KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAD, THIRUVANANTHAPURAM
APPEAL 596/09
JUDGMENT DATED: 4/12/2010
PRESENT
SMT.VALSALA SARANGADHARAN : MEMBER
SRI.M.V.VISWANATHAN : JUDICIAL MEMBER
SRI.M.KABDULLA SONA : MEMBER
Life Insurance Corporation of India, : APPELLANT
Divisional Office, Jeevan Prakash,
M.G.Road, P.B.No.1133,
Ernakulam – 682 011.
(By Adv.G.S.Kalkura)
Vs.
Bindu Raj @ Bindu.P.A., : RESPONDENT
W/o late Reji Thomas,
Thevarmadom House,
Mannathoor.P.O.,
Pampakadu, Muvattupuzha.
JUDGMENT
SRI.M.V.VISWANATHAN : JUDICIAL MEMBER
The appellant was the opposite party and respondent was the complainant in CC.No.315/07 on the file of CDRF, Ernakulam. The complaint therein was filed alleging deficiency of service on the part of the opposite party in repudiating the insurance claim preferred by the complainant as nominee and widow of the life assured Sri.Reji Thomas. The opposite party/LIC of India entered appearance and filed written version denying the alleged deficiency in service. The opposite party justified its action in repudiating the insurance claim. It was contended that the life assured Reji Thomas suppressed material facts and submitted incorrect statements and information by filing the personal statement for getting the lapsed policy revived. Thus, the opposite party prayed for dismissal of the complaint.
2. Before the Forum below Ext.A1 to A3 documents were marked on the side of the complainant. No oral evidence was adduced from the side of the complainant. On the side of opposite party three witnesses were examined as DWs 1 to 3. Exts.B1 to B5 documents were also marked on its side. On an appreciation of the evidence on record, the Forum below passed the impugned order dated 17.6.09 allowing the complaint by directing the opposite party to pay the assured sum of Rs.5,00,000/- with interest at the rate of 6% per annum from the date of the complaint till realization. Hence the present appeal by the opposite party/LIC of India.
3. We heard both sides. The learned counsel for the appellant/ opposite party submitted his arguments based on the grounds urged in memorandum of the present appeal. He much relied on the testimony of DW3, the doctor who treated the life assured
Reji Thomas at Devamatha hospital, Koothatukulam and also Ext.B3 copy of the case sheet maintained by the hospital authority of Devamatha hospital, Koothatukulam and argued for the position that the life assured suppressed material facts while submitting the B2 personal statement regarding his health. Thus, the appellant justified their action in repudiating the insurance claim preferred by the nominee of the life assured. On the other hand, the learned counsel for the respondent/complainant supported the impugned order passed by the Forum below and submitted that there was no suppression of material facts by the life assured while submitting original of B2 personal statement regarding state of health. He also relied on Ext.A2 copy of the case summary issued from Lakeshore hospital and submitted that there was no nexus between the alleged suppression of material fact and the cause of death of the life assured Reji Thomas. Thus, the respondent prayed for dismissal of the present appeal.
4. The points that arise for consideration are:-
1) Whether the appellant/opposite party can be justified in repudiating the insurance claim preferred by the respondent/ complainant being the nominee of the life assured Reji Thomas?
2) Whether the contention of the appellant/opposite party that there was suppression of material facts regarding the state of health of the life assured while submitting personal statement for getting the lapsed policy revived can be upheld?
3) Is there any legally sustainable ground to interfere with the impugned order dated 17.6.09 passed by CDRF, Ernakulam in CC.315/07?
5. Points 1 to 3:-
There is no dispute that the respondent/complainant is the nominee and widow of the life assured Reji Thomas. Admittedly the life assured Reji Thomas died on 1.6.06 due to duodenal ulcer perforation, while under going treatment at Lakeshore hospital, Ernakulam. Mr.Reji Thomas had taken a life policy. Ext.B1 is the said life policy issued in the name of Reji Thomas with the date of commencement of the policy as 8.11.02 for a sum of Rs.5,00,000/-. The aforesaid life policy was in a lapsed condition in May 2004, due to non payment of premium. The aforesaid lapsed policy was revived on 7.3.05 by remitting defaulted premiums. At the time of getting the policy revived, the life assured Reji Thomas had submitted B2 personal statement regarding health. Ext.B2 copy of the said personal statement regarding health dated 21st February 2005. There is no dispute regarding the filing of B2 personal statement by the life assured. Thereafter on 1.6.06 the life assured Reji Thomas died due to duodenal ulcer perforation, which led to peritonitis and multi organ disfunction syndrome.
6. After the death of life assured, the nominee of the life assured namely the complainant preferred the insurance claim. Ext.B1 policy would show that the said policy was issued for the sum assured as Rs.5,00,000/-. After getting the said insurance claim and the supporting documents, the opposite party/LIC of India repudiated the insurance claim vide repudiation letter dated 13.1.07. Ext.A1 is copy of the said repudiation letter issued by LIC of India. Issuance of A1 repudiation letter is not disputed by the opposite party/LIC of India. The insurance claim preferred by the complainant was repudiated on the ground that the life assured Reji Thomas had filed personal statement dated 21.2.05 giving incorrect answers in the said personal statement. It is also stated in A1 repudiation letter that the life assured had made deliberate misstatements and withheld material information from LIC of India regarding his health, at the time of getting the policy revived and that the LIC of India is declaring said revived policy as void. The opposite party/LIC of India has also relied on the terms of the declarations signed by the life assured at the foot of the said personal statement. The questions in the said personal statement and the answers given to the said questions were also incorporated in the said repudiation letter dated 13.1.2007. The said questions and answers are as follows:
a) Have you ever suffered from any illness/disease requiring treatment for a week or more? | No |
b) Did you ever have any operation accident or injury? | No |
c) Did you ever undergo ECG, X-ray, Screening, Blood, Urine or stool Examination? | No |
7. Ext.B2 is copy of the personal statement regarding health with the declaration therein filed by Reji Thomas, the life assured. Admittedly B2 personal statement regarding health was submitted by the life assured Reji Thomas for getting the lapsed policy revived. Ext.B2 is dated 21.2.2005. It is after consideration of B2 personal statement regarding health, the LIC of India revived the lapsed policy. It was revived on 7.3.05. The definite case of the appellant/opposite party LIC of India is that the life assured Reji Thomas had given
misstatement and suppressed material facts while submitting B2 personal statement regarding his health. The life assured had given negative answers to following questions. a) Have you ever suffered from any illness/disease requiring treatment for a week or more? B) Did you ever have any operation, accident or injury? C) Did you ever undergo ECG, X-ray, screenning, blood, urine or stool examination? Another question was put to the life assured in the said personal statement as follows. Are you at present in sound health? To the said question the life assured Reji Thomas gave the answer as ‘good’. The definite case of the LIC of India is that the aforesaid answers were given by suppressing material facts and by concealing the true facts regarding the state of health of the life assured.
8. The appellant/opposite party LIC of India much relied on the testimony of DW3 Dr.Varghese A.Jaison who issued A3 treatment certificate dated 1.2.07. Admittedly the life assured had undergone treatment in Devamatha hospital, Koothattukulam. DW3 Dr.Varghese A.Jaison was attached to that hospital as Gastro entrologist and that DW3 had the occasion to treat the life assured Reji Thomas at Devamatha hospital, Koothatukulam. The fact that the life assured Rejiu Thomas had undergone treatment at Devamatha hospital, Koothatukulam and that the life assured was under the treatment of DW3, Varghese A.Jaison is not in dispute. It is to be noted that the respondent/complainant herself has produced A3 treatment certificate and marked on her side. ExtA3 treatment certificate would make it clear that life assured, Reji Thomas was under consultation in gastro Enterology Department of Devamatha hospital, Koothatukulam from 8.5.04 to 3.7.04 for complaints of abdominal pain. It is also stated in Ext.A3 treatment certificate that the life assured, Reji Thomas was treated for erosive gastritis during the said period based on investigations. DW3 has also admitted issuance of A3 treatment certificate. Ext.A3 treatment certificate itself would show that the life assured had given incorrect answers in B2 personal statement regarding health. It is stated in said personal statement that the life assured never suffered from any illness/disease requiring treatment for a week or more. Ext.A3 treatment certificate would make it clear that the life assured had undergone consultation and treatment in Devamatha hospital, Koothatukulam from 8.5.04 to 3.7.04 of abdominal pain and his disease was diagnosed as ‘erosive gastritis’.
9. DW3 has also deposed about B3 attested copy of the case sheet produced from Devamatha hospital, Koothattukulam. The B3 case sheet was marked through DW2, the Administrator of Devamatha hospital, Koothatukulam. There is no dispute regarding the genuineness and correctness of entries in B3 case sheet. DW3 Dr.Varghese A.Jaison categorically deposed that as per B3 case sheet Reji Thomas had undergone treatment on 15.7.02. He also deposed that late Reji Thomas had been treated in that hospital as inpatient and as well as out-patient. The evidence of DW3 would show that life assured Reji Thomas had undergone investigations at that hospital and the details of the investigations can be seen at pages 84 to 88 of B3. It is also deposed that at page 71 of B3 ultra sound scanning report is incorporated. Thus, B3 case sheet would show that on 8.5.04 Reji Thomas had undergone ultra sound scanning of whole abdomen and that various blood examination tests were done at Devamatha hospital, Koothatukulam. It would also show that liver function test etc were done for Reji Thomas at that hospital and that on 12.4.04 , 14.4.04, 8.5.04, 2.7.04, and 15.7.04, various investigations were done for Reji Thomas. The aforesaid entries in B3 case sheet and the testimony of DW3 would make it abundantly clear that the life assured had given false statements or that he suppressed true facts regarding the various investigations undergone by him. It was answered by the life assured that he had not undergone ECG, X-ray, screening, blood, urine examinations. But the aforesaid evidence would show that the life assured Reji Thomas had undergone ECG, ultra sound scanning, blood examinations during 2003 and 2004. It can be concluded that the aforesaid answer given by the life assured was wrong answer and by giving such an answer he concealed the true facts from LIC of India, while submitting B2 personal statement regarding health.
10. Ext.B3 case sheet maintained by Devamatha hospital, Koothatukulam with respect to the treatment undergone by the life assured Reji Thomas at that hospital would show that the life assured Reji Thomas was admitted in that hospital as an outpatient following a road traffic accident on 2.11.03. Pages 63,65,66 and 67 are related to the treatment given to the life assured Reji Thomas in connection with the road traffic accident which occurred on 2.11.2003. The entries therein would show that the life assured sustained multiple abrasion, tenderness, contusion and restricted movement of left knee. The aforesaid entries would make it clear that life assured Reji Thomas was involved in an accident and he sustained injury in the said road accident which occurred on 2.11.03. The life assured was asked about any accident or injury sustained by the life assured since the date of proposal for the policy. The life assured answered in the negative. The aforesaid negative answer would show that the life assured was reluctant to disclose the true facts regarding the accident and injuries sustained by him on 2.11.03. Thus, it can be concluded that the life assured gave misstatement or concealed true fact regarding the accident and injury while submitting B2 personal statement. One thing is made clear that the life assured gave false statement or false answers while submitting B2 personal statement regarding health.
11.The life assured was also asked a very definite question as to the present state of health of the life assured. The aforesaid question and answer are as follows:- “ Are you at present in sound health Ans- Good”. But the testimony of DW3 Dr.Varghese A.Jaison would show that the life assured was undergoing treatment for abdominal pain ‘gastritis’ and he was also having an unhealthy liver. The aforesaid answer given by the life assured regarding the state of health as good cannot be treated as a correct answer. In effect, the life assured gave misstatement or deliberately concealed true facts. So, the case of the appellant/opposite party/LIC of India that the life assured made deliberate misstatement and withheld material information regarding his health at the time of getting the policy revived is to be upheld and accepted.
12. The next aspect for consideration is whether the misstatement or deliberate suppression of the facts regarding the state of health of the life assured can be considered as material suppression or misstatement of the true facts. Ext.B4 is the confidential report or circular issued by LIC of India classifying the risks. Ext.B4 circular would show that gastritis has been considered by LIC of India as an ailment which requires approval of the underwriting authority referred to in Ext.B4 circular. It would also show that the ailment gastritis is classified under specific head. Underwriting authorities are also classified according to the risk classifications. B4 document would support the case of the appellant that as for as LIC of India is concerned gastritis is illness or disease which requires specific approval of the concerned underwriting authority. This circumstance would negative the case of the complainant that gastritis is not a serious ailment and suppression of that ailment can not be considered as material suppression of fact.
13. There can be no doubt about the fact that the questions enumerated in the proposal form or in the personal statement regarding health are considered by the LIC of India as important informations and that is why those questions are incorporated in the proposal and in the personal statement. In such a situation it was incumbent upon the proposer or life assured to give correct and the proper answers to these questions. The information or data sought to be collected by putting such questions can be considered as material information or data as far as LIC of India is concerned. It is based on the aforesaid material informations the LIC of India will decide to accept or reject the proposal. It was the discretion of appellant/opposite party/LIC of India to revive the policy or not. If the appellant/LIC of India was not satisfied with the state of health of the life assured LIC had the discretion and option to refuse revival of the lapsed policy. It is to be noted that the life assured cannot claim as of right to getting the lapsed policy revived. The lapsed policy can be revived only on the objective satisfaction of the conditions required for reviving the policy. In such a situation, the state of health or the conditions of health of the life assured at the time of revival of the policy is a material aspect which deserves consideration by the LIC of India. It is not just or proper to say that the ailment of gastritis was not a serious ailment and suppression of existence of such a disease cannot be treated as material. It can be concluded that life assured Reji Thomas suppressed material facts regarding his state of health while submitting B2 personal statement.
14. Ext.B2 personal statement regarding health contains declaration given by the life assured. The aforesaid declaration can be considered as the warranty of the contract of insurance. As per the said warranty to the agreement the life assured declared that the statements contained therein are true and correct and that in which event it is found that there occurred any omission or suppression in giving the answers it would make the revival absolutely null and void and all moneys which shall have been part in respect there of shall stand forfeited to the Life Insurance Corporation of India. It is to be borne in mind that life assured Reji Thomas had given a declaration stating that the forgoing statement and answer are true and complete in every particular. He also agreed and declared that the statements and declaration along with the proposal for insurance under the lapsed policy shall be the basis of the contract of revival of the lapsed policy between life assured and the LIC of India. It is further declared that if any untrue averment is contained therein, the said contract shall stand forfeited to the Corporation. The aforesaid declaration would make it clear that the life assured was fully aware of the consequences of giving incorrect or untrue statements. The aforesaid declaration given by the life assured would give the authority for the appellant/LIC of India to avoid the contract of revival of the lapsed policy. It is to be noted that the lapsed policy was revived in favour of the life assured Reji Thomas based on the contract of revival of the lapsed policy entered into between the life assured and the appellant/LIC of India. The evidence on record especially, that of A3 and B3 documents and oral testimony of DW3 would make it abundantly clear that life assured Reji Thomas suppressed material facts regarding his health, while submitting B2 personal statement regarding health. Evidence of DW3 is more than enough to hold that the life assured was not having sound health while submitting B2 personal statement. Thus, the appellant/opposite party is perfectly justified in repudiating the insurance claim preferred by the respondent/complainant being the nominee and widow of life assured Reji Thomas. The appellant/ opposite party/LIC of India can be justified in issuing A1 repudiation letter dated 13.1.07.
15. The Forum below failed to appreciate the evidence on record in its correct perspective. The decisions relied on by the CDRF, Ernakulam can not be made applicable to the facts of the present case on hand. The Forum below relied on the decision rendered by the Hon’ble National Commission in LIC of India vs. Smt. Chandra Baghrecha reported in IV (2003) CPJ 16(NC). The facts and circumstances of the aforesaid reported case have no application in the present case on hand. Here the material point that arose for consideration was regarding the suppression of fact while submitting the revival application and the B2 personal statement regarding health. What was the state of health of the life assured at the time of submission of B2 personal statement was the issue for consideration. The Forum below was bound to consider the issue as to whether the life assured disclosed true and correct fact regarding the state of his health while submitting B2 personal statement. The Forum below failed to consider the case of law which is more applicable to the present case on hand. The Forum below has also totally ignored the evidence of DW3 and Ext.A3 treatment certificate and B3 case sheet with respect to the treatment of the life assured at Devamatha hospital, Koothatukulam. The Forum below cannot be justified in treating the ailments which had affected the life assured as not material or noteworthy.
16. The impugned order is based on the finding that there was no nexus between the cause of death of the life assured and the ailment of gastritis which had resulted in the treatment of the life assured at Devamatha Hospital, Koothatukulam. The question for consideration was as to whether the life assured had suppressed material facts regarding his health while submitting B2 personal statement for getting the lapsed policy revived. It is established in this case that life assured suppressed material facts with respect to his state of health at the time of submitting B2 personal statement. The mere fact that there was no nexus between the cause of death and the ailment of gastritis cannot be taken as a ground to hold that there was no suppression of material facts. It is a well settled position that if there occurred suppression of material facts on the part of the life assured then the insurer will be at liberty to avoid their liability under the life policy. It has been held by the Hon’ble National Commission in various decisions that concealment of fact about health of the life assured would give right to the LIC of India to repudiating the insurance claim. LIC of India Vs.Smt.Lily Rani Roy 1997 (I) CPJ 46 (NC), LIC of India and others vs Smt.C.P.Kacheebi reported in II (2003) CPJ 108 (NC) and LIC of India and another vs Parveen Dhingra reported in II 2003 CPJ 70 (NC). Moreover, the principle enunciated by the Hon’ble Supreme Court in Chacko v s. LIC of India reported in (2008) I KLT 698 (SC) would make it abundantly clear that the warranty given by the life assured/proposer in the form of declaration will bind the parties to the contract of insurance and any of the failure of the warranty would entitle the insurer (LIC) to treat the contract as null and void; that a deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law; that the effect of misrepresentation on the contract is precisely the same as that of nothing disclosure and it affords the aggrieved party a ground for avoiding the contract and that the contract of insurance are contracts uberrima fides and every fact of materiality must be disclosed, otherwise there is good ground for rescission. But unfortunately, the Forum below omitted to follow the correct position of law while passing the impugned order in CC.315/07. Therefore, this Commission have no hesitation to interfere with the impugned order passed by the Forum below and to dismiss the complaint in CC.315/07. These points are answered accordingly.
In the result the appeal is allowed. The impugned order dated 17.6.09 passed by CDRF, Ernakulam in CC.315/07 is set aside and the complaint therein is dismissed. The parties are directed to suffer their respective costs through out.
SRI.M.V.VISWANATHAN : JUDICIAL MEMBER
SMT.VALSALA SARANGADHARAN : MEMBER
SRI.M.KABDULLA SONA : MEMBER
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