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2. The facts, material to the case, are that the Complainant's husband, was approached by an Insurance Agent that is the third Opposite Party, for taking a Life Long Unit Linked Insurance Policy, which indemnifies the insured for an amount of ₹ 15,00,000/- for the coverage period 31.03.2008 to 30.09.2009. It was pleaded that the Insurance Agent himself filled the form on 24.03.2008 and took the signatures of the life Assured in the Proposal Form.
3. While so, on 13.04.2008, the insured complained of breathing problem accompanied by fever and was admitted to Sitaram General Hospital, where, on 14.04.2008 during the course of treatment, he expired on account of Pneumonia. The Complainant made a claim which was repudiated vide letter dated 24.02.2010 on the ground that the insured had taken Insurance Policies of more than ₹20,00,000/- from other insurance companies, which information was not disclosed in the Proposal Form. Despite several requests the claim was not settled and hence, the Complainant approached the District Forum seeking directions to the Opposite Parties jointly and severally to pay an amount of ₹15,00,000/- with interest, compensation and cost.
4. The First and second Opposite Parties filed their Written Version admitting to the issuance of the Policy for ₹15,00,000/- and contended that after 15 days of issuance of the Policy i.e., on 15.04.2008, the insured died due to Pneumonia. When the claim was investigated, it was revealed that the insured has taken policies of more than ₹20,00,000/- from different insurance companies viz., Reliance Life, Bharti AXA Life Insurance and ING Life Insurance Company, which fact was not declared by the insured in the Proposal Form. Had it been declared, the Insurance Company would have got an opportunity to decide whether the Policy was to be issued or not. Hence, there is no deficiency of service on their behalf for repudiating the claim.
5. The third Opposite Party, filed his Written Version stating that he had filled the Proposal Form and thereafter took the signature of the insured on the said Proposal Form, as, he being an employee of the Company has been trained by the Insurance Company for filling such Proposal Forms. Accordingly, he took the information from the Complainant's husband and filled the Proposal Form. It was pleaded that usually, the persons interested in taking medi- claim related insurance policies are asked queries pertaining to other policy details. In the present case, he did not deem it fit to ask any such question on the issue of other policies from the life assured as the policy in question was not a medi-claim policy. It was averred that, all the information necessary to the subject policy, was provided in the Proposal Form and therefore he cannot be made liable for any deficiency of service.
6. The District forum, based on the evidence and the material on record, dismissed the Complaint.
7. Aggrieved by the said order, the Complainant preferred an Appeal before the State Commission, which was allowed directing the first and second Opposite Parties to pay an amount of ₹15,00,000/- with interest @ 6% p.a. from the date of filing of the
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Complaint along with other benefits payable under the policy. While allowing the Appeal, the State Commission has observed as follows:
"(10) In short, we are in agreement with the fact that if the insured is holding any other life insurance policy the same needs to be disclosed in the proposal form so that the life insurance company gets an opportunity to deliberate on the terms and conditions on which the policy is to be issued, but in the present appeal opposite party insurance company has not been able to prove by way of concrete evidence that the deceased insured was holding other policies of value of more than Rs.20 lakhs from any other life insurance company.
(11) Ld. Counsel for the complainant Sh Daxesh Trivedi has placed on record a judgment in 3 (2002) CPJ 336 (NC) wherein the Hon'ble National Commission has referred to decision of Hon'ble Apex Court and Hon'ble National Commission relied upon the judgments, which are mentioned below:
i. 3(1998) CPJ page 30(NC)
ii. 1997 AIR-SC 2485
iii. 3(1997) JT 31(SC)
iv. 2(1996) CPJ 77 (NC) Wherein it is held that ' when there is no legal evidence on record to sustain the view taken by the investigator. Investigation report is to be proved by an affidavit of the investigator.' In short, the orders passed by the Gujarat State Commission in Complaint No. 111/2002, C.C. No. 8/2007 and C.C. No. 42/2007 have been placed before us, wherein in C.C. No. 42/2007 reliance has been placed on the order of Gujarat State Commission in 'New India Insurance Company Ltd. vs. Jagrat Nagrik' reported in 2011 CTJ page No. 464 (Gujarat) wherein it has been held that 'for repudiating an insurance claim it is not sufficient for the insurer to say that the statement made by the insured was false but it was required to be established that the statement made on the material matter and that it was made fraudulently'. In the above circumstances, the entire facts are clear that the facts mentioned by the deceased/insured in the proposal form that he does not have any other life insurance policy, is true. The grounds on which the insurance company repudiated the claim under the insurance policy of the complainant is not reasonable and justified, non payment of the claim to the complainant by the opposite party/insurance company amounts to deficiency of service. In the above circumstances, the order of the Ld. forum in dismissing the complaint of the complainant is not proper and is warranted to be interfered, appeal is admitted and the under-mentioned order is being passed."
8. Learned counsel for the Revision Petitioner submitted that in the proposal form submitted by the insured, the question under 8.1 of the proposal form as to whether the life assured was holding any other life insurance policy, he responded with an answer "NO". After the death of the insured, the Petitioner appointed CRP Technologies (India) Pvt. Ltd., for investigating the case and they filed their report on 16.02.2010 stating that the insured had
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suppressed several other insurance policies taken previously by him.
9. Learned counsel filed his written submissions stating that the insured had the following policies in his name:
"Particulars AVIVA RLIC BHARTI AXA ING
| Policy No. |
ALL-1940-976 |
1774-163 |
5000-837-491 |
1032-055 |
| Proposal Date |
27.03.2008 |
19.03.2008 |
07.03.2008 |
10.03.2008 |
| Sum Assured |
15,00,000 |
8,00,000 |
7,50,000 |
5,00,000 |
| Annual income of Prosper |
2,00,000 |
72,000 |
1,60,000 |
60,000 |
| Investigation Status |
Pending |
Intimation not received |
Claim settled and paid |
Paid” |
As the suppression regarding the aforementioned insurance policies amounts to material non-
disclosure under Section 45 of the Insurance Act, he contended that the repudiation was
justified. He relied on the judgements of the Hon'ble Apex Court in P.C. Chako Vs. Life
insurance Corporation, (2008) 1 SCC 321 and in LIC Vs. Ahsa Goel, (2001) 1 SCC 120, in
which the Hon'ble Supreme Court has laid down that given the scope of Section 45, it is
immaterial as to whether the insured had knowledge of the existence of the material fact
concealed or not; the suppression itself is material.
10. The Learned counsel for the Respondent submitted that the Agent had categorically accepted that he had not asked the insured any question relating to other insurance policies as these questions were relevant only with respect to medi-claim related insurance policies. The learned counsel relied on the 5 Member Bench judgement of this Commission in the matter of
United India Insurance Co. Ltd. Vs. Dashrathlal Jethabhai Patel, II (1996) CPJ 77 (NC)
and in National Insurance Co. Ltd. Vs. Munir Shah, III (2002)CPJ 336 (NC). He further contended that Annexure P-6 relied upon by the Insurance Company was not a part of the record either before the District Forum or the State Commission and in fact it was produced by the Insurance Company for the first time and as such this document cannot be relied upon. He vehemently argued that the claim was repudiated on 24.02.2010 and the alleged e-mails received from the other insurance companies were dated in the months of March and April. The allegation of the insurer is not substantiated by affidavits of the authorised officials of the said insurance companies confirming the content of the e-mails. He further contended that the Policy terms and conditions do not specifically stipulate any rule or condition for disclosure of information regarding other policies taken by the insured or any implications thereof and
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therefore, such a plea cannot, now be taken in a revision petition.
11. The brief point that falls for consideration in this Revision Petition is whether the Insurance Company was justified in repudiating the claim on the ground that the insured had suppressed the holding of other policies which he had allegedly taken from other insurance companies, especially in the light of the stand of their own Agent's assertion that he himself had filled the Proposal Form and had never sought for any information from the insured about other insurance policies.
12. The Learned counsel for the Insurance Company relied on the decision of this Commission in Consumer Complaint No. 148 of 2008 dated 20.05.2015 in Neetaben Mukund Shah and Ors. Vs. Birla Sun Life Insurance company Limited and Ors., in which case the correct income of the insured was suppressed. He vehemently argued that the State Commission did not follow Satwant Kaur Sandhu vs New India Assurance Company Ltd., (2009) 8 SCC 316, in which the Hon'ble Apex Court has held that the insured was required to disclose all material facts correctly in the Proposal Form as Insurance is a Contract between the two parties based on the principal of uberrimae fidei.
13. In the present case the facts are different as it was not the 'health condition' or the 'income' which was suppressed but rather it is the allegation of the insurer that the insured had concealed the factum of taking of other insurance policies.
14. At the outset, it is pertinent to note that the statement filed by the Insurance Company along with the Written Submissions, was admittedly not a part of the record before the fora below. There was a specific pleading by the Complainant in her Complaint before the District Forum, that insured was not questioned by the Agent with respect to other policies. At the cost of repetition, the relevant portion of the Written Version filed by the Agent before the District Forum is reproduced as under:
"I have filled up the proposal form, which is duly signed by the insured…. I have filled up the proposal form as answered by the insured for the asked questions. Generally in the cases of medi-claim related insurance policy holders'/ assured's case we ask queries pertaining to other insurance policies. I did not ask such questions from the insured", It is also pertinent to note that the entire Proposal Form shows that it was filled in English but was signed in Gujarati. It is further significant to note that the e-mails and the correspondence being relied upon by the insurer are all subsequent to the letter of repudiation dated
24.02.2010.
15. In CEO, Sahara India Life Insurance Company Ltd. and another Vs. Rayani Ramayanjneyulu in SLP(c) No. 30740 of 2014 dated 21.11.2014 the Hon'ble Supreme Court has reconfirmed that for any omission or commission of an Insurance Agent, the insured or his or her LRs cannot be made to suffer, The main question involved in Sahara India case (Supra) was that the insured did not mention about the previous insurance policies. The Hon'ble Apex Court upheld the view of this commission that by no stretch of imagination the information about any previous insurance policies could be held to be material. The Court has observed that it was difficult to fathom as to why these facts would influence the judgment of a prudent insurer in fixing premium or determining the cover or whether he would like to take the risk.
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There appears to be a mistake committed by the Agent and repudiation on this ground alone smacks of mala-fide intention on the part of the OP. This stand has been reiterated by this Commission in Smt. Sulochna Indukar Vs. the Life Insurance Corporation of India in R.P. No. 587 of 2015 dated 11.09.2015, wherein the repudiation on similar grounds, viz. that the insured had suppressed information regarding his previous insurance policies, has been held to be bad.
16. Keeping in view the facts and circumstances of this case, in our opinion, the non- disclosure of the other insurance policies does not fall within the ambit of Section 45 of the Insurance Act, as the concealment was neither wilful nor fraudulent. To reiterate, the Agent himself admitted that it is the normal practice that in non medi-claim policies, the question regarding existence of other insurance policies is not asked and that he himself had filled the proposal form. By no stretch of imagination it can be held to be a material fact fraudulently suppressed, entitling the Insurance Company to repudiate the claim on the stated ground.
17. For all the aforementioned reasons, this Revision Petition fails and is dismissed accordingly. No order as to costs.
......................J
D.K. JAIN
PRESIDENT
......................
M. SHREESHA
MEMBER
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