Mohd Azam Vs Birla Sunlife Insurance Co Ltd and Another - Citation 1111900 - Court Judgment

Judgment:

D. Appa Rao, President:

Oral:

1. The complainants are nominees and assignees of the policy holder, late Mohd. Mohtesham Azmi. Their case in brief is that late Mohd. Mohtesham Azmi a business man had taken various policies from the opposite parties/insurance companies after completing the formalities. As per the directions of the insurance companies premia were paid. They were accepted by the insurance companies, and policies were issued. Various details of the policies and nominees/assignees as the case may be are mentioned herein along with its case No.

C.D. No. 69/2003

1. Name of Insurance Company	Birla Sun Life Insurance Co. Ltd.
2. Policy No.	27787
3. Date of Policy	8.8.2002
4. Sum assured	Rs. 70,48,758.68
5. Premium	Rs. 2,98,900 (Quarterly)
6. Nominee/LR/ Assignee	Mohd. Azam (Father)
7. Claim	Rs. 70,48,758.68

C.D No. 70/2003

1. Name of Insurance	Om Kotak Mahindra Life Company Insurance Co. Ltd.
2. Policy No.	13207
3. Date of Policy	1.4.2002
4. Sum assured	Rs. 75 lakh
5. Nominee/LR/ Assignee	Mohd. Azam (Father)
6. Claim	Rs. 75 lakh

C.D. No. 71/2003

1. Name of Insurance Company	Om Kotak Mahindra Life Insurance Co. Ltd.
2. Policy No.	11139
3. Date of Policy	1.4.2002
4. Sum assured	Rs. 25 lakh
5. Nominee/LR/ Assignee	Mohd. Azam (Father)
6. Claim	Rs. 25 lakh
7. Related Benefits	Rs. 10 lakh accident benefit.

C.D. No. 72/2003

1. Name of Insurance	Birla Sun Life Insurance Co. Company Ltd.
2. Policy	No. 62849
3. Date of Policy	7.3.2003
4. Sum assured	Rs. 1 Crore
5. Premium	Premium paid by cheque on25.3.2003
6. Nominee/LR/ Assignee	Mohd. Azam (Father)
7. Claim	Rs. 1 Crore.

C.D No. 8/2004

1. Name of Insurance Company	LIC of India.
2. Policy	No. 646119629
3. Date of Policy	28.1.2002
4. Sum assured	Rs. 20 lakh
5. Nominee/LR/ Assignee	Mohd. Mahmood (Assignee) (Original nominee is Mahmooda Begum (wife).
6. Claim	Rs. 20 lakh with related benefits.

C.D. No. 9/2004

1. Name of Insurance Company	Allianz Bajaj Life Insurance Co. Ltd.
2. Policy	No. 356730
3. Date of Policy	14.5.2002
4. Sum assured	Rs. 20 Lakh+Accident benefit, Rs. 10 lakh +Term rider benefit of Rs. 20 lakh.
5. Nominee/LR/ Assignee	Smt. Afwan Anif Smt. Asma Basharat Sisters (Assignees/Nominees)
6. Claim	Rs. 50 Lakh

C.D. No. 61/2007

1. Name of Insurance Company

Om Kotak Mahindra Life Insurance Co. Ltd.âThe life assured had taken a life insurance policy for Rs. 1 crore for a term of 30 years on 15.1.2003 and issued a cheque for Rs. 29,606 towards premium which was illegally returned stating that he had not taken any policy on his life but his son has taken a policy for Rs. 1 crore. Since there was concluded contract between the deceased and O.P. and the insurance commenced on 22.1.2003 the date of receipt of amount towards first premium and the rejection of the proposal for want of medical certificate is illegal since it was after demise of his son.

2. While sons in the early hours of 31.3.2003 when Mohd. Mohtesham Azmi and his wife Mahmooda Begum were travelling in a Maruti van from Hyderabad to Jadcherla on National Highway No. 7 and by the time they reached Nandigama X roads the driver of the lorry bearing No. AET 6187 dashed against the Maruti Van due to which both of them died on the spot. A case in crime No. 74/2003 under Section 304A, IPC by Police Station, Kothur was registered against the driver of the lorry. After investigation, the police authorities fild charge sheet at Shadnagar. The complainants viz., father, daughters being the nominees are entitled to the amounts. They had promptly intimated about the deaths and preferred claims for the amounts covered under the policies for which the opposite parties did not respond on which they got issued registered notice for which opposite parties issued replies repudiating the claims on false and frivolous grounds. Though the opposite parties got throughly enquired into the matter and obtained the investigation report confirming the death of the insured as well as his wife in the motor vehicle accident, in order to avoid payment, they came up with the plea that the identity of the deceased was not confirmed. They requested the family members to collect the remains of the deceased in order to get DNA test. Since the complainants and the deceased hail from an orthodox Muslim family and if the remains of the dead body have to be removed from the burial for DNA test which is against the Muslim religion, it would naturally effect the family prestige resulting damage to the future of their kith and kin. There is no justification on the part of opposite parties to insist for DNA test. Since there was deficiency in service and the insurance companies are neligent in not settling their claims they came up with these complaints under Sections 12, 16 and 17 of the Consumer Protection Act claiming amounts covered under the policies + bonus and other benefits together with compensation for mental agony and costs.

3. The opposite parties resisted the complaints on various grounds. The sum and substance of their pleas can be summarised as follows:

4. While admitting that they had issued various insurance policies mentioned in the complaints they alleged that the assured had taken some more policies for which the complaints were filed before the Dist. Forum, Hyderabad and Mahaboobnagar. They are C.D. No. 408/2004 (Dist. Forum-III, Hyderabad), C.D. No. 406/2004 Dist. Forum-III, Hyderabad), C.D. 15/2004 (Dist. Forum, Mahaboobnagar), C.D. 16/2004 (Dist. Forum, Mahaboobnagar), C.D. No. 546/2005 (Dist. Forum-I, Hyderabad) C.D. No. 545/2005 (Dist. Forum-I, Hyderabad) and C.D. No. 407/2004 (Dist. Forum-I, Hyderabad).

5. From the above, it is clear that the assured had initially taken different insurance policies in his name but also in the name of his wife and daughters. All these policies were taken between January, 2002 and March, 2003. Prior to January, 2002 he had no life insurance cover with any of the insurance companies, except with LIC which was only for an amount of Rs. 1.50 lakh taken sometime in late 1990s. Altogether, the premium he had to pay was Rs. 11 lacs per annum. His income as show by him with Income Tax authorities and various insurance companies was less than Rs. 11 lacs. The details furnished with the Income Tax authorities and vaious insurance companies for the financial year 1999-2002 from rice trading business under the name and style of Deccan Traders and poultry business under the name and style of Lucky Poultry Farm were as follows:

	1999-2000	2000-2001	2001-2002
Rice Traiding	1.93 lacs	32,000	2.97 lacs.
Poultry	â	â	6.96 lacs

6. As per the Income Tax returns for the above financial years, his total income and amounts paid towards tax were as follows:

	1999-2000	2000-2001	2001-2002
Income	1.98 lacs	1.02 lacs	10.92 lacs
Tax Paid	35,000	3,000	2.86 lacs

7. Even for the financial year 2001-2002 he had total income of Rs. 10.92 lakh whereas Mohd. Mohtesham Azmi was required to pay Rs. 11 lacs towards premium of all policies that were taken for himself, his wife and children. He did not furnish the details of earlier policies taken from various insurance companies while submitting the proposals.

8. Since the death was under suspicious circumstances the investigators were appointed. Investigations revealed that one dead body was found in the drivers seat of the Maruti van which is said to be the insured and was burnt beyond recognition. The second body was identified as his wife and only one head injury was noticed. The alleged decesed had gone to Hyderabad in his Maruti car and while returning he changed the car at his friend Shakeels house and took a Maruti van. Curiously, the documents relating to the Maruti van were kept in a white envelope in the rear side portion of the van. It is mentioned that the lorrys rear portion was over the body of the Maruti van. In the charge sheet it has been mentioned that the Maruti van was completely burnt. In the accident report it is stated that the Maruti van was completely burnt and not repairable nor re-usable. The observation in the Inquest Report that a white envelope was located in the said Maruti van is highly improbable and highly doubtful. The accident occurred at 3.00 a.m. on 31.3.2003 and the deceased had changed the car at his friends house at 9.00 p.m. Therefore, the reason for travelling so late at night in a less safer vehicle is not known. According to the police both the vehicles involved in the accident caught fire and the Maruti van in which the alleged deceased was travelling was totally burnt. The front portion of the Maruti van had dashed against the truck. Whereas the fuel portion of the Maruti van is located at the rear end of the vehicle. No probable reasons as to how the vehicle caught fire are given by the police. The Maruti van was completely burnt. Therefore, in all probability there should have been an explosion of the fuel tank. But no such explosion is reported in the police papers. The burning of the Maruti van was totally without an explosion adds to the suspicion.

9. In the proposal form the height of the deceased has been mentioned as 182 cms. i.e., about 6 feet. In the medical examination dated 14.5.2002 the height of the proposer is mentioned as 185 cms i.e., 6 feet 2 inches. In the Inquest and the Post-mortem Reports, the height of the alleged deceased is mentioned as 5'6" i.e., 165 cms and the Post-mortem Report has described the body as average built.

10. The Investigator has also obtained the FIR, Inquest and Post-mortem Report in the alleged accident. Even from the said documents the suspicious circumstances of the case cane be easily gathered which are as under:

(a)Â It is evident that a completely charred body was found in the drivers seat of Maruti van bearing Registration No. AP-13/E-9271. The said body was beyond recognition and thus the identification of the said charred body to be that of the alleged deceased is highly doubtful and cannot be conclusively said to be established beyond doubt.

(b) That the alleged deceased had gone to Hyderabad in his Maruti car bearing No. AES-234 however, while returning he changed the car at his friends house and took Maruti van bearing No. AP-13/E-9271. The intention behind the change of vehicle is not known but it appears sudden and unreasonable.

(c)Â In the inquest report it has been mentioned that the documents relating to the Maruti van were kept in a white envelope in the rear side portion of the said Maruti van. However, at the same time it has been mentioned that the Lorrys rear portion was over the body of the Maruti van. In the charge sheet filed by the complainant it has been mentioned that the Maruti van was completely burnt. Similarly, in the accident report it has been observed that the said Maruti van was completely burnt and not repairable nor re-usable. Therefore, the observation in the Inquest that a white envelope was located in the Maruti van is to say the least highly improbable and highly doubtful.

(d)Â According to the police the alleged accident occurred at 3.00 a.m. on 31.3.2003 and the alleged deceased had changed the car at his friend Shakeels house at 9.00 p.m. Therefore the reason for travelling so late at night in a less safer vehicle is not known.

(e)Â According to the police both the vehicles involved in the accident caught fire and the Maruti van in which the alleged deceased was travelling was totally burnt. However, it may be noted that the front portion of the Maruti van had dashed against the truck. Whereas the fuel tank of the van is located at the rear end of the vehicle. No probable reasons as to how the vehicles caught fire are given by the police. Morever, the Maruti van has completely burnt and therefore in all probability there should have been an explosion of the fuel tank. However, no such explosion is reported in the police papers. Thus the Maruti van burning totally without an explosion adds to the suspicion.

(f)Â In the proposal form the height of the alleged deceased has been mentioned as 182 cms. i.e, about 6 feet. In the medical examination dated 14.5.2002 the height of the proposer is mentioned as 185 cms i.e., 6 feet 2 inches by Dr. M. W. Azam. However, in the inquest and the post-mortem report of the height of the alleged deceased is mentioned as 5'6" i.e., 165 cms and the post-mortem report has described the body as average built. Since the height of 6 feet and weight 92 kgs was declared by the insured, there is a grave and doubtful discrepancy in the height of the dead body as mentioned in the inquest and the post-mortem and also the observation in the post-mortem about the dead body being of average built.

(g)Â That in point No. V of the inquest the height of the dead body is mentioned as 56â i.e., 165 cms with a remark body is burnt. However, in point No. VI below the dead body has been referred as married male. This nothing of married male about a totally burnt body is not reasonable and seems baseless.

(h)Â In the post-mortem report it is clearly mentioned that there were no other identification marks on the dead body as the same were not visible since the body was totally burnt. It has been also mentioned in the post-mortem report that no clothings were found over the dead body for identification.

(i)Â Similarly it has been also observed in the post-mortem report that the bones and muscles are charred. That there is a remark âcannot be made out in many of the headings of observation in the post-mortem report.

11. It is submitted that from the above mentioned discrepancies and glaring improbabilities in the police papers the identity of the dead body cannot be convincingly said to be established beyond doubt. Therefore the opposite parties could not process the death claims further.

12. It is submitted that in normal circumstances it is very unusual and highly improbable for any individual to obtain Life Insurance policies worth in crores in a years time from different companies. This act of the alleged deceased also creates suspicion and doubt. Similarly the circumstances in which the alleged accident occurred and also the doubtful identity of the dead body create suspicion about the death of the alleged deceased. The opposite parties therefore kept the claims under considerations as no decision could be taken nor was it possible on account of reasons mentioned above which were beyond the control of the opposite parties.

13. It is submitted that there are complicated questions of law and fact involved in the present matter and therefore the same cannot be decided in a summary procedure under the Consumer Protection Act. There is absolutely deficiency in service on their part. Therefore they prayed for dismissal of the complaints with costs.

14. The points that arise for consideration are:

1.Â Whether the assured Mohd. Mohtesham Azmi died in the accident that took place on the night of 31.3.2003?

2.Â Whether the claims were unjustly repudiated?

3.Â Whether the Consumer Commission has jurisdiction to entertain the disputes?

4.Â To what relief?

15. It is an undisputed fact that Mohd. Mohtesham Azmi had taken several policies with the various insurance companies which are mentioned in detail in para 1 of the complaint. All these policies except the policies in favour of LIC, were taken between January, 2002 and March, 2003. They were to a tune of Rs. 6.5 crores. He had to pay premium of Rs. 11 lacs on the above said policies per annum. It is also not in dispute that he had shown his income and taxes paid vide Exs. B1 and B2 certified copies of Income Tax returns in C.D. No. 70/2003 and C.D. 71/2003 as follows:

	1999-2000	2000-2001	2001-2002
Income	1.98 lacs	1.02 lacs	10.92 lacs.
Tax Paid	35,000	3,000	2.86 lacs

Therefore his income was not proportionate to the insurance coverage.

16. It is the case of the complainants, nominees as well as assignees that on 31.3.2003 both Mohd. Mohtesham Azmi the assured and his wife Mohmooda Begum went to Hyderabad on 30.3.2003 to attend to a function in their Maruti car AES 234. Later while they were returning on 31.3.2003 due to trouble of the car they took a Maruti car bearing No. AP-13/9271. While so on 31.3.2003 while they were coming from Hyderabad to their village at about 3.00 in the early hours by the time they reached the outskirts of Jadcherla they met with an accident involving a lorry bearing No. AET 6187. A charred dead body was found in the Maruti van while Mahmooda Begum was found on the road with an injury on her head. Post-mortem was conducted on the body of the deceased. The allged body of Mohd. Mohtesham Azmi was burnt beyond recognition. Though the Maruti van was fully burnt the documents were found lying on the road side of the accident site intact. The father of the deceased/complainant had identified the bodies. When the bodies were sent to post-mortem the doctor who conducted the post-mortem found that the body was burnt beyond recognition. The height of the subject was 56â. However, the height of the assured was 62â as per the height mentioned in the insurance application.

17. The bank statement obtained from Global Turst Bank, Dilsuknagar, Hyderabad in respect of A/C No. 11060121822 in the name of Mohd. Mohtesham Azmi shows that he had withdrawn Rs. 15,000 at 19.52.49 on 30.3.2003 and Rs. 200 at 2.35.40 on 31.3.2003 and again Rs. 11,000 on 31.3.2003 at 02.35.43 leaving balance of Rs. 23.51. All these withdrawals were made from ATM centre at CDR Hospital, Nampally vide Ex. B3.

18. Since the parties had filed affidavits in support of their claims and they were not tendered for cross-examination, ex facie, this Commission had to pass its decision of the facts disclosed from the documents. The officials of the insurance companies filed affidavit evidence equally refuting the affidavit evidence of the complainants. It is oath against oath.

19. Ex. A1 is the F.I.R. registered by the police in Crime No. 74/2003 dated 31.3.2003 at 4.30 a.m. for the accident that took place at 3.00 a.m. on 31.3.2003. It was received by the learned Magistrate on 1.4.2003 at 5.00 p.m.. One Depalli Eswaraiah gave information stating that when he heard loud cracking sound dashing of vehicles, he came out and found a lorry bearing No. AET 6187 and Maruti van bearing No. AP-13/E-9271 at the place of accident. A spark came out from the Maruti van and caught fire, subsequently the lorry also caught fire. He found that a lady who caught in flames was dragged and even by then he found her to be dead. The driver of the Maruti van was also found dead due to flames. They could not remove the dead body in view of the heavy flames surrounding the vehicles. Inquest was conducted on the body of the deceased Azmi at about 12.00 noon wherein the father was one of the inquestors. He identified the body of the deceased as that of his son and daughter-in-law. It was mentioned that the dead body was in the drivers seat and was completely charred. Inquest was also made on the dead body of the wife of Azmi. Her body was found at a distance of 7 yards from the vehicles. The inquestors had observed an injury on her head. Evidently they did not see any burnt injuries on her. In the post-mortem report Ex. A4 the height of the deceased was noted as 56â. The doctor who conducted the post-mortem had found that the entire body was charred. In regard to his wife he mentioned fractures on the chin, fracture of upper 1/3rd of both bones left forearm and crush injury of left hand and multiple abrasions of right lower limbs. He found burns over the lateral aspect of the shoulder, upper arm and anterior aspect of the left arm with goof present. The doctor, opined that the death of the deceased Azmi was âdue to burns. However, he found that the death of his wife Mahamooda Begum was âdue to laceration of blood due to brain injury. The Motor Vehicles Inspector inspected the vehicles that were burnt. Maruti van was completely burnt and ânot repairable nor re-usable. The complainants have also filed news items wherein the news of accident was made a mention. Importantly, they mentioned that Azmi and his wife died in the said accident. Panchayat Secretary also issued death certificate to that effect under Exs. A19. Ex. A20 is the charge sheet filed against the driver of the lorry alleging that due to his rash and negligent driving the accident took place when he dashed against the Maruti van coming in opposite direction. The complainants have given registered legal notices to the insurance companies to pay the amounts covered under the policies.

20. Learned Counsel for the opposite parties in C.D. No. 61/2007 contended that though the policy was taken for Rs. 1 crore and paid Rs. 29, 606 by way of cheque it had issued a proposal deposit receipt and not towards premium. (Ex. B1). There is categorical mention in Ex. B2 that life insurance cover shall not be issued until the proposal has been examined, accepted and the Life Insurance Policy has been issued by Om Kotak Mahindra Life Insurance Company Ltd. Therefore it cannot be said that a policy was issued covering the risk of the deceased.

21. Condition No. 5 stipulates that âfor proposals, which entail a medical examination, we request you to undergo the medical test at the earliest to ensure speedy processing of the proposalsâ.

22. The proposer underwent several medical tests but did not undergo Nicotine test since the policy meant for non-tobacco users. Even from Ex. B3 letter it is clear that no policy was issued to him and the same was informed under letter Ex. B4. Since there was no contract of insurance between the proposer and the insurance company, the complainants are not entitled to any amount. Therefore, they re-sent the cheque along with their reply, while repudiating the claim.

23. The learned Counsel contended that since policy was not issued and there is no concluded contract they need not pay any amount. In support of his plea he relied on a Supreme Court decision in LIC v. Raja Vasi Reddy Komala Vallikamba reported in AIR 1984 SC 1014. It was held a contract of insurance will be concluded only when the party to whom an offer has been made accepts it unconditionally and communicates his acceptance to the person making the offer. Though in certain human relationships silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance. Mere delay in giving an answer cannot be construed as an acceptance, as prima facie, acceptance must be communicated to the offeror. Similarly the mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy documents is not acceptance.

24. He also relied on another decision of National Commission in L.I.C. of Indiav. Mrs. Bimala Routray,II (1993) CPJ 146 (NC)=1993 (2) CPR 98where it was held that âWhere a proposer dies before the acceptance of the proposal, ther is no concluded contract of insurance.â

25.It is settled proposition of law reiterated by the Honble Supreme Court in LIC v. Raja Vasi Reddy Komala Vallikamba (supra).

âWhen an insurance policy becomes effective is well-settled by the authorities but before we note the said authorities, it may be stated that it is clear that the expression âunderwriteâ signifies âaccept liability under. The dictionary meaning also indicates that [see in this connection, The Concise Oxford Dictionary, Sixth Edition, p. 1267]. It is true that normally the expression underwrite is used in Marine Insurance but the expression used in Chapter III of the financial powers of the standing order in this case specifically used the expression, âunderwriting and revivalsâ of policies in case of Life Insurance Corporation and stated that it was the Divisional Manager who was competent to underwrite policy for Rs. 50,000 and above. The mere receipt and retention of premium until after the death of the applicant or the mere preparation of the policy document is not acceptance. Acceptance must be signified by some act or acts agreed on by the parties or from which the law raises a presumption of acceptance. See in this connection the statement of law in Corpus Juris, Secundum, Vol. XLIV, page 986 wherein it has been stated as:

The mere receipt and retention of premiums until after the death of applicant does not give rise to a contract, although the circumstances may be such that approval could be inferred from retention of the premium. The mere execution of the policy is not an acceptance; an acceptance, to be completed, must be communicated to the offeror, either directly or by some definite act, such as placing the contract in the mail. The test is not intention alone. When the application so requires, the acceptance must be evidenced by the signature of one of the companys executive officers.

Though in certain human relationships silence to a proposal might convey acceptance but in the case of insurance proposal, silence does not denote consent and no binding contract arises until the person to whom an offer is made says or does something to signify his acceptance. Mere delay in giving an answer cannot be construed as an acceptance, as, prima facie, acceptance must be communicated to the offeror. The general rule is that the contract of insurance will be concluded only when the party to whom an offer has been made accepts it uncon-ditionally and communicates his acceptance to the person making the offer. Whether the final acceptance is that of the assured or insurers, however, depends simply on the way of which negotiations for an insurance have progressed. See in this connection statement of law in Mac Gillivray and Parkington on Insurance Law, Seventh Edition, page 94, paragraph 215.â

In LIC v. Mumtaz Begum reported in I (1993) CPJ 9, the Honble National Commission held that when âthe proposal had not been accepted by the LIC prior to the date of death of proposer nor had the policy been issued. In such circumstances, there was no contract of insurance which had come into operation and no liability could be fixed on the insurance company for the payment of the amount mentioned in the policy proposal form as payable in the event of death. The orders passed by the Dist. Forum and the State Commission are clearly illegal and devoid of jurisdiction and they are hereby set aside. The complaint petition is dismissed but there will be no order as to costs.â

26. He also relied on decisions Consumer Education and Research Society and Anr.v. LIC of India, I (1993) CPJ 128 (NC)=1993 (2) CPR 129; L.I.C. of Indiav. Mrs. Bimala Routray, II (1993) CPJ 146 (NC)=1993 (2) CPR 98; L.I.C. of India and Anr.v. Smt. K. Aruna Kumari, III (1995) CPJ 80 (NC); Elsa Tony Philipv. Manager, (Ps/Claims), L.I.C. of India and Ors., II (1999) CPJ 280; Jagraj @ Jagram Rathiv. LIC of India, I (2005) CPJ 353, for the same proposition. Therefore it cannot be said that there is a concluded contract between the deceased and the insurance companies. We agree with the said contention. Since no policy was issued complainants cannot claim the amounts.

27. Learned Counsel for the insurance companies contended that there are several suspicious circumstances right from taking policies to a tune of few crores within a period of one year without mentioning the other policies that were taken by him. Further, his income was insufficient even to pay yearly premium where he had to pay about Rs. 11 lacs towards premium. His income was less than the premia payable evidenced from his own Income Tax returns. Even otherwise, the very identification of the body as that of the deceased was itself suspicious. No body had identified the body except the beneficiary the father. When they have sought DNA test for proof of identity of the body they refused on the ground that it would be against their religious practices. Moreover, importantly, when the assured had withdrawn the amounts from ATM at about 2.35 in the early hours at Hyderabad the averment that the accident took place at 3.0 a.m. at Jadcherla at a distance of 65 Kms. could not have been true. No body could have travelled 65 kms within 25 minutes. The insurance companies made thorough investigation and repudiated the claims. The documents that were filed are running into about 262 pages (Exs. B1 to B11 e.g. C.D. 70/2003 and C.D. 71/2003). It is an undisputed proposition of law that the insurance is a contract based on the doctrine of good faith and the suppression of material facts in the proposal vitiates the policy and consequently no amount would be payable under the said policies. Had the proposer given correct information about the policies obtained by him prior to making the proposals the opposite parties would have taken more care while issuing the policies.

28. In the proposal executed in favour of Om Kotak Mahindra Life Insurance Company Ltd. in C.D. No. 70/2003 and C.D. No. 71/2003 the proposer has issued declaration to the effect that if any untrue statement is contained in the proposal form, the company shall have the right to vary the benefits which may be payable and if there has been a non-disclosure of a material fact the policy may be treated as void and all the premiums paid under the policy may be forfeited by the company. Clause 12 in the proposal form should contain âDetails of insurance policies of life to be insuredâ. Importantly he did not mention the particulars of earlier policies of all companies.

The Honble Apex Court in the case ofLife Insurance Corporation of India and Ors. v. Asha Goel and Another, I (2001) SLT 89=(2001) 2 SCC 160 has held that:

âThe duty to disclose material fact continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any mis-statements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any material fact it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable inquiry by a prudent person (para 12).â

29. When the material particulars disclosed by the assured were found to be suppressed, the insurace companies are within their right to repudiate the claims.

30. It is not in dispute that the claimants filed W.P. No. 6584/2004 and 6585/2004 against the Life Insurance Company for declaring the action of the respondents in not settling the claim of the petitioners pursuant to the death of late Smt.Mahmuda Begum as illegal, arbitrary and consequently to direct the respondent to settle their claims. The said policy was taken by Mohd. Mohtesham Azmi, her husband. The High Court of A.P. by its order dated 28.12.2004 observed that:

âIt is specifically stated that both the deceased persons have taken policies to a tune of Rs. 5.00 crores within a span of 12 months in between January and December, 2002. The policies were not only obtained from the respondent-Corporation but also from several private insurers viz., M/s. Birla Sun Life, M/s Bajaj Allianz and M/s. Kotak Mahendra, the premiums of which went into several lakh of rupees. It is also stated that one of the deceased has submitted some more proposals for huge insurance cover with private insurance companies, which were either declined or remained unconcluded contracts. Apart from that, same attempts were also made to obtain further policy of Rs. 1 crore from the respondent Corporation, which was not considered. It is also stated that few days before the alleged incident, changes were effected in the nominations of the policies in such a way that neither of the wife and the husband remain as nominee under any of the policies. It is also stated that one of the deceased withdrawn substantial amount from ATM machine located at CDR Hospital, Hyderabad at 2.35 a.m. on the same night, making the balance in the bank almost nil. Within 25 minuts thereafter the accident took place at a distance of 41 kms. During the course of investigation, several suspicious circumstances have been emerged. As the respondents have commenced investigation and in the course of investigation several suspicious and doubtful circumstances came to light, the respondents did not settle the claim. No doubt, under Clause 8(3) of the Regulations, 2002 a claim under a life policy shall be paid or be disputed giving all the relevant reasons, within 30 days from the date of receipt of all relevant papers and clarifications required. But, a claim of warrant or investigation shall be completed within six months from the date of lodging, the claim. Under Section 46 of the Insurance Act, 1938 the holder of the policy of insurance issued by an insurer in respect of insurance business transacted in India, after commencement of this Act, shall have the right notwithstanding anything to the contrary contained in the policy or an agreement relating thereto to receive payment in India or any sum claimed thereby and to sue for any relief in respect of the policy in any Court of competent jurisdiction in India and if the suit is brought in India any question of law arising in connection with any such party shall be determined in accordance with law in force in India.

Therefore, this section gives a right to the claimant to file a suit for grant of relief in respect of the policy in a Court of competent jurisdiction. Since serious disputed questions of fact with regard to the manner of taking place of the accident and the suspicious circumstances have come to light in regard to the manner of taking policies worth about Rs. 5.00 crores and that the attempts have also been made to obtain policy worth about Rs. 1.00 crore from the respondent-Corporation and identity of one of the deceased is also clouded in suspicion, it is not desirable to resolve those complicated disputed questions of fact while exercising the power under Article 226 of the Constitution. When a right is given to the petitioners to take approprite remedy under Section 47 of the Insurance Act, the petitioners have to establish their right in a Court of competent civil jurisdiction. It is not a case of denying the benefit under the policy without any reasons. In such view of the matter, the petitioners have to take recourse to Section 47 of the Insurance Act by availing the alternative remedy. Even though alternative remedy is not a bar for this Court in exercising the jurisdiction under Article 226, but it is a case where serious disputed questions of fact emerge from the pleadings.

The writ petitions are devoid of merit and therefore they are liable to be dismissed. However, this order will not preclude the petitioners from taking recourse to Section 47 of the Insurance Act.â

31. Evidently, the deceased taking several insurance policies to a tune of few crores of rupees within a period of one year nominating his wife and children and assigning one of the policies to his father just few days before his death wherein he had to pay about Rs. 11 lacs towards pemia whereas his income was less than Rs. 11 lacs per year and the suspicious circumstances under which he died would indicate that a detailed inquiry has to be made to find out the circumstances under which such policies were taken.

The questions raised involved complicated questions of fact and law. The allegations made by the complainants raise questions like:

(a)Â Whether there was concluded contract when the policy was not issued?

(b)Â Whether the claimants can ignore the decision of the High Court, when it directed them to file civil suit?

(c)Â What is the effect of Section 47 of the Insurance Act to the facts of the present case?

(d)Â Equally, the questions raised by the opposite parties that the death was suspicious and the policies were taken suppressing the existing earlier policies?

(e)Â Whether fraud was played for the assured in suppressing several insurance policies that were taken by him running into few crores, and the suspicious circumstances surrounding the death of the deceased, all these facts can only be resolved by Civil Court in a full-fledged trial?

32. In C.D. 61/2007 no policy was issued and there is no concluded contract. In regard to other claims various facts have to be gone into to find out whether under what circumstances the insurance was made running to few crores of rupees just before his death. Moreover in W.P. Nos. 6584 of 2004 and 6585 of 2004 the High Court directed the claimants to approach the Civil Court on the ground that complicated questions of fact or law cannot be adjudicated in Writ Petition. There is no reason why the claimants did not resort to Civil Court despite a positive direction by the High Court. The claimants cannot take parallel proceedings in Consumer Fora having courted an adverse direction from the High Court. Voluminous documentary evidence placed in this regard and the allegations made in the affidavits of the parties had to be determined only after the parties are subjected to cross-examination. It is not a case where the liability of the insurance company to be determined on affidavits and perusal of the documents.

33. Learned Counsel for the complainants contended that Consumer Forum has absolute power to determine these questions since they are vested with powers of summoning and enforcing attendance of witnesses and examining them on oath. In support of his contention he relied on Overseas Carpets Ltd. v. The National Insurance Co. Ltd., II (1992) CPJ 388 (NC)=1992 (2) CPR 107 (NC); Bharatkumar C. Patel and Orsv. The United India Insurance Co., II (1994) CPJ 533=1992 (1) CPR 224; National Insurance Company Ltd. v. Lal Chand Jain and Sons, 1997 (1) CPR 108; S.K. Lakhotia v. National Insurance Co. Ltd., II (1993) CPJ 1160=1994 (1) CPR 43. Those were the cases where it was held that if there is deficiency in service on the part of insurance companies in dealing with bona fide claims of the insured. There was inordiate delay in settlement of claim either due to negligence or unexplained delay either on the part of insurance company or on the part of Surveyor. In one of the cases, the insurance company did not rely on the report of its own Surveyor, in that context it was observed that non-abdication of claim amounts to uinjust denial of Consumer Protection Act to the aggrieved customer. It amounts to erroneous abdication of its jurisdiction.

34. The Honble Supreme Court in Oriental Insurance Company Ltd. v. Munimahesh Patel, IV (2006) CPJ 1 (SC)=VI (2006) SLT 436=(2006) 7 SCC 655 observed:

âProceedings before the Consumer Commissions are essentially summary in nature and adjudication of issues which involve disputed factual questions should not be adjudicated. It is to be noted that the Commission accepted that the insured was not a teacher. The complainant raised a dispute about the genuineness of the documents (i.e., proposal forms) produced by the appellant.

The Commission having accepted that there was wrong declaration of nature of occupation of the person insured, should not have granted the relief in the manner done.

The nature of the proceedings before the Commission as noted above, are essentially summary in nature. The factual position was required to be established by documents. The Commission was required to examine whether in view of the disputed facts it would exercise the jurisdiction. The State Commission was right in its view that the complex factual position requires that the matter should be examined by an appropriate Court of Law and not by the Commission.

Above being the position, the Commission was not justified to deal with the matter in the manner as was done. In our view, the directions of the State Commission were more appropriate keeping in line with the nature of dispute. Accordingly, the appeal is allowed but with no order as to costs.â

35. The Honble Apex Court in the case of Synoo Industriesv. State Bank of Bikaner and Jaipur and Ors., I (2002) CPJ 16 (SC)=I (2002) SLT 214=2002 (1) SCALE 148, observed where complicated questions of law and facts are involved Forum under the Consumer Protection Act may not be proper Forum to dispose of such a case in summary fashion.

36. The Supreme Court recently in the case of Oriental Insurance Company Ltd.v. Muni Mahesh Patel (supra), held:

âProceedings before the Commission are essentially summary in nature and issues which involve disputed factual questions should not be adjudicated by the Commission. The Commission having accepted that there was wrong declaration of the nature of occupation of the person insured, should not have granted the relief in the manner done. It was further rquired to examine whether in view of the disputed facts it should exercise the jurisdiction. The State Commission was right in its view that the complex factual position requires that the matter should be examined by an appropriate Cout of Law and not the Commission.â

37. The National Commission in the case of Ferrygold (India) Ltd.v. National Insurance Co. Ltd. and Ors., III (2002) CPJ 59 (NC), also held:

âThis complaint raises complex question of law and facts. To prove its case complainants will have to lead voluminous evidence both oral and documentary. It will not be possible for a Forum under the Consumer Protection Act to decide such a case in its summary jurisdiction.â

38. However, coming to the facts, we are of the opinion that complex factual position requires the matter to be adjudicated not summarily by way of affidavits. It has to be examined thoroughly by a competent Civil Court. More so, when the parties also pleaded fraud, misrepresentation, etc. in not disclosing the other policies. All this cannot be determined in these cases. A number of complaints have been filed in various Fora at all levels in Andhra Pradesh. Therefore, we feel that this a fit case where the complainants had to take recourse before the Civil Court where all these questions could be adjudicated.

39. Undoubtedly, the complainants are bound by the High Court decision courted in W.P. No. 6584/2004 and W.P. No. 6585/2004. Necessarily they have to resort to the Civil Court as opined by the High Court.

40. Therefore, in the light of above observations, we are of the opinion, that the complaints have to be dismissed. The complainants can approach the Civil Court for adjudication. It is needless to mention that the entire period spent for prosecuting before the Consume Fora, had to be excluded for computation of limitation. With these observations, the complaints are dismissed.

41. In the result, the complaints are dismissed. However, no costs.

Complaints dismissed.

Court	Andhra Pradesh State Consumer Disputes Redressal Commission SCDRC Hyderabad
Decided On	Apr-23-2008
Case Number	C.D. Nos. 69, 70, 71 & 72 of 2003, C.D. Nos. 8 & 9 of 2004 & 61 of 2007
Judge	D. APPA RAO, PRESIDENT, THE HONOURABLE MRS. M. SHREESHA, MEMBER & THE HONOURABLE MR. G. BHOOPATHI REDDY, MEMBER
Appellant	Mohd. Azam
Respondent	Birla Sunlife Insurance Co. Ltd. and Another

Mohd. Azam Vs. Birla Sunlife Insurance Co. Ltd. and Another - Court Judgment