05-12-14 –     1.   In the order impugned, the learned District Forum interalia held as follows:-

          “……The case of the Complainant that before acceptance of the offer of the life assured and issuance of policy, the O.Ps had subjected the life assured to level 3 + test has not been denied by the O.Ps. On the contrary, para 19 of the written version of the O.Ps and para 20 of the evidence on oath of the O.Ps indicate that the O.Ps have admitted to have subjected the life assured to some tests.  The O.Ps are alleging suppression of material facts regarding health of the policy assured and as such burden of proof lies on the O.Ps. In order to prove that the life assured was suffering from chronic diseases, the O.Ps have produced annexure ‘C’  series and annexure ‘E’ to the evidence on oath of the O.Ps which are copies of Doctor’s report and certificate of death. The O.Ps have not produced the evidence on oath of the Doctors or authorities issuing annexure ‘C’ and annexure ‘E’. In absence of any evidence of any Doctor supporting the case of the O.Ps, it appears to us that the case of O.Ps regarding life assured suffering from chronic diseases before entering into policy contract can not be accepted.  Apart from this, annexure ‘E’ (certificate of death of the life assured) to the evidence on oath of the O.Ps indicates that the cause of death of the life assured was Cardio Respiratory Arrest and there is no such case of the O.Ps that life assured was suffering from chronic Cardiac problem also……..”

2.       It was held that the repudiation of the claim was definitely a deficiency in service on the party of the Insurance Company.   The Insurance Company was directed to pay Rs. 5,00,000/- to the complainant along with interest @ 9% p.a. from the date of submission of claim form, within 60 days from the date of the order failing which, the complainant would become entitled to recover the amount with penal interest @ 12% p.a. till realization, Rs. 5,000/- by way of compensation and Rs. 2,000/- by way of litigation cost was also awarded.

3.       Mr. Pradeep Kumar Deomani learned counsel appearing for the Appellant/Insurance Company submitted as follows.  From the Medical papers supplied on behalf of the complainant itself, it appears that when the insured (deceased) Nasima Khatoon was admitted in the Hospital on 18.07.2009 the Doctors found and noted as known case of CKD(Chronic Kidney Disease) + HTN (Hypertension), Neuropalsy and IHD (Ischemic Heart Disease).  In the Death Certificate also such diseases were mentioned.  Nasima Khatoon proposed for the insurance policy on 29.03.2009.  The policy was issued to her with effect from 14.04.2009 and she died within four months from her proposal of insurance.  Therefore, the insured had fraudulently suppressed her pre-existing disease. The said medical papers were supplied on behalf of the Complainant and therefore there was no need to produce evidence on oath but the learned Lower Forum wrongly discarded the said medical papers on the ground that the Insurance Company did not produce evidence on oath of the Doctors or authorities issuing them. Further the cause of death will be always Cardio Respiratory arrest in such decease.  He relied on Section 45 of the Insurance Act and the judgment of the Hon’ble Supreme Court reported in the case of P.C. Chako -Vs.- LIC, dated 20.11.2007 passed in Civil Appeal No. 5322 of 2007 and of the Hon’ble Orissa High Court in the case of Sujata Agrawal -Vs.- LIC, dated 08.10.2010 passed in Writ Petition Civil No. 8799 of 2008.

4.       On the other hand, Mr. Dhananjay Kumar Pathak learned counsel appearing for the Complainant/Respondent submitted as follows. The insured (deceased) furnished her proposal form on 29.03.2009. On the same day, the Insurance Company issued a letter to her for undergoing level- 3 +   ECG tests by the Doctors of the Insurance Company.  Then the Insurance policy was issued on being fully satisfied that the insured was not suffering from any pre-existing disease. The Insurance Company could not deny and dispute the claim on the allegation of suppression of material fact on the part of the insured.   It is true that the said medical papers i.e. Annexures C and E were filed on behalf of the complainant, but the Learned Lower Forum rightly discarded them.   The Insurance Company could get it clarified through evidence as to what was meant by “known case of …….”.  The insured died due to cardiorespiratory arrest and not by Kidney disease.  The Insurance Company could not prove that there was fraudulent suppression of material fact on the part of the insured.  He relied on (1991)1 SCC 357 and  AIR 2001 SC 549.

Discussion

5.       The said letter dated 29.03.2009 issued by the Insurance Company to the insured reads as follows:-

Dear NASIMA KHATOON

Thank you for your interest in Reliance Life Insurance.

Your application has been assessed and there are some additional requirements that need to be complied with before a decision is taken on your Application for Life Insurance.

Kindly provide us the additional requirements listed below.

            LEVEL 3 – ECG/REQD

It may please be noted that the Life Insurance cover will be operative from the day on which a decision is taken on the basis of your compliance with the additional requirements.  Till such time, your Life risk cover is not in force with Reliance Life.  Hence, we request you to send the requirements within 30 days to avoid cancellation. 

Asha Sharma, Reliance Life Insurance Advisor will be happy to assist you in providing the details of the requirements.

You can also get in touch with the Sales Manager Ajay Kumar Sharma for immediate assistance in completing the above requirement.

If you have any queries kindly get in touch with the Branch office touch point –Customer care touch point- 022-30338191.

Kindly mention the Reference number in all your correspondence.

We thank you once again for your interest in Reliance Life and look forward to an early compliance of the requirement.”

6.       The details of level-3 test is as follows:-

Test - “Level 3 – MER, RUA, FBS, TOTAL Chol, GGT, HDL Chol, S Trigly, SGOT, SGPT, S Creatinine.” 

7.       In the judgment of Sujata Agrawal (Supra) relied by the Insurance Company the Hon’ble Orissa High Court interalia held as follows:-

          “In Annexure- 5 at page- 20 also on investigation by the Life Insurance Corporation, the hospital authority have supplied information in Form No. 3816 to the effect that the patient was a known case of Kidney disease (ESRD) on maintenance dialysis.  It is further mentioned in said form that history of the case was reported by the patient i.e. the policy holder.  During investigation by a Medical Officer “known case of ……….” is appended in the prescription or examination documents, generally if the disease has already been diagnosed or there is any report to that effect.”

8.       In our opinion, the said judgment of Sujata Agrawal (Supra) will not help the Insurance Company.  In the present case, on the one hand, on the basis of the phraseology- “known case of……..” the Insurance Company is seeking to draw a presumption that the insured had pre-existing disease; and on the other hand, there is a specific case of the Complainant, supported by the documents, that after submitting the proposal form, the insured was subjected to level- 3 + ECG tests and thereafter policy was issued.

9.       The insured was subjected to level-3 test + ECG tests before issuing the policy. On this aspect, the Insurance Company could not offer any satisfactory explanation except harping on the phraseology, “known case of ……….” written in the medical papers and also the certificate of death issued by the hospital in which, in the column of “disease/cause of death” the following was mentioned. 

“Disease/Cause of Death (Disease CKD, HTN, IHD, Asthma) cause of death – Cardiorespiratory arrest.”

10.     It also appears that the insured consulted one Doctor V.N. Tiwari on 11.07.2009.  The Doctor advised some tests and prescribed some medicines, without any diagnosis or indicating any doubt of the aforesaid diseases.  Thereafter, it appears that the insured was admitted in a Hospital on 18.07.2009.  From the Hospital records, it appears that on 20.07.2009 at about 6.30 A.M the condition of the insured suddenly started deteriorating and she died at about 7.30 A.M.

11.     In the case reported in (1991) 1 SCC 357, it was observed that the burden of proving that the insured had made false representation and suppressed material facts, is undoubtedly on the Life Insurance Corporation. In the present case, the appellant/Insurance Company has failed to discharge this burden.

12.     In the facts and circumstances, of this case, it will not be prudent for us to accept the contention of the Insurance Company that the insured had pre-existing disease which she suppressed deliberately at the time of taking the policy.

13.     However, we think it proper to modify the operative part of the impugned order,  to the following effect:- the Insurance Company will pay Rs. 5,00,000/- + Rs. 5,000/- as compensation + Rs. 2,000/- as litigation cost, total Rs. 5,07,000/- to the Complainant within 60 days of this order failing which, the Insurance Company will also be liable to pay simple interest @ 9% p.a. on the said amount from the date of this order till the date of payment/realization.

14.     With these observations and modification, this appeal stands disposed off.

          Issue free copy of this order to all concerned for information and needful.

Ranchi,    

Dated: 05.12.2014