Delhi

StateCommission

FA/13/334

LIC OF INDIA - Complainant(s)

Versus

SUDESH - Opp.Party(s)

20 Mar 2018

ORDER

IN THE STATE COMMISSION : DELHI

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

 

Date of Decision: 20.03.2018

 

First Appeal No.334/2013

(Arising out of the order dated 11.02.2013 passed in Complaint Case No.934/2011 by the District Consumer Disputes Redressal Forum (East), Delhi)

 

 

Life Insurance Corporation of India,

Through its Manager (L&HPF),

Jeevan Prakash Building,

25, K.G. Marg, New Delhi - 110001

                                            …Appellant

 

 

Versus

 

Smt. Sudesh,

W/o Late Shri Charan Singh,

R/O 1141, Near Subzi Mandi,

Village & PO Alipur,

Delhi – 110036.

                                      ….Respondent

 

CORAM

Justice Veena Birbal, President

Ms. Salma Noor, Member

 

 

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

    

2. To be referred to the reporter or not?

 

Justice Veena Birbal, President

 

1. Aggrieved by the order dated 11.02.2013 passed by the District Consumer Disputes Redressal Forum (East) (in short, the “District Forum”) in CC No.934/2011, present appeal has been filed. By the impugned order, Ld. District Forum has allowed the complaint and directed the appellant/OP to settle the insurance claim of the respondent/complainant and pay her Rs.2,00,000/- within a period of 30 days of the receipt of the order failing which appellant/OP shall be liable to pay interest @ 9% for the period of delay.
2. Briefly the facts relevant for disposal of the present appeal are that respondent/complainant is widow of deceased Charanjit Singh who was working as Head Constable with Delhi Police. The deceased had taken a life insurance policy No.123121866 from appellant/OP during his life time with cover of Rs.2,00,000/- wherein the respondent/complainant was the nominee. Her husband had suffered heart attack and died on 28.11.2007. The respondent/complainant informed the appellant/OP about death of her husband and lodged a claim by submitting requisite documents. The claim was repudiated by the appellant/OP on the ground that the deceased/life assured was diagnosed to have been suffering from DM since 19.11.2003 with M. Boil with cellulites back before he proposed for the above policy for which he had consulted a doctor and taken treatment from hospital and was on medical leave on different days. It was alleged that he did not disclose the aforesaid facts in the proposal form though he had personal knowledge of the same and rather had given false answers. After repudiation of the claim, the respondent/complainant had moved an application before Ombudsman wherein also repudiation was upheld. Thereafter, she had filed a complaint before District Forum alleging deficiency in service on the part of the appellant/OP in repudiating the claim. The respondent/complainant sought directions against the appellant/OP to pay Rs.2,00,000/- to her i.e. the sum assured along with interest @ 24% per annum from the date of repudiation along with future and pendentelite interest. The respondent/complainant had also prayed for grant of Rs.25,000/- towards damages and Rs.25,000/- as compensation for mental and physical harassment and Rs.20,000/- as costs.
3. Appellant/OP opposed the complaint by filing written statement wherein it was stated that the claim was repudiating on the ground that the deceased life assured was diagnosed with DM since 19.11.2003 with M. Boil with cellulites back before he proposed for the policy.  It was alleged that he had also taken treatment for the ailments and remained on medical leave. It was alleged that the life assured had information about his ailment and had concealed the material information as such the claim was rightly repudiated.  
4. Rejoinder was filed by the respondent/complainant refuting the allegations made in the written statement and had reiterated the contents of the complaint case.
5. Both the parties filed evidence by way of affidavit. After hearing the parties, Ld. District Forum held that appellant/OP had not produced any evidence to substantiate that deceased life assured was ever hospitalized for any disease in the proximity of taking the policy. Ld. District Forum held that the respondent/complainant had provided a certificate from the employer of the deceased wherein it was stated that deceased had not availed any EL or HPL during the period from 28.09.2006 to 28.11.2007 and the said letter was supporting the claim of the respondent/complainant to the effect that deceased was leading a normal life as such the repudiation was unjustified.  Ld. District Forum allowed the complaint and directed the appellant/OP to pay insured amount of Rs.2,00,000/- to the respondent/complainant.
6. Aggrieved with the aforesaid order, the present appeal is filed.
7. Ld. Counsel for the appellant/OP has contended that finding of the District Forum that the deceased was not aware about the alleged ailments is contrary to material on record.  It is contended that deceased had deliberately given wrong declaration in the proposal form about his health and medical leave taken by him at the time of taking the policy.  It is contended that the deceased was suffering from Diabetes Mellitus since 19.11.2003 with M. Boil with Cellulites on back before he proposed for the aforesaid policy.  It is contended that the deceased had willfully and intentionally withheld the material facts and had given false information under clause 11 as well as false declaration in the proposal form in order to procure the policy by adopting unfair means.  It is contended that at the relevant time deceased was working in office of Deputy Commissioner of Police, Delhi Police and was below 45 years of age and was entitled for non-medical examination scheme for getting the policy being in special category as such no medical examination was conducted at the time of taking of the policy.  It is contended that due to concealment of material facts, there is a breach of clause 5 of the policy.
8. On the other hand, Ld. Counsel for the respondent/complainant has contended that the deceased was not suffering from ailments as are alleged.  It is contended that there is no concealment of material facts on his part as is alleged.  It is contended that the deceased had died due to heart attack and there was no concealment on his part as has been contended.  It is contended that at the time of taking the policy, the deceased was having good health and was not suffering from any ailment.  On 28.11.2007, deceased had died of natural death i.e. on account of heart attack.  It is contended that impugned order has been rightly passed.
9. We have considered the submissions made and gone through the material on record.
10. It is admitted that the deceased had taken insurance policy, namely, LIC’s Golden Jubilee Policy and total sum assured was Rs.2 lacs.  It is also not disputed that husband of respondent/complainant had died on 28.11.2007.  The cause of death was heart attack which is not disputed by appellant/OP.  The stand of the appellant/OP is that before taking the policy, the deceased was diagnosed to be suffering from Diabetes Mellitus since 19.11.2003 with M. Boil with Cellulites on back before filling up the proposal form and had taken treatment for the aforesaid disease and was also on medical leave on different dates and did not disclose the alleged ailment as well as leave taken for different period at the time of taking policy.  The appellant/OP has relied upon proposal form (Exb. CW-1/5), which the deceased had filled up before taking the policy.  The relevant portion of the same is reproduced as under:

“            

Q.No.	Question	Ans.
11(a)	During the last five years did you consult a Medical Practitioner for any ailment of requiring treatment for more than a week?	No
11(b)	Have you ever been admitted to any hospital or nursing home for general check up, observation, treatment or operation?	No.
11(c)	Have you remained absent from place of work on ground of health during the last five years?	No.
11(d)	Are you suffering from or have you suffered from ailment pertaining to Liver, stomach, Heart, Lungs, Kidney, Brain or Nervous system?	No.
11(e)	Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, high blood pressure, low blood pressure, Cancer, Epilepsy, Hernia, Hydrocel, Leprosy or any other disease?	No.
11(i)	What has been your casual state of health?	Good

               ”

 

11. Appellant/OP in its evidence has produced an application moved by the deceased stating therein that he had a ‘Boil’ on his back and was getting treatment from Govt. hospital at Alipur, Delhi.  He further informed that he had been advised rest from 29.11.2003 to 08.12.2003 i.e. for about 10 days. The aforesaid application is supported with medical certificate issued by Medical Officer, PHC, Delhi. Another application of the deceased is produced by the appellant/OP in the evidence by way of affidavit informing the department that he was advised rest from 29.11.03 to 04.01.04 on account of ‘Boil’ at the back. Application is supported with medical certificate issued by Medical Officer, PHC, Alipur, Delhi. The aforesaid medical certificates on record annexed with the leave applications also show that deceased had been suffering from diabetes mellitus with M. Boil with cellulites at back and he had also taken treatment for the said ailments.  There is another medical certificate issued by Medical Officer, PHC, Alipur, Delhi showing that deceased is suffering DM and is advised rest from 14.9.04 to 20.9.04 and then from 21.9.04 to 23.9.04.  The Chief Medical Officer has put his endorsement dated 29.4.09 certifying that deceased was a known diabetic patient and was under his treatment. The necessary documents in this regard were filed before the District Forum as Exb. OP –W/1B to OP W/1C(Colly).
12. Aforesaid material on record shows that the deceased had suppressed the material facts relating to his health while submitting the proposal for taking the policy. The aforesaid documents also show that the deceased was suffering from diabetes mellitus since 19.11.2003 with M. Boil with cellulites back for which he had consulted the doctor and had also taken treatment and also remained on medical leave for different periods. Ld. District Forum has not considered the aforesaid material on record. The aforesaid documents are also not challenged by respondent/complainant. By producing aforesaid documents, the onus is discharged by the appellant/OP that the deceased was suffering from diabetes mellitus since 19.11.2003 with M. Boil with cellulites back and was aware of the said fact and had intentionally concealed the said facts while filling up the proposal form.
13. Reading the material on record, it is clear that the deceased had concealed the material facts about his ailments and has also concealed about taking medical leave, from the appellant, though there was specific question in this regard in the proposal form.
14. Clause 5 of the terms and condition of insurance renders the policy void if the statement and declaration made in the policy are found untrue. The same is reproduced as under:

     “5. Forfeiture in certain events: In case of premium shall not be duly paid or in case any condition herein contained or endorsed hereon shall be contravened or in case it is found that any untrue or incorrect statement is contained in the proposal personal statement, declaration  and connected documents or any material information  is withheld, then and in every such case but subject to the provisions of Section 45 of the Insurance Act, 1938, wherever applicable this policy shall be void and all claims to any benefit in virtue hereon shall cease and determine and all moneys that have been paid in consequence hereof shall belong to the Corporation excepting always in so far as relief is provided in terms of the privileges herein contained or may be lawfully granted by the Corporation”.

 

 

15. The contracts of insurance are contracts of uberrima fides and every material fact is required to be disclosed. In United India Insurance Co. Ltd. v. M.K.J. Corpn., III (1996) CPJ 8 (SC), a two-Judge Bench of Hon’ble Supreme Court has observed:

 

“It is a fundamental principle of Insurance law that utmost good faith must be observed by the contracting parties. Good faith forbids either party from concealing (non-disclosure) what he privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. Just as the insured has a duty to disclose, ‘similarly, it is the duty of the insurers and their agents to disclose all material facts within their knowledge, since obligation of good faith applies to them equally with the assured’.”

 

16. In Satwant Kaur Sandhu v New India Assurance Company reported in IV (2009) CPJ 8 (SC), Hon’ble Supreme Court has observed that in a contract of insurance, the expression “material fact” is to be understood in general terms, to mean as any fact which would influence the mind of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate its liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith– uberrimae fidei. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. It has also been  emphasized  that  it  is  not  for  the  proposer  to   determine whether the information sought for is material for the purpose of the policy or not.
17. Relying upon aforesaid judgment and other decisions of Hon’ble Supreme Court on the subject, the National Commission in Kokilaben Narendrabhai Patel v. Life Insurance Corporation of India IV 2010 CPJ 86 (NC), Life Insurance Corporation of India v. Gulab Singh Chauhan III (2015) CPJ 194 (NC) & Monica Jain v. Life Insurance Corporation of India 2015 (3) CPR 355 (NC)  has held repudiation by insurer justified where insured had suppressed material facts/made misstatements about his health conditions in the proposal form.
18. In the present case, the documents discussed above clearly establish that the insured had concealed about his health condition in the proposal form.  The insured had failed to disclose that he was suffering from Diabetes Mellitus since 19.11.2003 with M. Boil with Cellulites on back while filling the proposal form though a specific question about diabetes was put to him.  There was also a specific question as to whether he remained absent from place of work on the ground of health during the last five years. the same was also answered in negative. There was clear suppression of material fact with regard to his health and about availing leave on account of ill health.  The Ld. District Forum while passing the impugned judgment has ignored the material evidence on record. In the facts and circumstances of the case, the appellant/OP was justified in repudiating the claim of insurance.
19. In view of the above discussion, we allow the appeal and set aside the impugned judgment passed by the Ld. District Forum and dismiss CC No. 934/2011.  There is no order as to cost.

20.         A copy of this order as per the statutory requirement be forwarded to the parties free of charge and also to the concerned District Forum. The record of the District Forum be sent forthwith. Thereafter the file be consigned to Record Room.

(Justice Veena Birbal)

President

 

 

(Salma Noor)

Member