Kerala

Idukki

CC/144/2018

Seena W/o Late Shaji Mathew - Complainant(s)

Versus

Branch Manager LIC Of India - Opp.Party(s)

26 Dec 2019

ORDER

DATE OF FILING : 16/07/18

IN THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI

Dated this the 26^th day of December 2019

Present :

SRI. S. GOPAKUMAR PRESIDENT

SMT.ASAMOL P. MEMBER

 

CC NO. 144/2018

Between

Complainant : Seena, W/o Late Shaji Mathew,

Kochupurackal House,

Thattakuzha P.O., Karimannoor,

Thodupuzha.

(By Adv: Sebastian K.Jose)

And

Opposite Party : LIC of India, Represented by Sr.Branch Manager,

LIC of India, Branch Office Pulimoottil Plaza,

P.B.No 26, Thodupuzha 685 584.

(By Adv: M.V.Francis)

 

O R D E R

SRI. S. GOPAKUMAR (PRESIDENT)

 

The case of the complainant is that,

 

Complainant's husband Mr. Shaji took a policy from LIC, Thodupuzha Branch under the Jeevan Anand. The date of commencement of the policy was on 17/06/11. The sum assured as 5 Lakhs premium paying term was 15 years. Yearly premium payable was Rs.42,318/-. In this policy complainant is the nominee. At the time of availing policy complainant's husband was in good health. Complainant's husband remitted premium to regularly in three years. He failed to remit the 4^th years premium. But he revived it by paying the premium of last year on 02/01/2015. Thereafter he paid premium continuously for the subsequent years 2015 to 2017.

 

Complainant further averred that, in the month of June 2016, while on a test conducted in MOSC, Kolenchery, it was diagnosed that the policy holder is

(Cont....2)

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suffering from cancer. For further treatment he was admitted in Amritha Hospital till his death on 27/07/17.

 

Thereafter the complainant lodged a claim before the opposite party in the month of October 2017. But the opposite party repudiated her claim on the reason that, at the time of revival of the policy, the policy holder suppressed material fact regarding his serious illness.

 

The complainant further averred that the cancer disease of her husband was find out only on 18/06/16 and before that he was healthy and having not undergone any treatment for any disease. Even though the complainant filed appeal before the higher authority of opposite party branch, they confirmed the decision of the opposite party.

 

Complainant further averred that, it is the duty of the opposite party insurance company to honour the claim of the complainant. Opposite party is liable to consider the health condition of the policy holder at the time of commencing policy. Hence the repudiation of the claim without valid reason amounts gross deficiency in service on the part of the opposite party.

 

Under the above circumstances complainant filed this petition seeking relief such as to direct the opposite party to pay the sum assured in the said policy along with cost and compensation.

 

Upon notice opposite party entered appearance and filed detailed reply version admitting the issuance of a policy discussed above. Opposite party admitted that the life assured had remitted premium without any default up to June 2013. The premium due on 17/06/14 was remitted by the policy holder was only on 02/01/15, ie after six months gap from due date for payment of premium. As per the policy condition, the lapsed policy can be revived on submission of proof of continued insurability to the satisfaction of the Corporation and the payment of arrears of premium with interest. In this case life assured has to submit the 'Declaration of Good Health' as a proof of continued insurability for reviving the policy, on 01/01/15. Thereafter the life assured remitted premium till 2017. But at the time of remitting the life assured was in treatment for his

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serious illness and it is clear from the medical reports produced by the complainant. This is clear suppression of material facts at the time of revival from the part of the life assured.

 

Opposite party further contented that the life assured has diagnosed with “Achalasia Cardia” on 27/10/2012 at MOSC, Medical College Hospital Kolenchery. This fact was not informed to LIC. By suppressing the fact he had revived the policy on 02/01/15 and remitted subsequent premium of three years. But the life assured fraudulently declared that he had not undergone any treatment since the date of proposal even though he was a known case of Achalasia Cardia Adv.POEM or Esophago-Myotomy. This is against the principle of “Good Faith” because insurance is a contract based on Good Faith. Here the life assured was willfully violated the contract of insurance. The decision of LIC to revive the policy on 02/01/15 had been based solely on the Declaration of Good Health produced by the life assured to LIC. If the life assured had disclosed the details of treatment at the time of revival, the LIC would have been revived the policy considering the additional risk, with increased premium rate depending on the findings in the endoscopy , radiology and histopathology reports given by the MOSC, MCH, Kolenchery. So the claim of the claimant was not repudiated by LIC on the basis that the life assured having been affected by cancer as alleged in the complaint. Instead it was repudiated due to the suppression of vital material facts regarding his serious illness. But as per the terms and conditions of the policy, LIC had intimated the claimant herein that she is eligible for a net amount of Rs.2,37,772/- as full and final settlement in the said policy. This amount is the paid up value of the policy prior to the revival and refund of revival amount and subsequent premium remitted less outstanding loan and interest. On 14/05/15, the life assured availed a loan of Rs.90,000/- from LIC by assigning the said policy.

 

The matter being so, there is no deficiency in service happened on the part of the opposite party as alleged in the complaint and complaint is liable to be dismissed.

 

Evidence adduced by the complainant by way of proof affidavit and documents. Complainant and one doctor Tomi Mathew were examined as PW1 and PW2 and Ext.P1 to Ext.P7 marked. Ext.P1 is the copy of Death Certificate,

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Ext.P2 is the copy of policy certificate, Ext.P3 is the copy of receipts, Ext.P4 is the copy of letter dated 30/11/17 of LIC, Ext.P5 is the copy of submission, Ext.P6 is the copy of letter from LIC dated 31/03/18, Ext.P7 is the copy of judgment of Honourable High court of Kerala , Ext.P8 is the Revisionary Bonus details.

 

From the opposite party side officer of opposite party examined as DW1. Ext.R1 to Ext.R11 were produced and marked. Ext.R1 is the copy of proposal form, Ext.R2 is the copy of policy, Ext.R3 is the copy of claim forms, Ext.R4 is the copy of medical attendant's certificate, Ext.R5 is the copy of endoscopy report dated 27/10/12, Ext.R6 is the copy of Barium swallow report dated 05/11/12, Ext.R7 is the copy of UGI report, Ext.R8 is the copy of Histopathology report dated 13/06/16, Ext.R9 is the Annexure 1 of insurance law, Ext.R10 is the copy of repudiation of Death Claims provisions of Amendment details, Ext.R11 is the copy of repudiation letter.

 

Heard both sides,

 

The point that arose for consideration is whether there is any deficiency in service from the part of opposite parties, and if so, for what relief the complainant is entitled to ?

 

The Point:- We had heard the counsel for both parties and had gone through the records. It is an admitted fact that the husband of the complainant availed a policy from opposite party in the year 2011 and remitted three years premium continuously. Thereafter after a break of 6 months he revived it in the year 2015, and continued payment of premium till 2017. The sum assured was 5 Lakhs and the date of maturity of the policy is 17/06/25. While so, the life assured was died on 27/07/17 at Amritha Hospital, Kochi due to cancer and related serious ailments. Complainant is the nominee of this policy holder. On the basis of the nominee status complainant lodged a claim to the opposite party in the month of October 2017. But the opposite party repudiated her claim on the reason that, based on the treatment records produced by the complainant, LIC realized the fact that, the life assured had suppressed vital material facts regarding his very serious illness he had from 2012 onwards even while taking the policy.

 

(Cont....5)

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The learned counsel for the complainant argued that they were not aware of any such disease till 2016. At the time of taking the policy and at the time of its revival the husband of the complainant was in good health and has not undergone any medical treatment. The cancer was detected only in the year 2016 and the repudiation of the claim by some baseless reason is against the principle of natural justice and it amounts to gross deficiency in service on the part of the opposite party.

 

The counsel further argued that the opposite party denied the claim on the reason that complainant had undergone various tests from 2012 onwards and found that he is a known case of 'Achalasia Cardia'. For establishing the version of complainant examined PW2, one medical expert, Dr.Tomi Mathew. In the box he deposed that “Achalasia Cardia is not leading to cancer”. It is actually an auto immune disease. Cancer can be detected only by biopsy test'. The learned counsel further argued that the husband of the complainant availed the policy in the year on 17/06/11 and the opposite party has no right to repudiate it on the ground of suppression of mental facts at the time of revival as observed by the Honourbale High Court of Kerala in WP ( C) 37515 of 2008.

 

On the other hand the learned counsel for the opposite party vehemently argued that the documents such as endoscopy report, Barium swallow report , UGI scopy, Histopathology report (Ext.R5 to Ext.R9) issued by the MOSC, MCH Kolenchery, clearly reveals that the life assured has under the treatment from 2012 onwards and it is suppressed while he reviving the policy in the year 2015. More over in the revival form, the life assured answered all the health relating questions positively, and he declared that he is having good health at the time of revival.

 

The learned counsel further argued that the principle of 'atmost good faith' not complied by the life assured. Accordingly to Section 45 of the Insurance Act 1938, suppression of material facts at the time of revival makes the revival null and void. Hence the opposite party settled the claim fully and finally for a sum of Rs.2,37,772/-. The amounts includes paid up value prior to revival + bonus + premium paid for revival and after revival, less Rs.90,000/- loan advanced and its interest Rs.1000/-. But the complainant rejected this proposal. Hence there is no

(Cont....6)

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question of any deficiency in service arises on the part of the opposite party.

 

On perusing the evidence on record, it is seen that the husband of the complainant availed the policy in the year 2011 and remitted policy till 2017. In the year 2014 he revived it within a gap of six months. But the opposite party rejected the death claim on the reason that the policy holder suppressed his serious ailment which is stated in Ext.R5 to Ext.R8 and it is against the terms and conditions of insurance act.

 

On going through the deposition of PW2, the medical expert, it is seen that the ailments as alleged by opposite party is not a cancer. To rebut his opinion opposite party has not produced any authority medical evidence to convince the Forum that 'Achalasia Cardia' is a serious ailment and it is a symptom of cancer without having sufficient materials to substantiate the plea of the opposite party, the Forum is not in a position to consider.

 

More over as observed by the Honourable High Court of Kerala in WP ( C) NO.37515/2008 of LIC Vs Union of India and 2 others, that the benefit of the policy should relate back to the cate of the original policy and not to the date of its revivals'. In this case the policy commenced on 17/06/11, the benefit of the insurance cover on the deceased should be constrained to be from the date and that the revival in the year 2015 and the submission of personal states regarding health at that time cannot override the liability of LIC under the policy.

 

In this case the Honourable High Court observed that, the view taken in this case was on the basis of a decision of a Honourable Supreme Court in Mithoolal Nayale Vs LIC (AIR 1962 Se 814) and LIC Vs Sosamma Dannam (ARI 1991 Kr.230). In this case, the Honourable Supreme Court observed that the liability of the insurance company will have to be traced to the original policy and not to the date of revival and not to the date of revival of the same.

 

In the light of above discussion and on the basis of the evidence on records of the case, we the Forum of a considered view that, the repudiation of the death claim of the complainant's husband is no way justifiable and hence the act of the

 

(Cont....7)

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opposite party in repudiating the claim on some flimsy ground amounts to deficiency in service.

 

Hence the complaint allowed. Opposite party is directed to pay the sum assured of Rs.5 Lakhs by deducting the loan amount and its interest to the complainant within one months, failing which this amount shall bear 12% interest from the date of default till its realization.

 

Pronounced in the Open Forum on this the 26^th day of December, 2019.

 

Sd/-

SRI. S. GOPAKUMAR (PRESIDENT)

Sd/-

SMT. ASAMOL P. (MEMBER)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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APPENDIX

 

Depositions :

On the side of the Complainant :

PW1 -Seena Shaji

PW2 -Dr. Tomi Mathew

On the side of the Opposite Party :

DW1 - Sreedevi S.Nair

Exhibits :

On the side of the Complainant :

Ext.P1 -The copy of Death Certificate

Ext.P2 -The copy of policy certificate

Ext.P3 -The copy of receipts

Ext.P4 -The copy of letter dated 30/11/17 of LIC

Ext.P5 -The copy of submission

Ext.P6 -The copy of letter from LIC dated 31/03/18

Ext.P7 -The copy of judgment of Honourable High court of Kerala

Ext.P8 -The Revisionary Bonus details.

On the side of the Opposite Party :

Ext.R1 - The copy of proposal form

Ext.R2 - The copy of policy

Ext.R3 - The copy of claim forms

Ext.R4 - The copy of medical attendant's certificate

Ext.R5 - The copy of endoscopy report dated 27/10/12

Ext.R6 - The copy of Barium swallow report dated 05/11/12

Ext.R7 - The copy of UGI report

Ext.R8 - The copy of Histopathology report dated 13/06/16

Ext.R9 - The Annexure 1 of insurance law

Ext.R10 - The copy of repudiation of Death Claims provisions of

Amendment details

Ext.R11 - The copy of repudiation letter.

 

Forwarded by Order,

 

SENIOR SUPERINTENDENT