BEFORE THE DISTRICT CONSUMER FORUM AT ADILABAD
Date of filing : 26.05.2008.
Date of disposal : 30.03.2009.
Vodnala Rayamallu, S/o.Late.Yellaiah,
Age:35 years, R/o.Seetharampally village,
LIC Of India,
Branch Mancherial. …Opp.Party.
Counsel for Complainant : Mr.C.Sudhkar Reddy.
Counsel for Opposite Party : Mr. P.Mohan Singh.
SRI.P.THIRUPATHI REDDY, M.A., L.L.B. : PRESIDENT.
SRI.G.SRINIVAS, B.COM., L.L.B. : MEMBER.
MONDAY THE 30th DAY OF MARCH 2009.
This complaint is filed under section 12 of C.P. Act 1986.
Order Pronounced by President:-
The brief facts of complaint are as follows:
1. The complainant is resident of Seetharampally village R/M. Mancherial. The brother of the complainant by name Vodnala Srinivas, S/o.Late.Yellaiah, R/o.Seetharampally insured his life with the LIC Of India for an amount of Rs.2 lakhs on 20.12.2005. Therefore, the LIC Of India issued Policy Bond bearing No,683991025 for Rs.2,00,000/- in favour of Vodnala Srinivas. Later, the brother of the complainant paid the premium installments regularly till his death. The maturity date is 20.12.2023 and in case of death of the insurer, the policy amount of Rs.2,00,000/- plus vested bonus is to be paid to the Nominee. At the time of issue of the policy, the complainant was nominated as Nominee by the Policy holder Vodnala Srinivas. The policy holder, i.e., the brother of the complainant died on 15.07.2007 leaving behind him the complainant as his nominee. The complainant filed an application before the LIC Of India on 30.08.2007 for payment of the policy amount and vested bonus to him. The complainant also got issued a legal notice on 07.04.2008 demanding the LIC Of India to pay the amount. But the LIC Of India failed to pay the amount to the complainant.
Hence the complainant prayed this Forum to direct the LIC Of India as below:
a). To pay an amount of Rs.2,00,000/- (Rupees Two Lakhs Only) with vested bonus and interest at the rate of 24% per annum from the date of death of insurer till the realization.
b). To pay Rs.5,000/- (Rupees Five Thousand only) towards compensation on account of causing agony and pain both mentally, physically and monetarily and also on account of rendering deficient services.
c). To pay costs of the complaint.
d). To award any other relief or reliefs which this Hon’ble Forum deems fit and proper in the circumstances of the case.
2. The LIC Of India contested the petition and filed counter. The contents of counter is as follows:
It was found by the LIC Of India Corporation in the enquiries that the Life Assured was not a healthy person at the time of taking the said policy and suffering from cancer before issue of policy and taken treatment from Sai Orthopedic Clinic on 14.06.2004. That the life assured suppressed material facts about the status of his health, details of treatment taken for illness etc., in the proposal for insurance and fraudulently obtained the policy. That the proposal for Assurance dt:16.12.2005 the deceased Life Assured had answered the following questions as under noted:
During the past 5 years did you consult any Medical Practitioner for any ailment requiring treatment for more than a week.
Have you ever been admitted to any Hospital or Nursing Home for general check-up observation, treatment or operation?
Are you suffering from or have you ever suffered from any ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney Brain or Nervous System?
Are you suffering from or have you ever suffered from any Diabetes, Tuberculosis, High Blood Pressure, Cancer Epilepsy, Hernia, Hydrocele, leprosy, or any other diseases?
What has been your usual State of health?
That as per the Sai Orthopedic Clinic, Mancherial LA was admitted on 14.06.2004 and discharged on 21.06.2004 and was suffering from Fibromyxoid Sarcoma (cancer). This vital information was suppressed by the life assured in the Proposal dt:16.12.2005. Therefore, it is evident that the deceased life assured had made incorrect statements and withheld correct information from the Opp.Party regarding his health at the time of effecting the assurance. The LIC Of India prayed to dismiss the petition.
3. Both parties filed Proof Affidavits.
4. On behalf of complainant Ex.A1 to A7 are marked. Ex.B1 to B5 are marked on behalf of LIC Of India.
5. Now the point for consideration is whether there are grounds to allow the petition?
6. Heard both sides. The plea of the Ld. Advocate for complainant said that the deceased Srinivas was hale and healthy. He never suppressed that facts about his health and he never underwent any treatment prior to taking policy and he prayed to allow the claim. On the other hand the Ld. Advocate for LIC Of India in his counter and arguments constantly maintained that the Late.Srinivas underwent treatment from Sai Orthopaedic Clinic on 14.06.2004 and that he was patient and in support of the contention of LIC Of India they filed treatment particulars from Sai Orthopaedic Clinic Mancherial. A perusal of Ex.B3 shows:
Soft tissues swelling
(R ) Gluteal Region
Size: 8” X 6” X 5”
SA by Dr.Murthy.
By standard southern’s approach that sub gluteal region was exposed and found to be occupied by a cyst. The cyst wall was bluish, vascular and not adherent to surrounding tissues. The cyst wall was nearly ruptured and contents evacuated. Profuse, Ooze, was noted. Sciatic nerve was found extended in the sheath of the cyst wall. Haemostiasis was secured as much cyst as possible was excised.
7. The LIC Of India further relied on the Affidavit of the Doctor Sai Orthopaedic Nursing home it is marked as Ex.B5. Ex.B5 reads as follows:
I am the deponent herein and I know the deceased Vodnala Srinivas, S/o.Yellaiah, Age:22 years, R/o.Seetharampally, Post:CCC Naspur, Mdl:Mancherial, Dist.Adilabad. Who has taken treatment in my Nursing home for the disease Soft tissues swelling gluteal region as patient vide P.No.12/139 from 14.06.2004 to 21.06.2004. That earlier on the requisition of the LIC Of India I have given treatment Certificate on the basis of Records maintained by me in my Nursing Home.
A perusal of Ex.B4 i.e., opinion of the Dr.Thirupathi Rao ( consultant Doctor of LIC of India Karimnagar) shows that this case was referred to him for opinion and he passed remarks as follows: Life assured was suffering from Fibromyxoid Sarcoma (Cancer). Doctor passed his remarks on information furnished by LIC Of India it is as follows:
Please refer Case Sheet from Sai Orthopaedic Clinic dt:14.06.2004. Please ascertain 1). The disease suffered by the person. 2). The conformation of Histopathology report.
A perusal of Ex.B2 application proposal for insurance the contents are as follows:
Column 3 B.
Q: Have you understood fully the terms and conditions of the plan you propose to take?
Answer : Yes.
8. Coming to in personal history in Page No.3 column No.11F
Q: Do you have any bodily defects or deformity?
Answer : Yes.
In column No.11G Q: Did you ever have any accident or injury?
Answer : Yes.
In 4th page in column NB for Medical cases only
“ I certify that the Proposer has signed/put this/her thumb impression in my presence after admitting that all the answers to Questions No.’s 10 and onwards of this form have been correctly recorded”.
But where as column No.11 a to e
a). During the last five years did you consult any Medical practitioner for any ailment requiring treatment for more than a week?
b). Have you ever been admitted to any Hospital or Nursing Home for general check-up observation, treatment or operation?
c). Have you remained absent from place or work on grounds of health during the last 5 years?
d). Are you suffering from or have you ever suffered from any ailments pertaining to Liver, Stomach, heart, Lungs, Kidney, Brain or Nervous system?
e). Are you suffering from or have you suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other diseases?
9. Ex.B4 is dated three years after issue of policy. It is obtained for repudiating the claim. Thus a perusal of Ex.B3 & B4 clearly reveals that late.Srinivas was suffering from Cancer disease and he underwent treatment prior from 14.06.2002 onwards. This policy was Ex.B2 application for obtaining policy was made on 16.12.2005 i.e., one year after treatment in the Sai Orthopaedic Nursing Home.
10. Knowingly or unknowingly in column no.11 F & G Late.Srinivas admitted that he has bodily defects and injuries. But in column No.11 a to e the Late.Srinivas replied in negative, it amounts suppression of material facts about his status of health. Basing on this the Ld. Advocate for the LIC Of India relied on following Case Law.
Re: Case Laws in support of suppression of material facts by the proposer/life assured.
Repudiation of claim – Insured suffering from cancer took treatment in hospital not disclosed. Incorrect information regarding health. Insurance contract invalid ab initio. No deficiency in service. Repudiation justified. LIC of India
It is settled that law that contract of insurance is based on good faith. It is for the respondent insured to give correct information on his health which he did not disclose at that time.
This ground of incorrect information and false statements make the insurance contract null and void. We find there is no deficiency in service by LIC of India.
We are convinced that LIC Of India rightly repudiated because the said policy had been rendered void and invalid ab initio in view of the false answers given by the life assured and the policy was unenforceable.
If a person with holds any information, Doctor would not know it unless it is visible. Life Assured violated the very good faith on which contract of Insurance Stands. Suppression of material facts at the time of policy proved. Repudiation of Claim justified.
Gangamma & ANR (Respondents)
Repudiation of Claim – Suppression of material fact. Deceased had malignancy, obtained treatment, proved by documents on record. Suppression proved. Order of State Commission allowing claim is set aside. Suppression of information itself violates the terms of the contract, utmost good faith is a tenet of Insurance Policy which was not observed by the deceased.
Repudiation of Claim – concealment of material information. Deceased suffering – Not disclosed. Repudiation Justified. Complaint dismissed. Insurance policy is issued on trust and good faith. Order passed by State Commission is set aside.
Krishan Chander Sharma … (Respondent)
Repudiation of Claim – because of concealment of material facts regarding health. Insured is guilty of suppression of ailment. Repudiation justified. Complaint dismissed.
LIC of India … (Respondent)
Repudiation of Claim – Suppression of material facts. Death within short period of taking policy. District Forum rightly dismissed the complaint on the ground of suppression of material facts by life assured at the time taking policy.
Civil Appeal No.5322/2007 arising out of SLP (C ) No.23951/2005
7. P.C.Chacko and another …Appellant.
AIR 1962 SC 841
Chairman, LIC of India and others …Respondents.
8. Mithoolal Nayak …Appellant.
LIC of India …Respondent.
(Revision Petition No.3362 of 2004)
L.I.C. of India …Petitioner.
Head notes: Claim repudiated on the ground that the assured suppressed the material fact about his sickness and on being on medical leave before purchase of the policies. The cause of death had no relevance to the non disclosure of health at the time of purchase of policy.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI.
LIC Of India …Petitioner.
Revision Petition No.649 of 2005 from Order dated 28.10.2004 in Appeal No.421 of 2003 of A.P.State Consumer Disputes Redressal Commission, Hyderabad – Decided on 14.01.2009.
Consumer Protection Act, 1986 – Section 21(b) – Life Insurance – Suppression of material facts – Deceased disclosed at time of revival of policy – False declaration given at time of revival of policy – Deceased guilty of suppression of fatal pre-existing disease, from which he was suffering at time of getting policy revived – Lower For a erred in allowing claim – Orders set aside in revision – No relief entitled. ( Paras 11,12 and 13.)
11. On the other hand the Ld. Advocate for complainant submitted that the allegations raised by the LIC Of India are not established and it is an allegation for allegation sake. The Citation relied on by the LIC Of India has no application to the facts and circumstances of the case. In support of his contention he relied on the following citations.
LIC – Suppression of material facts: not proved repudiation of claim un- justified.
Divisional Manager LIC of India
LIC Of India – Suppression of material facts – Plea that insured suffered from Sciatica but not disclosed in proposal. No such mention in confidential report of LIC Of India’s doctor – Repudiation of claim held improper.
LIC Of India – Suppression of material facts – plea of – no evidence to substantiate it adduced before District Forum inspite of adequate Opportunity – Remand – Refused.
1995 CPJ 388, 1995 (1) CPR 313.
LIC Of India – Suppression of material facts – failure of LIC Of India to prove that insured made false representation – Death of insured due to Myo Cardinal infraction – claimant held entitled to amount under the policy – LIC Of India has failed to prove that the life assured suppressed the material facts and made false representations regarding his health at the time of obtaining life insurance policies.
II (1994) CPJ 55: 1994 (1) CPR 884.
LIC Of India – Suppression of material facts – Evidence relating to not adduced by LIC Of India in spite of adequate opportunity – claim – Repudiation of – amount to deficiency.
12. Coming to the background of this case the Date of Birth of complainant is 16.06.1987. 18 years 6 moths on the date of taking policy. V.Yellaiah the father of Srinivas was no more. Late.Srinivas admitted in First year Medical Course in @@@@hi Medical College on 29.05.2005 (Ex.A5). He took this policy about 4 months. Prior to his death while studying 1st year Medical course.
13. Admittedly Late.Srinivas has no recognize job of any type. As seen from Ex.B2 application source of income of his family or assets was not shown. As seen from column no.5 the Annual Income of Late.Srinivas by way tuitions was shown as at Rs.70,000/-. The Ld. Advocate for LIC Of India submitted that Medical student of the first year cannot spare single minute to towards tuitions for attending classes for others. As Medical study it is a intensive course of study. The Ld. Advocate for LIC Of India further submitted that another policy was taken on the name of Late.Srinivas (CC.No.70/08) and the premium p.a. is Rs.33,450/-. The premium in the case on hand is Rs.11,749/- and the total amount payable is Rs.45,199/-. Thus according to Ld. Advocate for LIC Of India said that the Financial capacity of the Late.Srinivas was doubt fully and it was the pre planned plot to take illegal advantage of the situation.
14. Perused the citation relied on by both parties. There is no dispute on the principle laid in those citations. The facts and circumstances of the case on hand in a way a bit different from the cases in the citations except the oral submission that the insured was earning so much income per annum by way of tuitions, there is no reliable evidence to show that deceased Late.Srinivas was getting so much income. The Ld. Advocate for Opp.Parties submitted that generally tuitions are being given in Residential Schools and Colleges for 10th and Inter students by the experienced Post Graduates Lecturers and they will be likely to get reasonable fees. Where as Late.Srinivas was Inter student, and not expected to give tuitions for 10th class students. If Late.Srinivas gave tuitions for below 10th class students he may not get that much income as stated by complainant. That according to the Ld. Advocate for LIC Of India the contention of complainant that Late.Srinivas was getting Rs.75,000/- p.a. by way of tuitions is not believable and reliable. In this regard we agree the contention of the Ld. Advocate for LIC Of India.
15. Admittedly Late.Srinivas died while he was doing his first year MBBS course. It is not an accidental death, it is pre matured death due to disease at young age. The Doctor who treated Late.Srinivas gave Proof Affidavit about the treatment given to Late.Srinivas that affidavit stands un rebutted. Thus a perusal of the application form and the nature of filing of the columns appears to be filled up without taking care.
16. The facts and circumstances of this case coupled with Case Law. We feel that in a way Late.Srinivas suppressed previous treatment under gone by him. Any how he died about 2 years after commenced of the policy. So we feel it is a fit case to allow the claim.
17. In the result complaint is allowed. The LIC Of India is directed to make a payment of Rs.2,00,000/- (Rupees Two Lakhs Only) with interest @ 9% p.a. from the date of filing of complaint i.e., Dt:26.05.2008 within a period of one month from the date of receipt of this order, failing which the complainant shall be at liberty to proceed against them U/S.25/27 of Consumer Protection Act 1986.
Dictated to Steno, transcribed by her, corrected by us and pronounced in the Open Forum on the 30th day of March 2009.