JAGRAJ SINGH vs Life Insurance Corporation of India

THE complainant is the nominee of Insurance Policy No. 190310197 which was obtained by his father from Alwar Branch of the opposite party (LIC) for Rs. 50,000/-. THE insurance was done on 28.4.1988. Amount of Rs. 5341/- was paid vide receipt dt : 28.4.1988. Policy was issued as per Table No. 73 and was for a period of 12years. THEre was a clause of accident benefit in the policy. THE date of risk mentioned in the policy is 14.5.1988 and date of maturity is 14.5.90. THE father of the complainant suddenly suffered from heat stroke on 31.5.1988. He was taken to Primary Health Centre, where he was admitted as indoor patient for treatment. At about 11.15 A.M. on the same day he expired. After his death the complainant who is the nominee as stated above submitted a claim to the Sr. Branch Manager, Alwar of the opposite party for the payment of the sum insured. It was mentioned in the claim form that the complainant''s father has died on 31.5.1988. THE Sr. Divisional Manager, Jaipur by his letter No. 402 of 31.3.1989 repudiated the claim for the policy amount. It was stated in the aforesaid letter that the answers to the questions given by the complainant''s father in his personal statement signed on 28.4.1988 were false, as the opposite party holds indisputable proof to show that before he; proposed for the policy he has suffered from paralysis. He did not discloses these facts in the proposal and instead gave false answers as stated above. It was also stated in the letter that he has understated his age by eight years and that he had given the correct age his proposal under the plan of assurance would not have been accepted. After the receipt of the above letter, the complainant represented the matter to the Chairman of the opposite party on 2.5.1989. He challenged the letter dt : 31.3.1989 of the Sr. Divisional Manager of the opposite party. THE complainant submitted a representation on 2.5.1989. Another letter dt : was received from the Divisional Office of the opposite party informing him that the decision of repudiation of claim has been upheld by the Zonal Claim Review Committee. THE repudiation of the claim has been challenged on the basis of the grounds mentioned in paras 11,12 and 13 of the complaint. He, therefore, filed the complaint on 16.1.1989 praying that the opposite party be directed to fulfil its part of the contract and make payment of Rs. 1,79,500/- details of which are mentioned in para 17 of the complaint with interest @ 12%. In support of the complaint an affidavit has been filed. He submitted documents Annexure 1 to Annexure 9. Opposite party filed its version of the case on 18.4.1990 resisting the complaint. Some preliminary objections were raised. Some of them are : 1. that the proceedings instituted by the complainant under the Consumer Protection Act, 1986 are nonest, null and void and without jurisdiction,

THAT the complainant is not a "consumer" and the dispute involved in the complaint is not a "consumer dispute", That the claim under the Life Insurance Policy can never be termed as compensation and That the L.I.C. has not been negligent in any manner,

That the elaim of the complainant has been repudiated on the grounds of withholding the material fact of ill health and also understatment of age by the deceased Shri Indel Singh (father of the complainant) at the time of proposing for insurance. A number of questions of fact are involved which can only be decided by a Civil Court as a number of witnesses and documents are to be examined for the same,

THAT besides the complainant there are other legal heirs of the deceased who are necessary parties and since they have not been joined in the complaint the complaint suffers from the non-joinder of necessary parties, That the claim under the Insurance Policy arises out of a contract between the life assured and the insurer and such contractual matters can only be decided by a Civil Court,

THAT the sum assured was Rs. 50,000/- and there was no double accident benefit. The compensation and other expenses have been exorbitantly overstated. As the sum assured is Rs. 50,000/- the State Commission has no jurisdiction to entertain, try and decide the complaint, 2. In the version of the case the complaint was also contested on merit. An affidavit of J.P. Bhutra Manager (Legal) LIC of India, Divisional Office, Jaipur was filed in support of the version of the case. Photostat copy of the Insurance Policy, Claim Investigation Report, Family Card (ration card), voters list etc. marked as Annex 1 to 6 were filed. 3. It was thought proper to hear the arguments regarding the maintainability of the complaint, which were heard on August 30,1990. 4. The following are the questions and answers mentioned in the personal statement which is signed by the deceased (assured) on 28.4.1988. 5. In the proposal form age mentioned by the deceased is 48 years nearer date of birth. Facts mentioned in the complaint on the above questions and answers are similar to those in Smt. Urmila Goyal v. Sr. Divisional Manager, LIC, Jaipur and others (Complaint Case No. 98/89 decided by the State Commission on 16.4.90). In THAT case amongst others it was pleaded THAT the policy was obtained by the deceased by a non-disclosure of material facts about ill health. It was also submitted THAT the answers given to questions 17(a), 18(a) and 20 in the statement signed by the deceased assured were false as the opposite party holds indisputable proof to show THAT before he proposed for the third policy he had suffered from palpitation and pain in chest for which he had taken treatment in the past. The claim was repudiated in THAT case THAT the policy was obtained by the deceased by fradulently suppressing material facts about ill health. The State Commission had considered the definition of "consumer", "complaint", "consumer dispute" and "service" as defined in Section 2(1) of the Act. Section 45 of the Insurance Act of 1938 was also examined. It is pertinent to state THAT Section 45 of the Insurance Act lays down THAT the policy is not to be called in question on the ground of mis-statement after two years from the date of the commencement of the Insurance Act and THAT no policy of life insurance effected after the coming into force of the Act of 1938 shall, after the expiry of 2 years from the date on which it was effected be called in question by an insurer on the ground THAT statement made in the proposal for insurance or in any receipt of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy was inaccurate or false, unless the insurer shows THAT such statement was on a material matter or suppressed facts which it was material to disclose. Section 46 of the Insurance Act deals with application of the law in force in India to policies issued in India. It was observed in Urmila Goyal''s case (supra) as under : "It is well setded THAT the contracts of insurance, unlike any other contracts are contracts unberrimae fides, i.e. in such contracts the duty is cast upon the assured to disclose all material facts known to him but unknown to the insurer and the former is bound to tell the latter everything which may be supposed likely to affect the latter''s judgment. As the contracts of insurance are made upon the basis of representations upon the truth or falsity of which the validity of the contract depends, a non-disclosure of any material circumstances or a misrepresentation, however, unintentional, has the same effect as fraud in vitiating the contract. The assured is bound to disclose and truly represent all the facts within his knowledge concerning the risk which are material for the underwriter to know; and the non-disclosure or misrepresentation of any such fact gives the underwriter an election to avoid the contract, as in the case of fraud although not accompanied by any fradulent intention."

The opposite parties have repudiated the claim of the complainant as is evident from the letter dt : 31.3.1989 (Annex. 3) THAT the answers given by the deceased assured in the personal statement were false as it holds indisputable proof THAT before the deceased proposed for the policy he has suffered from paralysis. He did not disclose this and instead he gave false answers as stated above. Penultimate para of the aforesaid letter is as follows : "It is, therefore, evident THAT he had made deliberate misstatements and withhold material information from us regarding his health and age of the time of effecting the assurance and hence in terms of the policy contract and the declaration contained in the forms of proposal for assurance and personal statement, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys THAT have been paid in consequence thereof, belong to us".

According to the opposite parties these questions of facts are complicated and can only to be decided by Civil Court on the basis of evidence. We have carefully looked into the complaint and version of the case and the documents filed by the parties. It was observed in M/s Special Machine Karnal v. Punjab National Bank and others I (1991) CPJ 78. (NC) (Original Petition No. 32/89 decided on 22.12.1989 by the National Commission) as under : "The procedure for disposal of complaints under the Act has been laid down in Section 13 of the Act, the provisions of which are made applicable to proceedings before the National Commission by Rule 14(2) of the Consumer Protection Act, 1987. Sub- sections (2) and (3) of Section 13 of the Act show beyond doubt THAT the statute does not contemplate the determination of complicated issues of fact involving taking of elaborate oral evidence and adducing of voluminous documentary evidence and a detailed scrutiny and assessment of such evidence. It is no doubt true THAT the forums constituted under the Act are vested with the power to examine witnesses on oath and to order discovery and production of documents. But such power is to be exercised in cases where the issues involved are simple such as the defective quality of any goods purchased or any shortcoming or inadequacy in the quality, nature and manner of performance of a service which the respondent has contracted to perform for consideration. Even in such cases, if it appears to the concerned Forum under the Act THAT the issues raised can not be determined without taking elaborate oral and documentary evidence it is open to it to decline to exercise jurisdiction and refer the party to his ordinary remedy by way of suit".

Sections 45 and 46 of the Insurance Act have already been referred to by us hereinabove. We are of opinion that there is complex nature of the questions of facts and law involved in the complaint for the determination of which elaborate oral as well as the documentary evidence will have to be adduced and considered and involve their detailed scrutiny. Points in controversy cannot be determined in a summary enquiry which is contemplated under the Consumer Protection Act, for, elaborate oral and documentary evidence is necessary. It is held in Special Machines Karnal''s case (supra) that power under the Act is to be exercised in cases where points involved are simple for example defective quality of the goods purchased or any short coming or inadequacy in the quality, nature and manner of performance of service, which the respondent has contracted to perform for consideration.Even in such cases, it was ruled that if it appears to the Redressal Forums under the Act that the issues raised cannot be determined without taking the elaborate oral and documentary evidence, it is open to them to decline to exercise jurisdiction and refer the party to his ordinary remedy by way of suit. It is well settled by a catena of cases of the National Commission that reliefs which Consumer Disputes Redressal Commission can grant are only those specified in Section 14(1) of the Act. If a plea of fraud is taken it has been held by the National Commission that it cannot form the subject matter of the complaint.

AT the risk of repetition it may be recalled that the defence taken by the opposite party is that there has been fraudulent mis-statement of facts by the deceased (assured) in the personal statement so far as the questions referred to hereinabove are concerned. All these aspects were considered in Urmila Goyal''s case (supra). We do not find it possible to take a view different from that which was taken in Urmila Goyal'' s case (supra).

IN view of the principles laid down by the National Commission in M/s Special Machines Karnal''s case (supra), we decline to exercise our jurisdiction and refer the complainant to his ordinary remedy by way of suit. As such it is not necessary to examine other questions raised by the opposite party. We uphold the preliminary objection to the extent stated above. It will not be proper to decide the complaint on merits in view of the complicated issues of fact and law. The complaint is rejected without going into merits of the case. There will be no order as to costs.

It is, however, clarified that nothing stated hereinabove shall adversely affect any of the parties. Complaint rejected.