Citation Codes

Equivalent Citations

citation codes

Case Number

CC/58/2019

Attorney(S)

Acts

SECTION 17 A CONSUMER PROTECTION ACT 1986
Consumer Protection Act; damages U/s. 14(1)(d)

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Smart Summary

Case Summary — CC. No. 58 of 2019 (Telangana State Consumer Disputes Redressal Commission)

Factual and Procedural Background

The complaint was filed by Smt. Parvathapu Mangamma, the nominee of her late husband, Parvathapu Narsaiah Chary, against The Aviva Life Insurance Company India Ltd. The deceased had taken an "Aviva Lifeshield Advantage" life insurance policy (policy number ALA 3131951) on 31.03.2013 for a sum assured of Rs.25,00,000/- with an annual premium of Rs.22,834/-. The complainant alleged that after the insured's death (the opinion records the date of death in different parts of the text as 09.04.2014 and 09.01.2014), the insurer repudiated the death claim by letter dated 30.06.2014.

The insurer repudiated the claim on the ground that the deceased had suppressed material facts in the proposal form, specifically that he was suffering from Diabetes Mellitus and hypertension prior to the policy (allegedly under treatment since 2011). The complainant alleged deficiency in service and unfair trade practice and sought the sum assured together with interest, compensation for mental agony and punitive damages, and costs.

Both parties filed evidence affidavits and documentary exhibits (Complainant: Ex.A1–Ex.A11; Opposite Party: Ex.B1–Ex.B7). The matter was heard and reserved for order; the Commission delivered the decision on 17.01.2022.

Legal Issues Presented

Whether there is a deficiency in service on the part of the Opposite Party (the insurance company) in repudiating the death claim?
Whether the life assured was guilty of having suppressed material information (specifically prior medical history of Diabetes Mellitus and hypertension) at the time of obtaining the insurance policy?
If a deficiency is found, what reliefs (payment of sum assured, interest, costs, etc.) should be granted to the complainant?

Arguments of the Parties

Complainant's Arguments

The complainant (nominee) maintained that the deceased was hale and healthy prior to his death and that the insurer repudiated the claim without proper basis.
She asserted that the repudiation amounted to deficiency in service and an unfair trade practice, and sought payment of the sum assured with interest, compensation for mental agony, and costs.
The complainant pursued internal review (representation to the insurer's Claims Review Committee), which also declined the claim; she then approached the Commission.

Opposite Party's (Insurer's) Arguments

The insurer admitted issuance of the policy but stated that the insured died within a short period (within a year) of policy inception, which triggered a thorough investigation.
The insurer contended that the deceased had concealed material facts in the proposal form, specifically that he had been under treatment for Diabetes Mellitus and hypertension since 2011, and had undergone treatment for cardiac issues previously.
Relying on investigation reports and medical records (obtained from various hospitals), the insurer argued that the deceased provided false information to procure the policy and that repudiation on grounds of suppression of material facts was justified.
Accordingly, the insurer denied any deficiency in service and prayed for dismissal of the complaint.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Commission set out the legal principle applicable to life insurance contracts: they are founded on the doctrine of utmost good faith, and an insurer is justified in repudiating a claim if it proves that the life assured knowingly suppressed material information regarding pre-existing ailments which caused the insured event.

The Commission then examined the factual matrix and the evidence produced by the insurer to establish suppression:

The Commission noted the admitted facts: policy issued on 31.03.2013 for Rs.25,00,000/-, annual premium Rs.22,834/-, and the insured died within a year of policy inception (dates of death appear in the opinion as 09.04.2014 in one place and 09.01.2014 in another).
Because death occurred within a short period after policy issuance, the insurer conducted an investigation. The insurer's repudiation letter (marked Ex.A8 / Ex.B5) stated that records showed the deceased had been suffering from Diabetes Mellitus and hypertension and under treatment since 2011, which preceded the proposal.
The Commission emphasized the evidentiary burden on the insurer to produce “cogent and convincing evidence” that: (a) the insured suffered from the alleged ailments before submitting the proposal; (b) the insured underwent treatment for them; and (c) there is a causal nexus between the concealed ailment and the death such that suppression would justify repudiation.
The Commission then evaluated the insurer's documentary evidence. The only directly relevant document identified by the Commission was a record dated 22.01.2011 showing the deceased was "suspected" to have DM Type 2 and hypertension; the same document recorded a normal 2D Echo and BCG, and prescribed medicines listed (Brufen & Rantac) that the Commission observed are not medicines typically indicative of treatment for diabetes, hypertension, or cardiovascular disease.
The Commission described the insurer's medical evidence and investigation reports as "far from satisfactory" and noted that the documents did not convincingly establish that the assured had a serious ailment, well within his knowledge, which he had suppressed in the proposal and which later resulted in death. Consequently, the Commission found the insurer had not met the necessary evidentiary threshold to justify repudiation.
Given the insufficiency of the insurer's proof on suppression and the absence of convincing evidence establishing the required nexus between any prior ailment and the death, the Commission concluded that repudiation could not be sustained.

Holding and Implications

Core Ruling: The complaint is allowed. The Commission directed the Opposite Party (the insurer) to pay the sum assured to the complainant together with interest at the rate of 6% per annum from 01.07.2014 until the date of payment.

The Commission also awarded costs of Rs.5,000/- to the complainant and directed compliance within 30 days.

Consequences and broader implications: The direct effect is that the insurer must satisfy the complainant's claim (payment of the sum assured with interest and statutory costs) within the stipulated time. The opinion expressly relied on the insurer's failure to produce cogent, convincing medical evidence of suppression; the decision does not announce or rely upon any new legal precedent beyond applying the established principle of utmost good faith and the evidentiary burden on insurers where repudiation for suppression is pleaded.

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Smt. Parvathapu Mangamma v. The Aviva Life Insurance Company India Ltd.,

BEFORE THE TELANGANA STATE cONSUMER DISPUTES REDRESSAL COMMISsION ; HYDERABAD. CC.NO.58 OF 2019 Between: Smt.Parvathapu Mangamma

W/o.Late Narsaiah Chary,

Age: 36 years, Oc: Household, R/o.H.No.13-51, Yadav Bazar,

Huzurnagar Village and Mandal of Nalgonda District -508204.

....Complainant

And

The Aviva Life Insurance Company India Ltd., Rep. by its Manager,

Aviva Tower, Sector Road,

Opp: Golf Course, DLF Phase V,

Sector-43, Gurgaon - 122003, Haryana State. .Opposite Party

Counsel for the Complainant :M/s.Gopi Rajesh 8 Associates

Counsel

for the Opposite Party: M/s.G. Nagesh QUORUM: SRI JUSTICE M.s.K.JAISWAL, HON"BLE PRESIDENT HON BLE SMT.MEENA RAMANATHAN .. LADY MEMBER MONDAY, THE SEVENTÉENTH DAY OF JANUARY

TWO THOUSAND TWENTY TWO

k****** Order

1. This is a complaint filed by the Complainant under Section 17 (1) (a) () of the Consumer Protection'Act, 1986, praying this Commission to direct the Opposité Party: (a) to pay Rs.25,00,000/- (Rupees twenty five lakhs only) along with interest 18% p.a: from the date of repudiation i.e.,

30.06.2014 till the date of realization;

( ( b b) ) to pay compensation of Rs.2,00,000/- by the Opposite Party

to the Complainant towards mental agony and loss caused

and also pay punitive

acts of the Opposite Party

the Consumer Protection Act; damages U/s. 14(1)(d) of the (C) to award costs of Rs.5,000/. that, the Complainants 2. The brief facts of the case are Shield husband late Parvathapu Narsaiah Chary took 'Aviva Life

for ^aAdvantage' policy during his life time from the Opposite Party sum of Rs.25,00,000/- bearing No.ALA 3131951. The annual 22 premium for the said policy wa_ Rs.22,834/- for a term of

31.03.2034

years. The said policy period was from 31,03.2013

to and the Complainant was the nominee. It is further submitted that, the Complainant's husband was a. tailor by profession and while doing his work he got chest pain süddenly and was admitted in NIMS hospital on. 16.12.2013. While undergoing treatment, he died on 09.04.2014. It is submitted that, prior to death he was hale and healthy did not have any ailment. After the death, the Complainant being nominee. made a claim to the Opposite Party, but to her surprise her claim was repudited by the Opposite Party

on 30.06.2014 after lapse of three months from the date of claim.

The Opposite Party repudiated the claim on the ground that, the

Complainant's husband was a diabetic mellitus and hypertension.

3. It is further submitted that, the Complainant made a

representation to the Opposite Party Review Committee and requested to settle the claim, but the said Claim Review Committee declined the claim. The Complainant submitted that, the Opposite

Party repudiated the claim solely on the ground that the insured

has suppressed that the deceased 'was suffering from diabetes

mellitus and hypertension in the proposäl form. In spite of several

letters and representations, the Opposite Party repudiated the

claim. With these allegations, the Complainant alleges deficiency in

service and unfair trade practice on the part of the Opposite Party

and prayed to allow the complaint.

3 4. Party filed written version denying t he The Opposite

issued

averments of the Complainants.

It is admitted that, they No.ALA3131951 to "Aviva Lifeshield Advantage' policy bearing on 31.03.2013 Mr.Parvathapu

Narsaiah Chary, the d eceased

was wherein his wife who is the Complainant S mt.P.Mangamma,

assured sum of

named as nominee. The policy ^wasfor ^anfor a for which the annual premium was payable Rs.25,00,000/- deceased expired

sum of Rs.22,834/-. It is contended that, the

of issuance of

within a short span of 9 months.from t

he date only

as per the

the policy. Hence, Opposite Party i

nvestigated

and assessment of. the

claim,

procedure. During investigation

and correct found that the deceased did

not provide true

was to his

information while filling up the proposal f

orm with respect

from history. It was revealed that, h

e was suffering

medical and treatment and Hypertension was under Diabetes Mellitus

2011 i.e., prior to the issuance of the policy. T

he Opposite

since

of procured treatment records various

hospitals which clearly

Party

establishes this fact. By concealing this m

aterial fact regarding

issue

medical history, the deceased induced t

he Opposite Party ^to

. in his favour. lt is further contended

that, even after

the policy

DM & HTMT DLI being aware that he was suffering f rom grave

at opted for the policy by not disclosing t he 'medical history

stage in order to get ^theundue advantage ^o ut of the same proposal

the

and provided false information in the proposal ^f orm. Thus,

the Opposite Party had rightly repudiated t he claim of

the ground of providing false Complainant

on information a t the

time of filling up the proposal. form. With these contentions, t he Opposite Party denies deficiency in service on their part and prays to dismiss the complaint.

5. The Complainant

filed evidence affidavit and produced documents Ex.A1 to A11 to prove her case. The Opposite. Party filed evidence affidavit and Ex.B1 to B7 marked on their behalf. The Complainant filed written arguments.e Both parties advanced oral arguments.

6 Heard both sides. The point that arise for consideration is, whether there is a deficiency in service on the part of the Opposite Party and if so, to what relief?

7. Alter having heard the submissions of the learrned counsel appearing for the, Complainant and the Opposite Party/Insurance Company, what is required to be seen is, as to whether the life

assured is guilty of having suppressed, material information irom

the Opposite Party at the time when. he obtained the insurance policy.

.8. The admitted fact.is that, the life assured aged about 4

years has taken the policy from the Opposite.Party for a sum of Rs.25.00 lakhs on 31.03.2013 by paying the annual premia oi Rs.22,834/-. Even before the due date for the second premia was due,. the life. assured fell sick and he was admitted in NIMS Hospital on 16. 12.2013 and. died due to cardiac .arrest on

09.01.2014. Since the death was within a period of one year, a thorough investigation was done during the course of which it

came to be noticed that the life assured has suppressed the fact

that he had undergone treatment for the cardiac problem two years

prior to taking the policy by getting himself treated in NIMS. Suppressing the said fact, it is alleged that the life assured has

declared himself to be hale and healthy in' the proposal form,

believing which the Opposite Party/Insurance Company has issued

the policy.

9. The legal position on this àspect' is well settled. The contract of the insurance in between the life assured and the insurer is based on the principle of utmost good faith. If it is shown that the

life assured has taken the policy by. suppressing existence of a

material ailment: which was wel within his knowledge and

obtaining the policy and ultimately succumbs to that ailment after

the policy is issued, he will be held to be responsible for having

suppressed ^thematerial information from the Insurunee Company thereby making the lusurance Company to acocept the proposal. It no satislactory cvidençe is produced to show that prior to the proposal and issuanee of the poliey, the lile assured had any ailment which was well within his knowledge, underwent treatment there for, did' not disclose the same and subsequently resulting in the death and it there is a nexus between all these three, only then the lnsurance Company can be heard saying that the claini of the

lile assured is liable to be repudiated on the ground of suppresio

varic. 10. In the instant case, the repudiation letter is marked as Ex.A8

is cquivalent to Ex.B5 the lnsuranee Company repudiated the claim observing as under:

"As per the records procured by us during claim evahuation, the deceased life assured was suffering from Diabetes Melitus and

hypertension and was under treatmerit since 2011 which is prior to

proposal". It is further mentioned in the said repudiation letter that, since

that information was suppressed, the claim is repudiated,

11. As already stated, if the Insurance Company can establish

by producing cogent' and convincing evidence to show that before the proposal was submitted, the life assured was suffering with ailments which he has not disclosed in spite of there being a specific query to that effect in the proposal, then the Insurance Company is justified in repudiating. In the instant case, the

documents that are produced by the Insurance Company do not convincingly establish that before the taking of the policy, the life assured was suffering with any serious ailmont which was well within his knowledge and he has suppressed the same. The'only document that is relevant is dated 22.01.2011 and the document

shows that the deceased was .suspectod to be DM Type 2 and Hypertension. 2D Echo was normal, BCG was done and everthing

was found to be normal and the medicine that is prescribed as per the said document is Brufen & Rantac,which to our knowledge do not prescribe for either the deceased was diabetic, hypertension or cardio vascular disease. Thàt apart this document do not inspire any confidence for the teason that it is not

The satisfactorily produced. evidence that is produced on behalf of the Insurance Opposite Party/ Company is far from satisfactory for holding that the assured lit has suppressed the existence thereby of any seriqus mis-representing ailmen the facts to the obtaining the Insurance and policy. Company Therefore, the Insurance repudiation as made the Company by cannot be be sustained set and aside. the same is The liable ^toOpposite satisfy the claim Party/Insurance of Company is bound to the Complainant in assured view of has the died that due fact life to in Cardiac Arrest NIMS after Hospital for undergoing treatment nearly three answered. weeks. The point ^isaccordingly

12. In the result, the complajnt is Party allowed to pay the directing the sum assured Opposite the interest to thereon @ 6% Complainant together with p.a. from payment. The 01.07.2014 till the date Comnplainant of is also Time entitled to for costs of compliance is 30 days. Rs.5,000/-. PRESIDENT LADÝ MEMBER

Dt: 17.01.2022.

UC APPENDIX OF EVIDENCE

WITNESS EXAMINED

Evidence affidavit of Mangamma, ComplaPinaarnvta thhearpeuin . Evidence affidavit on behalf of Opposite Party For Complainants EXHIBITS MARKED

Ex.A1 Copy of First Premium Receipt dated 31.03.2013.

Ex.A2 Copy of Schedule of Policy dated 31.03.2013.

Ex.A3 Copy of Policy information Ex.A4 Copy of list of Insurance Ombudsman Ex.A5 Copy of Terms & Conditions of Insurance Policy Ex.A6 Copy of Proposal Form dated 31.03.2013. Ex.A7-Copy of Death Summary along with Case Sheet and medical records of the deceased/life assured, issued by NIMS, Hyd.

Ex.A8 ^-

Copy of the letter dated 30.06.2014 addressed to the Complainant by the Opposite Party. Ex.A9 Copy of letter dated 26.09.2014 addressed to the Complainant by the Claims Review Committee of Opposite Party. Ex.A10 -Copy of letter dated 16.10.2014 addressed to the Complainant by the Opposite Party. Ex.A11 -Copy of letter dated 17.11.2014 addressed to the

Complainant by the Opposite Party. For the Opposite Parties:

Ex.B1 Copy of Proposal Form dated 31.03.2013.

Ex.B2 Copy of Schedule of Policy

Ex.B3 Copy of Death Claim Form (DCF)

Ex.B4 Copies of Investigation Report along with medical reports.

Ex.B5 Claim repudiation letter dated 30.06.2014.

Ex.B6 Letter dated 26.09.2014 addressed by the Complainant to

the Opposite Party regarding death claim.

Ex.B7 Letter dated 17.11.2014 addressed by the Opposite Party

to the Complainant.

Smt. Parvathapu Mangamma v. The Aviva Life Insurance Company India Ltd.,

Case Summary — CC. No. 58 of 2019 (Telangana State Consumer Disputes Redressal Commission)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Complainant's Arguments

Opposite Party's (Insurer's) Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Smt. Parvathapu Mangamma v. The Aviva Life Insurance Company India Ltd.,

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