Delhi

StateCommission

A/12/173

PANKAJ CHETAN & ANR. - Complainant(s)

Versus

LIC OF INDIA - Opp.Party(s)

28 Nov 2016

ORDER

IN THE STATE COMMISSION: DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

                                                             Date of Decision:28.11.2016

First Appeal No. 173/2012

(Arising out of the order dated 24.01.2012 passed in Complaint Case No. 212/2008 by the District Consumer Disputes Redressal Forum(North) Tis Hazari Delhi)

In the matter of:

1. Sh. PankajChetan

2586/10 ChunaMandi

Paharganj New Delhi-110055

 

2. Ms. AsthaChetan

2586/10 ChunaMandi

Paharganj New Delhi-110055                        .........Appellants

 

Versus

 

Life Insurance Corporation of India

Branch No. 12 C, 3909-3912

1 Duffrien Bridge

Mori Gate Delhi-110006                                    ..........Respondent

                                                                  

CORAM

N P KAUSHIK                         -                  Member (Judicial)

 

1.         Whether reporters of local newspaper be allowed to see the judgment?                   Yes

2.         To be referred to the reporter or not?                                                                  Yes

 

N P KAUSHIK – MEMBER (JUDICIAL)

 

JUDGEMENT

1.          Present appeal is directed against the orders dated 24.01.2012 passed by the Ld. District Forum (North) Tis Hazari Delhi. Vide impugned orders, the complaint filed by the complainant Sh. PankajChetan and Ms. AsthaChetan was dismissed.
2.         Ms. Uma Chetan admittedly had taken a life insurance policy from LIC of India (in short the OP) on 21.01.1996.  She died on 15.07.1998. Insurance claim filed by her was repudiated by the OP vide letter dated 26.04.2004 on the grounds that the insured had undergone certain pathological tests during the period from December 1995 to February 1996. The said tests were indicative of serious health problems the insured was suffering from. She did not disclose those tests in the proposal form and gave false answers. No proposal form was ever served upon her as per contention of the complainant. Zonal manager of the OP was requested to reconsider the claim. Claim review committed upheld the repudiation. No copy of the proposal form was again supplied. An appeal preferred to Insurance Ombudsman on 06.07.2005 was decided on 19.07.2007. Repudiation was upheld on the grounds of non-declaration or concealment.
3.         Defence raised by the OP in the District Forum was that during the period from December 1995 to February 1996, certain pathological tests were conducted and the insured was hospitalized. She was diagnosed as a case of pleural effusion since February 1996. She had a past history of pulmonary koch since 1978.
4.         Plea raised by the complainant was that she came to know of her disease first only in March 1997. Policy was taken in January 1996. She was thus not guilty of concealment of material facts. She died of lung cancer. On the contrary, contention of the OP was that the medical record produced by the complainant showed that the assured was suffering from tuberculosis. In the proposal form she had disclosed that she was not suffering from tuberculosis. It was concealment of the fact.
5.         Ombudsman upheld repudiation on the grounds that the insured was diagnosed as a case of pulmonary koch in 1978 on the basis of the x-ray report. This material information was suppressed by her. In 1985 she again suffered from breathlessness. In 1988, she had breathlessness on exertion for a period of 4 to 5 months.  In December 1995 she suffered pain in the right side of chest. Ld. District Forum observed that it was clear that in the year 1978, she was diagnosed as a patient of pulmonary tuberculosis. Ld. District Forum also observed that the proposal form was placed before Ombudsman who referred the same in his orders. Ld. District Forum thus further observed that the extracts of proposal form as reproduced in the repudiation letter dated 26.04.2004 were genuine. Ld. District Forum observed that disease relating to lungs increased during the period from December 1995 to February 1996. Observation of the Ld. District Forum in this behalf are reproduced below:

“On the basis of medical records it is clear that insured was under treatment and was having lung related problem in December, 1995 to February, 1996. Therefore, we come to the conclusion that knowing well that she was suffering from lung related disease and remained under treatment right from 1978 intermittently upto the date of the policy, she did not disclose to the insurer that she had suffered from tuberculosis or any lung related disease and it is concealment of material fact. The relationship of the insured and insurer is of judicious relationship in which insured is required to act with utmost honesty about facts of his/her health.”

 

6.         I have heard the arguments addressed by the Ld. Counsel for the Appellant Sh. Prem Kumar Singh Advocate and Counsel for the Respondent Sh. S.N.Shukla Advocate.
7.         Letter of repudiation dated 26.04.2004 is reproduced below:

“With reference to your claim under the above policy on the life of your deceased wife Late Smt. Uma Chetan, we have to inform you that we have decided to repudiate all liability under the policy on account of the deceased having withheld material information regarding her health at the time of effecting the assurance with us.

In this connection we have to inform you that in the Proposal for Assurance signed by the deceased assured, at the time of taking insurance she had answered the following questions as under noted:

 

Q. No.
	During the last five years did you consult a Medical Practitioner for any ailment or requiring treatment for more than a week?
	Have you ever been admitted to any hospital or nursing home for general checkup, observation, treatment or operation?
	Are you suffering from or have you ever suffered from ailment pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System?
	Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other Disease?
	What has been your usual state of heath?

 

We may, however, state that all these answers were false as we hold indisputable proof to show that life assured had undergone certain pathological tests during Dec. 95 to Feb. 96, which were indicative of serious health problems the life assured was suffering from, particularly of Pleural Effusion with marked deterioration during the same period. She did not however disclose these facts in her proposal form. Instead she gave false answers herein as stated above and proposed for insurance on her own life.

It is therefore evident that she had made deliberate mis-statement and withheld material information from us regarding her health at time of effecting the assurance and hence in terms of the policy contract and declarations contained in the form of proposal for assurance, we hereby repudiate the claim and accordingly we are not liable for any payment under the above policy and all moneys that have been paid in consequence thereof belong to us.

For your information we are enclosing herewith copies of the proposal referred to above.

We also enclose herewith out leaflet styled “Why is a Life Insurance Claim repudiated” which leaflet is self-explanatory.

In case you are not satisfied with the above decision and feel that we have not considered any particular facts and circumstances in support of your claims, your may send your representation within a month for re-consideration of your claim to our Zonal Office at the following address.”

 

8.         A careful perusal of the abovesaid letter shows that the OP alleged that the deceased concealed the ‘material information’ regarding her health. There are five questions answered by the deceased. What was the ‘material information’ has not been disclosed. Be that as it may, the second ground of repudiation is that the deceased had undergone certain pathological tests during the period from December 1995 to December 1996 indicative of serious health problems the deceased was suffering from,particularly of Pleural Effusion with marked deterioration.These facts were not disclosed in the proposal form.
9.         Counsels present have taken me through the whole of medical record. The first such record pertains to V.P. Patel Chest Institute, University of Delhi which is dated 24.02.1997. Its perusal shows that the patient had disclosed the term of pulmonary koch suffered by her in the year 1978. Besides this, she had disclosed her breathlessness in 1985 and 1988. In December 1995 she had pain in the right side of chest which increased on bending. There was no such pain on deep respiration or coughing. In April 1996, on a complaint of pain in the right side of chest, she had undergone chest x-ray. Bilateral nodular shadows were seen. Aforesaid record shows that the first pathological test was conducted in April 1996 which culminated into lung cancer in March 1997. There is no document on record showing any pathological test conducted prior to April 1996 and showing any lung issue.
10.  Ld. District Forum observed that the problem of pulmonary koch diagnosed in 1978 culminated into lung cancer in the year 1997. The finding is not based on any medical test. The test of tuberculosis is clearly different from the disease of lung cancer. There is no opinion of doctors that the disease of lung cancer discovered in February/March 1997 had its origin in the disease of ‘pulmonary koch’ discovered in the year 1978. On the contrary, the medical papers dated 27.03.1997 relating to the Breach Candy Hospital Mumbai reads as under:

“CXR-showed nodular shadows both lung field c increased over 1½ yrs. (December 1995-February 1996). Developed Rt plural effusion in February 1996 investigated.”

11. Its perusal shows that the deceased declared right pleural effusion in February 1996. Nodular shadows increased over the period of one and a half years. Policy was taken on 21.01.1996. The abovesaid observation of Breach Candy Hospital Mumbai dated 27.03.1997 is based on guess made by the doctors and the history given by the patient.
12. In the absence of any medical theory relating to the nexus between the diseases of tuberculosis and lung cancer, we cannot say that it was the‘pulmonary koch’ disease surfacing in 1978 culminated into lung cancer. Ld. District Forum thus fell in grave error in making such observations. There is no medical record to support the contention that on the date of booking of the policy i.e. 21.01.1996, the deceased had the knowledge that she was suffering from any lung problem.
13.  The disease of ‘pulmonary koch’ suffered in the year 1978 had lost significanceas the deceased remained healthy for a pretty good time thereafter.  Concealment of the said disease of ‘pulmonary koch’, therefore, does not amount to concealment of material information. At the cost of repudiation, it may be mentioned here that the OP did not indicate as to what was the ‘material information’ in reply to the 5 questions referred to above and mentioned in the proposal form by the deceased. Proposal form despite repeated requests and orders did not see the light of the day. The burden of proof clearly lies on the insurer to show that the insured gave false information.
14.  In view of the reasons given above, I am of the considered opinion that the Ld. District Forum fell in error in holding that the OP rightly repudiated the claim. Appeal is, allowed. Orders dated 24.12.2012 passed by the Ld. District Forum are set aside. Complaint is allowed and the OP is directed to pay to the complainant as under:
1. The amount of Rs. 5,00,000/- i.e. the sum assured alongwith interest @ 8% p.a. from the date of repudiation of claim i.e. 26.04.2004 till the date of its realization.
2. To pay to the complainants’ compensation for harassment inconvenience and mental agony to the tune of Rs. 1,00,000/-.
3. Litigation charges to the tune of Rs. 50,000/-.

 

The abovesaid amounts shall be paid by the OP to the complainants within a period of 60 days from today failing which the interest @ 18% p.a. shall be leviable on the amount accruing after the expiry of period of 60 days.

15. Copy of the orders be made available to the parties free of costs as per rules and thereafter the file be consigned to Records.
16.   FDR, if any, deposited by the appellant be released as per rules.

(N P KAUSHIK)
MEMBER (JUDICIAL)