O R D E R
K.S. MOHI, PRESIDENT
The complainant has filed the present complaint against the O.Ps u/sec. 12 of Consumer Protection Act, 1986. The facts as alleged in the complaint are that complainant’s son Late Sh. Naveen Kumar had purchased a LIC Policy namely JEEVAN SARAL of Rs.2,50,000/- for herself and paid first premium of Rs.12,010/- on 19.9.2007. It is alleged that above said policy was valid for 35 years w.e.f. 19.9.2007 to 19.9.2042. Unfortunately on 12.8.2008 health of Sh. Naveen Kumar was seriously ill thereafter he was admitted in the Safdarjung Hospital and he was expired on same date i.e.12.8.2008. It is alleged that Late Sh. Naveen Kumar made nominee as his father late Sh. Nobat Singh in the said policy. Unfortunately, Sh. Nobat Singh was also expired on 1.8.2009. It is alleged that the four son of complainant had jointly wrote a letter to OP-3 for changing the nominee as Smt. Bhoo Devi on 5.8.2009. Her four sons also gave no objection if the Smt. Bhoo Devi was made as nominee of the Late Sh. Naveen Kumar instead of Late Sh. Nobat Singh. It is alleged that complainant submitted all original documents in the office of OP-3. It is alleged that OP-3 wrote various letters to the Medical Suptd., Safderjung Hospital stating that “The deceased late Sh. Naveen kumar was having a LIC Policy. Death claim is payable under the same. Kindly provide us the said forms No.3784 and 3816 duly complete so that claim can be settled.” It is alleged that despite of providing all the medical treatment records pertaining to Late Sh. Naveen Kumar by the Safdarjung Hospital, OP-2 did not settle the death claim amount of Rs.2,50,000/-. On these facts complainant prays that O.Ps be directed to pay Rs.2,50,000/- towards the death claim of the insurance policy of deceased with interest @ 18% p.a. and also to pay cost and compensation as claimed.
2. O.Ps appeared and filed written statement. In its written statement O.Ps has not disputed that complainant’s son Sh. Naveen Kumar had taken the policy referred above and had paid first premium of Rs.12,010/- on 19.9.2007. It is alleged that the complaint filed by the complainant is baseless and is liable to be dismissed as the late Sh. Naveen Kumar did not disclose in his Proposal Form that he was suffering from Hematemesis and jaundice. It is alleged that claim was repudiated by the OPs on the basis that late Sh. Naveen Kumar was suffering from Hematemesis and jaundice prior to the proposal of policy. It is alleged that intimation of repudiation of claim was sent to claimant by the OP on 31.3.2011, therefore, the dismissal of the complaint has been prayed for as no cause of action has arisen against the O.Ps.
3. Complainant has filed her affidavit affirming the facts alleged in the complaint. On the other hand Shri G.P.Pandey, Manager has filed affidavit in evidence on behalf of O.Ps testifying all the facts as stated in the written statement. Parties have also filed their respective written submissions.
4. Counsel for the OP vehemently contended the Insurer at the time of filing-up the proposal form did not disclose the pre-existing disease of which he subsequently died in the hospital. As a result he concealed the material fact which disentitled him to claim under LIC Policy. In support of his submission he referred to Mithoolal Nayak Vs. Life Insurance Corporation of India AIR 1962 SC 814 wherein Hon’ble Supreme Court held that an Insurance Policy is an agreement of utmost good faith between the Insurer and Insured and any breach of this agreement by suppressing material facts by the insured would result in repudiation of the claim. He further referred to another case titled as Maya Devi Vs. Life Insurance Corporation of India Revision Petition No.2091 of 2007 decided by National Consumer Disputes Redressal Commission, New Delhi holding that Life Assured in this concealed the fact that he was diabetic at the time of execution of Insurance Policy. The Court held that repudiation by Insurance Company was proper justified. Counsel for the Insured, on the other hand, submitted that there was no concealment of material facts by the deceased and illness of which he died cannot, by any stretch of imagination be termed as an existing disease. He further submitted that for plea of pre-existing disease a duty is cast upon the Insurance policy to substantiate the same by leading cogent evidence with the help of medical record. The counsel for complainant referred to III(2014) CPJ 340(NC) New India Assurance Co. Ltd. Vs. Rakesh Kumar in which court held as under;
”Suppression of pre-existing disease alleged Claim repudiated – Deficiency in service – District Forum allowed complaint – State Commission dismissed appeal – Hence revision – OP did not produce any evidence “to prove that which medication and for how long the complainant was taking for diabetes/hypertension – OP cannot apply hard and fast rule to presume that complainant was suffering for long duration i.e. before taking the policy – People can live for months, even years, without knowing they have the disease and it’s often discovered accidentally after routine medical check-ups – Concealment not established – Repudiation not justified.”
5. He also referred to another judgement reported as III (2013) CPJ 74 (Raj) Life Insurance Corpn. of India Vs. Nathu Lal Sain & Ors. The head note of the judgement is reproduced as under:;
“Consumer Protection Act, 1986 – Sections 2(1) (g), 14(i)(d), 15 Insurance (Life) – Death claim – Alleged concealment and mispresentation of fact – Claim repudiated – Deficiency in service – District Forum allowed complaint – Hence appeal – Insured lady was illiterate as per proposal form Burden heavily lies on Insurance Company to prove allegation of deliberate concealment and mispresentation – Insurer miserably failed to discharge burden – Agent of company is required to explain all details and conditions of Insurance policy sought by customer – Common man is not supposed to know all niceties and technicalities of law – Insurance policies should not be issued and repudiated in such casual mechanical manner – Repudiation not justified- Direction issued.”
6. The State Commission in Aviva Life Insurance Claim Department Vs Sharanjeet Kaur IV (2014) CPJ 124 (PUNJ) held as under;
“In this case, death-claim was repudiated on the basis of suppression of pre-existing disease. The court held that hypertension/diabetes are the life style diseases, easily controllable with conservative medicine. Insured not deliberately concealed material fact, repudiation was held unjustified. Insurer cannot repudiate the contract unless the fact is actually material. Insurer can avoid policy only by proving that the statement is false, fraudulent. The duty to disclose is limited to the facts which are within the knowledge of the insured alone.”
7. The gist of the aforesaid authorities referred to above by the counsel for the parties makes it crystal clear that the Insurance Co. cannot be permitted to repudiate the claim on the basis of pre-existing disease, unless the concealment of facts by the insured is found to be deliberate and intentional. Also the Co. has to substantiate the pre-existing disease by leading medical evidence.
8. Keeping in view the discussion above the O.Ps repudiate the claim on frivolous grounds, therefore, deficiency in service. We award a sum of Rs.2,50,000/- with interest @ 6% from the date institution of the complaint till payment, the further award of Rs.2,500/- towards harassment mental agony loss of time and Rs.2,000/- towards litigation cost. Ordered accordingly.
Copy of this order be sent to the parties as per rules.
Announced this 26th day of February, 2016.
(K.S. MOHI) (SUBHASH GUPTA) (SHAHINA)
President Member Member
