Chairman, Reliance Life Insurance Co. Ltd. & Anr vs Singaram Patel

This revision petition has been filed by the petitioner Chairman, Reliance Life Insurance Co. Ltd. & Anr. against the order dated 18.8.2017 of the State Consumer Disputes Redressal Commission, Madhya Pradesh, (in short 'the State Commission') passed in First Appeal No.744/2017.

Brief facts of the case are that the complainant's wife had obtained a Reliance Life Endowment Plan for Rs.2,75,000/- and Reliance Term Plan for Rs.13,50,000/-. On 02.06.2015 insured died. On 29.01.2016 claim was lodged. Claim was repudiated by letter dated 29.02.2016 on the ground of misrepresentation of facts in respect of source of income (business) and nature of duties (Kirana shop) as stated in the proposal form. But, after investigation it was found that the insured was a BPL Card Holder.

The respondent/complainant filed a consumer complaint before the District Consumer Disputes Redressal Forum, Indore (in short 'the District Forum') and the District Forum vide its order dated 28.03.2017 allowed the complaint as under:-

"Resultantly the Insurance Company is directed:-

a. To pay Rs.16,25,000/- the entire insurance amount under both the policies within 2 months to the complainant.In case of default of payment of the above amount within a period of 2 months, the complainant will also be entitled to receive interest @12% per annum from the date of order till the date of payment.

b. To pay Rs.2000/- as cost of the case including counsel fee to the complainant."

Aggrieved with the order of the District Forum, the opposite parties preferred an appeal before the State Commission and the State Commission vide impugned order dated 18.8.2017 upheld the order of the District Forum.

Hence the present revision petition.

Heard the learned counsel for the petitioner at the admission stage. The learned counsel stated that the deceased life assured (DLA) misrepresented facts by giving wrong information in respect of income and occupation while filling up the proposal forms for the two policies. It is alleged that DLA had stated in the proposal form that her profession was business and nature of occupation was "Kirana" shop whereas it has been brought to the notice of the Insurance Company after investigation that the complainant and the DLA both were BPL card holders. Had they given the correct information in the proposal form the Insurance Company would not have given them these policies of huge amounts as their capacity to pay would have been limited. As the insured died within a period of two years from the commencement of the policies the complainant cannot get advantage of Section 45 of the Insurance Act, 1938. Hence, Insurance Company is completely justified in repudiating the claim on the ground of misrepresentation of facts while obtaining the policies. Both the fora below have not given any importance to the fact that the names of the complainant and the DLA appear in the list of BPL families.

I have carefully considered the arguments of the learned counsel for the petitioner and examined the material on record. It is seen that both the fora below have found the proposal forms incongruence with evidence produced by the complainant. In fact, the State Commission has observed the following:-

"6. On perusal of the impugned order as well as the grounds of appeal, as mentioned in the memorandum of appeal, we examine the proposal forms filled by the insured in order to obtain both the policies. It is evident from the perusal of documents D/1 and D/2 that the Source of Funds/Income of Gokulbai i.e. insured is mentioned as 'Business' and the Nature of Duties/Job Description as 'Kirana Shop'. Learned District Forum in the impugned order has emphasized that the complainant had placed on record the Income Tax Returns of the insured for the prevailing years which concur with the information filled by the insured in both the proposal forms which reinforce his contention."

Based on the above observation of the State Commission it is clear that the DLA was filing income tax returns which corroborated the information given in the proposal forms. Thus, both the fora have concluded that there was no misrepresentation of information while submitting the proposal forms by the DLA. Insurance Company has not claimed that the income tax returns submitted by the complainant are fake or do not pertain to the DLA. In the circumstances, it seems that the DLA might be doing business of 'Kirana' shop and was also filling income tax returns for her income but simultaneously her husband also obtained a BPL card where the DLA was also mentioned as member of the BPL family. Insurance is a commercial contract having all the qualities of a normal contract and nothing has been found by the fora below which vitiates this contract. So far as contract of Insurance is concerned misrepresentation has not been proved though it is also a fact that the complainant has cheated the government machinery by obtaining a BPL card for which separate action can be initiated against the complainant.

Based on the above discussion, I do not find any illegality material irregularity or jurisdictional error in the order dated 18.8.2017 of the State Commission which calls for any interference from this Commission. Accordingly, the revision petition No.3145 of 2017 is dismissed at the admission stage. However, it seems necessary that the matter of illegality in obtaining the BPL card be brought to the notice of the concerned authorities so that action can be taken against the complainant. Accordingly, copy of this order be sent to the Collector and District Magistrate of District Dausa Madhya Pradesh for taking appropriate action in the matter.