Lakbhir Kaur W/O Late Avtar Singh vs LIFE INSURANCE CORPORATION OF INDIA

REVISION Petition No. 1840 of 2014 has been filed by the petitioners/complainants against the order dated 14.1.2014, passed by Punjab State Consumer Disputes Redressal Commission, Chandigarh (short, "State Commission") in First Appeal No.1696 of 2009.

BRIEF facts of the case as per the petitioners/complainants are that the husband of the petitioner no.1/complainant no.1 got insurance from the respondents/opposite parties for Rs.5 lakhs against annual premium of Rs.30,192/ - till 9/2017. First premium was paid on 31.10.2006. Said insurance known as LIC''s New Bima Gold covered risk of life. Respondents issued insurance policy number 300852400. Husband of the petitioner nominated petitioner no.1 as his nominee in case of death to receive the sum insured.

DURING the insurance period, husband of the petitioner no.1 went to Oman for service where he died on 6.2.2008 due to cardio respiratory failure. His body was brought to India on 5.3.2008. Petitioner no.1 lodged insurance claim of Rs.5 lakhs with the respondents against insurance policy number 300852400 and submitted relevant documents including death certificate etc. The respondents repudiated the insurance claim vide its letter dated 29.3.2008 on the ground of withholding of material information regarding the age of the deceased at the time of effecting the assurance with them. Respondents on the following grounds repudiated the claim : - "In this connection, we have to inform you that in the proposal for assurance signed by him on 30.10.2006 in answer to question no.2 requiring him to give his age nearer birth day, he gave it as 32 years and also in the personal statement signed by him on 30.10.2006 at the time of medical examination in answer to question no.1 (c.) requiring him to give his age nearer birthday he gave it as 32 years. We may, however, state that these answers were false, as we have secured evidence to show that the deceased had grossly understand his age by about 14 years at the time of proposing for the assurance. The evidence in our possession goes to show that the deceased was more than 46 years of age. He, however, did not disclose his correct age in the proposal to us. On the other hand, he induced us to issue the above mentioned policy on a false statement made by him in the proposal and personal statement as regarding his age (by submitting a false document in support thereof). Had he disclosed his correct age, we would have called for special reports and our underwriting decision would be different. We have, therefore, in terms of the policy contract and his declaration contained in the said forms of proposal, statement, repudiated the claim and accordingly, we are not liable for any payment under the policy and all moneys that have been paid in consequence thereof belong to us."

The repudiation of claim was illegal, arbitrary and against natural justice. In fact, proposal form was written by agent and deceased only signed the said documents under good faith. Said agent never asked for proof of birth. He only wanted proof of residence which was supplied in the shape of voter card. No medical was got done by the respondent.

RESPONDENT S /Opposite parties in their reply before the District Consumer Disputes Redressal Forum, Ludhiana (short,''District Forum'') stated that : - "2. At the time of proposal, Voter I.Card as proof of age was submitted by the insured and the date of birth was declared by him as per proposal papers as 1.1.1975, whereas the correct date of birth as per Passport is proved to be 11.7.1960. The Passport is standard age proof, which has been relied upon by the competent authority (the opposite party) at the time of repudiated of claim. The policy was taken on 31.10.2006 and the life insured died on 6.2.2008. The sum assured is of Rs.5,00,000/ -. Age was admitted on the basis of Voter I. Card submitted by the life insured alognwith the proposal form. It is an early claim within one year three months and five days only under Policy No.300852400, which was obtained by the deceased life insured, in violation of the principle of Uberrima fides". Hence, the LIC has treated the contract under the policy as null and void and repudiated the claim of the complainant.

In the proposal form of the insurance dated 30.10.2006, there are various questions, the answers of which are to be given correctly. Against question no.2 -A, date of birth is mentioned wrongly as 1.1.1975, whereas the correct date of birth is 11.7.1960. Age mentioned as 32 years, whereas the correct age was 46 years. For question no.3, If policy is to be dated back, the date had been indicated by the life assured as 28.9.2006 and the same was allowed by the underwriter, while accepting the proposal for insurance. In the proposal form, there is declaration signed by the proposer himself that if any untrue statement be contained therein, the LIC would be entitled to treat the contract as null and void and forfeit all the moneys paid as premium. The fact of the declaration signed by him is to turn the representation in the proposal into warranty, which must be complied in toto. In this case, misstatement of age, lower by 14 years is treat breach of warranty and the LIC authority have rightly repudiated the claim."

DISTRICT Forum vide order dated 15.10.2009 while allowing the complaint observed that : - "In the facts of the case, it appears that no inquiry qua age of the insured was made by agent of the opposite party. He simply on the basis of age recorded in voter card, by own estimation, mentioned his age as well as date of birth in the proposal form. He never thought necessity to go for better proof regarding age. So, it means there was no mis -representation qua age of the insured. Nor he intended to defraud the insurance company, by false mis -representation qua age. As a result, in the light of above aspect, we are of the view that opposite party was not justified in rejecting the claim and rejection of the claim, as such, is held to be illegal and arbitrary. So, complaint allowed and sequel thereto, we direct opposite party to settle insurance claim of the complainant, in terms of the policy and pay the insurance amount to the complainant, within 45 days of receipt of copy of this order. We pass no order as to compensation, but order opposite party to pay litigation costs of Rs.2,000/ -. Copy of order be supplied to the parties free of costs. File be completed and consigned to record room."

AGGRIEVED by the order of the District Forum, the respondents filed an appeal before the State Commission. The State Commission in its detailed order allowed the appeal and observed that : - "8 ...In this regard reference may be made to Shobha Rani Shah''s case . The position would have been different if the exact date of birth had not been mentioned in the proposal form. In case the date of birth was to be determined by way of approximation on the basis of the age mentioned in the Voters Identity Card Ex.R -3 and the date on which the same was prepared then the date of birth comes to 24.1.1976, as that card was prepared on 24.1.1996 and the age of the insured was mentioned as 20 years. That proposal form was submitted by the insured on 30.10.2006. He had already got prepared the passport Ex.R -4 on 2.8.2006, in which he had given his date of birth as 11.7.1960. In these circumstances the observations made by the District Forum that the agent himself mentioned the date of birth by approximation cannot be upheld. The exact date of birth was known to the insured and he was supposed to disclose that date of birth in the proposal form. It is an admitted fact that the rate of premium was to be determined as per the age. There was deliberate act on the part of the insured in giving his age less in order to pay the premium at a lower rate. There was a difference of 15 years of age as disclosed in the passport and the proposal form, which also shows that the same was on account of deliberate act on the part of the insured.

IN Balbir Singh''s case , so relied upon by the District Forum while recording a finding in favour of the complainants, the insured has given her age as 15 years in the proposal form on the basis of the ration card issued to her father much before submitting of the proposal. The claim made by her legal heirs after her death was repudiated on the ground that wrong date of birth was given in the proposal form. It was held by this Commission that it was for the Insurance Company to have asked from the insured to furnish better proof regarding her date of birth particularly the school leaving certificate if they were doubtful about the correctness of the date of birth/age shown in the ration card but the same was never done and it had taken the date of birth as 12.6.1989 as furnished by her to be correct and accepted the proposal form.

THEREAFTER , the Insurance Company cannot turn around and challenged the correctness of her date of birth. Reference was also made to judgment of Hon''ble Calcutta High Court Allianz and Stuttgarter Life Insurance Bank Ltd. vs. Hemanta Kumar Das, 1938 AIR(Cal) 641. In Smt. Rami Bai''s case the insured was above 60 years of age but concealed that fact in the proposal form. It was held by a Division Bench that such false statement was made by the insured deliberately about his age in order to take out the policy. Thus practiced a fraud on the insurer, for otherwise the insurer would not have insured his life. It was held by the Hon''ble National Commission in Smt. Minu Kalita''s case that it is settled law that the contract of insurance is based on good faith. It is for the insured to give the correct information. The ground of incorrect information and false statement regarding the age of the insured and income makes the contract of insurance null and void. In Smt. Gita Bai''s case it was proved that the insured had intentionally shown his wrong age. It was held that by doing so he suppressed the material fact and was not entitled to any relief from the Consumer Fora.

ABOUT the making of wrong statement and giving of wrong answers deliberately bearing on the contract of insurance, P.C. Chacko''s case and Smt. Satwant Kaur Sandhu''s case are very much relevant. Both these judgments are of the Hon''ble Supreme Court. It was held in the first judgment as under: - "16. The purpose for taking a policy of insurance is not, in our opinion, very material. It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated if a fraudulent act is discovered. The proposer must show that his intention was bona fide. It must appear from the face of the record. In a case of this nature it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law."

IN the second judgment it was held that if the proposer has knowledge of a fact and the same is material he is obliged to disclose the same to the insurer particularly while answering the questions in the proposal form. Any inaccurate answer will entitle the insurer to repudiate its liability under the policy.

IN First Appeal No.418 of 2011 decided by this Commission on 11.2.2013 (Life Insurance Corporation of India and Anr. vs. Jaswinder Kaur) it was found that at the time of filling up of the proposal form the deceased was more than 43 years old and he had made a wrong declaration that he was 30 years old. By relying upon the judgment of the Hon''ble National Commission passed in Revision Petition No.4048 of 2009 decided on 9.3.2013 (Life Insurance Corporation of India and others v. Smt. Hira Devi), it was held that on account of making of that false declaration the deceased committed a breach of contract and the Insurance Company was well in its right to repudiate the claim made under the insurance policy. In Smt. Hira Devi''s case it was held that it is settled proposition of law that the insurance is a contract based upon utmost good faith. It requires no emphasis that when any information on a specific aspect was asked for in the proposal form, an assured is under solemn obligation to make a true and full disclosure of the information. It is expected of the contracting parties on either sides to give truthful account of details in the contract.

BY keeping in view the ratio of the above discussed judgments, we have no hesitation in concluding that Avtar Singh insured by deliberately and intentionally giving false statement regarding his age in the proposal form committed the breach of good faith required from him regarding the contract of insurance and the LIC was well within its rights to repudiate the claim made by the complainants on that ground. It was wrongly concluded by the District Forum that the LIC could not have repudiated the claim of the complainants on that ground. Accordingly this appeal is allowed, the order of the District Forum is set aside and the complaint filed by the complainant is dismissed. However, no order is made as to costs." 8. Hence, the revision petition. 9. We have heard counsel for the parties and carefully gone through the record. 10. Learned counsel for the petitioner argued that the proposal form has been filled by the agent and Shri Avtar Singh was not aware of the date of birth recorded by the agent and that the Voter I.Card was given only as proof of residence.

Learned counsel for the respondent on the other hand argued that the voter card had been given as an age proof and the specific date i.e. 1.1.1975 has been mentioned as date of birth not only in the proposal form but also on the declaration of age given for the medical examination. 12. We see from the record that in the column "Nature of age -proof submitted" it was clearly written that Voter Identity Card had been given and the age indicated as 32 with date of birth as 1.1.1975. In the declaration of age, a statement had been submitted by the Agent/Development Officer, which is required when standard age proof/School/University Birth Certificate is not submitted alongwith the proposal form. Therein also it has been mentioned that his date of birth is 1.1.1975. The same date had been incorporated in the LIC policy issued to him and placed on record.

Learned counsel for the petitioner could not explain that even if the proposal form was filled in by the agent, why and how the date the date of birth and age of the life assured came to be erroneously mentioned in the voter I card of Avtar Singh. The voter I card is prepared on the basis of the information supplied by voter himself. Therefore, it is clear that either late Avtar Singh had produced forged voter I card for scrutiny of the agent at the time of taking insurance cover or he deliberately gave wrong age to the election authorities while obtaining the voter I card for the reasons best known to him. Otherwise also, if the date of birth and age of late Avtar Singh was wrongly mentioned in the insurance policy, Avtar Singh was expected to get the error rectified by bringing this fact to the knowledge of the insurance company, which obviously has not been done. Thus, we do not find merit in the plea of the petitioner and are of the view that the State Commission has rightly set aside the order of the District Forum.

HON ''ble Supreme Court in Mrs.Rubi Chandra Dutta Vs. M/s United India Insurance Co. Ltd., 2011 3 Scale 654 has observed ; "Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21 (b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21 (b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."

THUS , no jurisdictional or legal error has been shown to us to call for interference in the exercise of powers under Section 21 (b) of Act. Since, the State Commission has given detailed and reasoned order which does not call for any interference nor it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is hereby dismissed.

NO order as to cost.