Sri. P. Satheesh Chandran Nair (President):
The complainant filed this petition u/s.12 of the C.P. Act 1986 for getting reliefs from the opposite parties.
2. The case of the complainant is briefly stated as follows: The husband of the complainant one Mr. Sajeev had availed 4 insurance policy Nos. 395311169, 395311170, 395311171 and 395311172 from 1st opposite party which were commenced from March 2011 onwards. According to the complainant, her husband died on 18.09.2013 thereby she preferred a claim before the opposite party. The 2nd opposite party repudiated the claim vide letter dated 03.03.2015 stating untenable reasons. Aggrieved by the repudiation and as a result of the advice of the opposite party she filed a petition to reconsider her claim before the Zonal Manager, Chennai of the opposite party. The said reconsider claim is also not so far considered by the concerned. It is contended that there is no reason for the repudiation the claim dated 03.03.2015 by the opposite parties and the reason stated in the letter is also against the actual fact. According to the complainant, her husband has not suppressed any fact before the opposite party at the time of the inception of the policy and he has no pre-existing disease as alleged by the opposite parties. It is contended that the proposal for the insurance was made in March 2011 when he was working in Saudi Arabia and the above said policies were taken when he was in India. It is further contended that it is a well settled legal principle that after 2 years of its inception the said policy shall not be called in question on any ground. It is also stated that the act of the opposite parties are in violation of Sec.45 of the Insurance Act. Hence this complaint for the settlement of the insurance claim with interest, compensation cost etc. etc.
3. This Forum entertained the complaint and issued notice to opposite parties for their appearance. Opposite party 1 and 2 entered appearance and filed a version as follows: According to the opposite parties on 28.03.2011 4 policies were issued in favour of the deceased husband of the complainant vide Policy Nos.395311169, 395311170, 395311171, 395311172. The total amount assured as per the policies are shown as Rs.3,62,500/- it is contended that the complainant in this case informed the death of the life assured on 06.11.2013 with regard to the death of her husband dated 18.09.2013. It is further stated that the policy holder usually and generally remitted the premium after the date of grace period allowed as per policy condition No.2. On the date of death of the life assured policy No. 395311169 was lying in lapsed stage since premium due on 03/2013 was not paid. It is further contended that when the claim of the other 3 policies were examined it is found that the life assured was a known case of diabetics and hypertension since 2 years which were revealed from the discharge summary dated 11.01.2013 issued from Lakeshore Hospital, Kochi. According to this opposite parties, the opposite party accepted these policies believing the personal statement to the effect that he was in sound health and had not undergone any treatment prayer to the date of this proposal. The opposite party repudiated the claim of the complainant on ground that the life assured suppressed certain material facts with regard to his health condition. It is further contended that the life assured was a known case of diabetics and hypertension since 8 years but he is suppressed all these facts in the proposal form dated 25.03.2011. The opposite parties stated that the reason for the death of the disease was due to the coronary artery disease, renal failure on hemodialysis with hyperkalemia on 18.09.2013. It is further contended that the opposite party 1 and 2 has not committed any delay in deciding the claim or for sending the reason for the repudiation to the concerned. This opposite parties have not committed any deficiency in service as alleged by the complainant. Therefore, this opposite parties prayed to dismiss this claim with cost.
4. This Forum perused the complaint, version and records before us and framed the following issues:
- Whether the life assured suppressed any disease at the time of filing the proposal form?
- Whether the opposite party committed any deficiency in service as alleged by the complainant?
- Regarding relief and costs?
5. In order to prove the case of the complainant, complainant filed a proof affidavit in lieu of his chief examination and examined him as PW1. Through PW1 Ext.A1 to A3 are also marked. Ext.A1 is the repudiation letter dated 03.03.2015 sent by the 2nd opposite party to the complainant. Ext.A2 is the copy of letter sent by the complainant to the Zonal Manager, LIC of India. Ext.A3 is the Original Passport of the complainant’s husband. On the other side, for opposite party 1 and 2 the Manager (L&HPF), Divisional office, LIC of India, Kottayam she who filed a proof affidavit in lieu of her chief examination and marked Exts.B1 to B13. Ext.B1 is the Policy Certificate No.395311169 dated 31.03.2011. Ext.B1(a) is the portion of Ext.B1. Ext.B2 is the Policy Certificate No.395311170 dated 31.03.2011. Ext.B2(a) is the portion of Ext.B2. Ext.B2(b) is the proposal form. Ext.B2(b)(i) is the B2(b) question No.12. Ext.B3 is the Policy Certificate No.395311171 dated 31.03.2011. Ext.B3(a) is the portion of Ext.B3. Ext.B3(b) is the proposal form. Ext.B3(b)(i) is the B3(b) question No.12. Ext.B4 is the Policy Certificate No.395311172 dated 31.03.2011. Ext.B4(a) is the portion of Ext.B3. Ext.B4(b) is the proposal form. Ext.B4(b)(i) is the B4(b) question No.12. Ext.B5 is the discharge summary issued by Lakeshore Hospital, Kochi. Ext.B6 is the discharge summary dated 25.01.2013 issued by Lakeshore Hospital, Kochi. Ext.B7 is the copy of certificate of hospital treatment dated 12.11.2013. Ext.B8 series (2 in Nos.) are the letter dated 12.12.2013 and reminder letter dated 27.12.2013. Ext.B9 and Ext.A1 are one and same. Ext.B10 and Ext.A2 are one and the same. Ext.B11 is the acknowledgment receipt dated 12.06.2015. Ext.B12 is the letter dated 22.09.2015 sent by the 2nd opposite party to the complainant. Ext.B13 is the copy of death summary dated 18.09.2013 issued by Pushpagiri Hospital, Thiruvalla. After the closure of evidence, we heard both sides. The learned counsel appearing for the opposite parties filed an argument note apart from his oral submissions.
6. Point No.1:- In this case the opposite party raised a material contention to the effect that he suppressed certain pre-existing disease at the time of availing the policy. When we appreciate the evidence of this case, it can be revealed that the husband of the complainant availed 4 policies from the opposite party and all the policies are commenced in the month of March 2011. This fact is admitted by the opposite parties also. There is no dispute with regard to the claim application of the complainant and its repudiation dated 03.03.2015. The main question to be answered is whether life assured suppressed any disease at the time of filing the proposal for the insurance policy on 25.03.2011. As per Ext.A1, it is clear that the reason for the repudiation of the complainants claim is, “we may however state that all these answers were false as we have evidence and reasons believe that he was not in good health at the time of proposal since he had been suffering from diabetic and hypertension”. As per the discharge summary from Lakeshore Hospital, he was a known case of diabetics and hypertension since 8 years. The learned counsel for opposite party 1 and 2 argued that at the time of filing the proposal for availing the insurance policies the life assured suppressed all these material facts before the opposite parties. As discussed earlier Ext.A2 can be considered as an appeal petition before the Zonal Manager to reconsider the repudiated claim of the complainant. Ext.A3 the passport shows that the life assured was often travelled to gulf countries for his employment purposes. According to the complainant, the life assured was not suppressed any material fact at the time of the inception of the policies.
7. In order to rebut the contention of the complainant, the opposite party produced Ext.B1, Ext.B3, Ext.B7, Ext.B11 policy certificate along with its terms and condition. The Ext.B2, B4, B8, B12 are the terms and condition of the above said policies respectively. As per the above stated exhibits, terms and condition 5 extended term cover and forfeiture in certain events are stated as follows:- “The extended term shall be half of the policy term after the expiry of the policy term. During the extended term provided all the premiums under the policy have been paid, death cover equal to half the Sum Assured under the basic plan shall be payable. The extended term cover shall not be available in case of paid-up policies”. As per Ext.B1(a) in terms and condition of the policy grace period is explained it reads, “A grace period of one month but not less than 30 days will be allowed for payment of yearly, half yearly or quarterly premiums. If a premium, that has become due is not paid before the expiry of the days of grace the Policy lapses.
If death occurs in the first policy year, any premium that has fallen due but not paid any premiums, if any, falling due before the next Policy anniversary shall be deducted from the claim amount”. On the basis of the above description, it can be seen that the main issues to be decided in this case is not stated anywhere in the above exhibits. It is seen that Ext.B5, Ext.B9, Ext.B13 are the proposal form of all these 4 policies respectively. Ext.B6, Ext.B10 are the questionnaire related to Ext.B2 policy, Ext.B3 policy and Ext.B4 policy respectively. As discussed above it is true that any proposal form connected to all these 4 policies or answers to the questionnaire the life assured has never stated that he was suffering diabetics or hypertension at the time of availing these policies. If so, the burden of proof of this pre-existing disease is shifted to the shoulders of the opposite parties. It is true that the opposite party mainly relying Ext.B5 document to prove that the life assured was suffering diabetics and hypertension prayer to so many years of the inception of the policies. Ext.B5 says, “the patient who is a known case of diabetics, hypertension since 8 years, hypothyroid since 6 months on maintenance hemodialysis since 4 months was referred from Josco Hospital, Pandalam with history of chest pain, chest discomfort during dialysis, the patient was admitted”. It is true that Ext.B5 is a document signed by a doctor by name, Dr. Georgy K. Ninan, Nephrologist attached to Lakeshore Hospital, Kochi. If we examine this exhibit though the signature of the doctor is seen no date or the date of issue has not been mentioned in this exhibit. Moreover, it can be seen that the statement to the effect that the patient who is a known case of diabetics, hypertension since 8 years etc. is seen only as a general statement. On the basis of this certificate we are not in a position to ascertain how long the diabetic or hypertension was started to life assured. On the other side, when DW1 was examined before the Forum in cross-examination he answered, “8 വർഷം എവിടെയാണ് ചികിത്സിച്ചത് എന്ന് നിങ്ങള് എവിടെയെങ്കിലും തിരക്കി കണ്ടുപിടിച്ചോ”? (A) “ഇല്ല”. നിങ്ങള് പല ആശുപത്രികളിലും രേഖകള് collect ചെയ്യാൻ ശ്രമിച്ചു എങ്കിലും കിട്ടാത്തതിനാലല്ലേ നിങ്ങള് രേഖകള് ഹാജരാക്കാതിരുന്നത്? (A) “അല്ല”. ഒരു രേഖയും ഹാജരാക്കിയതായി കാണുന്നില്ലല്ലോ? “No answer”. As we discussed earlier, we have to see that whether opposite party 1 and 2 has produced any positive evidence to show that the life assured was suffering diabetics or hypertension at the time of the inception of all the policies. Except the Ext.B5 document the opposite party has not produced any piece of evidence to substantiate their case. As discussed earlier, the relevancy of Ext.B5 document with regard to the pre-existing disease of the life assured was also not proved beyond doubt. If the opposite party has a definite case with regard to this aspect what prevented them to examine the concerned doctor who issued the Ext.B5 document to prove their case? If a person has treated for 8 years for such disease it is so easy to adduce any positive evidence with regard to his illness, treatment etc. etc. Considering the above facts we are inclined to discard the relevancy of Ext.B5 document produced by the opposite party in this case. It is true that the opposite parties have a strong case to the effect that Ext.B1 policy bearing Policy No. 395311169 for a sum of Rs.62,500/- is lapsed due to the non-payment of the premium in time. In cross-examination DW1 answered, “Ext.B2, B3, B4 policy കള് lapse ആയതല്ലല്ലോ”? “അല്ല”. In the light of the question and answer with regard to the lapse of the policy even complainant is also accepted that Ext.B1 policy was lapsed due to the non-payment of premium in time. It is true that in Ext.B6 also, it is seen that the life assured was suffering diabetics and hypertension since 8 years. When we refer Ext.B6 certificate it is interesting to see that there is no seal or date of issue or the name or designation of the person who issued the certificate can be seen. Herein also the authentication of this Ext.B6 has become doubtful and this evidence is also to be discarded.
8. As per Sec.45 of the Insurance Act 1938, it reads, “Policy not to be called in question on ground of mis-statement after two years – No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy was inaccurate or false, unless the insurer shows that such statement [was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made] by the policy-holder and that the policy-holder knew at the time of making it that the statement was false [or that it suppressed facts which it was material to disclose]”. In the light of Sec.45 of the Insurance Act 1938, it is to be understood that no policy can be called in question by an insurer after 2 years of its inception on the ground that a statement made in the proposal for insurance or in any report of the medical officer or referee or friend of the insurer or in any other document relating to the issue of the policy, was inaccurate or false unless the insurer shows that such defect in the proposal form etc. etc. was material to disclose and that it was fraudulently made by the policy-holder with a knowledge of that statement was false or the insurer suppressed any fact. In this case, it is clear that the insured availed the policy on March 2011 onwards. There is no dispute with regard to the death of the insured, i.e. 18.09.2013 and the date of repudiation of the claim, i.e. 03.03.2015. On the basis of the above aspect it can be inferred that the opposite parties pleaded or contended the suppression of the pre-existing disease at the time of availing the policy, i.e. March 2011 which was clearly after 2 years. When we read the definition clause of 45 of the Insurance Act it also reveals that the burden of proof of all these suppression of fact, pre-existing disease etc. etc. have to be proved by the opposite parties. In order to substantiate the contention of the complainant in this aspect complainant’s counsel cited a decision reported in 2015 KHC 1070 of High Court of Rajasthan in Life Insurance Corporation of India Vs. Rajasthan and others the dictum is, “Insurance Act, 1938 – Sec.45 – Life Insurance policy – No material on basis of which it could be concluded that insured ever availed any treatment for disease/ailment referred in bed head ticket – Merely for reason that treating doctor in bed head ticket put note about disease of insured with prefix ‘known’ it cannot be presumed that insured while getting his insurance policy renewed had suppressed some material fact within his knowledge – Repudiation of claim by Insurance Corporation, not proper”. On the basis of the decision cited as 2015 KHC 1070 it is to be noted that if a doctor noted in the prefix of a medical certificate ‘known’ it cannot be presume that the insured suppressed any material fact at the time of the inception of the policy or at the time of the renewal of the same. The learned counsel for the opposite parties relied Ext.B5 and B6 document and submitted that the certificates shows a statement of known case of diabetics and hypertension since 8 years and a known case of CKD. If so, in the light of the decision discussed above that mere reference is not sufficient to believe the contention of the opposite parties in this case. Moreover, as per reported decision of our Hon’ble Supreme Court reported in 2001 KHC 910 in Life Insurance Corporation of India Vs. Asha Goel the Hon’ble Court found that the burden of proof would be on insurer for all these issues. The dictum is, “Insurance Act 1938 – S.45 – Repudiation of claim of the insured or nominee by the insurer – On a fair reading of the Section, it is clear that it is restrictive in nature – it lays down three conditions for applicability of the second part of the Section namely: (a) the statement must be one a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy holder’ and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose – Mere inaccuracy or falsity in respect of some recitals in the proposal would not entitle the insurer to repudiate the claim – False statement or suppression must be on material aspect made fraudulently by policy holder with knowledge that it was false – Burden of proof would be on insurer”. The learned counsel appearing for the opposite parties also cited a decision reported in 1985 KLT 865 in Sarojam Vs. LIC of India, the dictum of the decision is, “Insurance Law – Contract of insurance – Assured giving false answers to the questions in the proposal form – Medical Officers of LIC certifying life of assured as good – Effect of – LIC if can repudiate contract and decline payment”. In the light of the above cited decision of our Hon’ble High Court, it is to see that the false answers to the proposal form given by the insured vitiate the contract of insurance and the defendant corporation is entitled to repudiate the policies and decline payment there under. When we referred the Hon’ble Supreme Court decision of 2001 KHC 910 and the decision reported in 1985 KLT 865 we ought to have relied the Supreme Court decision in this aspect. In addition to these citations the learned counsel of the opposite parties cited another decision in Revision Petition No.2025/2011 of National Consumer Disputes Redressal Commission, New Delhi, the dictum of the decision is, “The claim was rejected by the petitioner corporation on the ground that the deceased Life assured had been suffering from Tuberculosis for which he was admitted and treated in Mathuradass Mathur Hospital, Jodhpur, which fact he did not disclose in the proposal submitted by him at the time of revival of the policy”. When we look into this decision it is so clear that the claim of the petitioner was rejected by the LIC on the ground that the life assured had been suffering disease and he was admitted in a hospital and treated. In this case, opposite party failed to produce any document to show that the life assured was admitted in a hospital and treated for hypertension or diabetic etc. etc. Therefore, we find that there is no relevancy for this citation as far as this case is concerned. The complainant as the nominee of the insured has every right to get insurance claim of Ext.B2, B3 and B4 policies as such the complaint is allowable. We also find that Ext.B1 policy was lapsed due to the non-payment of premium in time. Hence the opposite parties are liable to the complainant and Point No.2 and 3 are also found in favour of the complainant.
9. In the result, we pass the following orders:
- The opposite parties are hereby directed to pay the insurance claim of policy Nos. 395311170, 395311171 and 395311172 to the complainant within 30 days of the receipt of this order with 10% interest from the date of order onwards. (Each policy carries 1 lakh each).
- The opposite parties are also directed to pay a compensation of Rs.10,000/- (Rupees Ten Thousand only) and a cost of Rs.5,000/- (Rupees Five Thousand only) to the complainant with 10% interest from the date of this order onwards.
Dictated to the Confidential Assistant, transcribed and typed by her, corrected by me and pronounced in the Open Forum on this the 28th day of February, 2017.
(Sd/-)
P. Satheesh Chandran Nair,
(President)
Smt. Sheela Jacob (Member) : (Sd/-)
Appendix:
Witness examined on the side of the complainant:
PW1 : Bindu. V
Exhibits marked on the side of the complainant:
A1 : Repudiation letter dated 03.03.2015 sent by the 2nd opposite party
to the complainant.
A2 : Copy of letter sent by the complainant to the Zonal Manager, LIC of India. A3 : Original Passport of the complainant’s husband.
Witness examined on the side of the opposite parties:
DW1 : Sreedevi S. Nair
Exhibits marked on the side of the opposite parties:
B1 : Policy Certificate No.395311169 dated 31.03.2011.
B1(a) : Portion of Ext.B1.
B2 : Policy Certificate No.395311170 dated 31.03.2011.
B2(a) : Portion of Ext.B2.
B2(b) : Proposal form.
B2(b)(i) : B2(b) question No.12.
B3 : Policy Certificate No.395311171 dated 31.03.2011.
B3(a) : Portion of Ext.B3.
B3(b) : Proposal form.
B3(b)(i) : B3(b) question No.12.
B4 : Policy Certificate No.395311172 dated 31.03.2011.
B4(a) : Portion of Ext.B3.
B4(b) : Proposal form.
B4(b)(i) : B4(b) question No.12.
B5 : Discharge summary issued by Lakeshore Hospital, Kochi.
B6 : Discharge summary dated 25.01.2013 issued by Lakeshore Hospital, Kochi. B7 : Copy of certificate of hospital treatment dated 12.11.2013.
B8 series (2 in Nos.) : Letter dated 12.12.2013 and reminder letter
dated 27.12.2013.
B9 : Repudiation letter dated 03.03.2015 sent by the 2nd opposite party
to the complainant.
B10 : Copy of letter sent by the complainant to the Zonal Manager, LIC of India. B11 : Acknowledgment receipt dated 12.06.2015.
B12 : Letter dated 22.09.2015 sent by the 2nd opposite party to the complainant. B13 : Copy of death summary dated 18.09.2013 issued by Pushpagiri Hospital,
Thiruvalla.
(By Order)
Copy to:- (1) Bindu V., Vakkayil House, Prakkanam.P.O.,
Pathanamthitta – 689 643.
(2) The Branch Manager, Life Insurance Corporation of India,
Pathanamthitta.
(3) The Divisional Manager, LIC of India, Divisional Office,
Nagambadom, Kottayam.
(4) The Stock File.
