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TRIPURA STATE CONSUMER DISPUTES REDRESSAL COMMISSION
S. Baidya, President, Sobhana Datta and Narayan Ch. Sharma, Members
BRANCH MANAGER, SBI LIFE INSURANCE CO. LTD. - Appellant
Versus
BINA GHOSH - Respondent
Appeal Case No. A/2 of 2016
Decided on : 07-04-2016
Bhaskar Deb and Paramita Roy, Advocates, for the Appellant; Anjan Kanti Pal and D.C. Roy, Advocates, for the Respondent
The main legal point established in the judgment is the requirement for the insurance company to prove the intentional and fraudulent suppression of material facts by the policy-holder in order to justify the repudiation of an insurance claim. The judgment also emphasizes the duty of the proposer to disclose material facts in insurance contracts and the legal principles related to 'utmost good faith' in insurance agreements.
Headnote:
Consumer Protection Act - Insurance Claim - 1986 - [Late Bimal Chandra Ghosh, insured] - [Section 12, Section 15] - The judgment discusses the legal provisions of the Consumer Protection Act, 1986, specifically sections 12 and 15, and their application in a case involving an insurance claim dispute. The court analyzed the duty of the proposer to disclose material facts in the insurance proposal form and the insurer's right to repudiate the claim in case of suppression of material facts. The judgment also refers to the doctrine of 'utmost good faith' in insurance contracts and the legal principles established in previous court decisions related to insurance claims.
Fact of the Case:
Late Bimal Chandra Ghosh, the insured, purchased an insurance policy from SBI Life Insurance Co. Ltd. The insurance claim filed by the legal heirs of the deceased policy-holder was repudiated by the insurance company on the grounds of suppression of material facts in the proposal form, specifically regarding the health status of the insured. The appellants challenged the judgment of the Ld. District Forum, alleging that the insurance contract was vitiated due to the suppression of material facts by the deceased policy-holder.
Finding of the Court:
The court found that the insurance company failed to establish that the deceased policy-holder intentionally made false statements about his health condition in the proposal form. The court held that the repudiation of the claim by the insurance company was illegal and unjustified. The court awarded the death benefit to the legal heirs of the deceased and also granted compensation for harassment and deficiency in service on the part of the insurance company.
Issues: The main issue was whether the insurance company was justified in repudiating the insurance claim based on the alleged suppression of material facts by the deceased policy-holder in the proposal form. The court also considered the legal principles related to the duty of the proposer to disclose material facts in insurance contracts and the insurer's right to repudiate the claim in case of suppression of material facts.
Ratio Decidendi: The court's decision was based on the failure of the insurance company to provide sufficient evidence to prove that the deceased policy-holder intentionally made false statements about his health condition in the proposal form. The court emphasized the importance of establishing the suppression of material facts and the insurer's burden to prove the intentional and fraudulent nature of the suppression. The court also considered the principle of 'utmost good faith' in insurance contracts and the legal provisions of the Consumer Protection Act, 1986.
Final Decision: The court affirmed the judgment of the Ld. District Forum, granting the death benefit to the legal heirs of the deceased and awarding compensation for harassment and deficiency in service on the part of the insurance company. The appeal was dismissed, and there was no order as to costs.
JUDGMENT
S. Baidya, J.—This appeal filed on 29.01.2016 by the appellants under section 15 of the Consumer Protection Act, 1986 is directed against the Judgment dated 30.12.2015 passed by the Ld. District Consumer Disputes Redressal Forum (in short District Forum), West Tripura, Agartala, in case No.CC-90/2014, whereby the Ld. District Forum allowed the application filed under section 12 of the Consumer Protection Act, 1986 directing the opposite party-Insurance Company, the appellants herein, to pay death benefit to the petitioner being legal heir and attorney of other legal heirs, the other petitioners with a further direction to pay Rs. 50,000/- for deficiency of service and also for the cost of petition immediately payable within one month, if not paid, will carry interest @9% per annum.
2. The brief fact of the case as narrated in the memo of appeal, is that Late Bimal Chandra Ghosh, insured was the husband of the petitioner no.1 who purchased the insurance policy from SBI Life Insurance Co. Ltd., Agartala which was effective on and from 08.01.2010 by submitting a proposal form on 18.12.2009, but the policy-holder died on 26.02.2012. It has been stated that after the death of the policy-holder Bimal Chandra Ghosh, his legal heirs' claim from the appellant is denied and therefore, they filed the complaint before the Ld. District Forum which was disposed of in favour of the present respondents.
3. It has also been stated in the memo of appeal that the appellants in the instant appeal has assailed the impugned judgment dated 30.12.2015 to be arbitrary, illegal and unsustainable in law. It has also been alleged that on the basis of the proposal form submitted by the Deceased Life Assured (DLA) and believing the information furnished therein to be true and accurate, the appellants have accepted the risk cover under the doctrine of Utmost Good Faith and issued policy No.16016037108 for a sum assured of Rs. 3.00 lakhs with date of commencement of policy as on 08.01.2010.
4. It has also been alleged that as the risk needs to be assessed while accepting the proposal form for insurance cover, it is essential that the proposer or the person whose life has to be insured will give true and correct answers to the questions in the proposal form, but in the instant case, DLA answered negatively to all the questions in the medical questionnaire including question nos. 8(iii), 8(xii) and 8 (xiii).
5. It has also been alleged that the proposal form is the primary document for assessment of risk and answer to each and every question therein is vital for the underwriter to decide whether the proposed life is to be insured or not and as such, any incorrect information in the proposal form certainly vitiates the interest of insurer and hence, the insurer is well within its rights to repudiate the claim whenever material facts are suppressed by the life assured.
6. It has also been alleged that the DLA died after 2 years 1 month and 18 days of the commencement of the said insurance policy and as such, the SBI Life Insurance Co. Ltd. enquired into the matter and found that the DLA was suffering from Diabetes Mellitus and Hypertension prior to the date of commencement of the policy, which has not been disclosed in the proposal form.
7. It has also been alleged that as per the prescription slip dated 30.07.2009 given by Dr. Chinmoy Datta, the DLA was a patient of Hypertension with Diabetes Mellitus and as per prescription slip dated 18.02.2011 given by Dr. Amitabh Ghosh of Apollo Hospital, the DLA was a patient of T2DM with Hypertension. Both these prescriptions clearly establish the pre-existing illness of the DLA. It has also been alleged that on the basis of the said evidence, that claim of the legal heirs of the DLA was repudiated, but being not satisfied with such repudiation of the claim, the present respondents being the complainants approached the Ld. District Forum for redressal of their grievance.
8. It has also been alleged that the Ld. District
