Haryana

StateCommission

A/30/2016

LIFE INSURANCE CORP.OF INDIA - Complainant(s)

Versus

MEENA RANI - Opp.Party(s)

satyawan ahlawat

19 Oct 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :     30 of 2016

Date of Institution:   11.01.2016

Date of Decision :    19.10.2016

 

Life Insurance Corporation of India, Branch Office, near Head Post Office Ambala City and another, through its Manager (L & H), Division Office, Chandigarh.

                                      Appellant-Opposite Party

Versus

Smt. Meena Rani wife of late Sh. Parminder Kumar s/o Sh. Shankar Ram, Resident of Village and Post Office Tharwa, Tehsil and District Ambala.

                                      Respondent-Complainant

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

         

Argued by:          Shri Satyawan Ahlawat, Advocate for appellant.

                             Shri Ashish Sareen, Advocate for respondent.

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          Life Insurance Corporation of India (LIC)-Opposite Party, is in appeal against the order dated November 26^th, 2015 passed by District Consumer Disputes Redressal Forum, Ambala (for short ‘the District Forum’) in Complaint No.321 of 2011.

2.                Parminder Kumar-since deceased (hereinafter referred to as ‘the life assured’)-husband of Meena Rani-complainant/respondent, was insured with Life Insurance Corporation of India-Opposite Party, vide policy Exhibit C-1 for Rs.1.00 lac with Double Accident Benefit. The policy commenced from 28^th December, 2007. The Life Assured fell from the stairs and succumbed to the injuries during the night of 17^th/18^th April, 2009. The complainant being nominee, filed claim with the LIC but the same was repudiated vide letter dated 14^th July, 2010 (Annexure R-17) on the ground that before purchasing of the policy, the life assured was suffering from tuberculosis (T.B.) but he did not disclose this fact in the proposal form (Annexure R-1). However, the LIC paid the Bid Value of Rs.17,925/- to the complainant. Aggrieved thereof, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986.

3.                The Opposite Party/respondent (LIC), in its written version stated that the life assured was suffering from T.B. and was treated in T.B. Hospital at Ambala w.e.f. 27^th May, 2006. In support, reference was made to Revised National Tuberculosis Control Programme Haryana (Annexure R-8 to R-12) and other documents. It was prayed that the complaint be dismissed.

4.                On appraisal of the pleadings and evidence of the parties, the District Forum vide impugned order allowed complaint and directed the LIC to pay Rs.1.00 lac to the complainant alongwith interest @ 9% per annum from the date of repudiation, that is, 14^th July, 2010 till its actual realisation and Rs.10,000/- compensation.

5.                Learned counsel for the appellant-LIC has assailed the order of the District Forum raising plea that the life assured was suffering from TB disease prior to the purchase of the policy from the LIC; he received treatment from T.B. Hospital, Ambala with effect from 3^rd June, 2006 as per F-3784 and F-3816 issued by Medical Officer, T.B. Hospital, Ambala. In support, reference was made to treatment record Annexure R-8 to R-12.

6.                Annexure R-8 is the Mycobacteriology Culture/Sensitivity Test Form; R-9 and R-10 are Laboratory Forms for Sputum Examination; Annexure R-11 is OPD Card; R-12 Blood Examination report. Certificate (Annexure R-14 and R-15) issued by Medical Officer, T.B. Hospital, Ambala shows that the life assured was suffering from T.B. in June, 2006.

7.                Annexure R-1 is the Proposal Form which was submitted by the life assured at the time of purchasing of the policy. In Annexure R-1, the life assured gave answers to question No.6 in negative stating about his health as ‘Good’ whereas the medical record speaks volumes that the life assured was not having good health as he was suffering from T.B.

8.                It is well settled principle of law that the contract of insurance is based on the principle of utmost faith–uberrima fides and the insurer can repudiate the insurance claim if it finds that the policy was purchased by the life assured on mis-statement and by concealment of true fact regarding his/her health.

9.                In Mithoo Lal V. Life Insurance Corporation of India , AIR 1962 Supreme Court 814, Hon’ble Apex Court held as under:-

“Contract of life insurance entered into as a result of fraudulent suppression of material facts by policy holder- Policy is vitiated and person holding assignment of policy cannot claim benefit of contract………….”

10.              Hon’ble Apex Court in Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd. – (2000) 2 SCC 734 held as under:-

“It is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and the good faith forbids either party from non-disclosure of the facts which the parties know.  ………..”

11.              In Revision Petition No.967 of 2008, Life Insurance Corporation of India versus Smt. Neelam Sharma, decided on September 30^th, 2014, Hon’ble National Commission observed as under:-

“8.       In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression “material fact” is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not.  If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering questions in the proposal form.  Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith –uberrima fides.  Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary. (See: United India Insurance Co. Ltd. Vs. M.K.J. Corporation [(1996) 6 SCC 428].  It has also been emphasized that 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 facts which are known to the applicant and not to what he ought to have known.”

“11.     Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of “material facts” in regard to the health of the Insured.  It was not for the Insured to determine whether the information sought for in the aforesaid questionnaire was material for the purpose of the two policies…..”  

12.              The evidence produced on the record established that the life assured was suffering from T.B. prior to the purchase of the policy and was not having good health; thus the life assured suppressed the material fact regarding his state of health.  So, in view of the law enunciated above, this Commission is of opinion that LIC was justified in repudiating complainant’s claim.  The District Forum fell in error in allowing the complaint and as such the impugned order cannot be allowed to sustain.  

13.              In view of the above, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

14.              The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellant-opposite party against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

 

 

Announced: 19.10.2016

(B.M. Bedi) Judicial Member

(Nawab Singh) President

 

CL