Heard learned counsel for the appellants on V.C. None appears for the respondent.
2. Here is an appeal filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.
3. The factual matrix leading to the case of the complainant is that the complainant is the wife and nominee of deceased Dr. M.V.S.Rao, who has purchased the LIC policy called “Jeevan Mitra” with triple cover under the policy for sum assured of Rs.1,00,000/-. The policy commenced on 28.11.1999. Complainant alleged inter alia that the policy holder died on 23.3.2000 in M.K.C.G. Medical College and Hospital, Berhampur due to “endotoxic shook leading to A.R.D.S”. After the death the complainant filed the claim before the OPs but the OPs repudiated the claim on the reason that the policy holder has suppressed the material fact of pre-existing disease and for that they have called the policy in question within two years from the date of commencement of the policy. Complainant filed the protest petition but it was in vain. So complainant filed the complaint alleging deficiency of service on the part of the OPs.
4. OPs filed written version stating that the policy holder being a doctor has purchased the policy in question but while filling up of the proposal form has suppressed the material fact of his pre-existing disease. It is averred that just before the proposal form being filed, on 16.9.1999 the policy holder having suffered from disease went to Apollo Hospital, Chennai where he was being treated for the disease namely “Tubercular Lymphadenitis”. The policy holder has suppressed such material fact. The repudiation of the claim by the OPs cannot be said as illegal and improper. So they averred that there is no any deficiency of service on their part as they have acted u/s 45 of the Insurance Act, 1938.
5. Learned District Forum after hearing both sides passed the following impugned order:-
“xxx xxx xxx
I fully agreed with the succinct judgment passed by the learned Lady Member in the above case, found just and proper as she has applied her judicial mind after going through the relevant case record, citations as well as documents.
In the result, we direct the OPs to pay the full assured value with all benefits amounting to Rs.3,00,000/- besides a modest compensation of Rs.2,000/- together with cost of Rs.1,000/- to the complainant within one month of receipt of this order, failing it shall attract penal interest of 9% per annum till it is paid.”
6. Learned counsel for the appellants submitted that the learned District Forum has erred in law by not considering the written version and the materials produced by the OPs. According to him during investigation of the claim, they have found that on 16.9.1999, the policy holder had been to Apollo Hospital, Chennai and got the investigation for the “Tubercular Lymphadenitis” and collected the report of the concerned doctor from the hospital of Chennai. But in the proposal form at Para – 11, he has suppressed the same fact while purchasing the policy. Learned District Forum ought to have considered the documents with proper perspective so as to defeat the claim of the complainant.
7. Learned counsel for the appellants submitted that the learned District Forum has committed error in law by not following the cartena of decisions of the Hon’ble Supreme Court where it is held that if the complainant has suppressed the material fact, there is breach of contract and complainant is not entitled to any compensation under the policy in question. Further, he submitted that learned District Forum has not considered the clause of triple benefit of the policy because death due to accident only applies triple benefit but not otherwise. Learned District Forum ought to have only awarded the benefit of R.1,00,000/- sum assured but awarded the compensation beyond the sum assured which is not permissible under the policy. However, he submitted to set aside the impugned order by allowing the appeal.
8. Considered the submission of learned counsel for the appellants and perused the DFR including the impugned order.
9. It is admitted fact that Dr.M.V.S.Rao being the policy holder has purchased the policy on 28.11.1999 for sum assured of Rs.1,00,000/- on quarterly payment of premium of Rs.2,250/-. It is not in dispute that the policy holder died in the M.K.C.G.Medical College and Hospital, Berhampur due to “endotoxic shook leading to A.R.D.S”. No doubt the complainant is required to prove the deficiency of service on the part of the OPs.
10. Now issue is whether the insured has suppressed the pre-existing disease and making false statement. In the decision of Mithoolal Nayak vrs. Life Insurance Corporation of India AIR 1962 Supreme Court 814, it has been held by the Hon’ble Apex Court which is as follows:-
“ xxx xxx xxx
The three conditions for the application of the second part of Section 45 are
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 policy holder 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.”
11. The aforesaid decision has also been followed in the decision of P.C. Chacko and another vs. Chairman, Life Insurance Corporation of India and others passed in Civil Appeal No. 5322 of 2007. With due regard to the aforesaid decision of the Hon’ble Supreme Court, it is clear that the insurer has got onus to discharge by proving the suppression of material fact by the insured while filling up of the proposal form. In the instant case, since the OPs insurer have taken plea of pre-existing disease of the complainant has to discharge the onus to prove all the pre-conditions before repudiating the policy in question. The OPs have relied on the proposal form of the complainant. The proposal form at Clause – 11 states as follows:-
“xxx xxx xxx
Sl.No. 11
- During the last five years did you consult a Medical practitioner for any ailment requiring treatment for more than a week? No
- Have you ever been admitted to any hospital or Nursing Home for general check-up, observation, treatment or operation? No.
- Have you remained absent from place of work on ground of health during the last 5 years? No
- Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, kidney, brain or nervous systems? No.
- Are you suffering from or have you ever suffered from Diabetics, Tuberculosis, High Blood Pressure, Low Blood Pressure, cancer, Epilepsy, Hernia, Hydrocele, leprosy or any other disease? No.
- Do you have any bodily defect or deformity? No
- Do you ever have any accident or injury? No
- Do you use or have ever used (i) Alcoholic drink, (ii) Narcotics (iii) Any other drugs (iv) Tobacco in any form? No.
- What has been your usual state of Health? Good
- Have you ever received or at present availing/undergoing medical advice, treatment or tests in connection with Hepatitis “B” or an “AIDS” related condition ? No”
12. Learned counsel for the appellants drew attention of the Commission to Clause – A of Part 11 where question has been put whether the policy holder in last 5 years have consulted medicinal practitioner for any ailment requiring treatment for more than a week and the policy holder said “No”. Further the OPs have also relied on the letter of the complainant dated 30.3.2000 which shows that the policy holder had been to Apollo Hospital, Chennai for examination of the blood and such report is available. Further the appellants relied on the letter of Apollo Hospital stating that policy holder on 16.9.1999 met Dr. Narasimhan who has stated that Shri Rao has diagnosis of “Tubercular Lymphadenitis” but neither the report of Dr.Narasimhan nor the medical papers of the deceased are produced by the OPs. Mr C.Goviondarajan, Sr.Manager of the Hospital and Dr.R.Narasimhan, Senior Consultant have not been examined by the OPs. No affidavit is also filed. Apart from this, the report does not disclose that the policy holder was requiring the treatment for a week or more. That apart, there is no other document produced by the OPs to discharge their onus. On the other hand, OPs are found to have failed to prove by cogent evidence that Dr. M.V.S.Rao has suppressed the material fact of his pre-existing disease while filling up of the proposal form. Rather it is available from the complaint petition that before acceptance of the proposal he has been medially examined by the OPs but nothing was found.
13. In view of above, it is found that the OPs having failed to discharge the onus for suppression of material fact by the policy holder, complainant is entitled to the claim of compensation of his sum assured. With reference to the order of the learned District Forum, it is found that the learned District Forum awarded Rs.3,00,000/- but the reason is not given in the order itself. The policy has got triple benefit but the triple benefit only applies when there is accidental death but the concerned policy holder has died having suffered from disease but not from accident. Therefore, the impugned order of the learned District Forum should be modified to the extent that the OPs are to pay full assured amount of Rs.1,00,000/- and the modest compensation of Rs.2,000/- with litigation cost of Rs.1,000/-.
14. The appeal is disposed of accordingly. This order be complied within 45 days from today failing which same would carry 12% interest per annum from date of impugned order till payment is made.
DFR be sent back forthwith.
Supply free copy of this order to the respective parties.
