Before the District Forum:Kurnool

Present :Sri K.V.H.Prasad, B.A., LL.B., President

And

Smt C.Preethi, M.A., LL.B., Member

Sri R.Ramachandra Reddy, B.Com., LL.B., Member

Monday 16^th day of February, 2004

C.D.No.35/2003

D.Leelavathi,

W/o Late D.Siva Sankar Reddy,

Chinna Malkapuram Village,

Dhone Mandal,

Kurnool District.                               . . . Complainant represented by his Counsel

                                                                Sri.B.Jangam Reddy, Advocate

-Vs-

1. Life Insurance Corporation of India,

Dhone Branch by its Manager,

Dhone,

Kurnool District.                      . . . Opposite party

1. Life Insurance Corporation of India,

Cuddappah Divisional,

Represented by its Divisional Manager,

Cuddapah.                     . . . Opposite party No.2 represented by his counsel

                                             Sri.B.Rama Subba Reddy, Advocate

O R DE R

1.       This Consumer Dispute case of the complainant is filed under Section 11 and 12 of the C.P. Act seeking a direction to the opposite parties for paying her an amount of Rs.5,00,000/- and paid premium of Rs.24,860/- and future interest and the said amounts and costs of the case.

2.       The brief facts of the complainant’s case are that D.Siva Sankar Reddy the husband of the complainant insured his life with the opposite parties under the policy No.652724712 for Rs.5,00,000/- dated 28-09-2001 by paying the first annual installment Rs.24,860/- which was accepted by the opposite parties after the due enquiry and after the medical test and accordingly the said policy certificate was issued.  The complainant’s husband died on 11-02-2002 all of a sudden when he came to G.G. Appolo Hospital to see his ailing father.  The doctors in the Hospital recorded that he died on account of Respiratory arrest (cause not known) on seeing the ailing father he died suddenly may be due to shock.  Subsequently, the father of the complainant’s husband was shifted to Appolo Hospital, Hyderabad and he also died on 30-04-2002.  As a nominee the complainant made a claim for the insured amount under the said policy by enclosing the original policy certificate and the relevant documents.  The opposite party No.2 repudiated the claim on 18-02-2003 as the insured with held or suppressed the information regarding the health without giving the further details.  As   this repudiation is illegal and without any basis and amounts to deficiency in service and that the complainant is entitled to the policy amount of Rs.5,00,000/- initially paid the insurance amount of Rs.24,860/- with future interest and costs of the case.

3.       The complainant besides filing a sworn affidavit in reiteration of the complaint averments relies on the document record which is marked as Ex.A1 to Ex.A4.

4.       In pursuance of the receipt of the notice of this case the opposite parties made their appearance and while the opposite party No.2 filed its objection statement and the opposite party No.1 filed its sworn affidavit reiterating the averments of opposite party No.2 objection statement.  The opposite party No.2 in its objection statement besides the questioning the justness and maintainability of the complaint on facts and law and he admits that the complainant’s husband insured his life for Rs.5,00,000/- with the opposite party No.1 on 20-09-2001 under yearly mode and the complainant was nominated under the said policy bearing No.652724712 and the complainant’s husband (Policy Holder) died on 11-02-2002 and this  opposite party No.2 remains all the allegations in the complaint.  The complainant’s     husband i.e., deceased D.Siva Shankar Reddy while insuring his life with the opposite party No.1 played fraud on the opposite parties corporation by deliberately suppressing the health condition.  The deceased policy holder died within 4months and 21 days from the date of the proposal i.e., 20-09-2001.  After the receipt of the claim forms from the complainant this opposite party No.2 ordered investigation as the claim is very early one in terms of the insurance act, 1938 the investigation was done thoroughly.  It revealed that the policy holder life assured Late D.Siva Sankar Reddy the complainant’s husband was unwell prior to the date of the proposal i.e., on 20-09-2001 for the insurance and undergone treatment from Dr.K.Nagi Reddy, Neuro Psychiatrist,. Assha Kiran, Clinic, Kurnool for the mild mental  retardation for the past 7 Years and also  from one Dr.M.Rama Subba Reddy, Kurnool for the same mild mental retardation.  To establish this ill-health history of the policy holder, the above said medical certificates obtained from the above concerned doctors was filed for their appreciation and they are marked as Ex.B1 and Ex.B2.  in the above circumstances the complainant is not entitled for any reliefs claimed in the complaint since there was non disclosure of the material facts by the deceased life assured policy holder as seen from the questions of para 11 (a), (b), (c), (d), (e) and (i) in the personal history which was enclosed to the Insurance Policy and the contract is valid “ABINITIO”.  And the opposite party No.2 further states that the complicated questions of law and facts are involved in this case and this Forum cannot enquire into this complaint under the summary jurisdiction.  Civil Court is the proper Forum for deciding the complicated questions and law hence this complaint as to be dismissed with costs.

5.       The sworn affidavit of the opposite party No.1 filed on 25-07-2003 not only stated in the objection statement averments of the opposite party No.2 but also alleges the communication of the repudiation letter dated 18-02-2003 and the opposite party No.1 relied on Ex.B1 certificate dated 31-01-2003 issued by a Doctor Sri.B.Nagi Reddy, M.D., (AIIMS), Delhi Neuro Psychiatrist, Aasha Kiran Clinic, Kurnool and the Ex.B2 certificate dated 05-02-2003 issued by the another Doctor Dr.Rama Subba Reddy, Civil Assistant Surgeon, Assistant Professor of Psychiatrist, government General Hospital, Kurnool for their appreciation.

6.       Hence, the point for consideration is whether the complainant is entitled to the reliefs sought for?

7.       The Ex.A1 is the death certificate of D.Siva Sankar Reddy issued by the Registrar of Births and Deaths, Municipal Corporation, Kurnool.  Ex.A4 is the attested Xerox copy of the policy No.652724712 of D.Siva Sankar Reddy.  The said facts are not denied by the opposite parties side.  Hence the Ex.A1 and Ex.A4 does not require any further appreciation.  The Ex.A3 is the certificate given by the Gowri Gopal Appolo Hospital as to the cause of the death of D.Siva Sankar Reddy, the complainant’s husband it given the particulars as to the name of the patient (OP. No.0413) i.e., D.Siva Sankar Reddy, S/o Subba Reddy, Chinna Malkapur, Dhone, Kurnool District, Male 28 Years.  Date of death 11-02-2002 dated 11.10 A.M. cause of death.  Respiratory arrest (under lying cause not known).   This fact also is not disputed or dis-approved with any contradictory evidence by the opposite parties side.  The Ex.A2 is the repudiation letter dated 18-02-2003 addressed by the opposite party No.2 to the complainant as the policy claim of the complainant is on the account of the complainants’ husband (deceased) having with held correct information regarding his health at the time of his Medical Examination effecting the assurance with the opposite parties and that in the personal History regarding health as per the proposal dated 20-09-2001 signed, the deceased assured on 20-09-2001 and at the time of his medical Examination he had given false answer to the questions for 11.(a, b, c, d, e and i) of the said policy and the opposite parties hold indisputable proof to show that about 7 Years before he proposed for the above policy, his mental condition is no good and he (deceased) has consulted a medical man and had taken treatment from a Hospital as he did not now ever disclosed these facts in his proposal, instead he gave false answers there in as stated above and interms of the said policy contract and declaration contained in the form of the proposal for assurance and interms of the said  acceptance letter  and the policy contract the opposite party No.2 repudiated the said claim and accordingly they were not liable for any payment  under the said policy and all moneys that have been paid in consequent there of belonging to them only and incase in complainant is not satisfied with this repudiation, she may appeal to the Zonal Manager, within 30 days from the date of the receipt of the said repudiation letter.

8.       The complainant in support of her case filed a Xerox copy of the “British Medical Dictionary” to English the meaning of the “RETARDATION” with reads as follows.  (1) Mental backwardness.  (2) A slowing of thought or action, executive retardation of a though a slowing of the action dictated by a thought.  Initial retardation of thought a slowing of a thought reading to an action psychomotor retardation, a slowing of thought and action, retardation of thought a slowing of the thought. It shows the opposite parties plea of mild mental retardation on the doctors certificates on which the opposite parties relied (Ex.B1 and Ex.B2) especially in Ex.B1 it was clearly mentioned that the complainants’ husband I.Q was around 80 to 90 and the said doctor used to give him mental tablets, who was under his treatment for the past 7 years.  Even from the opposite parties side filed a Xerox copy of the National trust for the welfare of the persons with autism, cerebral palsy, mental retardation and multiple disabilities Act No.44/1999.  In this Act also at Para (g) mental retardation means a condition of arrested or incomplete development of mind of a person which is specially characterized by the sub normality of intelligence.  As seen from the above material it clearly shows that eh mild mental retardation is not a decease and also nowhere in the personal history in which the para 11 of the proposal for the Insurance on own life obtained by the Insurance Company enunciated that the said mild mental retardation is an ailment with this there arise any suppression of decease by the complainant’s husband at  the time of the obtaining the policy.  Further the opposite parties took objection that the complicated questions of summary trial by referring to the decision reported in:

1. 2003 (1) ALT Page 41 CPA (NC) in this case which went in appeal to the Honourable Supreme Court, the Honourable Supreme Court has also held that the claim in the complaint and prayed for damages in the sum of Rs.15 Crores and for the additional sum of Rs.60,00,000/- for covering the cost of the travelling and other express incurred by the Appellant, it is obvious that very detailed evidence would have to be  led on both sides.  It is therefore in any event not an appropriate case could be heard and disposed off in summary position.
2. III (2003) CPJ Page 171 (NC) in this decision where the vehicle met with accident and wives of the complainant died who took 10 policies in the name of his wives within three months from the date of the accident and in the circumstances of this case looking to those complex questions of facts and law, it would not be proper to entertain the complaint.
3. III (2000) CPJ Page 331 wherein this decision, patient sundering from Heomophilia operated upon with wrong diagnosis, which cause excessive bleeding resulted the death of the patient, therein the absence of the expert medical evidence, the above diagnosis whether proper or not could not be ascertained where the complicated questions of facts and law involved, it could not be ad-judicable in summary jurisdiction.  As no complicated questions and voluminous evidence is there in this case for the adjudication of the matters in the controversy between the parties.  Further in support of their case the opposite parties   filed the following citations of the repudiation of the claim by the  LIC was  proper when there was suppression of the legal facts referring to the decision reported in:

1. III (2000) CPJ Page 363 Maharastra State holds that Fistula in ANO is one of the items contained in the written manual of the LIC  which empowered the LIC to refuse or to accept or to determine the date of the commencement of the Insurance Policy.  If that be so, the concealment of these facts by the complainant amounts to breach of faith and calls for the repudiations.
2. 1998 (III) CPJ Page 267 M.P. holds that the LIC has repudiated the claim of the complainant on the ground that the insured had with held the correct information about his health in the proposal form by answering in the negative to the questions that the insured ever suffered from Tuberculosis, where as in the instant case that the insured being treated as an outdoor patient by the District Tuberculosis Centre and his treatment was continued for 18 months and it was proved by the LIC by the Certificates issued by the said centre.
3. 1998 (II) CPJ Page 299 Punjab holds that the complainant’s wife who took the life policies died due to the advanced stage of cancer while taking treatment, this fact was concealed and the LIC collected certificates from the doctors who had treated the insured, as this  facts was suppressed the LIC rightly repudiated the claim.
4. I (1998) CPJ Page 2 (NC) holds that if the LIC was able to establish that the deceased suppressed facts which it was material to disclose such claims the LIC could repudiate.
5. I (2000) CPJ Page 253 A.P. holds that the insured suppressed in the original proposal that he being a chronic diabetic patient, this fact has been proved by the LIC as the insured suffering from diabetic several years prior to his death, he being admitted with end stage of renal failure ulcer in the left toe and suffering from obema in the left foot for the one and half year.  In this the repudiation of the claim justified.
6. 2003 (1) ALT Page 18 (NC) C.P.A. in paras 4 and 5 that the deceased has cancer before taking the policy which he concealed at the time of making proposal, enough material on record to show that the deceased has malignancy which was detected in 1988, this suppression of the information itself violated the terms of the contract, hence the impugned order of the state Commission was liable to be and accordingly set aside.
7. 1999 ALD (Con.) Page 79 holds that the insured died in Saudi Arabia and form the unofficial information secured for the Hospital at Saudi Arabia by the Company, it is revealed that the deceased was suffering from Mycardial infarction from 1980 onwards and this was not disclosed in the proposal. Subsequently submitted that the deceased died about 8 months after the insurance of policy in these circumstances the LIC is justified in repudiation the policy.
8. 2002 NCJ Page 108 (NC) holds that it is not a deficiency if the claim repudiates on the basis of the concealing material facts regarding illness and the Medical Leave having suffered heart illness 2 years prior to taking of the Insurance Policy.
9. AIR 2000 A.P. Page 350 holds that the deceased suppressed the factum of the suffering from the deceased i.e., Florosis much earlier to the policy and the claimant not adduced any valid material in support of his case as to the date of birth as shown in the policy, the claimant widow of the Insurer not entitled to the amount of Insurance Policy.

9.       But where as in all the above citations the circumstances discussed as to the suppression of the material facts have not relevancy and the applicability to the existing situations of the present case.

10.     The complainant in support of her case filed a decision which was reported in (2003) 3 MLJ 110 in the High Court of Judicature of Madras in ATHAYEE (died and others) -Vs- LIC, Divisional Officer, Coimbator represented by its Divisional Manager and another decided that the Insurance Act IV of 1938, Section 45 scope and applicability life Insurance Policy taken on 07-02-1983 for Rs.1,00,000/- and on 21-04-1983 remitted Rs.7,770/- as premium for one year policy.  The policy holder died on 08-12-1983 claim made by the legal representative to the policy amount repudiation of the contract by the Insurance Company allegation of the suppression of the material facts claim navigated even though there was suppression it is not a material matter to attract the provisions of the Act appeal by the claimants allowed.  In another decision of the Karnataka High Court 1992 (3) CCC Page 540 Paras 9 and 10 Miss.Prabhavathi Gangadhar Shanbag –Vs- LIC of India decided that “Insurance Act, 1938 Section 45 repudiation of claims challenged Life Insurance Policies plea of fraudulent suppression of material facts burden of proof rests heavily on the party alleging fraud from the answers given by the insured in his personal statement it cannot be inferred that he deliberately suppressed the facts of his health and thus committed fraud the corporation has also not produced any reliable material to show that the deceased was as a matter of fact suffering from a disease.  The corporation cannot escape its obligation under the policies merely stating that the deceased insured has suppressed material facts.  In the another Judgment reported in AIR 1995 Alahabad Page 299 Aqueela, Applicant          -Vs- Oriental Fire and General Insurance Company Limited Lucknow and another opposite parties it was decided that the Insurance Act IV of 1938 Section 39.  Insurance claim nominee under the policy entitle to receive the payments without obtaining succession certificate payment un-Fairley delayed by the Insurance Company, company saddled with costs.  In the another Judgment reported in AIR 2002 Supreme Court 2931 holds that the Consumer Protection Act, 1968 of 1986 Sections 17.21.13 complaint about negligence by the doctor involving complicated issues party need not be directed to approach the Civil Court Forum is competent    to decide complex issues plea that the trial by the Forum is summary not ground to direct party to the Civil Court.

11.     The State Consumer Disputes Redressal Commission, Madhya Pradesh in Ashok Kumar Shatia –Vs- Mandal Prabandha, Life Insurance Corporation of India reported in I (2000) CPJ Page 121 says the seriousness of ailment and its nexus with the cause of the death has to be established when it could not the basis of the repudiation is wrong and un justified and it amounts to deficiency of service making the LIC liable to make the payment along with interest.

12.     The State Consumer Disputes Redressal Commission, Punjab in the Life Insurance Corporation of India -Vs- Charanwith Kowl reported in 2001 CPJ Page 135 CPSCDP hold the policy holder cannot be held as suppressed the material information as to the State of his health in the answers of the proposal forms when there is no direct evidence to prove that the deceased suppressed his previous ill health.

13.     The National Consumer Disputes Redressal Commission, New Delhi in the LIC of India -Vs- Jasbheer Singh reported in 2003 (1) CPR Page 277 (NC) holds the knowledge of the insured of the deceased with which he was suffering at the time of taking the policy to hold him liable for the forfeiture or not revealing the said facts in the proposal form if the said deceased has direct nexus to the death.

14.     In this case the crux of the material is that whether the policy holder was faulty at the time of taking the policy had concealed any material fact as his health and the opposite parties accepting of the policy on the medical report of it to the policy holder by its panel doctor, as to the policy holder health and on  receipt of due premium and in terms thereon as per  records, as now properly repudiates the claim in the alleged cause of the death of the policy holder is having no direct or indirect axis and nexus to the treatment of mild mental retardation which the policy holder said to have concealed at the time of taking   of policy, wherein the said mild a mental retardation not enunciated in the personal history at para 11 of the proposal for Insurance on own life was a decease and where as the Ex.A3 reveals that the complainant’s husband died due to Cardio respiratory arrest (under lying cause not known).  The opposite parties has neither filed any cogent material to establish that the said mild mental retardation lead to Cardio Respiratory arrest which was the cause of the death, nor examined anybody connected to this case nor any doctor of the Government General Hospital, and filed any sworn affidavits of the said doctors who issued the certificates under Ex.B1 and Ex.B2 to prove their case that the complainant’s husband has mild mental retardation at the time of the proposal.  Hence there being no nexus between the actual cause of the demise and concealed cause of the past ill health, the repudiation by the opposite party No.2 of the complainant’s claim does not appear to be one drawn on the said lines.

15.     In the light of the above decisions and the cogent material placed on the record by the complainant and in the result of the above discussion the complainant is entitled to the policy amount of the deceased D.Siva Sankar Reddy on the contingency of his death and the opposite parties   by their avoiding conduct put the complainant to the mental agony and also driven her to seek the redressal in this Forum, the complainant is not only remaining entitled to the said policy amount of Rs.5,00,000/- as the nominee of the deceased policy holder with interest at 9% per annum from the date of demise of the policy holder, but also to Rs.10,000/- as compensation and Rs.5,000/- as costs.

16.     Therefore, the opposite parties are directed to pay the awarded amount to the complainant within a month of the receipt of this order.  In default the opposite parties are liable to pay the above said awarded amount with 12% interest from the date of the said default till the date of realization.

Dictated to the Stenographer, Typed to the Dictation corrected by us pronounced in the Open Court this the 16^th day of February, 2004.

MEMBER                                    PRESIDENT                                           MEMBER

APPENDIX OF EVIDENCE

Witnesses Examined

For the complainant:- Nil                                    For the opposite parties:- Nil

List of exhibits marked for the complainant:-

Ex.A1          Death Certificate dated 1503-2002 D.Siva Sankar Reddy issued by

                   Registrar of Birth and Death, Kurnool Municipal Corporation, Kurnool.

Ex.A2          Repudiation Letter dated 18-02-2003 addressed by opposite party to the complainant.

Ex.A3          Certificate given by Gowri Gopal Appolo Hospital as to the cause of death of D.Siva Sankar Reddy.

EX.A4         Attested Xerox copy of the policy No.652724712 of Sri.D.Siva Sankar Reddy.

List of exhibits marked for the opposite parties:-

Ex.B1                   Certificate dated 31-01-2003 given by Doctor K.Nagi Reddy M.D.,

                   (ALLMA DELHI) Neuro Psychiatrist, Kurnool.

Ex.B2                   Certificate dated 05-02-2003 given by Dr.M.Rama Subba Reddy,

                   Kurnool Civil Assistant Surgeon, Assistant Professor of Psychiatry

                   Government Hospital, Kurnool.

MEMBER                                    PRESIDENT                                           MEMBER