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India First Life Insurance Co. Ltd., v. 1.Botla Yakantha alias Srikala
Legal Opinion Summary: State Consumer Disputes Redressal Commission, Telangana — FA No.13 of 2019
Factual and Procedural Background
This appeal arises from an order dated 18.01.2018 of the District Consumer Forum, Warangal (CC No.86/2016). The District Forum allowed a consumer complaint filed by the Respondent/Complainant (mother and nominee-appointee) against IndiaFirst Life Insurance Company Limited (Opposite party No.1) directing payment of policy proceeds and costs, and dismissed the complaint against Opposite party No.2 (Andhra Bank).
Relevant factual matrix, as found on the record and set out by the Commission:
- The life assured, Botla Venkateshwarlu, was a group member and took an "IndiaFirst Money Balance Plan" life insurance policy (policy number recorded as 70129406) with Opposite party No.1. The policy commenced on 02.03.2014, annual premium paid Rs.15,000/-, sum assured Rs.2,00,000/-, policy term 10 years.
- The life assured died on 28.05.2015; the Complainant (his wife) was the nominee's appointee and filed the consumer complaint on 19.05.2016 complaining of repudiation of claim by the insurer.
- The insurer repudiated the claim on the ground of suppression of material fact — specifically, that the life assured had received inpatient treatment at Jaya Hospital from 04.01.2010 to 07.01.2010 for liver-related issues, which was not disclosed in the proposal form (a pointed question required disclosure of hospitalization in the five years prior to proposal).
- The District Forum, after evidence and documents adduced by both sides, found for the complainant and directed payment of Rs.2,00,000 with interest and costs. The insurer (now the appellant) challenged that order by filing the present appeal before the State Commission.
Legal Issues Presented
- Whether the impugned order passed by the District Forum suffers from any error or irregularity such as to warrant setting aside, modification or interference by this Commission.
- What relief, if any, should be granted in view of the findings on record (including the question of entitlement to policy proceeds and the identity of the payee).
Arguments of the Parties
Appellant / Opposite Party No.1 (IndiaFirst Life Insurance Company Limited) — Arguments
- The insurer admitted issuance of the policy but contended that the life assured suppressed a material fact: inpatient treatment at Jaya Hospital (04.01.2010 to 07.01.2010) which was within five years prior to the proposal (proposal signed 02.03.2014) and therefore required disclosure.
- On the basis of that alleged suppression, the insurer maintained the repudiation was justified and the District Forum erred in allowing the complaint; hence the appeal should be allowed and the complaint dismissed with costs.
Respondent / Complainant (nominee-appointee, mother of nominee) — Arguments
- The Complainant acknowledged the life assured's hospitalisation in January 2010 but submitted that (a) the hospitalisation occurred more than four years before death and in any event (b) the death on 28.05.2015 was accidental due to a sun stroke and had no nexus with the 2010 ailment; therefore the non-disclosure could not justify repudiation of the claim.
- The Complainant argued the District Forum correctly appreciated the material on record and rightly granted relief to the nominee (represented by the Complainant when a minor).
Opposite Party No.2 (Andhra Bank) — Arguments
- Opposite party No.2 contended they were not a party to the agreement between the insurer and the life assured and thus had no relation to the policy in question.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Commission undertook a careful perusal of the voluminous evidence on record and identified facts that were admitted, uncontroverted or proved. The bench summarized the key factual findings: existence of the policy (Ex.B3 / Ex.B1 appear on record), premium payment (Ex.A6), policy commencement 02.03.2014, sum assured Rs.2,00,000/-, and date of death 28.05.2015.
The insurer's principal contention was suppression of an inpatient admission in January 2010. The District Forum had accepted the complainant's case and allowed relief. The Commission analyzed whether repudiation solely on the ground of non-disclosure of that 2010 hospitalization was justified in the circumstances of this case.
The Commission's key analytical steps were:
- Identify the factual link between the suppressed information and the cause of death: the Commission observed there was no evidence on record to establish any nexus or close proximity between the hospitalisation in January 2010 and the cause of death in May 2015 (sun stroke / accidental death).
- Assess the legal consequence of suppression: the Commission held that in the absence of nexus between the suppressed fact and the cause of death, the insurer could not repudiate the claim solely on the ground of prior hospitalization. The Commission noted that suppression may be a factor to be weighed where there are other grounds for repudiation, but in the instant case repudiation was based solely on the alleged suppression.
- Examine continuity of illness or treatment between 2010 and 2015: the Commission found no evidence of treatment or hospitalization in the interregnum (2010–2015) to support the insurer's contention that the 2010 event materially related to the death.
- Conclude on the correctness of the District Forum's assessment: having regard to the absence of nexus and lack of evidence to justify repudiation, the Commission concluded the District Forum had appreciated the material on record in the correct perspective and there was no reason for interference with its findings.
- Address the question of payee: the Commission further examined who was entitled to receive the proceeds. The policy nominated Botla Vishal (born 20.03.2004) as nominee with the Complainant as appointee. When the life assured died in 2015 the nominee was a minor; during the pendency of proceedings (by March 2022) the nominee attained majority. The Commission held that the proceeds are therefore to be paid directly to the nominee (Botla Vishal) who is then competent to give valid legal discharge to the insurer.
Holding and Implications
HOLDING: The appeal is dismissed. The Commission affirmed the order of the District Consumer Forum which had allowed the complaint.
Direct consequences ordered by the Commission (explicit holdings and directives):
- The Appellant insurance company (IndiaFirst Life Insurance Company Limited) is directed to pay the proceeds of the policy (sum assured Rs.2,00,000/-) together with interest at 7.5% per annum from 19.05.2016 until the date of payment.
- Payment is to be made to Botla Vishal (the nominee), who has attained majority during the proceedings and is competent to give valid legal discharge.
- The insurer is directed to pay litigation costs in the sum of Rs.10,000/- as quantified by the District Forum.
The opinion does not state or declare any novel legal principle or bind any broader precedent; the decision is confined to the facts of this case and the direct effect on the parties as described above.
Before the State Consumer Disputes Redressal Commission (constituted under the Consumer Protection Act, 2019) of Telangana, Eruvaka Building, Khairathabad at Hyderabad
FA NO.13 OF 2019 AGAINST CC NO.86 OF 2016
ON THE FILE OF DISTRICT COMMISSION, WARANGAL
Between:
IndiaFirst Life Insurance Company Limited, through its Head-Governance & Company Secretary, having its Registeredand Corporate officeat 301, (B)-Wing, the Qube, Infinity Park, Dindoshi, Film City Road,
Malad (E), Mumbai - 400 097.
Appellant/Opposite party No.1
And
1) Botla Yakantha @ Srikala S/o late Botla Venkateshwarlu, H.No.1-9-581, Julywada, Police Headquarters,
Subedari, Warangal district. ..Respondent/Complainant
2) The Manager, Andhra Bank, Nakkalagutta branch, Warangal district. Respondent/Opposite party No.2 Counsel for the Appellant Sri G.Nagesh Counsel for the Respondent Sri K.Rajeshwar Rao-R1 M/s P.Balaji-R2
cORAM:
*****
Hon'ble Sri Justice MSK Jaiswal President and
Smt Meena Ramanathan Member
Thursday, the Fourteenth day of
July Two Thousand Twentty Two
Oral Order:
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This is an appeal preferred by the Opposite party No.1 aggrieved by the orders dated 18.01.2018 passed by the District Consumer Forum, Warangal in CC No.86/2016 in allowing the complaint and directing the Opposite party No.1 therein to pay Rs.2,00,000/- towards the sum assured with interest 7.5% per annum from the date of filing the
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Complaint i.e., 19.05.2016 till date of realisation and to pay Rs.10,000/. tOwards legal expenditure including costs within one month. By dismissingthe complaint against Opposite party No.2
For the sake of convenience, the parties are referred to as arrayed in the complaint.
2)
tis the case of Complainant that she is the wife of Botla venkateswarlu who worked in Police Department and during his lifetime,
3)
ne obtained insurance policy "IndiaFirst Money Balance Plan" bearing8 No.70129406 from the Opposite party No.1 for an assured sum or RS.2,00,O00/- by paying the premium of Rs.15,000/-, which commenced from 06.03.2014 onwards. While the policy was in force, the life assured died on 28.05.2015 leaving behind him the Complainant, his wife and two children Swetha and Vishal. Complainant was shown as nominee to the above said policy.
4) When the claim was made, the Opposite party No.1 repudiated the claim on the ground that the deceased life assured had suppressed the material fact i.e., admission in Jaya Hospital in the year 2010 with regardto treatment he underwent for liver problem. Hence, complaining deficiency of service, filed the present complaint with a prayer to direct the Opposite parties to pay the amount covered by policy in question for
a sum of Rs.2,00,000/- together with interest, Rs.20,000/-
as damages and costs of Rs.10,000/-
5) Opposite party No.1 filed its written version admitting the issuance of policy in question contending that the proposal for the policy was signedon 02.03.2014 suppressing the factum of taking treatment from Jaya Hospital, Hanamkonda from 04.01.2010 to 07.01.2010 vide IP No.6935/2010 in Grastoenterology Department having diagnosed for Reflux Esophagitis Grade-l. Again, he was treated on 28.05.2015 at Jaya Hospitals for Hematemesis with history of alcoholism and hence there is no deficiency of service on its part. Hence, prayed to dismiss the complaint with costs.
6) Opposite party No.2 filed its written version contending that they are not party to the agreemnent in between Opposite party No.1 and the Complainant and hence it has nothing to do with the policy in question.
2
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norder to evade payment of housing loan instalments, the presen Complaint is initiated. Hence, prayed to dismiss the complaint against l
7) During the course of enquiry before the District Forum, in order to
prove his case, the Complainant filed his affidavit evidence as PWI and got marked the documents Ex.Al to A8. On behalf of Opposite party NO., one K.R.Viswanarayan, their Head-Governance & Company Secretary filed his affidavit evidence as RW1 andgot marked the
documents Ex.B1 to B7.
8) The District Forum after consideringthe material availableon
record, allowed the complaint bearing CC No.86 of 2016, by orders dated
18.01.2018,as stated,at paragraph No.1, supra.
9) Aggrievedby the said orders,the Appellant preferred the present
appeal contending that the forum below failed to consider the documents
brought on record in proper perspective and thereby allowed the
complaint without considering the fact that the deceased life assuredwas
diagnosed with hematemesis with Reflux Esophagitis (Grade-I) with
bleed and had previous history of COL (Cirrhosis of Liver) with portal
hypertension with decompensation,EVL (Esophageal Varices ligation)
done twice last in January 2009 with ADL (Alcoholic Liver Disease). Hence, prayed to allow the appeal by setting aside the orders impugned.
10)
The point that arises for consideration is whether the impugned orderas passed by the District Forum suffers from any error or
irregularity or whether it is liable to be set aside, modifiedor interfered
with,in any manner? To what relief?
11) A careful perusal of the voluminous evidence on record in support of the impugned order, without fear of contradiction, we can place on record certain facts which are either admitted, not controverted or proved.
12) Botla Venkateshwarlu was a group member and he has taken the ife insurance policy from the Appellants/Opposite party vide Ex.B3 which came into force w.e.f. 02.03.2014 having paid the annual premia of Rs.15,000/- vide Ex.A6. The sum assured was Rs.2,00,000/-. The life of the policy was 10 years. The date of birth of life assured was
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OO19. He has taken a policy and nominated his minor son Botla Sal as a nominee who was to be represented by the Respondent/ Complainant being the natural mother.
13) While the matter stood thus, on 28.05.2015, the life assured had Sun stroke due to which he was hospitalised in Jaya Hospital, Warangal and untortunately on the same day at about 7.30 pm succumbed to une sun stroke. When the claim was made to the Appellant insurance onpany, the same was repudiated vide Ex.A5 on 17.05.2015 on the ground that the life assured is guilty of having suppressed the materia information from the Appellant which was to the effect that even though the life assured had undergone inpatient treatment in Jaya Hospitals from 04.01.2010 to 07.01.2010, the same was not disclosed in tne proposal form in spite of there being a pointed question to the effect as to whether the life assured was hospitalised or underwent treatment for the periodof five years prior to the submission of the proposal. Since the hospitalisation was well before proposal and the policy was taken in 2014, which was within five years, the non-disclosure of the hospitalisation according to insurance company amounts to suppression of material fact which affects the very contract in between the insurance company and the life assured. On the said ground, the claim was repudiated.
14) Aggrieved thereby, the Respondent/Complainant being the mother of the nominee, filed CC No.86/2016 which came to be allowed vide the impugned order.
15)The learned counsel appearing for the insurance company submits that even though the record clearly shows that the life assured has suppressedthe material fact, the District Forum has erroneously granted the relief which cannot be sustained.
On the other hand, the learned counsel appearing for the 16) Respondent/ Complainant submits that no doubt, the record shows that the life assured was admitted in hospital for three days in January 2010 but that was more than four years prior to the unfortunate death which was purely accidental due to sun stroke and that the ailment with which he was admitted in January 2010 has absolutely no nexus whatsoever with the cause of death which is purely accidental. Therefore, the
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earned counsel appearing for the Respondent/Complalnan ga . Ouict Forum has properly appreciated the material on recora and granted the reliefs.
17)
to n agreement with the submissions made by the learned counsel pon carefully perusing the material on record,we find ourselves
appearing for the Respondent/Complainant that in the absence of there
Deng any nexus or close proximity in between the cause of death andthe
1acts suppressed, the insurance company cannot repudiate the claim
sOlelyon that ground. May be if there are other grounds on which the
Tepudiation is made, this may be one of the factors to be weighed butin
the instant case, the entire claim is repudiated solely on the ground that
the life assured has suppressed the fact that hewas admitted in hospital
in January 2010 when he taken the policy in March 2014 and diedon
28.05.2015. Absolutely, no evidence is producedto show about any
The Forum
treatment or hospitalization in between 2010 and
2015.
below has appreciated the material on record in correct perspective and
granted the relief.We see no reason to interfere with the said findings and the impugned order is liable to be confirmed by dismissing the
appeal.
18) However, we would liketo state thatthe Appellant insurance
company is liable to settle the claim and pay the proceeds of the policy in
favour of Botla Vishal who is the nominee and who is competent to give valid legal discharge to the insurance company. As per the policy bond, Ex.B1, the said nominee is shown as a minor whose date of birth waas 20.03.2004 and appointee as per the policy is the Complainant, being the natural mother. When the life assured died on 28.05.2015, the nominee was aged about 11 years and when the consumer complaint was filed on 19.05.2016, the nominee was aged about 12 years. The Complainant being the natural mother of the nominee and the appointee, has filed the complaint. During the pendency of the proceedings i.e., in March 2022, the nominee Botla Vishal has attained majority and therefore the proceeds of the policy are liable to be paid to him directly but not to the Complainant.
19) In view of the foregoing discussion, the appeal is dismissed with a direction to the Appellant insurance company to pay the proceeds of the
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POHey together with interest thereon @ 7.5% per annum from
19.05.2016
till the date of payment to Botla Vishal, son of late Botla Venkateswarlu, ogether with costs of the litigation at Rs. 10,000/- which have been
quantified by the District Forum.
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