Haryana

Karnal

187/2012

Ram Kali W/ Zila Singh Narwal - Complainant(s)

Versus

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

Vijay Pal

25 Oct 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM KARNAL.

                                                              Complaint No. 187 of 2012

                                                             Date of instt. 03.04.2012

                                                               Date of decision:25.10.2016

 

Ram Kali widow of late Shri Zila Singh Narwal resident of village Luhar Gali, Kheri Naru Tehsil and District Karnal.

 

                                                                         ……..Complainant.

                                                Versus

1. Life Insurance Corporation of India, Divisional Office, Jeevan Parkash Building, Model Town Karnal through its Divisional Manager.

2. Life Insurance Corporation of India, Branch no.II, Branch Office, Sant Nagar, Hansi Road, Karnal through its Branch Manager.

                                                                                 …………Opposite Parties.

 

                     Complaint u/s 12  of the Consumer Protection Act.

 

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

                   Sh.Anil Sharma…….Member.

 

Present:-      Shri Vijay Pal Advocate for complainant.

                    Shri L.R. Chuchra Advocate for opposite parties.

                                     

 ORDER:

 

                        This complaint has been filed by the complainant u/s 12 of the Consumer protection Act, 1986, on the averments that her husband Zile Singh Narwal ( the deceased life assured)  had purchased Jiwan Anand Policy no.173698032 for Rs.1,00,000/- from opposite parties on 28.11.2003 and in the said policy she was nominated as his nominee. After purchase of the policy, he deposited the premiums from time to time. On 4.7.2010 he started suffering from pain in his abdomen and the said problem could not be cured and he died on the same day. After his death, she lodged claim with the opposite parties and completed the necessary formalities. She was assured that the insurance benefits under the policy would be given to her within a period of two months, but the same were not given despite repeated requests. She wrote several letters and reminders to the opposite parties and the Higher Officials, but the opposite parties postponed the matter on one pretext or the other and ultimately refused to pay the claim under a wrong, unlawful and illegal perception. The refusal of the opposite parties to settle the claim was illegal null and void and the same amounted to deficiency in service and unfair trade practice on their part due to which she suffered mental pain and agony apart from financial loss.

                   Notice of the complaint was given to the opposite parties, who put into appearance and filed written statement controverting the claim of the complainant. Objections have been raised that the complaint is abuse of process of law and as such 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 her own acts and conduct; that there was no deficiency in service on the part of the opposite parties and that the complainant has suppressed  the true and material facts from this forum and the complaint has been filed just to harass and humiliate the opposite parties.

                   On merits, it has been submitted that the deceased life assured had not deposited all the premiums in due time. The premiums for 5/2007 to 11/2007 were not deposited before due date or within the grace period of one month, rather the policy was revived on 14.12.2007. The deceased life assured expired on 4.7.2010 after a period of 2 years 6 months and 20 days of revival of the policy. Investigation was conducted and medical record was collected. It was found that the deceased life assured has been suffering from Renal problem since July 2007 and he had taken treatment form PGIMR Chandigarh. He was not in good health before the date of revival on 14.12.2007. These material facts were suppressed by him from the opposite parties at the time of revival of the policy, therefore, the claim of the complainant was rightly repudiated, vide order dated 6.1.2011 as per provision of Section 45 of the Insurance Act 1938. The other allegations made in the complaint have not been admitted.

3.                In evidence of the complainant, her affidavit Ex.C1 and documents Ex.C2 to Ex.C17 have been tendered.

4.                 On the other hand, in evidence of the opposite parties, affidavit of P.K.Sexna Manager Legal Ex.OP/A and document Ex.OP1 to Ex.OP6 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.                It is admitted fact that the deceased life assured had obtained Jeevan Anand Policy from opposite parties on 28.11.2003 and he died on 4.7.2010 during subsistence of the policy. The complainant lodged claim for getting benefits under the policy, but her claim was repudiated by the opposite parties, vide order dated 6.1.2011, on the ground that the deceased life assured did not deposit the premiums from 5/2007 to 11/2007 and he got the policy revived on 14.12.2007, but he withheld the material information at the time of revival of the policy regarding the fact that he was suffering from Renal failure in July, 2007 and had taken treatment from PGIMR Chandigarh.

7.                Learned counsel for the complainant vehemently argued that the deceased life assured was not suffering from any disease at the time of obtaining the policy on 28.11.2003. He died on 4.7.2010, after 2 years 6 months and 20 days of the revival of the policy. He was not suffering from any disease even at the time of revival of the policy and was in good state of health at that time. Opposite parties have not produced the affidavit of any doctor, who treated the deceased life assured for any ailment what to talk of Renal failure problem before revival of the policy. The report of some Senior resident of PGIMR Chandigarh, which has not been got proved by producing the record of treatment is not sufficient to prove that the deceased life assured suffered from Renal failure in July, 2007 and he underwent Renal Transplantation on 14.09.2009. The opposite parties have altogether failed to prove that the deceased life assured had concealed any material fact at the time of revival of the policy. It has further been canvassed that even if the deceased life assured suffered from Renal problem before revival of the policy and concealed that fact in the revival form, then the policy could not be called into question by the opposite parties on the ground that the statement made in the revival proposal                  was false, in view of provisions of Section 45 of Insurance Act 1938. It has lastly been argued that repudiation of the claim of the complainant by the opposite parties was illegal and unjustified and the same amounted to deficiency in service on their part. In support of his contentions, he placed reliance upon Arminder Kaur Versus Life Insurance Corporation of India 2016(3) CPJ 242,  G.Muthupackiam Versus The Zonal Manager, Chennai & Anr. 2014 ACJ 1401: 2012 AIR(Madras) 203: 2014(3) ACC 11, Moromi Sarmah Versus Life Insurance Corporation of India and Ors.2010(70) R.C.R. 608 and Divisional Manager, LIC of India Versus Roshan Khatoon 2009(3) J.K.J.11.

8.                To wriggle out of the aforesaid contention, the learned counsel for the opposite parties contended 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.OP1 for revival of the policy, wherein he replied all the questions relating to his health in negative He denied about suffering from any ailment or getting treatment of any illness requiring treatment for one week or more or any surgery performed for his treatment. However, while processing the claim during investigation it was found that he remained admitted in PGIMR Chandigarh in July, 2007 with symptom of Renal failure of hemodialysis and he underwent Renal Transplantation on 14.09.2009. However, in the revival form he concealed about his Renal failure, which amounted to suppression of material fact knowingly and intentionally, therefore, the claim regarding his 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.

9.                In Arminder Kaur’s case supra the certificate relied upon by LIC was issued by the consultant doctor after the death of the insured. Entire history was recorded by another doctor. In the history it was only written that there was HT-1year, diabetes 3 years. The insured had never availed even a single medical leave. Under those circumstances, it was held by Hon’ble National Commission that mere writing HT-1 year and diabetes 3 years in the history will not prove that the insured was suffering from diabetes since three years. It was duty cast upon the opposite parties to prove whether the insured was taking treatment for diabetes. However, the opposite parties did not make any attempt to produce medical record or the Rajiv Gandhi hospital’s ‘patient daily progress sheet’ to prove that during hospitalization, the patient was also given medicines for diabetes and hypertension. Therefore, the repudiation of the genuine claim was on frivolous ground, which was deficiency in service by the opposite parties. In G.Muthupackiam’s case supra there was no symptom of cancer at the time of taking policy and at the time or before even renewing his policy. There was no proof that the insured was suffering from any ailment at the time of taking policy or at the time of revival of policy. However, the opposite party repudiated the claim on the ground that the insured had suppressed the factum of his disease. Under those circumstances, it was held by Hon’ble Madras High Court that beyond the period of two years the policy could not be called into question. The opposite parties were directed to pay the insured amount to nominee of the deceased insured. In Moromi Sarmah’s case supra  the life assured had undergone medical treatment and examination and CT scan of his head before effecting revival of policy. Death of the insured during continuation of the policy. Claim was rejected by the LIC on the ground that incorrect declaration was given by insured as regards his good health at the time of revival of the policy, therefore, the revival was declared to be void. Infact the readings reflected in the CT scan were within the normal limits and no abnormalities were detected. Under those circumstances, it was held by Hon’ble Guhati High Court that non-disclosure of such fact would not entitle the respondents to reject the claim. The decision making process adopted by respondent in arriving at the impugned decision suffers from illegalities and irregularities and the same was quashed. Direction was issued for payment of sum assured with accrued interest thereon. In Roshan Khatoon’s case supra the death claim regarding death of the insured was repudiated by the LIC on the ground that the insured had suppressed material fact of the suffering kidney problem since December, 2003. The doctor, who issued death certificate, had opined that the deceased insured had died of cardio problem. Under those circumstances, it was held by Hon’ble   J & K State Consumer Disputes Redressal Commission, Jammu that there was no proximity with the kidney problem of the deceased insured. The repudiation of the claim was illegal.

10.               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.

11.              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 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. 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.

12.              The facts of the present case are to be analysed keeping in view the proposition of law laid down in the aforediscussed authorities. The deceased life assured had purchased Jiwan Anand Policy from the opposite parties on 28.11.2003 and he died on 4.7.2010. As per the case of the opposite parties, the deceased life assured did not deposit the premiums from 5/2007 to 11/2007 and got the policy revived on 14.12.2007. However, at the time of revival of the policy he withheld the material information regarding the fact that he had been suffering from Renal failure in July, 2007 and had taken treatment from PGIMR Chandigarh. Thus, the material question which falls for consideration is whether the deceased life assured was suffering from problem of Renal Failure in July, 2007 and had taken treatment from PGIMR Chandigarh.

13.              The main plank of the opposite parties is the history of illness as per records given by Senior resident Department of Surgery (Transplant Unit) PGIMR Chandigarh, the copy of which is Ex.OP2. According to the said report the deceased life assured was presented to PGIMR in July, 2007 with the symptom of Renal failure for 4/5 months, he was treated with Hemodialysis and in the meanwhile hepatitis ‘O’ was deducted, which was treated. It was further reported that the deceased life assured underwent Renal Transplantation on 14.09.2009 successfully. The report was based upon the medical record. Such fact regarding treatment in July, 2007 has also been mentioned against column no.5. It was specifically mentioned that the patient himself had told the history to Nephrology doctor. The copy of the certificate of employer Annexure-B indicates that the deceased life assured availed Sick Leave from 4.12.2007 to 31.01.2008. No doubt the opposite parties have not produced the affidavit of concerned doctor who prepared the record of treatment of the deceased life assured, but the report cannot be discarded merely on this ground, because the complainant has not produced any material on record from which even an inference may be drawn that the deceased life assured never got treatment from PGIMR Chandigarh in July,2007 for Renal problem or any other problem and he never availed Sick Leave from his office before revival of policy on 14.12.2007. Moreover, it is not disputed by the complainant that the deceased life assured had underwent Renal Transplantation on 14.09.2009 in PGIMR Chandigarh. This fact further lends support to the fact that he got treatment from PGIMR Chandigarh regarding Renal failure and for Hepatitis in July, 2007. Thus, it stands established that deceased life assured got treatment from PGIMR Chandigarh in July, 2007 regarding Renal failure problem and he was treated with Hemodialysis and apart from that treated for Hepatitis also.

14.              The copy of the proposal form is Annexure –A. Questions no.2A, 2B and 4 are relevant for deciding the present case. Therefore, the same are reproduced as under:

Question 2A: Are you suffering from any disease or not……… No.

Question 2B : If, you suffering from any disease for which there was requirement of treatment for one week……….No.

Question 4: Are you enjoying good health……Good.

15.              Thus, it is emphatically clear that the deceased life assured did not disclose in the proposal form regarding his suffering from Renal failure problem in July, 2007 and getting treatment for the same and Hepatitis from PGIMR Chandigarh. The deceased life assured was an educated person, as is evident from his signatures in English language. He also signed the declaration form on 14.12.2007. It cannot be said any stretch of imagination that he had no knowledge regarding his Renal failure problem with which he suffered and got treatment from PGIMR Chandigarh in July, 2007. He was bound to disclose all the material facts regarding condition of his health in the proposal form submitted for revival of the policy. However, the aforediscussed facts and circumstances make it quite clear that he knowingly concealed about his disease of Renal failure problem and treatment from PGIMR Chandigarh in July,2007 in the proposal form filled by him for revival of the policy on 14.12.2007.

16.              No doubt the opposite parties have neither alleged nor led any evidence that there was nexus between the cause of death of the deceased life assured and the problem of Renal failure with which he was suffering before submission of the proposal form for revival of the policy, but the fact remains that he had concealed material fact regarding his ailment before the submission of the proposal form for revival of the policy. Under such facts and circumstances, the proposition of law laid down in the authorities cited on behalf of the complainant do not cut any ice in favour of the complainant, rather the law laid down by the Hon’ble Supreme Court in Satwant Kaur Sandhu’s case (Supra)  and other authorities relied upon by the opposite parties and discussed in proceedings paras no.10 and 11. As the deceased life assured knowingly concealed about his disease of Renal failure and getting treatment regarding the same from PGIMR Chandigarh in July, 2007, in the proposal form submitted for revival of the policy on 14.12.2007, the policy became void on account of concealment of material fact regarding his health. 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.

17.              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: 25.10.2016

                                                                                      (K.C.Sharma)

                                                                                         President,

                                                                             District Consumer Disputes

                                                                             Redressal Forum, Karnal.

                             (Anil Sharma)

                               Member