BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD

FA 319 of 2013   against CC 08 of 2012    on the file of the District Consumer Forum, Nalgonda

Between:

1) Gannu Pranathi W/o Late Venkat Reddy, Aged about 37 years,

    Occ: Household,

2) Gannu Sai Theja Reddy S/o Late Venkat Reddy, Age: 17 years,

    Occ: Student, being minor represented by his natural mother

    R/o Polumalla Village of Noothankal Mandal, Nalgonda District.

                                                            Appellants/Complainants.

AND

1) Bajaj Allianz Life Insurance Company Limited, H.No.1-6-60,

    Ground Floor, Srilekha Complex, Nallala Bhavi Road, Suryapet Town

    and Mandal, Nalgonda District.  Represented by its Branch Manager.

2) The Claims Review Committee, Bajaj Allianz Life Insurance

    Company Limited, 5^th Floor, G.E.Plaza, Airport Road, Yerawada,

    Pune-411 006, Maharashtra State.  Represented by its Authorized

    Signatory.

                                                     .. Respondents/Opposite Parties.

Counsel for the Appellants             :       Mr. K. Narasimha Chari.

Counsel for the Respondents         :       Mr. Karra Srinivas

QUORUM:  

HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT

AND

SRI  R. LAKSHMINARASIMHA RAO, HON’BLE MEMBER

Thursday, the Twenty Sixth  Day of June, TWO THOUSAND FOURTEEN

Oral Order :   ( As per Sri R. Lakshminarasimha Rao , Hon’ble Member )

1.                The first appellant’s husband, namely , Gannu Venkat Reddy  during his  lifetime  obtained life insurance policy bearing number  0184725534 for an assured sum of Rs.7,50,000/- for the period from  09.09.2010 to 09.09.2035  from the respondent-insurance company.  The first appellant’s husband  died on 16.09.2010 and after the death of her husband, the first appellant lodged claim with the respondent -insurance company.  The respondent has not paid the claim amount on the premise that the insured concealed the fact that he was suffering from carcinoma penis with bilateral inguinal nodes. Hence, the first appellants  filed the complaint  claiming the sum assured from the respondent -insurance company.

2.                The respondent -insurance company resisted the claim on the premise that the insured was suffering from “carcinoma penis with bilateral inguinal nodes ” prior to obtaining the insurance policy and he was treated in Bibi General Hospital and Cancer centre.  The insured had undergone surgery for carcinoma penis with bilateral inguinal nodes on 4.05.2009 at Bibi General Hospital and Cancer Centre, Hyderabad . . The investigation conducted by the respondent -insurance company disclosed that the insured suffered from cancer  and                                                                 he was treated for 21 days  at General Hospital and Cancer Cetnre, Hyderabad.  Thus, the respondent supported repudiation of the claim.    

3.                The first appellant has filed her affidavit and the documents,  Exs.A1 to A-8-.  On behalf of the respondent- insurance company, the manager of the first respondent insurance company filed his affidavit and  Dr. China Babu was examined as RW1 and  ExB1 to B7 had been marked.      

4.                The District Forum dismissed the complaint on the premise that the insured concealed the fact of his suffering from carcinoma penis with bilateral inguinal nodes”at the time of submitting the proposal. The District Forum held the appellants  entitled to refund of the premium paid by the first appellant’s husband to the respondent-insurance company.

5.              Feeling dissatisfied by the order of the District Forum, the complainant has filed appeal contending that the District Forum has not considered the evidence on record in correct perspective. The appellants contended that the   District Forum failed to take into consideration of the of evidence of RW.1, Dr. China Babu to the effect that as on the date of discharge of the deceased all his vital organs were in normal condition and there is no corroborative evidence on the part of the respondents that the insured suppressed the disease  and that at the time of submission of proposal  form the insured was not suffering from any ailment and since the application was filled at the instance of the agent of the respondents and hence  if there are any lapses in filling up the application, the respondents and its agent are liable for the same, there are no suppression of any  material facts made in the proposal and thus prayed for relief as to the  assured amount.  

6.              The learned counsel for the respondent -insurance company has filed written arguments.

7.              The point for consideration is whether the respondent is entitled to the benefits conferred by the insurance policy?.   

8.                The facts which have been admitted and which do not require much  discussion are that  on 31.08.2010 the respondent insurance company had issued Life Insurance Policy in favour of the first appellant’s  husband  for the  sum assured of Rs.7,50,000/- and the insured died on 16.09.2010.    The first appellant had lodged claim for payment of the sum assured under the policy. 

9.                The respondent -insurance company repudiated the claim on the premise that the insured suppressed the fact that he was suffering from “carcinoma penis with bilateral inguinal nodes ”.  The first appellant’s husband    submitted proposal on 31.08.2010  that he was not suffering from any disease. The contention of the first appellant is that her husband   was hale and healthy and the respondent-insurance company had not medically  examined him,  for he was healthy at the time of taking the insurance policy.

10               The Medical Record of the Bibi General Hospital and Cancer Centre, Hyderabad  would  establish the insured suffering from “carcinoma penis with bilateral inguinal nodes ”  and that  he had undergone surgery  on 02.05.2009 and he was discharged from the hospital on 18.05.2009.   In the discharge summary  it is noted that the insured was admitted in the hospital on 27.04.2009  with confirmed “carcinoma penis with bilateral inguinal nodes ”-.

11.              The learned counsel for the appellants  has contended that the respondent failed to prove that the deceased suppressed that she was suffering from cancer. He relied on the following decisions;

1. New India Assurance company Limited Vs. Tambireddy Subbaraghava Reddy, AIR 1961 AP 295
2. Krapa Vidyavathi and others Vs. Life Insurance Corporation of India and others, 2012 (2) ALD 479
3. Life Insurance Corporation of India Vs. Kalva Subhadramma, 2009 (3) ALD 790
4. Kulla Ammal (died) and others Vs. The Oriental Government Security Life Assurance Ltd, AIR 1954 Madras 636
5. Life Insurance Corporation of India Vs. Smt. G.M. Chenna Basamma, (1991) (1) SCC 357
6. LIC of India and others Vs.  Asha Goel (Smt) and another (2001) 2 SCC 160

12.              In Tambhi Reddi Subbaragahva Reddy (supra), the assignee of the  policy holder filed suit for payment of the sum assured on the life of his adoptive father who submitted proposal to the insurance company on 21.8.1947 to obtain policy on his life for a sum of Rs.20,000/-.  He was examined by two doctors on the panel of the insurance company. He paid premia regularly up till 1950. When owing to non payment of premium amount the policy was lapsed.  On 28.2.1950 the insured applied for revival of the life insurance policy by submitting declaration of good health and he died subsequently on 19.2.1952 and thereafter the assignee of the policy submitted claim which  was repudiated on the ground that the insured had given false and inaccurate answers to some of the questions in the proposal and in the personal statements made before the medical consultants of the insurance company that he had no previous ailments.

13.     The Court of Subordinate Judge, Nellore decreed the suit and in the appeal preferred by the Insurance company, the Hon’ble High Court held that two years after issuance of the Insurance policy, the Insurance company cannot avoid the policy on the ground of mis-statements or untrue answers unless the insurer is able to establish the statement was false and it was made suppressing the facts material to disclose and such statement was fraudulently made as also that the policy holder knew at the time of making the statement that it was false to his knowledge. 

14.              The High Court held : “death is a most natural event and it is uncertain as to the point at which it will happen. “ Every man must face the risk of death although various factors contribute to its happening sooner or later; the circumstances in which he is placed, habits, the mode of life, his age, occupation and a host of other circumstances.  Since the insured proceed on the calculation of the average duration of human life, based on a consideration of these and similar factors, it is  of the utmost importance that such personal details of the life insured ought to be revealed to; them as being likely to affect their calculations “

15.              Krap Viyavathi (Supra) is a case  where the question that fell to the consideration of the High Court was whether failure of the insured to mention his  hospitalization six years prior to  obtaining the  policy does amount to suppression of material fact. The High Court referring to the decision of Division Bench in “ LIC of India Vs. Bogadichandravatamma”, held that ‘ duty is cast on the insured to make true and complete disclosure of material facts which however does not extend  to the matter not within his knowledge.  It was held  “ though the insured made false statement that he was never hospitalized and did not suffer from any ill-health, it cannot be considered to be suppression of material fact in the circumstances where he submitted proposal six years after he was discharged from the hospital and after his being was cured of the ailments for which he underwent treatment at the hospital and in absence of evidence that he died of heart attack which was result of hypertension that he stated to have suffered. 

16.     In Kalva Subhadramma ( supra)  the insurance company repudiated the claim on the ground that the husband of the nominee withheld correct information as to his health at the time of taking out the policy and that he was suffering from diabetes for about four years prior to the policy and had been treated therefor.  The High Court held that the questionnaire was not explained to the insured so as to attribute concealment of material facts on his part.  The agent who filled up the proposal form and was examined by the insurance company stated that he could not read and explain all the columns in the proposal form to the insured. The High Court observed that in the light of the decision in Bogadi Chandravathamma’s case (surpa) the declaration by itself does nto discharge the onus resting on the insurance company. 

17.              In kulla Ammals ( supra ) , Madras High Court considered the requirement of proof for repudiation of liability of the insurance company on the ground of false statement made by the insured. The insured did not know English and he was onoy  able to sign his name in Tamil.  There was no evidence on record to show that the questions were explained and interpreted to the insured.  The insurance company did not examine any witnesses.  The High Court held that a person cannot be held bound in law by his signature to a document which he does not understand.         

18.              In Chenna Basamma ( supra ) the Hon’ble Supreme Court considered the obligation of the insured and insurance company on the premise of  an insurance contract. It was held that the LIC has failed to discharge the burden of proving its plea that the serious illness of the insured at the time of taking of the policy and knowingly suppressing the material information.  Further, the Apex court held that the doctors examined were not in a position to state anything about the identity of the patient. It was held in the 10^thparagraph of the judgment as under :

“ According to the evidence of three other doctors DW 5, DW 6 an DW 10, they had examined and treated a person bearing the name Gurupadayya or Gurupadaiah or Gurupadlappa. But none of them is in a position to say that it was the same person as the deceased husband of the present plaintiff.  They are not in a position to indicate anything whereby the identity of the patient an be proved or inferred. Th ere is no mention of the father’s name or residence of the patient and their depositions can be of evidentiary value only if the statement of Dr. Kumar DW 4 is accepted.  If the evidence of DW 4 is rejected as we have already done, the evidence of  other three doctors by themselves is not of any help.  As against this, the evidence of the Corporation’s doctors who had certified the good health of the insured or were negligent in performing their duty.  They had submitted confidential reports about the health  of the insured and were of the opinion that he was in good health.  We, therefore, agree with the High Court that the defendant Corporation  has failed to discharge the burden of proving the defence story about the serious illness of the insured at the time of taking out the insurance policies and knowingly suppressing the material information “.

19.              The insured was a matriculate and he was an employee and was working as Accounts Manager  with  JVR Travels.  He had the knowledge of the disease “carcinoma penis with bilateral inguinal nodes ” and the treatment he underwent therefor.  However, the insured had not disclosed in the proposal, of the particulars of disease he suffered and the treatment he underwent at Bibi Cancer Hospital. As such the aforementioned decisions have no application to the facts of the case.

20.              The doctor,RW1 deposed that the patient by name Venkat Reddy was admitted to the hospital on    27.04.2009 with the complaint of Penis Carcinoma and he operated upon the patient and at the time  of discharge, the patient’s condition was stable. He deposed:

“        I am working as Consultant Surgeon, Oncologist since 5 years in Bibi General Hospital and Cancer Centre.   On 25.04.2009 the patient by name Gannu Venkat Reddy , S/o Chandra Redy, R/o Polumalla village came to our hospital and registered his name in the hospital with the complaint that he had ulcer over penis.  He came to the hospital with biopsy report taken from some other hospital.  Accordingly, he admitted in our hospital on 27.04.2009 under Arogyasree Health Insurance Scheme.  On 2.5.2009 the patent was operated for carcinoma penis by partial amputation of + bilateral inguinal nodal dissection by me.  And he was discharge on 18.05.209.  Ex. B-1 is the hospital registration form.  Ex. B02 is the Discharge Summary”.

21.              The appellants except disputing the identity of the patient, had not e1icted anything from the evidence of the doctor. The insured had the knowledge of the disease and he had undergone treatment therefor. The decision to repudiate the claim was taken by the respondent-insurance company based on the medical record . The first appellant could not show how the order under appeal could be said to suffer from any infirmity.

22.              The Hon’ble Supreme Court in  ‘Satwant Kaur Sandhu vs New India Assurance Company Ltd ‘ IV(2009)CPJ 8(SC)  held that a contract of insurance is one of utmost good faith on the part of the assured and the Court observed:  “Thus it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for proposer to determine whether the information is sought for is material for the purpose of the policy or not”.

23.              In the aforementioned decision the  repudiation of the claim for  non-disclosure of the material facts was  held valid and sustainable. The facts of the aforementioned case and those of the present case are similar and as such the ratio laid down therein is  applicable to the facts of the case. In the case on hand the insured was suffering from “carcinoma penis with bilateral inguinal nodes ” and  he had not revealed the disease that  he was suffering from and the treatment he had undergone therefor at the time of obtaining the insurance policy.  The District Forum had awarded, in the circumstances, for  the return of the premium which is not questioned by the respondent-insurance company and as such the order as for as awarding the relief of the refund of the premium has become final. The appeal, as such is liable to be dismissed.

24.              In the result, the appeal is dismissed confirming the order of the District Forum. No order as to costs.  Time for compliance four weeks.

                                                                PRESIDENT

                                                                MEMBER

                                                                DATED : 26.06.2014.