O R D E R
By Sri.C.T.Sabu, President
Complainant’s case is that her husband Sri.Zachariachan was a policy holder with the opposite parties. During the valid period of the policy her husband died due to Hepto Reneal Syndrome due to Cardio Respiratory Arrest. Being the nominee of the policy having the No.777178713 dated 20/8/2009 named ‘Jeevan Anand’. She lodged a claim to get the policy proceeds due to death of her husband before the 2nd opposite party. The claim was repudiated by the letter dated 5/1/2012 by the 2nd opposite party stating that complainant has no right of entitlement to get any amount since the complainant had concealed many material facts with regard to the health condition of her husband. Complainant alleged that before filling up and signing the proposal form a premedical checkup was done by a qualified doctor and certified the good condition of his health as proposed by the 2nd opposite party. The proposal form was filled up by the agent of the 2nd opposite party. If there are any errors or omissions committed by the agent, 2nd opposite party is responsible being the principal. Aggrieved by the above repudiation necessary complaints were given to Zonal Manager, LIC of India, South Zone. No remedial measures were undertaken. A rejection letter from Zonal office claim review committee dated 21/9/2012 was also received. In the above circumstances, it can be seen that there is deficiency in service and the opposite party has o right to repudiate the claim. As per the policy, complainant is entitled to get Rs.1,00,000/- with accrued bonus with 12% interest from the date of petition and court expenses allowing the petition.
2. Admitted the case. Issued notice to the opposite parties. Opposite parties appeared before the Commission and filed their objection. As stated, a thorough investigation was done by the opposite party and revealed that the life assured Zachariachan was under continuous treatment from 2007 for Diabetics Mellitus in Railway hospital, Ernakulam. Also found that he had a history Cirrhosis, Hypertension, Ascites and Oesophageal varices. Based on their report opposite party reiterates that it is sufficient to establish that the life assured was suffering from various illness and he had made consultation with medical practitioner which was known to him while making proposal for insurance on 19/8/2009 with the opposite party. It amounts to suppression of material facts. Insurance contracts are based on the principle of utmost good faith and therefore any such concealment makes the contract void abinitio. All other allegations are denied and opposite party is not at all liable to give any relief to the complainant. And the complaint may be dismissed with compensatory costs to the opposite parties.
3. Then the case posted for evidence. The points for consideration are the following :
1) Is there any deficiency in service on the part of opposite parties ?
2) If yes what are the reliefs and costs ?
4. Complainant and the opposite parties filed proof affidavits, documents, argument notes. The case was finally heard in detail. Complainant produced 5 documents that are marked as Exts.P1 to P5. Opposite parties also produced 7 documents which are marked as Exts.R1 to R7. Treatment records at Southern Railway Medical Department were marked as Ext.X1 series and treatment records at Jubilee Medical Mission Hospital were marked as Ext.X2 series.
5. On examination of proof affidavits, documents and argument notes of both parties, the Commission is very much convinced the points advanced by the complainant. One of the main point canvassed by the complainant is with regard to the S.45 of the Insurance Act, 1938. In the instant case the proposal was made on 19/8/2009 and the claim was made on 8/11/2011. As submitted correctly by the complainant, the claim was submitted clearly after two years. S.45 fairly and squarely applicable to the case.
6. The Insurance Laws (Amendment) Act. 2015 came into force on 26/12/2014. As per the new Act it was three years. Prior to 26/12/2014 it was only two years. It is true that 190th Law Commission had recommended for five years. Under the relevant S.45 of the Insurance Act a policy of insurance cannot be called in question by an insurer after the expiry of two years form the date on which it was effected on the ground that a statement made in the proposal of insurance or in any other document leading to the issue of the policy was inaccurate or false unless the following conditions are fulfilled.
a) The insurer should show that such statement was on a material matter or suppressed fact which it was material to disclose.
b) That it was fraudulently made by the policy holder
c) That the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
7. It was held by the Hon’ble Supreme Court in Mithoolal Nayak Vs. LIC of India (AIR 1962 SC 814) that after the expiry of a period of two years after the date on which a life insurance policy is effected such policy can be repudiated by the insurer on the ground that a statement made in the proposal for insurance or in other document leading to the issue of policy was inaccurate or false only if all the three conditions enumerated in the second part of S.45 are satisfied conjointly. Misstatement or suppression of fact will not be considered material unless it has a direct bearing on the risk undertaken by the insurer. The test is whether the insurer would have still issued the policy had he been aware of the said fact.
8. No repudiation of the policy to be permitted on the ground of fraud where the insured can prove that the suppression or misstatement of the material fact made was true to the best of knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement or suppression of material fact was within the knowledge of the insurer or his agent. A person who solicits and negotiates a contract of insurance should be deemed for the purpose of formation of the contract to be the Agent of insurers. Section 182 of the Indian Contract Act defines the words ‘Agent’ and ‘Principal’ An Agent is a person employed to do any act for another or to represent another in dealing with a third person. The person for whom such act is done or who is so represented is called the principal. In insurance industry the term Agent is ordinarily applied to a person engaged by the insurer to procure new business. The rule as to ‘agency’ is expressed in maxim qui facit alium, facit per se’ ie one who acts through others acts to himself. Therefore contracts entered into through an agent and obligations arising from acts done by an agent may be enforced in the same manner and will have the same legal consequences, as if the contracts have been entered into and the acts done by the principal himself. As submitted in the argument note the proposal was filled by the Agent of the opposite parties. This is a fact admitted by the opposite party. This Commission is consistently taking the stand as decided in Oriental Insurance Co. Ltd. Vs. Madhusuden Sharma (2006) 1 CPJ 494 that non-disclosure of controllable diseases is not concealment of facts. Disease like hypertension, diabetics are so common and are always controllable unless long treatment on hospitalization or undergoing operation etc. Take place the disease cannot be said so serious that its disclosure is necessary in proposal form. Hence repudiation on the ground that diabetics not disclosed is not proper and the complaint was allowed.
9. In the instant case a premedical checkup was done. If any adverse inference was there the insurance could not have been considered. This Commission is certain and with stronger reasons confirms that there is deficiency in service on the part of opposite parties. The documents submitted by the opposite parties such as Exts.R1 to R7 neither convinced this Commission nor support their pleadings to the effect that the complainant knew all these symptoms and concealed deliberately to make unjust enrichment. This Commission decides to give a right verdict in favour of the complainant appreciating the evidence and find the repudiation of the claim tantamount to serious deficiency in service.
10. Relief and Cost : We are inclined to allow the complaint and direct the opposite parties to pay Rs.1,00,000/- (Rupees One lakh only) with accrued bonus if any with 12% interest from the date of complaint and Rs.5,000/- (Rupees Five thousand only) towards costs within 30 days from the receipt of copy of this order to the complainant.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Commission this the 30th day of November 2020.
Sd/- Sd/- Sd/-
Sreeja.S Dr.K.Radhakrishnan Nair C.T.Sabu
Member Member President
Appendix
Complainant’s Exhibits
Ext.P1 Copy of Policy
Ext.P2 Copy of Claimant’s statement
Ext.P3Coply of letter dated 18/5/2012
Ext.P4Copy of letter dated 25/8/2012
Ext.P5 Postal cover
Opposite Parties Exhibits
Ext.R1Copy of Proposal form dtd. 19/8/09
Ext.R2 Copy of Medical Examiner’s confidential report
Ext.R3 Copy of Policy Bond with conditions
Ext.R4 Copy of Medical attendant’s certificate
Ext.R5 Copy of Certificate dtd.22/3/12
Ext.R6 Copy of im repudiation letter dtd. 5/4/12
Ext.X1 series - Treatment records at Southern Railway Medical Department
Ext.X2 series - Treatment records at Jubilee Medical Mission Hospital were marked as.
Id/-
President
