Complainantan ill-fated wife of Late BadalKarmakar who has appeared before this Forum praying for relief against LICI who is repudiated the claim of the sum insured in respect of the LICI policy No.42323372 for a sum assured of Rs.5 lakhs which was purchased by Late BadalKarmakar the husband of the present complainant.

          It is specifically mentioned in the complaint that the said policy was purchased by BadalKarmakar during his lifetime on 28.01.2002 on payment of quarterly premium of Rs.8,112/- and maturity date was on 28.01.2027 and complainant as wife was the nominee of the policy and the policy was running one and the last premium was pain in January 2003.  It is also submitted that prior to this policy he purchased 3 other policies of Rs.50,000/-, Rs.25,000/- & Rs.1,00,000/- on 28.07.1989, 28.07.1994 & 25.03.1996.

          But suddenly BadalKarmakar died a premature death due to Cardio Respiratory failure on 31.03.2003 leaving the complainant as widow wife and also his 2 minor children and the widow aged mother.  On the death of BadalKarmakar complainant submitted claim along with all documents as legal heirs and also as nominee thereafter to the op and op directed the complainant to submit some original papers considering the admissibility of the claims and again directed to submit some other papers on 15.12.2003 to proceed further with the claim, complainant complied with the directions and as per all requisite papers for the early disposal of the bonafide claim but the op office repudiated the genuine and bona fide claims vide their letter dated 18.09.2004 and intimated to contact the Zonal Manager for reconsideration.

          In the above situation complainant filed a representation to the Zonal Manager for reconsideration of the claims in due course and op’s office issued her a letter dated 17.11.2004 acknowledging and assuring their best attention and the complaint was made under the policy No.423233720 on 21.11.2005 and accordingly the office of the Insurance Ombudsman issued her a letter vide Ref. No. 581 dated 28.11.2005 acknowledging the same and asking for filing some papers and information.

          Thereafter complainant submitted prayer and papers dated 12.05.2005 for kind consideration of the Hon’ble Insurance Ombudsman and Hon’ble Ombudsman issued her a memo vide Ref. No.100/20/001 dated 19.05.2005 acknowledging her prayer and intimations and regretting inability to admit the complaint for redressal stood therein and stating the complaint treated as closed.  Thereafter Hon’ble Insurance Ombudsman issued her a letter vide Ref. No.581/21 dated 01.06.2005 to send some papers and again vide her petition dated 01.07.2009 and accordingly a letter was issued to her vide Ref. o.289/20 dated 31.08.2009 treating the complaint as closed fort he present with a copy to the op office also.

          Thereafter op office issued her a letter vide Ref. No.KSDO/41B dated 14.07.2010 repudiating the Death Claim.  After that complainant represented for the re-opening of the Death Claim and to favour her by treating the case sympathetically vide her letter dated 22.08.2012 which was duly received by the op office under seal and signature.  But ultimately no result was received, so the present complaint was filed praying for redressal on account of higher authority that is their Appellate Authority also did not dispose the same as yet and in fact such repudiation was made on 14.07.2010 and complainant then filed review prayer for reconsideration before the higher authority on 22.08.2012, but that was not disposed of and the present complaint was filed for redressal.

          On the other hand op nos. 1 to 3 by filing written statement submitted that the complaint is not maintainable as barred by limitation and further they admitted about the purchasing of the policy and date of commencement of the policy is 28.01.2002.  but it is alleged that it was under the solemn obligation of the insured to truly and correctly answered the questions in the proposal form because the insurer is completely ignorant of the risk to be undertaken and fact remains the insured did not give proper declaration and disclosure in the application form about his health in policy proposal form for purchasing the said policy on 28.01.2002 and regarding his state of health he did not give any history of any treatment or pathological tests, X-ray, Sonography or clinical tests etc. which were not also reported because it was necessary for coming to a decision whether the risk can be accepted at all and if accepted then what will be the rate of premium payable by the insured.  But in this regard insured was completely ignorant of the risk and it was going to undertake and has to fully depend on the information provided in the proposal from by the insured.

          But considering the entire materials after submission of the claim ops considered all medical reports and found that before purchasing the present policy complainant’s husband had been suffering from several type of diseases that is hypertension, sugar and even cancer but that was suppressed and ultimately the insured died on 31.03.2003 whereas the policy commenced on 28.01.2002 but other 3 policies were purchased in the year 1994 and 1996 which were taken before 2001 and same were in force for 14 years, 9 years and 7 years respectively.  So, those claims were decided and settled and insured amount was delivered to the complainant.  Op has also stated that the claim of the complainant is that insured died being suddenly fell ill and died a premature death due to cardio respiratory failure on 31.03.2003 are not at all correct because the life insured had been suffering from various diseases such as Anemia, hypertension, hypothrinia, erithroidhypoplaria since March 2001 for which he took treatment at Ruby General Hospital, Kolkata from March 2001 till his death.

          So, it is apparently proved that life insured has been suffering from several pre-existing diseases which may cause death.  It is also submitted that the insured underwent several pathological tests in the year 2001 but that was not disclosed in the proposal from and before the Medical Board of LICI and thus suppressed material facts which were within his knowledge at the time of taking the policy in the year 2002 and considering all the matter into consideration and for breach of contract and for non-disclosure of the health condition by BadalKarmakar at the time of purchasing the disputed policy the claim was repudiated and practically the policy was taken by insured by adopting unfair path and also suppressing the truth and practicing fraud.  So, as per provision of the contract of LICI the terms and conditions the matter was rightly repudiated on account of the conduct of the insured who gave false statement deliberately and so nothing is payable in a void contract.

          It is further submitted that if actually the complainant was not satisfied with the decision of repudiation then she had the option for reconsideration of her claim before the Zonal Claim Review Committee and it is further submitted that claim was repudiated on 18.04.2009 and there can be no second repudiation and the decision of repudiation was upheld by Zonal Claim Review Committeeand cannot be deemed as repudiation for the second time as alleged or at all and practically the entire complaint is barred by limitation and complainant is not entitled to any relief.

Decision with reasons

          On in depth studyof the complaint and the written version and also considering the status of the policy No.42323372 in respect of the insured BadalKarmakar it is undisputed fact that BadalKarmakar as insured purchased the said policy and sum assured was Rs.5 lakhs and quarterly premium was Rs.8,182/- and the policy was effective from 28.01.2002 and its maturity date was 28.01.2027 and fact remains that the premium was paid up to 03.02.2003 and it is undisputed fact that on 31.03.2003 at about 06:45 PM BadalKarmakar died at the age of about 46 years.

          It is also admitted fact that the policy was for sum assured Rs.5 lakhs and as per provision of rules and regulations of LICI in respect of sum assured policy of Rs.5 lakhs and above and medical examination by the LICI is must and in this case LICI has admitted in their written statement that medical examination was done by them and thereafter considering the medical examination report of the LICI that policy was accepted.

          But in the particular case at the time of hearing the argument from the side of the op Insurance Co. it is found that Ld. Lawyer of Insurance company submitted that complainant did not disclose that prior to taking this policy on 24.03.2001 complainant was examined by his doctor for some of his treatment wherefrom it is found that Urinalysis was done hematology test was done and Faiest test was also done.  But all those test reports were not submitted for which the doctor of the LICI failed to diagnose his any pre-existing disease at the time of purchasing the policy and in fact complainant from 24.03.2001 had been suffering from Carcinoma (cancer).  But even then this BadalKarmakar in the application from for purchasing this policy did not disclose all his previous ailments including the fact that he had been suffering from cancer.  So, it is clear that the insured suppressed the truth about his pre-existing disease of cancer for which the claim was repudiated.   

          After considering the argument of the complainant herself and also considering the documents which were submitted by the complainant before the op also it is found that ultra sonography of upper and lower abdomen was done at N. Seba Trust on 27.03.2001 and from the said report it is found that approximately 1 cm. size cortical cyst was found at the lower poll of the left kidney.  Thereafter bone marrow examination was made on 06.04.2001 and from that report it is found that some iron deficiency was detected.  But otherwise no sign of cancer was detected.  After that he was quite okay and he was in good health and he was attending office and no other problem was found.  Subsequently on 19.09.2002 it was found that his Hemoglobin was decreased to the extent 6%.  So, he was hospitalized at Ruby General Hospital and practically for severe anemia he was admitted and blood was transfused during stay thereafter on further several tests and Colonoscopy was done and after colonoscopy it was detected some growth in colon when on 20.09.2002 biopsy was done suspecting malignant growth in colon.  After that doctors of Ruby General Hospital found that there was impression of polypoidac as well as inflamativelesion and suspected the probability of malignant growth and thereafter he was advised to attend doctor T.K. Das for biopsy and also for review.

          Thereafter biopsy was done and ultimately he was released from Ruby General Hospital on 23.09.2002.  after that on 02.10.2002 he was admitted under Dr. GoutamMukhopadhayay at Ekbalpur Nursing Home and was discharged on 06.10.2002 after colon operation and thereafter he was released and after considering those fact it was found that in the year 2001 or prior to 23.09.2002 there was no detection of BadalKarmakar that he had been suffering from any disease of cancer.  But small cyst was found below the kidney or that is in the colon but no further problem was detected as it was found at that time, no sign or suspect that it was cancer by any doctor.

          But when on 19.09.2003 it was found that his hemoglobin rate was decreased he was hospitalized at Ruby General Hospital and blood was transfused, colonoscopy was done and at that time the doctor suspected it as anemia in case of colonic growth and advised for biopsy, biopsy was also done and from biopsy report it was found that colon growth was suspected as malignant in nature.  After getting biopsy report on 03.10.2002 Dr. Mukhopadhyay was confirmed that it was cercinova in right colon and operation was done and chemo therapy for pollination was made at Bengal Oncology Centre specially a centre for outpatient Oncology Care and prior to that he was hospitalized on 02.10.2002 and discharged on 06.10.2002 and ultimately on 31.03.2003 he died due to said effect.

          Considering all the materials it is clear that BadalKarmakar had not been suffering for any carcinoma or any type of cancer up to Sept. 2002.  But for the first time in between 19.09.2002 to 23.09.2002 only it was detected that his hemoglobin rate was decreased to 6%.  So, blood was transfused when colonoscopy was done and thereafter biopsy was done and thereafter operation was done and ultimately Dr. D. Mukhopadhyay held operation as inflamtivelesion of right colon was detected and it was suspected that it is Polydactyl.  So considering all the above fact it is found that at the time of taking this policy by the complainant or prior to that complainant had not been suffering from any pre-existing disease and for the first time on 19.09.2003 it was found that he was feeling unwell and then he was first admitted at Ruby General Hospital on 19.09.2003 and doctor after hematology test found that his hemoglobin rate was decreased up to 6%, so, 6 units of packet of blood were transfused during hospital stay and after that colonoscopy was done, biopsy was done and thereafter it was detected that complainant suffered from right colon inflamative as well as polydactyl that means there was an obstruction in the right colon with inflamation.

          So, considering all the above fact we have gathered that defense of the op that complainant had suffering from cancer and other pre-existing disease prior to purchase of this policy on 28.01.2002 is completely false and fabricated.  Another factor is that in case of a policy of sum assured of Rs.5 lakhs and above medical examination by the insurance company is must and in all cases if any medical examination is made by the LICI and the policy is accepted in that case the insurance company cannot adopt any such path of principle of approbate and re-approbate and particularly in case of a policy of Rs. 5 lakhs and above all liabilities is upon the LICI to determine after medical checkup of a particular applicant of the policy about his health.  LICI must be satisfied after medical checkup that this policy can be accepted with such assessment of premium and then policy document is issued and it is settled principle of law under any circumstances in future if any claim is made due to death of the insured insurance company is debarred from challenging any pre-existing disease of the insured and in such particular case any statement of the insured in the application form regarding health shall be treated as final when it is checked by the doctors board of LICI.  Particularly in this case LICI Medical Board examinedBadalKarmakar before signing the policy and fact remains BadalKarmakar filed application form along with all materials document on 31.01.2002.  Thereafter medical board of LICI examined the insured BadalKarmakar and after that after lapse of one month on 28.01.2002 the policy document was issued giving effect of the policy w.e.f. 28.01.2002.  So, considering that fact it is clear in the present case the LICI is solely liable when being satisfied about not existence of previous disease of BadalKarmakarthe authority of LICI and their medical board confirmed the good health condition of BadalKarmakar and thereafter waiting for one month issued this policy document.  So, it is clear that legally LICI is debarred to challenge the health condition of BadalKarmakar prior to 31.01.2002 or from 28.01.2002 (date of effect of the policy).  Not only that after evaluating all the documents and materials which were produced by the complainant before the Insurance Company also we have gathered that the insurance company has adopted unfair trade practice and after assessment of the medical documents we have confirmed that for the first time on 19.09.2002 complainant was feeling unwell and uneasy and he was admitted at Ruby General Hospital and after hematology test it was found that hemoglobin rate was decreased up to 6% whereas normal level is 11% to 13 % for which 6 units of blood was transfused.  After that by 23.09.2002 colonoscopy and other tests were done and it was found after biopsy that his colon is affected because the right colon was inflatative and doctor suspected that it was atmalignant stage.  Thereafter Dr. D. Mukhopadhyay operated the said portion in the month of October, 2002, after operation no other problem was detected but after starting of chemotherapy he was quite okay.

          Then it is clear that up to 19.09.2002 he never suffered from any cancerous disease, though a small size of cyst was found outside the kidney.  But that cyst was not the cause of his death but subsequently his right colon was blocked for inflammation of the colon wall and colon pipe.  But anyhow no pre-existing disease at the time of purchasing this insurance policy was found in the body of the insured BadalKarmakar which is proved from the fact the medical board of the LICI also issued certificate to the LICI authority regarding good health of the insured and for which LICI cannot deviate from their own decision and own medical board reports.  When there is no such allegation of the LICI that insured gave gratification to their board of doctors or any bribe and obtained that medical certificate of the LICI doctor’s board.  So, considering all the above facts and circumstances we are confirmed that the whole procedure as adopted for LICI for repudiation of the claim was unethical, unjust, illegal and unwarranted and at the same time it is an unfair path as adopted by all the insurance companies in case of releasing of any death claim of sum assured of Rs.5 lakhs and above and we are sure that there is no ground to believe that BadalKarmakar had been suffering from any pre-existing disease or any cancer prior to September-2002.  But only for the purpose to repudiate the claim,all the fabricated and false defense has been taken.  We have gathered all the insurance companies have adopted such path not to release any insurance of sum assured of Rs.5 lakhs and above and inall the cases defense is same that insured has been suffering from any pre-existing disease that was not disclosed at the time of filing the proposal form. Anyhow all the insurance companies particularly the Government undertaking Insurance company must not have to take such sort of path in future and if any such sort of instance is proved in that case insurance company shall be penalized at a high rate for adopting such unfair path and in that case invariably further penal action would be taken against the insurance company and in this case the insurance company no doubt adopted unfair practice by making some false allegations and not even raising any finger against their medical board of doctorswho confirmed that BadalKamakar had his good health at the time of filing the proposal form or at the time of issuing the policy document in favour of the BadalKarmakar.

          Fact remains that BadalKarmakar after opening of the disputed policy paid premium till his death.  In this case it has become a practice of the insurance company to raise allegations that the same are time barred.  Particularly the administrative vocal cord fitted with the sound ‘time barred and time barred and repudiated on the ground of pre-existing disease and it is the clause of repudiation of LICI in all the cases.  But we feel that invariably the insurance company has not ever gone through very beautiful judgement of the Hon’ble Apex Court passed in AIR 1966 page 1644 and in that judgement of the Hon’ble Apex Court came to a conclusion that in case of ambiguity in contract of insurance company the ambiguity should be resolved in favour of the claimant and against the insurance company.  But in this case there is no ambiguity in the contract.  If there was any fault it was the fault on the part of the medical board of the LICI and LICI authority ought to have dismissed all those doctors after investigation that those doctors issued a false certificate about the health condition of BadalKarmakar.  So, it isclear thatBadalKarmakar had good health on or prior to date of issuing policy document.  Now he is far off from us and also from LICI authorities and now the LICI has entered into the Forum for holding his postmortem to search out the cause of death but it is evident from the doctors’ certificate he died due to ColonCarcinoma.  But that death was caused on 31.03.2003 i.e. long after one year and two months from the date of purchasing the said policy.  Regarding limitation point we have gathered that a poor widow having 2 minor children and the widow mother of BadalKarmakar roamed from one office to another office of LICI up to 22.08.2012.  But on 22.08.2012 last attempt was made by this ill-fated widow for relief.  But from all corner she got a negative attitude.  Practically she went to Insurance Ombudsman of LICI authority and their reviewing committee and after that the highest authority only for Rs.5 lakhs with interest but all the doors were found closed.  Then she ultimately appeared before this Forum.  If it is found that an ill-fated widow lady is being harassed by the insurance company against her bonafide claim and ultimately finding no redressal appeared before this Forum and in the meantime some years passed and for that reason the bona fide claim of the insured cannot be swallowed by the insurance company and there is no such rule and cannot be such rule of law.  But it is legal proposition that if claim of the complainant is a bona fide there is no question of any limitation in case of insurance claim because it is the legal duty of the insurance company to handover the valid claim of insured or the heirs of the insured or the nominee and if it is found that the insurance company has not delivered it to the insured or in case death of insured the nominee or his legal heirs in time in that case there is no question of limitation till Insurance Company denies liability in written statement because insurance company was not established for the purpose for grabbing the money of the insured, only with the plea of the limitation and in this case there is no question of limitation. Valid claim has been denied by making some false allegations.  Practically unfair trade practice has been made and in fact this poor lady roamed here and there but failed to get any relief and the peculiar factor is that the complainant has no such financial capacity.  So, she personally appeared before this Forum and filed this case and conducted it as because the insurance company is monetary liable establishment and they have their capacity to appoint standard lawyers and they are trying to get result to grab the entire amount of the insured.  This insurance company must have to refrain from adopting such policy for the benefit of the policy holders because insurance company is no doubt a company, but it was established for social protection of the insured policy holders in all respect.  Insurance company must have to think that it is not a banking business.  Particularly in this case and many other cases we have also observed that insurance company is making strong defenceagainst the claim where it is found that sum assured is Rs.5 lakhs and above.  But we have failed to understand how long such a policy shall be followed by the insurance company.

          In the light of the above observation and also considering the entire fact we have gathered that in present case insurance company has adopted unfair trade practice for which penalty should be imposed particularly when the doctor’sboard of the LICI confirmed the health condition of BadalKarmakar that his health condition was good and insurance company relied upon their board of doctors’ opinion and issued this policy document but even then why this insurance company did not release the fund of claim and interest till now.  We feel that answer is only to grab the money of the dead person (insured) in such a fashion.  Such sort of policy of insurance company may be for increasing the capital but ultimately social purpose of establishment of insurance company shall be frustrated and in this context we are very much annoyed about the performance of the insurance companies for not releasing claim amount in most of the cases but the administrative outlook of the insurance company must be changed otherwise all the policy holdersof sum assured of Rs.5 lakhs and above must be sent to Forum and probably it is the administrative policy of the insurance companies to refuse the claim of the insured on the death of the insured to his or her heirs or nominees.

          In the light of the above findings and observation and materials and discussions we are convinced to hold that there is good ground to allow this complaint by directing the op to repay the claim amount with interest @ 8% p.a. w.e.f. 31.03.2003 (from the date of death) and till its full payment by the Insurance Co.

          Thus the complaint succeeds.

          Hence, it is

ORDERED

          That the complaint be and the same is allowed on contest with cost of Rs.10,000/- against the ops.

          Ops are jointly and severally directed to repay and refund the claim amount of the complainant a sum of Rs.5,00,000/- and also interest @ 8% p.a. w.e.f. 31.03.2003 over the said amount till full satisfaction of the said amount along with litigation cost as awarded within one month from the date of this order failing which for further harassment, causing mental pain and agony ops jointly and severally shall have to pay Rs.500/- per day as penal interest after expiry of the stipulated period of one month from the date of this order.

          For adopting an unfair trade practice by the LICI, LICI is imposed punitive damages of Rs.50,000/- which shall be paid to the present Forum within one month from the date of this order.

          Ops are jointly and severally directed to comply the order very strictly failing which for disobeyance of the Forum’s order penal proceeding shall be started against the ops and in that case also all the ops shall be imposed further penalty of Rs.10,000/- and if it found that ops are reluctant to comply this order of this Forum and anydisobeyance of the Forum’s order is reflected from their conduct then proceeding u/s 27 of C.P. Act 1986 shall be started and further penalty may be imposed for which the insurance company shall be responsible and liable.