S.C. CASE NO.: FA/2008/58 DATE: 07.08.2009



DATE OF FILING: - 15.02.2008



APPELLANT : Smt. Satyabhama Sharma,

W/o Late Shivesh Sharma,

8/1, Baikuntha Chatterjee Lane, Howrah-711101.







RESPONDENT : The Zonal Manager, LICI,

Hindusthan Building, Chittaranjan Avenue,

Kolkata-700 012.







BEFORE: HON’BLE JUSTICE : Sri Aloke Chakrabarti, PRESIDENT.

MEMBER : Sri A.K. Ray.

MEMBER : Smt. S. Majumder.







FOR THE APPELLANT : Sri. Prasanta Banerjee, Advocate.

FOR THE RESPONDENT : Smt. Sumita Roychowdhury, Advocate.





-ORDER-



S. Majumder, Member.

This appeal has arisen out of the judgment passed by the District forum Kolkata, Unit – II on 11/01/2008 in its case no. 139/2006, wherein the Ld. Forum below has dismissed the complainant on contest without any cost



The brief facts of the case of the Complainant before the forum below were that her husband since deceased was a policy holder of a LICI and the assured sum was of Rs. 5,00,000/- including accrued guaranteed addition and loyalty addition. The husband of the complainant was admitted to AMRI hospital on 18/06/2006 due to septic shock under the care of Dr. Dulal Biswas at the ICCU and for getting quick admission the son of the insured reported to the doctor that his father was suffering from diabetes since seven years although he was actually not. He in hot haste and gave the statement by mistake. The doctor of the AMRI hospital Mr. P. Bhattacharya also admitted that the deceased was not suffering from diabetes through a letter written to the Zonal Manager. LICI on 31/10/2005, wherein he also stated that in order to get emergency admission the patient party declared that the patient was diabetic but it was not the cause of his death. In spite of the aforesaid facts and circumstances the LICI had repudiated her claim on the ground of non-disclosure of material facts at the time of taking this policy. Hence the Complainant has filed the complaint before the Forum below praying for direction upon the OP-LICI to pay her the policy money along with cost and compensation etc.



Being dissatisfied by the above mention judgment the Complainant- Appellant has preferred this appeal contending the same facts as stated by her in the complaint petition before the Ld. District Forum. According to her the judgment passed by the Forum below is erroneous, in legal and liable to be set aside and she has prayed for allowing this appeal.



The contention of the OP before the Forum below was that the husband of the Complainant whose life was assured had suppressed some material information and the time of taking the policy, which he was under compulsion to disclose the same in the proposal form fairly. The insured did not disclose that he was a patient of T2 diabetes and was on medication at the time of taking this policy. The LICI came to know for the first time this information from the treatment sheet and certificate that the insured was a patient of T2 diabetes. Further contention of the OP was that the contract of insurance is based on utmost good faith. The insurer was totally ignorant regarding the health condition of the insured and relied upon the information supplied by the insured in the proposal form.
If the insured had disclosed the disease from which he was suffering and treatment taken by him, he could have been asked on special quesnnaire regarding the disease and could have been undergone some pathological tests for considering the matter whether his life would be assured or not. But he did not disclose the actual health condition in the proposal form rather he gave a written declaration that he had not withheld any material information and if any untrue or false statement was made by him the policy would be null and void and nothing would be payable under this void contract. So the LICI-OP had rightly repudiated the claim of the Complainant on the ground of non-disclouser of material fact and pre-existing disease at the time of taking this policy and the OP had prayed for dismissal of the complaint.



On careful consideration of the record, documents, it is seen by us that it is an admitted fact that the husband of the present Appellant, since deceased took a LICI policy from the Respondent and the assured sum was of Rs.5,00,000/-. The husband of the Complainant was admitted at the AMRI hospital on 18.06.2005 due to septic shock under the care of Dr. Dulal Biswas and expired on the next day. After his death being a nomiee of the policy this Appellant lodged the claim before LICI along with the relevant documents, but it is an admitted fact that the LICI had repudiated the claim on the ground of non-disclosure of the material facts in the proposal form at the time of taking out the policy. According to the LICI the insured did not disclose his health condition in the proposal form. The insured was suffering from diabetes since seven years, but he did not disclose this fact in the proposal form.

The allegation of the Appellant is that the doctors of the AMRI hospital did not state that the patient was suffering from diabetes and hence no treatment for diabetes was given to him. Moreover the doctor of the said hospital on 31.10.2005 stated in the treatment sheet that the patient/insured was never a diabetic patient. Dr. P. Bhattacharyya in his letter written to the Zonal Manager, LICI, stated that the cause of death of the insured was due to septic shock, which had no relation with diabetes. According to the Appellant as the insured was not a patient of diabetes the LICI arbitrarily repudiated her claim without considering the letter-dated 31.10.2005. We have carefully gone through the treatment sheet of AMRI hospital from where it is evident that the patient insured was a diabetic since 10 years and the son of the patient to the Hospital stated it at the time of admission.

In respect of such averment the Appellant has stated that due to quick admission in the Hospital this statement was made but actually the insured was not suffering from diabetes. But in our opinion such plea of ‘quick admission’ is not correct as it is settled principle that treatment is given to a patient according to the history of ailment of the patient. If any one gives wrong history of ailment, it is not possible for the doctors to provide him the actual and best treatment.

We have also observed that after admission of the insured neither the son nor any relative disclosed to the doctor that the patient is not actually diabetic and only for getting quick admission such statement was given. We have also noticed that the doctor of the AMRI Hospital prescribed the patient for insulin on 18.06.2005. The Ld. Counsel for the Appellant during hearing submitted that the Forum below has failed to relied upon the letter written by Dr. P. Bhattacharyya, where it has been stated by the said doctor that the patient was not a diabetic and he died due to septic shock with which diabetes had no relation. But it is to be noted that the patient was admitted under Dr. Dulal Biswas but the certificate was given by Dr. P. Bhattacharyya who was in no way attached with the treatment of the deceased insured at the time of his staying at the Hospital and the Complainant has not made out any case that Dr.Bhatttacharyya was also attached with the treatment of the deceased insured. It has been stated by the Complainant that the insured was admitted under Dr. Dulal Biswas, therefore the certificate given by Dr. Bhattacharyya has no relevance with the instant case.

Moreover. Dr. Bhattacharyya did not adduce any evidence stating that the patient was not diabetic. It is true that the assured sum was of Rs.5,00,000/- and in such big amount some medical tests had to be performed on the part of the LICI and during hearing we asked for the pathological test reports from the LICI. In response the Ld. Counsel for the Respondent has submitted that until and unless the proposer is disclosed the disease from which he was suffering from, the LICI has no liability from their own to perform pathological tests of the proposer.
The said Counsel has further stated that it is the settled principle of the LICI that if the insured had disclosed the disease from which he was suffering and treatment taken by him, he could have been asked on special quesnnaire regarding the said disease and could have undergone some pathological tests for considering the matter whether his life would be assured or not. But in the instant case the insured did not disclose the actual health condition in the proposal form, on the contrary signature was made by him under the column where it is written that due to untrue or false statement the policy would be null and void and nothing would be payable under this void contract.

The above-mentioned settled principle has also been mentioned before the Ld. Forum below, but the Complainant did not raise any objection or has failed to adduce anything challenging the said principle. Therefore this contention as advanced by the Ld. Counsel for the Respondent-OP remains in force. In this context we are to say that it is the established principle that the insurance policy is an agreement between the insurer and the insured based on utmost good faith. The insured must disclose everything within her/his knowledge at the time of taking the policy and moreover she/he was duty bound to answer some questions, put before her by the Agent/ Authorized person of the LICI before acceptance of the said policy and on which it depends whether the policy is liable to be rejected or accepted.

The Ld. Counsel for the Appellant has placed a judgment passed by this Commission on 12.12.2008, in the case no-FA/2008/306, wherein the fact of the case of the Complainant-Respondent was the complaint of heaviness in chest and the Complainant took treatment after renewal of the policy. In the said case the Insurance Company has failed to show us that the Complainant took treatment before renewal of the policy and according to this Commission the chest pain is not a disease, it is only a symptom and hence suppression of the chest heaviness cannot be treated as suppression of any material fact. In the instant case the insured was suffering from diabetes since 10 years as stated by his son to the doctor at the time of admission in the AMRI Hospital and according to us diabetes is not a symptom, it is a disease.

The Ld. Counsel for the Respondent has attracte our notice to the proposal form where some specific questions were made by the LICI regarding disease and state of health of the proposer and answers were given by the said proposer. The Respondent pointed out the question no 11(a) in the proposal form where it was written ‘During the last 5 years did you consult a medical practitioner for any ailment requiring treatment for more than a week?’ The answer of the Appellant/insured was ‘No’. In the question no 11(e) in the proposal form where it was written ‘Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Presurre, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?’ The answer of the Appellant/insured was in the negative. It was also mentioned by the Appellant/insured in the proposal form that the state of health of the policyholder was ‘Good’.

The Ld. Counsel for the Respondent has drawn our attention to the treatment sheet of the insured from where it is evident to us that the policyholder was suffering from diabetes since 10 years i.e. before taking the policy and this statement was made by the son of the deceased insured, but he did not disclose all the material and true facts in the proposal form at the time of taking the policy. The proposal that leads to the acceptance of insurance policy shall be on good faith. The proposer is expected to disclose everything required within her knowledge. The authorized doctor of the LICI recommended the acceptance of the policy by declaring the proposer fit on the basis of routine examination coupled with the statement made by the proposer in the proposal form. So, this cannot be the defense against suppression of facts and pre-existing disease. Therefore, it is clear to us that the Appellant’s deceased husband by suppressing the material fact, practiced fraud upon LICI and for this reason the claim was repudiated by the LICI.

It is the settled principle that the contract of insurance is based on utmost good faith and the proposers is under solemn obligation to truly and correctly answer the questions in the proposal form at the time of taking the policy, as the proposal form is the basis of the contract. In this regard, we are to say that the present Appellant who did not raise any objection nor challenged the said treatment sheet where it was written that the patient was suffering from diabetes and due to this disease the patient was prescribed for taking insulin. As the said treatment sheet is not under challenge, we may take it as legal and valid document and the Respondent-LICI has repudiated the claim of the Appellant on basis of this document.

Therefore, we are of the opinion that the Insurance Company has rightly repudiated the claim for withholding in formations regarding health and disease that were material to disclose for the insurer to arrive at a correct decision in accepting the claim. In this respect we may refer to a judgment reported in III (2002) CPJ 10 (NC), in which it has been held that it is the settled law that the contract of Insurance is based on utmost good faith. In the present case the information as to the insured having suffered from diabetes has been withheld by the insured in the proposal form intentionally.

The Hon’ble National Commission has also held that it is the duty of the policyholder to give the correct information of his health and if the LICI repudiated any claim on the ground of submission of false and incorrect information by the policyholder there will be no deficiency in service on the part of the LICI. In the instant case the Respondent submitted false statement regarding the state of his health and due to such concealment or suppression of the material facts the claim was repudiated by the Respondent-LICI.

We may refer to the judgment in this context passed by the Hon’ble National Commision, reported in 2004 CTJ 640 (CP) (NCDRC), where Their Lordships have held that ‘No one should forget that Policy is issued on trust and in good faith. It is for both the parties to maintain this well laid principle.’ In another judgment passed by the Hon’ble Supreme Court in the case of Mithoolal Nayek vs. LICI, reported in AIR 1962 SC 814, where Their Lordships have held that ‘where the policy was vitiated by reason of a fraudulent suppression of material facts by the assured there was no right to refund the money paid by the assured to the Insurance Company and the Courts will not entertained either u/s 64 or u/s 65 of the Contract Act.’ On the similar point the Ld. Counsel for the Respondent has filed several judgments i.e. the Revision Petition between LICI Vs. Krishan Chander Sharma, reported in II (2007) CPJ 51 (NC), the case between Oriental Insurance Company Limited vs. Munimahesh Patel, reported in (2006) 7 SCC 655, where the Hon’ble Supreme Court held that ‘when there was suppression of a material fact relevant to the coverage of the policy, the insured/nominee is not entitled to any relief’. In a case between P.C. Chako & Another vs. Chairman, LICI & others, reported in III (2006) CPJ 78 (SC), wherein the Hon’ble Supreme Court held that ‘deliberate wrong answer having great bearing on contract of insurance, if discovered may lead to policy being vitiated in law.’ Having regard to the above-mentioned decision we are of the opinion that such repudiation cannot be regarded as deficiency in service on the part of the Respondent-LICI and it was correctly done as per settled law. As per the abovementioned settled law, we are also of the opinion that there is no infirmity in the judgment, which is under challenged before this Commission.



Going by the foregoing discussion, we deem it appropriate to pass the following order -

In view of our findings aforementioned and keeping in view the fact that the District Forum cannot be said to have acted without jurisdiction, we are of the opinion that no case has been made out for interference with the impugned judgment. The Appeal is accordingly dismissed on contest. However, in the facts and circumstances of the case, there shall be no order as to cost. The office is directed to send down the copy of this judgment to the Ld. Forum below and issue the same upon the recorded Advocates forthwith free of cost.



(S.Majumder) (A.K. Ray) (Justice. A. Chakrabarti)

MEMBER MEMBER PRESIDENT