- (1.) THIS is a complaint u/s, 12 read with sec. 17 of the Consumer Protection Act, 1986 ("the Act" herein) filed on 16-10-89. Smt. Urmila Goyal and Shri Ghanshyam Goyal (complainants) are widow and real elder brother of late Shri Radhey Lal, who died on 8-12-86, Life Insurance Corporation of India accepted three proposals for the lifeinsurance of Shri Radhey Lal (deceased ). Policies Nos. are (l) 25587040 (2) 190042312 and (3) 190043280. The policies were for Rs 10,000/-, Rs. 25,000/- & Rs. 75,000/-respectively. Shri Radheylal hadchest pain at Bhopal on 7-12-86. He was immediately taken to the Sajjad Nursing Home, Bhopal, where he was admitted and treated by the incharge doctor Shri N, A. Sh. He expired on 8-12-86 due to sudden cardia respiratory arrest. Death certificate (Anx. 3) dated 8-12-86 was given by Dr. N. A. Shah, on the basis of which, death certificate No. 3496/no. 36 was issued by the Chief Registrar, Death and Birth Nagar Nigam Bhopal. . He was brought to his house at Rajgarh Bhopal (Alwar district) and was cremated on 9-12-86, Complainant No. 1 Smt. Urmila Goyal widow of Radheylal claimed insurance money. The Life Insurance Corporation of India, made payments of the claim arising out of Policies No. 25587040 and 190042312. The nominee of the third policy (No. 190043280) was complainant No. 2 Shri Ghanshyam Goyal. The Branch Manager, Life Insurance Corporation, Alwar Branch, vide his letter dated 22-5-87, asked him to send the documents. Forms No. 3783 and 3785 were also sent to him. The complainant has alleged that Proposal No. 1341195 of the third policy was submitted on 7-9-86. The first instalment of Rs. 917. 90 was paid on 30-9-86. The Life Insurance Corporation issued the proposal slip stating that the next date of premium falls due on 28-2-87. According to the complainant, the dates of next premiums were in February, May] August and November every year. The case, set up by the complainants is that the proposal then submitted by deceased Radhey Lal was completely accepted by the Life Insurance Corporation and his life was assured on medical basis. The deceased paid an amount of Rs. 917. 80 being the first premium on 30-9-86 vide receipt dated 30-9-86. According to the complainants, Radheytal had not defaulted in payment of premium etc. Complainant No. 2, being the nominee, lodged the claim. It is stated in the reply to the claim, filed by Senior Divisional Manager, Life Insurance Corporation, Jaipur, that as the deceased had with-held the material information regarding his health as per questions No. 17 (a), 18 (b) and 20 and made deliberate mis-statement, they have repudiated the claim and refused to make any payment against the third policy. Complainant No 2 replied that Shri Radheylal was medically examined and there was no deliberate mis-statement by him and as the Life Insurance Corporation had made payment of the claims of the two policies, the payment of the claim arising out of this policy, may also be made. Complainant No. 2 (nominee) had given an affidavit dated 23-11-87 declaring that the claim of Policy No. 190043280 for Rs. 75,000/- may be paid to complainant No. 1, who is widow of late Radheylal. The complainants have alleged that they are consumers as per sec. 2 (l) (d) of the Act and as the services of the insurance are included in sec. 2 (1 ) (o) of the Act, there was deficiency in performance of the services on account of the non-payment of the claim covered by the third policy. The claimants have claimed Rs. 2,22,500/-, the details of which are as under: - 1. Death cover endowment with bonus Rs. 1,60,000/- 2. Interest @ 1% p. a. Rs. 4,250/-- 3. Compensation Rs. 20. 000/- Total Rs. 2,22,500/- The complaint was presented on 16-10-89.
(2.) THE opposite-parties, who are Senior Divisional Manager, Life Insurance Corporation of India, Jaipur and Branch Manager, Life Insurance Corporation of India, Alwar, filed the version of the case resisting the claim of the complainants on various grounds. THE opposite-parties had raised certain preliminary objections regarding the maintainability of the complaint. THE grounds raised by the opposite-parties are : (1) that the disputes raised by the complainants are outside the perview of the Act in any event, the Act is in addition to and not in derogation of the provisions of the Insurance Act and the Life Insurance Corporation Act, which statutary enactments specifically deal with the manner and methods of dealing with any dispute/claim arising out of the life insurance policy, taken by the policy-holders. THE proceedings initiated by the complainants under the Act are nonest, null and void and without jurisdiction; (2) that the definitions of 'complainant', 'complaint', 'consumer dispute' and 'service', as defined in sec. 2 (1) of the Act do not cover the claims arising under the life insurance policy and that from the aforesaid defini-tions, the complainants are not 'consumers' and the controversy involved in the complaint is not a consumer dispute'; (3) that the claim under the life insurance policy cannot be termed as compensation as envisaged by sec. 14 (1) (b) of the Act and that the Life Insurance Corporation has not been negligent in any manner; and (4) that the opposite-parties have repudiated the claim on the grounds of with holding of the material facts about ill-health and treatment taken by the deceased Radheylal in the past and at the time of proposing for insurance and even before the completion of the proposal. According to the opposite-parties, many questions of facts are involved, which can only be decided through a civil court, as number of witnesses and documents are to be examined for the same. The complaint has been contested by the opposite-parties on merits. It was submitted in the version of the case that three policies were issued on different dates on the life of late Shri Radheylal Goyal and that Policy No. 190043280 for Rs. 75,000/- was obtained by the deceased by deliberate mis-statements and with-holding and suppressing the material facts regarding the ill-health in past and at the time of effecting assurance. He bad not disclosed even before the completion of the proposal that he was suffering from pain in chest, palpitation etc. and had taken treatment in the past for the same. On behalf of the opposite-parties, it was pleaded that the policy was obtained by the deceased by fraudulently suppressing the material facts about the ill-health and treatment taken by him. Reference was made to letter dated 31-3-89, by which the claim was repudiated. It was submitted that the answers given to Questions 17 (a), 18 (b) and 20 in the statement signed by the deceased-assured on 27-9-86 were false as the opposite-parties have in their possession, indisputable proof to show that before he proposed for the third policy (190043280), he had suffered from palpitation dyspnoea and pain in chest for which he had consulted a doctor and had taken treatment from him. The claim was repudiated as the deceased had made deliberate and with-held material information from the opposite-parties regarding the health at the time of effecting the assurance. Arguments were heard in regard to the maintainability of the complaint under the Act on 19-2-90. We propose to decide this question first. In accordance with sec. 2 (l) (b), 'complainant' inter-alia means 'consumer' 'comp-laint' has been defined in sec. 2 (1) (c) of the Act. It means any allegation in writing made by the complainant that the services mentioned in the complaint suffer from deficiency in any respect, with a view to obtaining any relief provided by or under the Act. 'consumer' has been defined in sec 2 (1) (d) of the Act. Material part of the definition of 'consumer' is as follows :- " (ii) hires any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for re-sale or for any commercial purpose; or. " Under sec. 2 (1) (e) of the Act, 'consumer dispute' means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint. 'service' has been defined in sec. 2 (1) (o) of the Act. According to it, it means service of any description, which is made available to potential users and includes, amongst others, provision of facilities in connection with insurance.
(3.) NOW, we may notice the provisions of the Insurance Act, 1938 (Act No. IV of 1938) (for short 'the Act of 1938'), which are relevant for considering the question of maintainability of the complaint, under the Act. Sec. 2 (11) of the Act of 1938 defines 'life insurance'. It is as under:- (11) "life insurance" means the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life, and any contract which is subject to payment of premiums for a term dependent on human life and shall be deemed to include- (a) the granting, of disability and double or triple indemnity accident benefits, if so provided in the contract of insurance; (b) the granting of annuities upon human life; and (c) the granting of superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons, engaged or who have been engaged in any particular profession, trade or employment or of the dependents of such persons. " Sec. 45 of the Act of 1938. lays down that the Policy not to be called in question on ground of mis-statement after two years from the date of the commencement of the Act and that no policy of life insurance effected after the coming into force of the Act of 1938 shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that the statement made in the proposal for insurance or in any report 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 the such statement was on a material matter or suppressed facts which it was material to disclose. Sec. 46. of the Act of 1938. deals with, application of Indian law to* policies issued in India. It is well settled that the contracts of insurance,, unlike: and other contracts are contracts uberrimae fides, i. e. . in such contracts the duty is cast upon the assured to disclose all material facts known to him but unknown to the insurer and the former is bound to tell the later everything, which may be supposed likely to affect the latter's judgment. As the contracts of insurance are; made upon the basis of representations upon the truth or falsity of which the; validity of the contract depends, a non-disclosure of any material circumstances-or a misrepresentation, however unintentional, has the same effect as fraud in vitiating the contract. The assured is bound to disclose and truly represent all the facts within his knowledge concerning the risk which are material for the under writer to know;, and the non-disclosure or misrepresentation of any such fact gives the underwriter an election to avoid the contract, as in the case of frauds although, not accompanied by any fraudulent intention. It may be re-called that the opposite-parties have specifically stated that they have repudiated the claims on the grounds of with holding, the material facts about the ill-health and treat-ment taken by deceased Radheylal Goyal in the past. According to the opposite-parties, these questions of facts are complicated and can only be decided by a civil court, as a number of witnesses and documents are to be examined. We have carefully looked into the complainnt, the version of the case and the documents filed by the complaint. It was observed in M/s Spl. Mechines Karnal Vs. Punjab National Bank (l) as under :- "the procedure for disposal of complaints under the Act has been laid. down in sec. 13 of the Act, the provisions of which are made: applicable to the proceedings before the National Commission by rule 14 (2)of the Consumer Protection Rules, 1987. Sub-secs,. (2) &. (3) of sec 13 of the Act show beyond doubt that the statute does hot contemplate the determination of complicated issues, of fa;ts involving: taking of elaborate oral evidence and addueing; of voluminous documentary evidence and a detailed; scrutiny and assessment of such evidence. It is no doubt true that the forums constituted under the Act are vested, with the power of examining the witnesses on oath and to order discovery and production of documents. But such power is to be exercised in cases where the issues involved are simple such as the defective-quality of any goods purchased or any shortcoming or inadequacy in; the quantity, nature and manner of performance of a service, which the respondent has contracted to perform for consideration. Even in such cases, if it appears to the concerned Forum under the Act that the issues cannot be determined without taking the elaborate oral and documentary evidence, it is open to it to decline to exercise jurisdiction and refer the party to his ordinary remedy by way of suit. We have already referred to secs. 45 and 46 of the ,\ct of 1938. There is complex nature of the questions of fact and law involved in the complaint for the determination of which oral as well as documentary evidence will have to be adduced and considered and involves their close scrutiny. The issues raised cannot be determined without examination of elaborate oral and documentary, evidence. In these circumstances, in view of the principles laid down by the National Commission, New Delhi in the afore said decision. We decline to exercise jurisdiction and refer the complainants to their ordinary remedy by way of suit. We uphold the preliminary objection to the limited extent that it will not be proper to decide the complaint on merits in view of the complicated issues of fact and law. ;