Heard learned counsel for both sides.
The Senior Officer of LIC is present with the original records as directed by us on the earlier occasion. The original LIC file of the deceased policy holder is filed.
2. Here is an appeal filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.
3. The factual matrix leading to the case of the complainant is that one V.Govindo Rao who is the husband of the present complainant has purchased LIC policy bearing No. 571801086 from the OPs for sum assured of Rs.7,70,000/- with premium of Rs.22,269/-. It is alleged inter alia that policy holder submitted the proposal on 8.11.2007 and thereafter, OPs issued the insurance policy to the policy holder. However, on 10.1.2008, the policy holder died by suffering from infective hepatitis. Thereafter, complainant filed the claim before the OPs to settle the same but the OPs did not listen to her request. The complainant showing such repudiation being deficiency of service on the part of the OPs filed complaint before the learned District Forum, Malkangiri. Hence, the complaint.
4. Per contra, the OPs filed written version stating that they have issued the policy on the proposal made by the policy holder V.Govoindo Rao. It is further submitted that after the claim was received, they have investigated the matter and found that the policy holder suppressed the material fact with regard to his health condition at the time of making the proposal. According to the OPs the policy holder was suffering from infective hepatitis 30 days prior to his consultation with Doctor Sri T.P.K.Swamy of Jeypore on 27.12.2007. Since at the time of submitting the proposal form on 8.11.2007, the policy holder has not reported about any disease of malaria, gastro enteritis, ulcer foot, same amounts to suppression of material facts and as such the OPs invoked Section – 45 of the Insurance Act to call the policy in question. So, there is no any deficiency in service on their part.
5. Learned District Forum after analysing the evidence of both the parties allowed the complaint in part and the operative portion of the impugned order is extracted below:-
“ xxx xxx xxx
The complaint petition is allowed in part. The opp.parties are herewith directed to settle the death claim of Rs.7,70,000/- in favour of the complainant, besides the opp.parties jointly and severally are liable to pay Rs.50,000/- and Rs.5,000/- to the complainant towards compensation and costs of litigation within 45 days from receipt of this order, failing which, the compensation amount shall carry interest @ 10% p.a. from the date of order.”
6. Learned counsel for the appellants challenging the order of the learned District Forum submitted that the impugned order of the learned District Forum is wrong, illegal and completely one sided inasmuch as the impugned order itself is against the letter and spirit of section – 45 of the Insurance Act and the law laid down by the Hon’ble Apex Court in this regard. According to him the policy proposal form although given on 8.11.2007 but it was submitted on 29.11.2007. He also submitted that the doctor has examined the policy holder on 27.12.2007 30 days prior to and as per the doctor’s opinion, the policy holder was suffering from infective hepatitis since 30 days at the time of examination. Before submission of proposal form since the policy holder was suffering from infective hepatitis, he ought to have filled up of the proposal form by stating the true fact. He also submitted that since it is a contract based on the principle of “Uberrima fides” i.e. based on most abdudant good faith and trust, and the insured must observe most perfect good faith towards the insurer. Learned District Forum ought to have considered all these facts and law involved in this case.
7. Further, learned counsel for appellant submitted that the policy holder has declared in the proposal form that he would inform about the health condition if occurred after the proposal form is submitted and before the first premium is received. But in the instant case although he submitted the proposal form, he has not acted so as per the declaration. In order to support his submission, he relied upon the decision of the Hon’ble National Commission based in Hon’ble Supreme Court of India in Saramma Varghese vrs. LIC of India CDJ 2008 (cons) Case No. 082 and Life Insurance Corporation of India vrs. Smt. Asha Goel AIR 2001 SC 549.Therefore, he submitted to allow the appeal by setting aside the impugned order.
8. Learned counsel for the respondent submitted that the fact narrated by the learned counsel for the appellants is not on record. According to him on 8.11.2007, the proposal form was filled up by the policy holder and he was not suffering from infective hepatitis. Therefore, he filled up of the proposal form correctly. He also submitted that he has not made any false declaration in the proposal form. He drew the attention to the discussions made by the learned District Forum. However, he supports the impugned order.
9. Considered the submission of learned counsel for respective parties and perused the DFR including the impugned order.
10. It is well settled in law that the complainant is required to prove the deficiency in service on the part of the OPs but here the OPs have taken the plea in their written version that the policy holder has suppressed the pre-existing disease while filled up of the proposal form.
11. Now issue is whether the insured has suppressed the pre-existing disease and making false statement. In the decision of Mithoolal Nayak vrs. Life Insurance Corporation of India AIR 1962 Supreme Court 814, it has been held by the Hon’ble Apex Court which is as follows:-
“ xxx xxx xxx
The three conditions for the application of the second part of Section 45 are
a) the statement must be on a material matter or must suppress facts which it was material to disclose,
b) the suppression must be fraudulently made by the policy holder and
c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.”
12. With due regard to the decision, it can be safely observed that within two years of commencement of policy the insurer have right to revoke the policy as per provision contained in unamended Section 45 of Insurance Act, 1938. But onus lies on the insurer to prove all the pre-conditions before calling the policy in question within two years from the date of commencement of policy.
13. The above decision has been also followed by the several decisions of the Hon’ble Supreme Court of India including the decision of Asha Goel (Supra). With due regard to the aforesaid decision, it is made clear that the onus lies on the OPs to prove that the policy holder was suffering from pre-existing disease. It is also clear from the decision of the Hon’ble Supreme Court that the contract of insurance including the contract of life insurance are contract “Uberrima fides” and every fact of material must be disclosed otherwise, there is good ground for reissuance of the contract. The duty to disclose material facts continues right up to the conclusion of the contract and also implied any material alternation in the character which may take place between the insured and the insurer. Therefore, in this case, it is for the OPs to prove that the policy holder has suppressed the pre-existing disease while filling up of the proposal form and therefore, they called the policy in question u/s 45 of the Insurance Act, 1938.
14. The OPs in order to discharge their onus have relied upon the proposal form and medical documents. The original proposal form submitted by the LIC and copies thereof available on the DFR clearly show that the proposal of the policy holder has been filled up in following manner:-
“xxx xxx xxx
- During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week? No
- Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation? No.
- Have you remained absent from place of work on grounds of health during the last 5 years? No
- Are you suffering from or have you ever suffered form ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system? No
- Are you suffering form or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy Hemia, Hydrocele, Leprosy or any other diseases? No
- Do you have any bodily defect or deformity? No
- Do you ever have any accident or injury? No
- Do you use or have ever used Alcoholic drink, Narcotics, any other drugs, Tobacco in any form?
- What has been your usual state of health? Good
- Have you ever received or at present availing/undergone medical advice, treatment or tests in connection with Hepatitis – “B” or an “AIDS” related condition? No”
15. It is also made clear that the proposal has been made and filled up on 8.11.2007. The same fact is also admitted by both parties. Now the question comes whether the aforesaid declaration is false and fabricated by the policy holder by contravening the contract which is based on the above principle of contract.
16. The medical record as relied upon by the OPs shows that on 27.12.2007 Dr.T.P.K.Swamy of first diagnosised the disease of the policy holder and also suffering form infective hepatitis disease. It is only available from Para - 4 of the medical examination certificate that the policy holder was suffering from disease 30 days prior to the examination. Even if 30 days are counted, it falls on 27.11.2007. So, it is not possible for the policy holder to show that he was expecting disease in future because he was to only specify the disease he was suffering on that date i.e. 8.11.2007. Therefore, we are constrained to hold that the OPs have not proved that the policy holder has suppressed the pre-existing disease on the date of filling up of the proposal form.
17. The second plea of submission of learned counsel for the appellants is that the policy holder has violated the declaration he has made in that proposal form. For better clarification the declaration in this regard is as follows:-
“xxx xxx xxx
I V.Govindo Rao the person whose life is herein being proposed to be assured, do hereby declare that the forgoing statements and answers given by me after fully understanding the questions and the same are true and complete in every particular and that I have not withheld any information and I do hereby agree and declare that statements and this declaration shall be the basis of the contract of assurance between me and the Life Insurance Corporation of India and that if any untrue averment be contained the said contract shall be absolutely null and void and all moneys which shall have been paid in respect there of shall stand forfeited to the Corporation. Notwithstanding the provision of any law usage, custom or convention for the time being in force prohibiting any doctor, hospital and/or employer from divulging any knowledge or information about me concerning my health or employment on the grounds of secrecy in my heirs executors, administrators and assignees or any other person or person have interest of any kind whatsoever in the policy contract issued to me, here by agree that such authority, having such knowledge or information, shall at any time be at liberty to divulge any such knowledge or information to the Corporation.
And further agree that if after the date of submission of the proposal but before the issue of the First premium Receipts (1) any change in my occupation or any adverse circumstances connected with my financial position or the general health of myself or that of any members of y family occurs or *(2) if a proposal for assurance or an application for revival of a policy on my life made to any office of the Corporation has been withdrawn or dropped, deferred or accepted at an increased premium or subject to a lien or on terms other than as proposed, I shall forthwith intimate the same to the Corporation in writing to reconsider the terms of acceptance of assurance. Any omission on my part to do so shall render this Assurance invalid and all moneys which shall have been paid in respect, thereof shall stand forfeited to the Corporation.”
In this regard learned counsel for the appellants drew attention to Para – 6 of the written version where it is stated that the policy holder did not suffer from hepatitis before filling up of the proposal form. No such document is filed to show that first premium receipt was dated 29.12.2007. However, learned counsel for the appellants drew attention of this Commission to receipt dated 20.12.2007 on which date the first premium was paid. He tried to convince the Commission that actually the policy holder was suffering on 27.12.2007 as doctor examined him on that day as available from Medical Attendant Report. On perusal of such report, it is evident that doctor issued certificate on 16.5.2008, i.e. after death of the insured. No treatment document was placed by OP to show treatment of insured for the first time on 27.12.2007. So OP failed to prove that before filing premium receipt insured was treated but failed to inform the insurer. Even if this receipt is taken as 28.12.2007 same is not at all pleaded in the written version. Therefore, we are unable to accept his submission to prove that the policy holder has violated his declaration.
18. In view of above discussion, we reiterate that the policy holder has neither suppressed the material fact nor violated the declaration made on 8.11.2007. In view of aforesaid discussion, we are of the view that learned District Forum has analysed the materials on record correctly and there is nothing to interfere with it. Hence, the impugned order is confirmed and the appeal stands dismissed. No cost. The original documents be returned to appellant after keeping the copies of documents in file.
DFR be sent back forthwith.
Supply free copy of this order to the respective parties or the copy of this order be downloaded from Confonet or Website of this Commission to treat same as copy supplied from this Commission.
