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RAJASTHAN STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, JAIPUR
Hon’ble Mr. Justice S.K.M. Lodha, President;
Mr. Damodar Thanvi, Member; Mrs. Saria Khan, Member.
JAGRAJ SINGH—Appellant
versus
LIFE INSURANCE CORPORATION OF INDIA—Respondent
Appeal No. 10/90—Decided on 15.11.1990
CONSUMER PROTECTION ACT - INSURANCE POLICY - SECTION 45 AND 46 OF THE INSURANCE ACT - SUMMARY
Fact of the Case:
The complainant's father obtained a life insurance policy from LIC for Rs. 50,000 with an accident benefit clause. The policy was issued on 28.4.1988, with a risk date of 14.5.1988 and a maturity date of 14.5.90. The complainant's father suffered a heat stroke on 31.5.1988 and died the same day. The complainant submitted a claim for the sum insured, but LIC repudiated the claim on the grounds of misrepresentation and concealment of material facts in the proposal form.
Finding of the Court:
The court held that the complaint was not maintainable under the Consumer Protection Act, 1986, as the issues involved were complex and required elaborate oral and documentary evidence. The court also held that the repudiation of the claim by LIC was justified as the deceased had made false statements in the proposal form regarding his health.
Issues: 1. Whether the complaint was maintainable under the Consumer Protection Act, 1986. 2. Whether LIC was justified in repudiating the claim.
Ratio Decidendi: 1. The court held that the complaint was not maintainable under the Consumer Protection Act, 1986, as the issues involved were complex and required elaborate oral and documentary evidence. The court relied on the decision of the National Commission in M/s Special Machines Karnal v. Punjab National Bank and others, where it was held that the Consumer Disputes Redressal Commission can only grant reliefs specified in Section 14(1) of the Act and that a plea of fraud cannot form the subject matter of the complaint. 2. The court held that LIC was justified in repudiating the claim as the deceased had made false statements in the proposal form regarding his health. The court relied on Sections 45 and 46 of the Insurance Act, which provide that a policy of life insurance cannot be called in question on the ground of misstatement 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.
Final Decision: The complaint was rejected without going into the merits of the case.
S.K.M. Lodha, President –– 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,
2. that the complainant is not a “consumer” and the dispute involved in the complaint is not a “consumer dispute”,
3. 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,
4. 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,
5. 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,
6. 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,
7. that the sum assured was Rs
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