Haryana

Karnal

33/2012

Vijay Kumar Sethi S/o G.K. Sethi - Complainant(s)

Versus

Life Insurance Corporation Of India - Opp.Party(s)

Sh. Gagan Sehgal

09 Dec 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.  

                                                               Complaint No.33 of 2012

                                                             Date of instt.:13.01.2012

                                                              Date of decision:9.12.2016

 

Vijay Kumar Sethi son of Shri G.K.Sethi, resident of House no.C-5, Dayal Singh Colony, Adarsh Nagar, Karnal.

 

                                                                   ……..Complainant.

                                      Vs.

1. The Manager, Life Insurance Corporation, Model Town, Karnal.

2. The Zonal Manager, Life Insurance Corporation, near Sector-12, Petrol Pump, Karnal.

 

                                                                   ………… Opposite Parties.

                     Complaint u/s 12  of the Consumer Protection Act.

Before                   Sh.K.C.Sharma……….President.

                   Sh.Anil Sharma…….Member.

 

Present:-      Sh.Gagan Sehgal Advocate for the complainant.

                    Sh. L.R.Chuchra Advocate for the Opposite parties.

                  

 ORDER:

 

                        This complaint has been filed by the complainant u/s 12 of the Consumer protection Act 1986, on the averments that his wife namely Priti (the deceased life assured) got herself insured from the opposite parties, vide insurance policy no.176449433 dated 17.7.2009, for a sum of Rs.5,00,000/- and she paid the insurance premium of Rs.13,679/- in that regard. His wife died on 31.12.2009. He informed the opposite parties on 23.4.2010 and submitted all the relevant documents for payment of insured amount. Opposite party no.1, vide letter dated 23.9.2010 directed him to supply the documents regarding medical treatment for further necessary action and accordingly all the relevant documents of medical treatment were provided on 27.9.2010. Thereafter, he sent letters dated 3.10.2010, 13.10.2010, 28.4.2011 and 7.11.2011 to the opposite parties for payment of the insured amount, but the opposite parties postponed the matter on one pretext or the other. Ultimately, he got served legal notice dated 16.12.2011 upon the opposite parties, but the same also did not yield any result. In this way, there was deficiency in service on the part of the opposite parties, which caused him mental pain, agony and harassment apart from financial loss.

2.                Notice of the complaint was given to opposite parties, who put into appearance and filed written statement controverting the claim of the complainant. Objections have been raised that the complaint is not legally maintainable in the present form; that the complainant has no locus standi and cause of action to file the complaint; that the complainant is estopped from filing the complaint by his own acts and conduct and that there was no deficiency in service on the part of the opposite parties.

                   On merits, it has been submitted that the insured in the proposal form dated 16.07.2009 gave false answers regarding her health and asserted that she was in good health. Thus, she deliberately suppressed the facts from the opposite parties. The complainant had disclosed in his application that deceased life assured was suffering and had taken treatment from Amritdhara Hospital and Dr.Parveen Garg Hospital. Thereafter, the opposite parties wrote letter dated 23.09.2010 to Dr. Rajiv Gupta, Amritdhara Hospital requesting for treatment record, which he provided, but the treatment record for November, 2006 of Dr. Parveen Garg Hospital was not provided. As the claim was early in nature and policy had run only five months fourteen days from the date of commencement, so the opposite parties got conducted further investigation. During investigation, it was found that deceased life assured had been suffering from Cancer for the last 2/3 years and taken treatment from Rajiv Gandhi Cancer Hospital Delhi. She remained under treatment of the said hospital from 27.01.2006 to 15.07.2009 for breast cancer. However, she concealed her medical history and took the insurance policy from the opposite parties on 17.7.2009. Therefore, the claim of the complainant was rightly repudiated as per Section 45 of the Insurance Act 1938. It has further been pleaded that the opposite parties sent registered letter dated 10.4.2012 to the complainant in response to the registered legal notice got served by him. Death claim under the policy was repudiated on medical grounds. The other allegations made in the complaint have been denied.

3.                In evidence of the complainant, his affidavits EX.C1 and Ex.C3 and documents Ex.C4 to C17 have been tendered.

4.                On the other hand, in evidence of the opposite parties, the affidavit of Balihar Singh Manager Ex.OP1/A and documents Ex.OP1 to Ex.OP8 have been tendered.

5.                We have appraised the evidence on record, the material circumstances of the case and the arguments advanced by the learned counsel for the parties.

6.                Admittedly, the deceased life assured had obtained insurance policy from the opposite parties on 17.7.2009 and the sum assured was  Rs.5,00,000/- She died on 31.12.2009. The complainant submitted the claim, but the claim was repudiated, vide letter dated 18.4.2012 on the ground that the deceased life assured suffered from Cancer prior to obtaining the policy, but she concealed that fact in the proposal form.

7.                Learned counsel for the opposite parties laid emphasis on the contention that contract of insurance is based upon principle of uberrima fide i.e. utmost good faith and concealment of any material fact renders the policy void. The deceased life assured submitted the proposal form, the copy of which is Ex.OP2, for obtaining the policy, wherein she did not disclose that she was suffering from any disease mentioned in question 11(e) including Cancer and asserted against question 11(i) that she was having good health, whereas as per the medical record, the copy of which is Ex.OP3 she remained admitted in Rajiv Gandhi Cancer Institute and Research Centre, New Delhi from 2.2.2006 to 8.2.2006 and got treatment for breast cancer. She intentionally did not disclose about the problem of Cancer she was suffering prior to submission of the proposal form knowingly and intentionally, therefore, the claim regarding death was rightly repudiated by the opposite parties. In support of his contention he relied upon Satwant Kaur Sandhu Versus New India Assurance company IV (2009) CPJ 8 (SC),  Life Insurance Corporation of India Versus Sahida Khatun 2014(1) CPC 88, Life  Insurance  Corporation of India Versus Krishan Chander Sharma, revision petition no.1935 of 1999 decided by Hon’ble  National Commission on 23.1.2006 and Life Insurance Corporation of India and another Versus Bimla  Devi revision petition no.3806 of 2009 decided by Hon’ble National Commission on 12.8.2015.

8.                To wriggle out the aforesaid contention, learned counsel for the complainant vehemently argued that even as per the medical record the deceased life assured was discharged from the hospital in satisfactory condition and was not suffering from any disease at the time of submission of the proposal form. Therefore, it cannot be said that she concealed material fact in the proposal form.

9.                    In Satwant Kaur Sandhu’s case (Supra)   the policy holder was suffering from chronic diabetic renal failure, but that fact was not disclosed while obtaining the policy. It was held by the Hon’ble Supreme Court that term “material fact” is not defined in the Insurance Act and therefore, it has been understood and explained by the courts in general term to mean as any  fact which would influence the judgment of a prudent insurer in fixing 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.   As cited in Pollock and Mulla’s Indian Contract and Specific Relief Act any fact, the knowledge or ignorance of which would materially influence an insurer in making contract or estimating the degree and character of risk in fixing rate of premium is a material fact. If, the proposer   has knowledge of  such facts, he is obliged to disclose it  particularly while answering the questions in the proposal form. Needless to emphasis that any inaccurate answer will entitle to insurer to repudiate his liability, because there is clear term that information sought for in the proposal form is material for the purpose of a entering into a contract of Insurance. It was further held that contract of insurance is a uberrima fide meaning a contract of utmost good faith of the assured.  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 the proposer to determine, whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to fact which are known to the applicant and not what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses.

10.                       In  Krishan Chander’s case(Supra), the deceased life assured got treatment for Asthma  and allergic  bronchitis from 23.5.92 to  9.6.1993 and again from 28.7.1993 to 12.8.1993, but that fact was not disclosed  in the proposal form.  Though the life assured died due to heart failure on 22.9.1994, yet claim  put forth by her husband was repudiated on the ground that she withheld information regarding  her health at the time of purchasing the policy. It was held by the Hon’ble National Commission that answers given by the life assured in the  proposal form were false  to her knowledge, therefore, insurance company was justified in repudiating the claim. In  Shahida Khatoon’s case (Supra), the  deceased life assured was suffering from Diabetes Mellitus, but he did not disclose about the said disease in the proposal form.  Under those circumstances, it was held by the Hon’ble National Commission that material fact was not disclosed, which amounted to violation of the terms of insurance contract on the part of the insured, therefore, claim was rightly repudiated by the insurer. It was also held that  term material fact is not defined in the  Act, therefore, it has been understood and explained in the general terms to mean as any fact which influences the judgment of a prudent insurer  in fixing the premium or determine whether he would like to accept the risk. In Bimla Devi’s case (Supra)  the deceased had undergone an operation for right kidney stone on 18.5.1998 and had availed medical leave for 46 days i.e. from 16.5.1998 to 30.6.1998.The deceased had also taken treatment from Apollo Hospital, New Delhi. The claim was repudiated by the Corporation on the ground that deceased had concealed vital facts regarding his health at the time of making proposal for insurance.  Therefore, the complainant was not entitled to any claim under the policy. It was held by Hon’ble National Commission, considered the judgment of Hon’ble Supreme court in  P.C.Chako and others Vs.Chairman, Life Insurance Corporation of India and others 2008(1) SSC 321, Life Insurance Corporation of India  Versus Asha  Goel, Rattan Lal and Anr.Vs.Metropolitan Insurance co.Ltd. , Satwant Kaur Sandhu ‘s case (Supra), United India Insurance Co.Limited Versus  M.K.J.Corporation  1996 (6) SCC 428,  Carter Vs.Boehm (V) 1766 BURR 1905 and held that  upshot of the entire discussion is that in a contract of Insurance  any fact which   would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a “material fact” .If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material fact  for the purpose of entering into a contract of insurance.  Under the facts and circumstances of the case, it was held that it was clear that the insured had suppressed the material information about the procedure he had undergone in 1998 and his medical condition thereafter, therefore, the claim was rightly repudiated.

11.              The facts of the present case are to be analyzed in view of the proposition of law laid down in the aforediscussed authorities. The material question which falls for consideration is whether the deceased life assured was suffering from Cancer prior to submission of proposal form, she had knowledge about the said problem and that she got treatment from Rajiv Gandhi Cancer Institute and Research Centre, New Delhi.

12.              The copy of the treatment record Ex.OP3 indicates that she was admitted in Rajiv Gandhi Cancer Institute and Research Centre, New Delhi on 2.2.2006 with a lymp in the right breast. Investigation proved the said lymp to be malignant. She was optimized for surgery and her right modified radical mastectomy was performed under GA on 3.2.2006. She was discharged on 8.2.2006. Thereafter, other diagnostic tests were conducted and first cycle of Chemotherapy was given on 7.3.2006. She was to visit the hospital for the next Chemotherapy on 14.07.2009 and then on 4.8.2009. On 4.7.2009 CT scan of chest was conducted, which showed bilateral nodular parenchyma and subpleural infiltrates in lung, subcm mediastinal lymphnode, bilateral moderate pleural effusion, multiple SOL in liver, bilateral follicular cyst in ovary. FNAC from right supraclavicular lymphnode was positive for malignant cells. Copy of certificate of Hospital treatment Ex.OP4 shows that she got treatment as indoor and outdoor patient from 27.1.2006 to 15.7.2009 for breast Cancer. Thus, from the medical treatment record makes it emphatically clear that the deceased life assured suffered from breast cancer and she got treatment including Chemotherapy from Rajiv Gandhi Cancer Institute and Research Centre, New Delhi in the year 2006 and thereafter prior to submission of the proposal form on 17.7.2009.

13.              The copy of the proposal form is Ex.OP1, the same was signed by the deceased life assured. It is neither the case of the complainant nor there is any material on record, which may even tend to show that the document was not readover and explained to the deceased life assured and her signatures were obtained on blank performa. She was an educated lady as is evident from the fact that she signed the proposal form in English.

Question 11(e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? Answer………No.

Question 11(i) What has been your usual state of health? Answer……..No.

Thus, it is clear that the deceased life assured concealed that she had been suffering from Cancer since January, 2006 and getting treatment for the same Rajiv Gandhi Cancer Institute and Research Centre, New Delhi, before submission of the proposal form. Therefore, in view of the law laid down in the aforediscussed authorities the policy became void on account of concealment of material fact by the life assured in the proposal form and in such a situation repudiation of the claim of the complainant by the Opposite Parties cannot be considered as illegal or unjustified in any manner.

14.              As a sequel to the foregoing reasons, we do not find any merit in the present complaint. Therefore, the same is hereby dismissed. The parties concerned be communicated of the order accordingly and the file be consigned to the record room after due compliance.

Announced

Dated:09.12.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member