This complaint coming up before us for hearing on 15-04-14                                in the presence of Sri P.V. Ramana, advocate for complainant and                                                Sri G. Erukala Reddy, advocate for opposite party, upon perusing the material on record and having stood over till this day for consideration this Forum made the following:-

O R D E R

Per Sri A. Hazarath Rao,  President:-        The complainant filed this complaint under section 12 of the Consumer Protection Act seeking insured amount of Rs.8,00,000/-; Rs.50,000/- towards mental agony; Rs.50,000/- towards compensation and Rs.5,000/- towards legal expenses.

2.   In brief the averments of the complaint are these:

          One M. Lakshmi wife of Venkata Ramaiah obtained life insurance policy on 23-04-12 for Rs.8,00,000/- which covered a period of 20 years.   The mode of premium is once in a year for two years.   The insured paid Rs.2,00,000/- on 24-03-12. The insured died on  25-05-12 due to cardiac arrest.   The complainant being nominee of the insurance policy submitted relevant documents and the claim papers. The complainant on 31-12-12 received repudiation letter.   The opposite party in the said letter mentioned that the claim was repudiated due to misrepresentation of material facts.  The complainant gave a written representation on 10-01-13 that the insured was hale and healthy while taking policy and there was no concealment of any material facts.   The opposite party again gave reply reiterating the reasons mentioned earlier.   The repudiation of claim by the opposite party is unjust and amounted to deficiency of service.   The complaint therefore be allowed.

3.   The opposite party repudiated the claim as the insured suppressed material facts i.e., about undergoing medical treatment prior to obtaining policy.  The opposite party covered the risk for complainant’s mother solely on the basis of facts mentioned in the proposal form.   The subject life insurance policy was issued on the principles of utmost good faith.  The deceased insured was suffering from carcinoma of antral region stomach since 24-11-11.   The complainant himself admitted in his letter dated                 10-01-13 issued to claim review committee that the deceased insured was suffering from the above said ailment.   The insured was under solemn obligation to make a true and full disclosure of the information on subject which is within her knowledge.   After issue of policy the insured did not survive for more than two months.   The complaint is ill conceived.   The complainant filed this complaint with a malafide intention to have wrongful gain.

4.  Exs.A-1 to A-5 and Exs.B-1 to B-10 were marked on behalf of the complainant and opposite party. 

5.   Now the points that arose for consideration in this complaint are:

          1.  Whether the opposite party repudiated complainant’s  claim                             unjustly and if so amounted to deficiency of service?

          2.  Whether the complainant is entitled to compensation and if                              so to what amount?

          3.  To what relief?

6.  Admitted facts in this case are these:

a. The deceased insured obtained subject insurance policy for Rs.8,00,000/- on 23-04-12 from the opposite party.

b. The deceased insured nominated the complainant as her      nominee in the subject insurance policy.

c. The insured died on 25-05-12 (Ex.A-4) in M/s. Sri Lakshmi Sai     Nursing Home, Macherla (Ex.A-5).

d. The opposite party repudiated the claim on 31-12-12                     (Ex.A-1 and A-3).

e.  The complainant addressed a letter on 10-01-13 to Claims Review Committee (Ex.A-2).

7.   POINT No.1:-    In Shnyni Valsan Pombally vs. State Bank of India & another 2014 (1) CPJ 387 (NC) held that it is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith – Uberrimae fidei, applicable to both parties. The rule of non disclosure of material facts vitiating a policy still holds the field.  The bargaining position of the parties in a contract of insurance is unequal.  The insured knows all the facts, the insurer is unaware anything which may be material to the risk. Very often it is the insured who is the sole person who has this knowledge.  The insurer may not even have the means to find out the facts which would materially affect the risk.  The law therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable enquiries.   A contract of insurance therefore can be repudiated for non disclosure of material facts. 

8.      In Satwant Kaur Sandhu vs. New India Assurance Company 2009 (4) CPJ 8 (SC) regarding the expression material fact it was held

“It has to be understood in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk.   Any fact, which goes to the root of the contract of insurance and has a bearing on the risk involved, would be “material” and 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 their 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”.         

9.  In Life Insurance Corporation of India and others vs. Nita Bharadwaj 2014 (1) CPJ 409 (NC)  it was held that it is immaterial whether cause of death had any nexus or not with the disease suffered and suppressed by the insured. 

10.   Now this Forum has to see whether the documents filed by the opposite parties are sufficient to prove that the deceased insured suppressed material facts regarding her ailments.  A negative aspect cannot be proved by adducing positive evidence.   Burden is therefore on insurance companies to prove or establish that an insured suppressed some ailment with which she or he was suffering prior to taking policy and obtained insurance policy with a malafide intention as rightly contended by the learned counsel for the complainant.

11.  In this case the insured died on 25-05-12 after taking the questioned policy on 23-04-12.   The opposite party did not file affidavit of that doctor with whom the insured said to have been taken treatment.  The learned counsel for the opposite party took time to file affidavit of that doctor with whom the insured said to have taken treatment.  But failed to do so. 

12.    The learned counsel for the opposite parties contended that affidavit of concerned doctor need not be filed and it is not a ground to allow the claim and relied on the decision reported in the Divisional Manager, LIC of India and others vs. Smt Anupama and others decided by the National Consumer Disputes Redressal Commission on 17-04-12 in R.P.Nos.3794-3796 of 2007.   In the above decision, the National consumer Disputes Redressal Commission followed the decision LIC of India Vs. Krishan Chander Sharma – II(2007) CPJ 53(NC).   

13.   The National Consumer Disputes Redressal Commission  in LIC of India Vs. Krishan Chander Sharma – II(2007) CPJ 53(NC) has ruled that if there is other credible evidence to prove the fact of a pre-existing disease, mere absence of an affidavit of the concerned treating doctor is not an adequate reason to reject the proof.

14.  In Divisional Manager, LIC of India and others vs. Smt Anupama and others decided by the National Consumer Disputes Redressal Commission on 17-04-12 in R.P.Nos.3794-3796 of 2007 it was held

 “The authenticity of the Hospital documents was proved by the Record Keeper of Apollo Hospitals before the Fora below.  The insuree had not disclosed these facts in Column No.4 of Declaration of Good Health and had also replied in the negative on the question whether he consumed alcoholic drinks.    At the time of revival of his policies that had lapsed on account of non-payment of premium he again did not disclose his pre-existing disease.  Respondent has also not been able to submit any credible evidence to rebut the facts in the documents/records produced from Apollo Hospital.  The various documents produced from Apollo Hospitals indicated his treatment for his pre-existing disease of Cirrhosis of Liver caused by heavy consumption of                   1 and 1½ liters alcohol per day.  Since there is close nexus between his disease and his death, it is clear that insuree had suppressed material facts regarding his health and therefore the revision petition deserves to be allowed.

                   We have heard the averments made by the learned Counsel for both parties at length and have carefully considered the evidence on record led by the parties.  The facts pertaining to the issuance of 4 policies by the Petitioner to the Respondent’s late husband are not in dispute.  It is also an admitted fact that the insuree expired on 24.07.2003 in Apollo Hospital because of Cirrhosis of Liver.  Counsel for Respondent had contended before us that the case summary and other medical records produced from Apollo Hospital where the insuree had been admitted and subsequently died is not adequate proof that he was a known case of Cirrhosis of Liver with previous UGI bleeds because the case history was based on the version given by an attendant.    We are, however, unable to accept this contention because this was not the only evidence available on file to prove that the insuree had been suffering from Cirrhosis of Liver.  This diagnosis was reached by a well-qualified medical expert in a reputed hospital who after examining the insuree recorded a diagnosis of chronic alcohol related liver disease.  It is medically well established that Cirrhosis of Liver does not develop overnight and one of the most common causes of this disease is alcoholism.   In view of these irrefutable facts, it is clear that the insuree had a pre-existing disease the information about which he had suppressed in his insurance proposal form.  We are also unable to accept the reasoning of the District Forum that merely because the affidavit of the doctor who had given the said certificate has not been filed, the same is adequate reason to reject the documents from the Hospital even though these were certified by an official of the said Hospital.

                   We note that the insuree who was a young man of 33 years took 4 insurance policies, the last one for an amount or Rs.15 lakhs on 28.01.2003 i.e. just a few months before he expired which would justify drawing of an adverse inference.  We have also carefully gone through the majority order of the State Commission and we do not find any specific reasons that have been recorded by them to controvert or challenge the records of Apollo Hospital as proof that the insuree was an alcoholic and a patient of Cirrhosis of Liver for quite long time.   It is well established that a contract of insurance is made in “utmost good faith” and suppression of any material fact by the insuree would entitle the Insurance Company to repudiate the claim.  Since it is clearly proved as discussed in the foregoing paras that insuree had suppressed material facts regarding his pre-existing disease which eventually led to his death, we are unable to uphold the majority order of the State Commission and the same is set aside.  The revision petitions are therefore allowed.  No costs.

15.    The learned counsel for the opposite party relied on the letter written by the complainant to claims review committee on 10-01-13.  The complainant filed office copy of that letter (Ex.A-2).   The relevant portion in Ex.A-2 is extracted below for better appreciation:

          “I am Mr. M. Subba Rao.  My mother Srimati. Maddi Lakshmi has taken one policy in your Bajaj Alliance Life Insurance Company.   She recently died.   Your claim reviews committee person who came to my home for verification Mr. M.V. Damodaram (cell:9700501386) forcefully made us to write like that, what he submitted for you recently on second verification.   She suffered with that mentioned illness before 8 months.  But at that time of taking this policy she is very healthy.   It was already proved by my neighbours.   So I please request you to rearrange the verification.   Please do the needful above mentioned” (Emphasis supplied)”.

16.  The above averments of Ex.A-2 revealed that the nominee (complainant) was forced by M.V. Damodaram, an employee of the opposite party to write that the insured suffered with some ailment prior to taking policy.   The complainant in para III (d) and affidavit (para-5) mentioned that he sent a written representation on 10-01-13 by stating that she is very healthy at the time of taking policy and there is no concealment of disease by the time of taking policy and requested to do the needful.  No where either in  complaint or affidavit filed along with the complaint and evidence affidavit filed on 27-06-13 the complainant mentioned that he was forced to mention that the insured suffered with that mentioned illness before 8 months so as to draw presumption against the opposite parties u/s 16(3) of the                   Indian Contract Act. Death of the insured within a period                                of thirty three days after obtaining policy corroborated the contention                     of the opposite party by Ex.A-2 letter. The complainant failed to                    establish prima facie the force which he was subjected to as mentioned                        in Ex.A-2 letter.  Under those circumstances, we opine that the                  opposite party discharged its burden in proving that the insured suffered                                       with some ailment prior to taking policy and it was suppressed and the opposite party repudiating the claim is justifiable.   We therefore answer this point against the complainant.

17.  POINT No.2:-   In view of findings on point No.1, the complainant is not entitled to any compensation or damages and answer this point also against the complainant.

18.   POINT No.3:-   In view of findings on points 1 and 2, the complaint is dismissed without costs.

 Typed to my dictation by Junior Stenographer, corrected by us and pronounced in the open Forum dated this the 21^st day of April, 2014.

MEMBER                                                                   PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party: 

                                                                                                PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.