BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION

AT HYDERABAD.



F.A. 1009/2006 against C.C. 54/2004, Dist. Forum, Warangal.



Between:



1) Life Insurance Corporation of India

Rep. by its Divisional Manager

Divisional Office, Balasamudram,

Hanumakonda, Warangal Dist.



2) M/s. Life Insurance Corporation of India

Rep. by its Branch Manager

Pocham Maidan, Warangal Branch. *** Appellants/

Opposite Parties.

And

1) Smt. Pindi Anuradha

W/o. Late P. Jithender Babu



2) Pindi Sandeep Kumar

S/o. Late P. Jithender Babu

Age: 14 years, Minor,

Rep. by his mother

Smt. P. Anuradha



3) Pindi Nishanth

S/o. Late P. Jithender Babu

Age: 10 years, Minor,

Rep. by his mother

Smt. P. Anuradha

All are R/o. 4-4-93

Kumarpalli, Hanumakonda

Warangal Dist. *** Respondents/

Complainants



Counsel for the Appellants: M/s. Srinivas Karra

Counsel for the Resps: M/s. V. Gourishankara Rao

HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT

SNT. M. SHREESHA, MEMBER

&

SRI K. SATYANAND, MEMBER



FRIDAY, THIS THE THIRD DAY OF JULY TWO THOUSAND NINE



Oral Order: (Per Hon’ble Justice D. Appa Rao, President)



*****





1) This is an appeal preferred by opposite party insurance company against the order of the Dist. Forum directing it pay Rs. 1 lakh covered under the policy together with interest and costs.









2) The case of the complainants in brief is that complainant No. 1 is the wife, complainant Nos. 2 & 3 are minor children of the deceased Late Jithender Babu who obtained an insurance policy from the appellants on 28.9.2001 for Rs. 1 lakh. The panel doctor of the insurance company examined him and opined that he was free from ailments. While so, on 13.7.2002 he died of cardiac arrest at Nizam’s Institute of Medical Sciences, Hyderabad (NIMS). She intimated the death along with necessary documents followed by legal notice for which the appellants sent repudiation letter alleging that the assured had suppressed the material facts that he was suffering from diabetes and hyper tension. In fact his death was sudden and he was not diabetic. The repudiation was unjust and illegal and therefore claimed Rs. 1 lakh under the terms of the policy with interest, compensation and costs.



3) The insurance company appellant resisted the case. It denied that the panel doctor has examined the assured. The policy was issued under non-medical scheme. The proposer himself signed the declaration mentioning that he was free from any ailment. He was suffering from diabetes and hypertension etc. for more than 10 years evident from the hospital record obtained from NIMS. He had taken sick leave from 16.4.2001 to 30.4.2001. He was treated by Dr. G. Laxminarayana of Kalyani Nursing Home, Warangal for diabetic foot with cellulites with Septicaemia and HTN. These ailments as well as the treatment taken were suppressed by him in the proposal form. He was taking treatment for these ailments for more than 3- 4 years prior to the proposal. The policy was taken to defraud the insured knowing full well that he was suffering from various ailments. Since the assured had suppressed the material facts they were not entitled to the amount covered under the policy and therefore prayed for dismissal of the complaint with costs.









4) The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to A10 marked, while the insurance company filed the affidavit evidence of higher grade assistant and filed Exs. B1 to B7 marked.



5) The Dist. Forum after considering the evidence placed on record, opined that the deceased died of sudden cardiac arrest. It has no nexus with the ailment diabetes and hypertension and therefore opined that the repudiation was unjust and therefore directed the appellant insurance company to pay Rs. 1 lakh with interest and costs.



6) Aggrieved by the said decision, the insurance company preferred this appeal contending that the Dist. Forum did not appreciate the facts or law in correct perspective. It ought to have seen that medical record Ex. B4 issued by NIMS and Ex. B7 case sheet maintained by Kalyani Nursing Home, Warangal would disclose that the policyholder was hypertensive and diabetic for more than 10 years and took treatment and the said fact was suppressed at the time when he submitted the proposal. Since the suppression is material it vitiates the policy and therefore prayed that the appeal be allowed, consequently dismiss the complaint.



7) The point that arises for consideration is whether the assured had suppressed the material facts pertaining to his health in the proposal form, consequently not entitled to the amount covered under the policy?



8) It is an undisputed fact that the assured died on 13.7.2002 while he had taken the policy on 28.9.2001 within one year from the date of commencement of the policy. By virtue of Section 45 of the Insurance Act since the death was within two years from the date of commencement of the policy, the insurance company had ordered investigation.









In LIC of India Vs. Smt. Asha Goel, AIR 2001 SC 549 the Supreme Court laid down three conditions for applicability of the second part of the Section 45 viz., (a) The statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policyholder; and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. Mere accuracy of falsity in respect of some recitals or items in the proposal is not sufficient. The Supreme Court reiterated the principle that the burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material must be disclosed. Otherwise, there is good ground for rescission of the contract. The duty to disclose material facts 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 in question.



9) In order to discharge the burden of proof, the insurance company filed Ex. B7 admission record issued by Dr. G. Laxminarayana of Kalyani Nursing Home, Hanumakonda. The record shows that the deceased was under his treatment for diabetic foot with cellulites with Septicaemia and HTN. He was admitted in the said hospital on 16.4.2001 and was discharged on 30.4.2001. In order to confirm the said fact, the appellant insurance company filed certificate of leave particulars obtained from the Municipal

Office where the assured had worked. It discloses that the deceased had applied medical leave for the above said period. He was remained in the hospital for more than 10 days. Later, within five months he took the policy and subsequently admitted in NIMS hospital from 2.7.2002 to 13.7.2002.



In the case sheet maintained by NIMS it was mentioned that he was having these ailments for the last three or fours years. In the proposal for insurance (Ex. B6) signed by the deceased assured on 28.9.2001 he had answered the following questions as under noted:

Questions : Answer

11 Personal History:

(a) During the last five years did you consult a 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 of work on grounds of health during the last five years?





(d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system?





(e) Are you suffering or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?





(f) Do you have any bodily defect or deformity?





(g) Did you ever have any accident or injury?





(h) Do you use or have you ever used:


Reply






i) Alcoholic drinks





ii) Narcotics





iii) Any other Drugs





iv) Tobacco in any form





(i) What has been your usual state of health?





(j) Have you ever received or at present ailing/ undergoing Medical advice, treatment or tests in connection with Hepatitis 'B' or an AIDS-related condition?

















10) Despite the fact that the appellant in its counter mentioned about the admission of the assured in the hospital taking treatment for diabetes, hypertension etc. the complainant did not in her affidavit evidence denied the said fact. There is no reason to doubt the medical record furnished by the insurance company nor it could be said that the insurance company has fabricated the entire record viz., record furnished from Kalyani Nursing Home, Hanumakonda and NIMS, Hyderabad. The Dist. Forum however allowed the complaint solely on the ground that there is no nexus between the cause of death and the ailment he had suffered. It did not consider the information regarding health as required under the aforementioned clauses 11(a) to (f).



11) The complainant did not file any evidence to show that diabetes and hypertension did not lead to cardiac arrest. In fact, when the assured was admitted in NIMS, Hyderabad he was having diabetic foot with cellulites with Septicaemia. It was mentioned that he was not fit for any type of anaesthesia because of his liver failure (Toxic Hepatitis) and Adult Respiratory Distress Syndrome (ARDS). The death was not due to cardiac arrest but due to various factors viz.., diabetic foot with cellulites with Septicaemia and multi organ failure. It cannot be said that there was no nexus between the cause of death and the ailment he had suffered. The fact remains that the insured had suppressed the material facts regarding his health. He took treatment before the date of proposal for insurance evidenced from Ex. B7 from Kalyani Nursing Home, Hanumakonda. Since the suppression is material, the repudiation which according to us was justified. Therefore the order of the Dist. Forum allowing the claim cannot be justified.

















12) In the result the appeal is allowed setting aside the order of the Dist. Forum, consequently the complaint is dismissed. However, in the circumstances of the case there shall be no order as to costs.







1) _______________________________

PRESIDENT





2) ________________________________

MEMBER





3) _________________________________

MEMBER

Dt. 03. 07. 2009.