Tamil Nadu

StateCommission

A/51/2020

The Life Insurance Corporation of India, Divisional Office at vellore, Represented by Senior Divisional Manager, office at Jeevan Prakash, Arcot Road, Vellore 632 004. - Complainant(s)

Versus

M.Suraj Bai, W/o Late. K.Motilal Residing at No.457, Main Bazar, Vellore-4. - Opp.Party(s)

M/s. M.B. Gopalan Associates

21 Jul 2023

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:Hon’ble Thiru. Justice R.SUBBIAH ... PRESIDENT

             Thiru.R VENKATESAPERUMAL       … MEMBER

 

F.A. No.51 of 2020

(Against the Order, dated 11.12.2018, in C.C. No.39 of 2007, on the file of  the DCDRF, Vellore)

 

                                                     Order, dated:21.07.2023

 

The Life Insurance Corporation

             Of India,

Divisional Office at Vellore,

Rep. by Senior Divisional Manager,

Office at Jeevan Prakash,

Arcot Road, Vellore 632 004.                … Appellant / Opp. Party

 

vs.

 

1.M.Suraj Bai (Deceased),

W/o.Late K.Motilal,

Residing at No.457,

Main Bazar, Vellore-4.

 

2.M.Jeevan Raj, S/o.K.Motilal

3.M.Sajan Raj, S/o.K.Motilal,

Both residing at No.22A,

Kasi Viswantharkoil Street,

Vellore 632 004.           … RR-2 & 3/LRs of Complainant-R1              

        For Appellant           :  M/s.M.B. Gopalan Associates

             For Respondents      :  M/s.T.Sharmila Jain

This Appeal is coming before us for final hearing today and, after hearing the arguments of the counsels for the parties and upon perusing the material records, this Commission passes the following:-:-

 

O R D E R

 

R.Subbiah, J. – President.                                  (OPEN COURT)

 

 

             Aggrieved by the Order, dated 11.12.2018, passed by the DCDRF, Vellore, in C.C. No.39 of 2007, in allowing the Complaint filed by the 1^st respondent herein/complainant therein by holding that the LIC/appellant herein/OP therein have committed service deficiency and consequently, directing them to pay to the complainant the policy amount of Rs.4.50 lakh with interest @ 9% p.a. from the date of death of the insured till the date of realization  and to pay Rs.15,000/- and Rs.4,000/- respectively towards mental agony and costs, the LIC have preferred the present First Appeal.

             For the sake of convenience, the parties are hereinafter referred to as per their respective rankings before the District Forum.

 

             2. The crux of the Complaint is as follows:-

             The husband of the complainant took handful of LIC Policies and the last one was taken by him on 28.02.2004 vide Policy No.733495069 for an assured sum of Rs.4.50 lakh.  Except for mild diabetes, the insured was hale and healthy all along and, before issuance of the said Policy, he was in fact examined by a Doctor attached to the LIC. On 14.01.2005, the insured died due to onset of sudden health complications in the winter season.  Thereafter, his wife, the complainant, laid claims against the policies held by her deceased husband/insured and, while the LIC had allowed all other policies -  3 in number, they repudiated the claim under the aforementioned/4th policy on a vague reasoning that the insured had suppressed material details about his illness at the time of taking the Policy.  When three other polices have been honored, the act of the LIC in singling out the last policy for repudiation amounts to clear service deficiency & unfair trade practice which caused great degree of mental agony to the complainant; hence, she filed the
Complaint before the District Forum, seeking to direct the LIC to pay to her the policy amount of Rs.4.50 lakh, besides a sum of Rs.1 lakh towards compensation for the unfair trade practice/service deficiency and Rs.10,000/- towards litigation expenses.

 

             3. Gist of the Written Version filed by the OP/LIC is as follows:-

             The insured was not healthy at the time of taking the policy in question and this factum was not made known to the OP.  After his death, while processing the claim made, the medical records of the insured were collected from the Hospitals where he had received treatments and the same revealed that he was suffering from Class-IV Dyspnea, Chronic Diabetes, Hypertension and also difficulty in walking.  Before taking the policy, the insured/deceased was taking treatment from Mercury Hospital – Egmore, Apollo – Chennai and CMC – Vellore; however, he willfully suppressed the details regarding his ailment and treatment to the Doctor attached to the LIC, at the time of taking the policy.  On humanitarian consideration, the other three policies held by him were honored, however, the present claim under the policy in question could not be entertained due to suppression of material facts relating to the insurance contract and further, the said policy is different from the other ones in terms of age, amount and other relevant factors.  The claim was repudiated as per the provisions of the Insurance Act; as such, there is no scope at all to allege any service deficiency, hence, the complaint is liable to be dismissed.

 

         4. In order to prove their claim & counter-claim, both sides filed their proof affidavits and, on the side of the complainant, 12 documents were marked as Exs.A1 to A12, however, no document was marked by the LIC.  The District Forum, after consideration, observed that although it is stated by the LIC that they had collected records from the Hospitals to show that the insured was having health problems at the time of taking the policy and it was suppressed in the proposal form, they have not marked the documents on their side in support of their averments in the Version and consequently, held that the complainant has proved the service deficiency on the part of the OP and ultimately, allowed the Complaint by issuing the direction as aforementioned and, aggrieved thereby, the present appeal is preferred by the LIC.

 

             5. While the learned counsel for the complainant/respondents herein submitted that the District Forum has passed the impugned order after well appreciating and assessing the case of both sides and thus, there is no scope for interference therewith, it is argued by the counsel for the OP/appellant that, after the claim was laid, while processing it, they conducted a thorough enquiry by collecting various medical records of the patient/insured, who took treatment for a number of ailments from different hospitals.  In fact, after the complaint was filed, based on the details available from the documents hitherto collected, they reflected all those details in the proof affidavit, however, till the time they could collect the last piece of paper very much relevant to the case, the matter had reached the stage of disposal and resultantly, an adverse observation came to be made by the lower forum to the effect that, despite stating so many things about the health condition of the insured, the LIC failed to produce any single document to substantiate their defence and further, it was also observed in the impugned order that the LIC have not chosen to file the written argument and make oral arguments.  Now, as they are absolutely ready with all the documents in support of the defence and to present their written and oral arguments based on such documents, if one more opportunity is afforded, a fair decision could be reached in the matter; otherwise, great prejudice would be caused to their just interests.  Accordingly, they seek to remand the matter to the lower forum for a fresh consideration with an opportunity to mark their documents as Exhibits in the case.  

            

             6. We have carefully considered the submissions of either side and meticulously perused the materials on record including the impugned order passed by the District Forum.

             It is the case of the complainant that the deceased/insured was hale and healthy all along except for some mild diabetes, which according to them, is not a disease at all.  At the same time, they do no dispute that the insured died due to sickness/health complications. It is their case that, before issuance of the policy, the insured was examined by the LIC Doctor and therefore, the OP cannot presume otherwise after due examination of the insured by their own Doctor. 

          But, it is the case of the LIC that, in the Policy Form, the insured willfully suppressed his health complications and, only during the scrutiny of the claim laid, they could collect his medical records from different hospitals that clearly confirmed that the insured, at the time of taking the policy, had resorted to willful suppression of material particulars about his health condition.

             Be that as it may, the medical endorsement by a doctor attached to the LIC based on a general check-up and usually based on the replies given by the insured would not absolve the insured’s liability to furnish correct information about his/her health condition in the Proposal Form, for, the law requires a person seeking insurance cover to disclose all material facts relating to the risk involved and the principle of utmost faith/uberrima fides plays a predominant role in insurance contracts. 

              In the present case, admittedly, the insured died during the currency of the policy in question and it is not disputed that he died of certain health complications.  If really the insured had resorted to willful suppression of material particulars, no doubt, such factor would nullify the very claim itself.  While so, now, the LIC gives a list of hospitals from where the insured was taking treatment just prior to presenting the proposal form and they are quite emphatic that this is a clear case of willful suppression of material particulars that would disentitle the beneficiaries from claiming the assured sum.  Considering the fact that the LIC had furnished the relevant details in the proof affidavit and further, it seems, it took considerable time for them to collect various medical records of the insured from different hospitals, prima facie, we find bona fides in their present contention and hence, giving one more opportunity to them to discharge their burden to prove that the insured had resorted to willful suppression of his clinical status as well as there was positive presence or existence of any adverse ailment/sickness at the relevant point of time, would only better serve the interests of justice and ultimately, the respondents herein would also be heard on those medical records, however, allowing the said plea is subject to the condition that the LIC shall pay a sum of Rs.3,000/- (Rupees three thousand only) towards costs, which they have now complied with by paying the said sum across the table to the counsel for the respondents and receipt of the same is thus acknowledged.

 

             7. In the result, the appeal is allowed by setting aside the order, dated 11.12.2018, passed by the DCDRF, Vellore, in C.C. No.39 of 2007 and consequently, the matter is remanded back to the District Commission for consideration afresh, after permitting the LIC to mark their documents/written arguments forthwith, whereupon, both sides shall be heard and, by duly considering the arguments/points/objections of the RR-2 and 3 herein on those documents, the matter shall be disposed of on merits and in accordance with law, preferably within a period of 3 months from the date of receipt of a copy of this Order.

 

 

R VENKATESAPERUMAL                                                                                                           R.SUBBIAH, J.

MEMBER                                                                                                                                           PRESIDENT.

 

ISM/TNSCDRC/Chennai/Orders/July/2023.