KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACADU THIRUVANANTHAPURAM APPEAL NOS:622/2003 & 624/2003 COMMON JUDGMENT DATED:22..04..2010. PRESENT SRI. M.V. VISWANATHAN : JUDICIAL MEMBER SRI.M.K. ABDULLA SONA : MEMBER APPEAL NO:622/2003 K.Mithran, Agent, LIC of India, P.O.Thillankari, : APPELLANT Via Mattannur, Kannur District. (By Adv:Sri.Cherunniyoor P.Sasidharan Nair) Vs. N.Sudhamani, Rajeev Nivas, Nalankeri.P.O, Poovar, : RESPONDENT Via Mattannur, Kannur District. ( By Adv:M/s J.Soloman & P.S.Pradeep) APPEAL NO:624/2003 Divisional Manager, LIC of India, Divisional Office, Jeevan Prakash, PB No.177, : APPELLANT Kozhikkode-673 001. (By Adv:Sri.R.S.Kalkura) Vs. 1.N.Sudhamani, Rajeev Nivas, Nalankeri, P.O, Poovar, Via Mattannur, Kannur District : RESPONDENTS 2. K.Mithran, Agent, LIC of India, P.O.Thillankeri, Via Mattannur, Kannur District. (By Adv:Sri.Cherunniyoor P.Sasidharan Nair) COMMON JUDGMENT SHRI.M.V. VISWANATHAN: JUDICIAL MEMBER These appeals are preferred from the order dated:17th June 2003 passed by CDRF, Kannur in OP:265/2000. The appellants in these 2 appeals were the opposite parties and the 1st respondent was the complainant in OP:265/2000 on the file of CDRF, Kannur. The aforesaid complaint was filed alleging deficiency of service on the part of the opposite parties 1 and 2 in repudiating the insurance claim with respect to two insurance policy bearing Nos:791449278 and 791449279. 2. The opposite parties entered appearance and filed separate written versions denying the alleged deficiency of service and contended that the life assured, Viswanathan suppressed material facts and deliberately misrepresented the facts while submitting the proposal for the said policies and that the said policies were obtained by concealing material facts. The 2nd opposite party, the agent of LIC of India contended that there was no deficiency of service on his part and that he canvassed the insurance policy and he only assisted the life assured in filling up the proposal form and that he filled up the proposal form as instructed by the life assured. And that the life assured after fully understanding the entries in the proposal form affixed his signature admitting the statements therein. Thus, the opposite parties prayed for dismissal of the complaint in OP:265/00. 3. Before the Forum below, the complainant was examined as PW1. Exts.P1 to P10 documents were marked on the side of the complainant and R1 to E13 documents were marked on the side of the 1st opposite party. 2nd opposite party was examined as DW1. On an appreciation of the evidence on record the Forum below passed the impugned order dated:17/6/2003 allowing the complaint and thereby directing the opposite parties to pay the policy amount to the complainant along with compensation of Rs.5000/- and cost of Rs.250/-. The 1st opposite party was given the liberty to get the amount reimbursed from the 2nd opposite party who is responsible for all the calamities. Aggrieved by the said order the Appeal:622/03 is preferred by the 2nd opposite party and the Appeal.No.624/03 by LIC of India. 4. We heard both sides. The learned counsel for the appellants/opposite parties submitted their arguments based on the grounds urged in the memorandum of the present appeals. They canvassed for the position that the life assured deliberately made misrepresentation and suppression of material facts regarding his health condition and thereby obtained the 2 life insurance policies by concealing material facts. They also relied on the documentary evidence adduced from the side of the 1st opposite party/LIC of India to substantiate the contention that the life assured had undergone medical treatments as an inpatient on various occasions. The counsel for the appellant/2nd opposite party(LIC agent) vehemently argued for the position that the 2nd opposite party had only assisted the life assured in filling up the proposal form and that the 2nd opposite party had only acted as an agent of the life assured in filling up the proposal form. The learned counsel for the appellant/2nd opposite party has also relied on the oral testimony of 2nd opposite party as DW1 and the declaration given by the life assured admitting the correctness of the entries in the proposal forms. It is further submitted that the life assured Viswanathan was employed as UD clerk in Water Authority and he was a well qualified person having a post graduate degree. Thus, the appellants justified the repudiation of the insurance claim put forward by the complainant as nominee of the life assured. On the other hand, the learned counsel for the respondent/complainant supported the impugned order passed by the Forum below and requested for dismissal of the present appeals. 5. The points that arise for consideration are:- 1. Whether the 1st opposite party/LIC of India can be justified in repudiating the insurance claim put forward by the complainant in OP:265/00? 2. Whether the 2nd opposite party/LIC agent can be made liable for the alleged suppression and misrepresentation of material facts regarding the health condition of the life assured while filling up the proposal forms in obtaining the two life insurance policies in the name of the life assured, K.Viswanathan? 3. Whether the Forum below can be justified in directing the opposite parties to pay the policy amounts to the complainant with respect to the 2 life insurance policies issued by LIC of India infavour of the life assured, K.Viswanathan? 6. Point Nos: 1 to 3:- For the sake of convenience, the parties to these two appeals can be referred to according to their rank and status before the Forum below in OP:265/2000. 7. There is no dispute that the complainant is the wife and nominee of the life assured, K.Viswanathan. The issuance of two life insurance policies bearing Nos: 791449278 and 791449279 by the 1st opposite party/LIC of India insuring the life of K.Viswanathan for an amount of Rs.50,000/- each is not in dispute. The aforesaid 2 policies commenced on 11/3/1997. Ext.P1 and P2 are copies f the said two life insurance policies issued by the 1st opposite party in the name of Viswanathan Komath. It is to be noted that the aforesaid 2 policies were issued on one and the same day. Ext.R10 and R11 are the proposals submitted by the life assured, Viswanathan.K for obtaining the said 2 policies. Both the proposals are dated:24th February 1997 and the said proposals were accepted by the branch office of LIC of India on 28th February 1997. It is on the basis of R10 and R11 proposals submitted by the life assured, K.Viswanathan, the originals of P1 and P2 policies were issued by the 1st opposite party. R10 and R11 proposal forms contain questionnaire under the sub heading Personal History. Those questionnaire are enumerated as 11(a) to (i). 8. Those questionnaires and the answers thereon are as follows:- (a) During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week? Answer. No. (b) Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation? Answer. No. (c) Have you remained absent from place of work on grounds of health during the last 5 years? Answer. No. (d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system? Answer. No. (e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? Answer. No. (f) Do you have any bodily defect or deformity? Answer. No. (g) Did you ever have any accident or injury? Answer. No. (h) Do you use or have you ever used alcoholic drinks, narcotics or any other drugs? Answer. No. (i) What has been your usual state of health? Answer. Good. 9. The perusal of R10 and R11 proposals would show that the answers to those questions 11(a) to (h) were answered in the negative and the answer to question 11(i) was answered as ‘Good’. The aforesaid answers would disclose that the life assured, Viswanathan.K was not having any sort of ailment, treatment or hospitalization and he was having good health. 10. The case of the 1st opposite party/LIC of India is that those answers were given in the proposals by deliberately misrepresenting and suppressing the material facts. It is the definite case of the 1st opposite party/LIC of India that the life assured concealed material facts while submitting the proposals for the policy and thereby obtained the life policies by concealing material facts. Ext.R1 to R9 documents would make it clear that the life assured, Viswanathan.K was suffering from the disease by name ‘Hemiplegia’ and he had undergone treatment for the said disease of hemiplegia. Those medical records would also show that the life assured, K.Viswanathan had undergone hospitalization as an inpatient at Kasthurba Medical College Hospital, Manipal and he had also undergone surgery under general anesthesia in that hospital. R9 prescription would also show that the life assured had also undergone ayurvedic treatment and he had also undergone treatment in Aryavydyasala as inpatient. The genuineness and correctness of R1 to R9 documents have not been disputed by the complainant; but rather admitted the fact that the life assured had been suffering from the disease known as hemiplegia. The complainant as PW1 has also admitted the fact that the life assured died due to the disease hemiplegia. The medical dictionary would show that the disease hemiplegia is a neurological disorder. The answer to the question 11(d) that the proponent was not suffering from ailments pertaining to brain or nervous system was a misleading answer. The available documents would also show that the life assured was not having good health at the time of submitting the proposal for the said policies. R10 and R11 proposals would make it crystal clear that the said proposals were submitted by the life assured suppressing material facts regarding his health condition. It would also make it clear that the life assured obtained the said 2 life policies by concealing material facts. 11. The case of the complainant is that ext.R10 and R11 proposals were filled by the LIC agent namely the 2nd opposite party and that the life assured had only affixed his signature in the said proposal forms. On the other hand, the 2nd opposite party/LIC agent as DW1 has deposed that he filled those proposal forms in order to assist the life assured, K.Viswanathan and that the 2nd opposite party had only written what had been disclosed by the life assured. DW1 further deposed that the life assured affixed his signatures in R10 and R11 proposal forms after fully understanding the entries in those proposal forms. There is nothing on record to show that PW1, the complainant was present at the time of filling R10 and R11 proposal forms. Only the name of the complainant is written in the proposal forms in the place of the nominee. The testimony of PW1 that the 2nd opposite party/LIC agent obtained the signatures of the life assured in those proposal forms by stating that he will fill up the blanks in those proposal forms cannot be believed or accepted. It is to be noted that the answers given to many of the queries in the proposal forms were known to the life assured himself. The date of birth, age, place of birth, name of the wife, length of service, educational qualification, annual income etc could only written with the assistance of the life assured. Those entries in the proposal forms would make it clear that the proposal forms were filled up in the presence and with the assistance of the life assured. So, the aforesaid version of PW1 cannot be accepted. 12. The life assured was a well educated man. He was holding a post graduate degree. He was working as UD clerk in the Water Authority Department. He was in a position to read and understand the answers and the consequences of giving false or misleading answers. It is highly improbable to believe that a person like the life assured affixed his signatures in bank proposal forms by entrusting the work of filling up proposal forms by the LIC agent. It is also to be noted that on the date of filing the proposal forms the life assured was working as UD clerk in the Government Department. Te complainant has no case that the life assured was not in a position to understand the things in the correct perspective. There is no case that the mental faculty of the life assured was impaired at the time of submission of the proposals for the policies. 13. The life assured who proposed for the policy had also given declaration admitting the statements contained in the proposals. It is specifically stated to the effect that the declaration is given by fully understanding the contents and that the proposer has divulged all the informations correctly. He also agreed for cancellation of the policy, in the event it is found that the informations furnished are not true or correct. It is further to be noted that the LIC agent had also affixed his signature stating that the details in the proposal were explained to the proposer and that the same have been truthfully recorded by the proposer. Thus, it can only be inferred that the life assured had given the declaration after filling up the proposal form and that the proposal was submitted by fully understanding the consequence of the same. It is too much on the part of the complainant to say that the life assured submitted the proposal without knowing the contents of the proposals. The facts, circumstances and the documentary evidence available on record would show that the proposals for the 2 policies were submitted by the life assured by deliberately suppressing the material facts regarding his health condition and that the life assured obtained the 2 policies by deliberately concealing the material facts. If that be so, the 1st opposite party/LIC of India is perfectly justified in repudiating the insurance claim. It is well settled position that the LIC of India is at liberty to repudiate the insurance claim and cancel the insurance policy itself as and when it is revealed that the policy was obtained by suppressing material facts. 14. There can be no doubt about the fact that the life assured suppressed material and relevant facts. The life assured died before the expiry of 2 years from the commencement of the policy. The policy commenced on 11/3/1997 and the life assured died on 25/12/1998. The life assured died due to hemiplegia and that the life assured has been suffering from the very same disease when he submitted the proposal for the life policies. It is to be noted that the 2 policies were taken under non medical scheme and that the 2 proposals were submitted on the one and the same day. What promoted the life assured to take two such policies on one and the same day has not been disclosed. The insurance policies have been issued under good faith on the part of either side. If any one of the parties to the contract of insurance suppressed material facts from the other party that will give a valid ground for cancellation of the policy. As and when the deliberate suppression and concealment of the material facts were revealed, the LIC of India can very well revoke the policy and repudiate the claim made on the strength of such policies which were obtained by concealing material facts. Thus, the 1st opposite party/LIC of India is perfectly justified in repudiating the insurance claim preferred by the complainant as nominee of the life assured. 15. There is nothing on record to show that the 2nd opposite party/LIC of India committed any wrong or mistake in canvassing the life assured and in filling the proposal forms. It is also to be noted that by assisting the life assured in filling the proposal forms, the 2nd opposite party/LIC agent had only acted as an agent or friend of the life assured. The aforesaid action on the part of the 2nd opposite party cannot be considered as an agent of the 1st opposite party/LIC agent. The finding of the Forum below that 2nd opposite party committed wrong by concealing the material facts cannot be accepted. The Forum below has also gone wrong in making the 1st opposite party liable for the alleged unauthorized action of the 2nd opposite party/LIC of India. There is nothing on record to show that the 2nd opposite party was authorized to do any such activities. More over, there is also nothing on record to show that the 2nd opposite party acted unauthorisedly or illegally while filling the proposal forms on behalf of the life assured. Thus in all respects, the opposite parties cannot be made liable to pay the insurance amount or compensation to the complainant. So, the impugned order passed by the Forum below is liable to be quashed. Hence we do so. In the result, the above appeals are allowed. The impugned order dated:17th June 2003 passed by CDRF, Kannur in OP:265/00 is set aside and the complaint in OP:265/00 is dismissed. The parties to these appeals are directed to suffer their respective costs throughout. M.V. VISWANATHAN: JUDICIAL MEMBER M.K. ABDULLASONA : MEMBER VL. | 
