Haryana

StateCommission

A/206/2016

LIFE INSURANCE CORP.OF INDIA - Complainant(s)

Versus

MUNNI DEVI - Opp.Party(s)

PIYUSH SHARMA

01 Dec 2016

ORDER

TE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  : 206 of 2016

Date of Institution: 10.03.2016

Date of Decision : 01.12.2016

 

1.      Divisional Manager, Life Insurance Corporation of India, Divisional Office 3,4,5, SCO Sector-1, Rohtak

2.      Branch Manager, LIC of India, Opp. Radio Station, Subhash Road, Rohtak.

                                      Appellants-Opposite parties

 Versus

 

Smt. Munni Devi wife of Late Sh. Kanwar Singh Resident of Village Ritoli, Tehsil and Distt. Rohtak.

                                     

                                      Respondent- Complainant

 

 

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

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member   

 

Argued by:          Sh. Piyush Sharma, Advocate for the appellants

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          Life Insurance Corporation and its functionaries-opposite parties are in appeal against the order dated 11.01.2016 passed by the District Consumer Disputes Redressal Forum, Rohtak (in short, ‘District Forum’) vide which the complaint was allowed and opposite parties were directed to pay sum assured of Rs.1,00,000/- alongwith interest at the rate of 9% p.a. from the date of filing of the complaint i.e. 01.06.2012 till its realisation and Rs.3000/- as litigation expenses.

2.      Munni Devi-complainant filed complaint submitting that Kanwar Singh, deceased, her husband, purchased Life Insurance Policy with assured sum of Rs.1,00,000/- on 20.10.2007 and died on 06.11.2009.  Complainant being nominee lodged the claim. However, opposite parties repudiated the claim on the ground that at the time of revival of policy, the insured did not disclose true and correct information of his health.

3.      The opposite parties contested the complaint by raising plea that Kanwar Singh purchased Life Insurance Policy with assured sum of Rs.1,00,000/- on 20.10.2007 and premium was payable half yearly. It is submitted that the policy lapsed due to non-payment of premium in April, 2009 and was got revived on 20.10.2009.  At the time of revival of the policy, life assured had concealed that he was suffering from Cancer and TB.  Opposite parties prayed for dismissal of complaint.

4.      District Forum after hearing both the parties allowed the complaint and issued directions to the appellants as mentioned in opening para of this order.

5.      Opposite parties have come up in appeal.

6.      Notice being issued to complainant-respondent, complainant did not appear despite service. Complainant has not challenged that the policy lapsed due to non-payment of premium due in April, 2009 and was got revived on 20.10.2009 by filling up revival form (Exhibit-R-3) dated 18^th October, 2009.  The plea of Insurance Company is that at the time of revival of policy, insured had not disclosed that he was suffering from Cancer and TB prior to the revival of the policy. Opposite parties to prove that the life insured was suffering from Cancer and TB, has placed on the file certificate (Exhibit R-5) issued by the Army Authorities vide which the life insured was transferred to Command Hospital (SC) Pune. Exhibit R-7 shows that life insured was suffering from Immune Surveillance (on ART) (Review) & Cryptogenic TB (On ATT) dated 12^th September, 2009. Army Authorities have also issued a certificate (Exhibit R-8) reporting the cause of death as NHL, WITH SVC Obstruction Disseminated TB Immune Surveillance.  The certificate (Exhibit R-9) mentioned that the life insured was suffering from Cancer and TB since July, 2005 and continued till death. Besides in Exhibit R-10 and Exhibit R-11, the Army Authorities have again certified that CPR was immediately initiated and maintained for 30 minutes but patient could not be revived. He was declared dead at 1315 hrs, 06 Nov 2009. He was a known case of NHL with? SVC obstruction immune surveillance and disseminated TB. He had been on ART and ATT which he had discontinued for 01 month (Sep, Oct, 09) in view of his undenying disease condition.  Death was attributed to immune surveillance NHL with? SVC obstruction Cryptogenic Tuberculosis. Being a case of NHL and immune status HIV positive, PM study was not mandatory.  Body handed over to NOK. Thus, certainly the life assured was suffering from Cancer and TB which he did not disclose at the time of revival of policy (Exhibit R-3).  It has been settled law that revival of policy is a new contract and any concealment in knowledge of Life Assured and materially affecting about the health of the life assured makes the contract void.

7.      It is also well settled principle of law that revival of the policy is a new contract and the insurer can repudiate the insurance claim if it finds that the policy was taken by the assured on mis-statement by concealment of true fact regarding his/her health. Support can be had from the judgment rendered in LIFE INSURANCE CORP. OF INDIA & ANR.versus KEMPAMMA & ANR. I(2013) CPJ 653 (NC), wherein Hon’ble National Commission held as under:-

“11.   Learned Counsel for the respondent further argued that statement regarding his health at the time of revival of lapsed policy is not to be seen. This argument is devoid of force in the light of judgment rendered by this Commission in R.P. No.85 of 2007, Pritam Kaur v. LIC of India, in which it was held that “At the time of revival fresh declaration is taken on the basis of which new contract is entered into”. Thus, it becomes clear that at the time of revival of policy new contract comes into existence and if assured suppresses material fact or gives false declaration regarding his health, Insurance Company is entitled to repudiate claim.”

8.      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 relied upon the judgment of Hon’ble Supreme Court and 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…..”  

9.                The case in hand is fully covered by the authoritative pronouncements referred to above. Thus, the District Forum fell in error in allowing the complaint and did not consider this aspect. The appeal is accepted, impugned order is set aside and the complaint is dismissed.

10.    The statutory amount of Rs. 25000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced 01.12.2016

(Diwan Singh Chauhan) Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President