Haryana

StateCommission

A/892/2015

LIC - Complainant(s)

Versus

NARENDER KUMAR JAIN - Opp.Party(s)

R.MALHOTRA

12 Apr 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeals No: 892 to 895 of 2015 and 33 to 38 of 2016

                           Date of Institution: 15.10.2015 & 11.01.2016

Date of Decision: 12.04.2016

 

Appeals No.892 to 895 of 2015 & 33 to 37 of 2016

 

1.      Life Insurance Corporation of India, Branch Office, Narnaul, Haryana, through its Manager.

 

2.      Divisional Manager, Life Insurance Corporation of India, SCO No.3,4,5, Sector 1, Rohtak, Haryana through Senior Divisional Manager.

 

3.      Life Insurance Corporation of India, Jeewan Bharti, Connaught Circus, New Delhi through Zonal Manager.

 

4.      Life Insurance Corporation of India, Corporation, Yog Akshem, Jeewan Beema Marg, PB No.19953, Mumbai – 400021 through Managing Director.

                                      Appellants-Opposite Parties

 

Versus

 

Narender Kumar Jain son of Sh. Naresh Kumar Jain, C/o Goyal Electronics, Pull Bazaar, Narnaul, District Mahendergarh, Haryana.

                                      Respondent-Complainant

Appeal No. 38 of 2016

 

1.      Life Insurance Corporation of India, Branch Office, Narnaul, Haryana, through its Manager.

 

2.      Divisional Manager, Life Insurance Corporation of India, SCO No.3,4,5, Sector 1, Rohtak, Haryana, through Senior Divisional Manager.

 

3.      Life Insurance Corporation of India, Jeewan Bharti, Connaught Circus, New Delhi through Zonal Manager.

                   Appellants-Opposite Parties

Versus

 

Naresh Kumar Jain son of Sh. Babu Lal Jain, C/o Jain Cycle Bhandar, Pull Bazaar, Narnaul, District Mahendergarh, Haryana.

                            

          Respondent-Complainant

 

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

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                         

Present:     Shri Rajneesh Malhotra, Advocate for the appellants.

                   Shri Varun Gupta, Advocate for the respondent.

 

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

In these ten appeals under Section 15 of the Consumer Protection Act, 1986 (for short “the Act”), preferred by Life Insurance Corporation of India-opposite parties (LIC), orders, dated August 5^th, 2015, (Appeals No.892 to 895 of 2015); October 29^th, 2015 (Appeals No.33 to 37 of 2016) and October 26^th, 2015 (Appeal No.38 of 2016), passed by District Consumer Disputes Redressal Forum, Narnaul (for short ‘the District Forum’) in Complaints No.154 to 158, 161 to 164  and 182 of 2012 filed by Narender Kumar Jain and Naresh Kumar Jain-complainants/respondents, are under challenge. By the impugned orders dated August 5^th, 2015, the District Forum has allowed complaints No.161 to 164 of 2012 and directed the LIC to pay the sum assured alongwith interest at the rate of 10% per annum from the date of filing the complaints till its realization; Rs.10,000/- compensation and Rs.2200/- litigation expenses, to the complainant. Complaints No.154 to 158 and 182 of 2012 were allowed directing the LIC to pay the sum assured alongwith interest at the rate of 10% per annum from the date of filing the complaints till realization and Rs.2200/- litigation expenses to the complainant.

2.      These appeals are being disposed of by this common order because the question of facts and law involved is identical.

3.      Laxmi Devi – since deceased (hereinafter referred to as ‘the insured’)-mother of Narender Kumar Jain and wife of Naresh Kumar Jain-complainants/respondents, purchased 13 Life Insurance Policies from the LIC.  For ready reference, the description of the insurance policies is reproduced as under:-

Case No.	Policy No.	Sum Assured Rs.	Date of Commencement	Date of Maturity
FA No.892,CC No.161	176862050	3,00,000	28.12.2008	28.12.2018
FA No.893,CC No.162	176862049	3,00,000	28.12.2008	28.12.2018
FA No.894,CC No.163	176862048	3,00,000	28.12.2008	28.12.2018
FA No.895,CC No.164	176862045	3,00,000	28.12.2008	28.12.2018
FA No.33,CC No.154	176863815	6,00,000	01.01.2009	01.01.2019
FA No.34,CC No.158	176863816	6,00,000	01.01.2009	01.01.2019
FA No.35,CC No.156	176863817	6,00,000	01.01.2009	01.01.2019
FA No.36,CC No.157	176863819	6,00,000	01.01.2009	01.01.2019
FA No.37,CC No.155	176863818	6,00,000	01.01.2009	01.01.2019
FA No.38,CC No.182	175877884 175877885 174877204 176170030	1,00,000 1,00,000 1,00,000 2,00,000	28.02.2008 28.07.2007 28.02.2008 28.02.2008	28.02.2023 28.07.2023 28.02.2028 28.02.2028

 

4.      The insured died on October 06^th, 2010.  The complainants filed claim with the LIC but it did not pay the benefits of insurance. The complainants filed complaints before the District Forum. 

5.      The LIC in its reply pleaded that at the time of obtaining the insurance policies, the insured was suffering from Rheumatic Heart Disease and Mitral Valve Replacement (MVR) was performed in the year 2003, that is, prior to the dates of purchase of the insurance policies but she did not disclose this fact in the proposal forms.

6.      Learned counsel for the LIC has urged that the insured was admitted in Medanta Heart Institute, Medanta-The Medicity, Gurgaon (for short, ‘Medanta Hospital’) on October 05^th, 2010 and died on October 06^th, 2010 due to Cardiogenic Shock and Acute Renal Shutdown. In support, reliance was placed upon Death Summary (Exhibit R-6) coupled with a certificate of Dr. R.R. Kasliwal, Chairman, Division of Clinical & Preventive Cardiology, Medanta Hospital, where it was stated that the insured was a case of Post Mitral Valve Replacement in the year 2003.

7.      Per contra, learned counsel for the complainant has urged that no concrete evidence has been led by the LIC to prove that the insured was having pre-existing disease. So, the certificate relied upon by the LIC should be discarded.  In support of his contention, reliance has been placed upon (i) Life Insurance Corporation of India versus Jasbir Singh and others, 2011(1) CPC 229 (SCDRC, Punjab); (ii) Reliance General Insurance versus High Court Lawyers, Public Charitable Trust, 2010(1) CPC 373 (SCDRC, UT Chandigarh); (iii) Kusum Lata Jain versus Life Insurance Corporation of India, 2012(1) CPC 397 (NC) and (iv) Life Insurance Corporation of India & others versus Ram Murti, 2010 (1) CPC 143 (NC).

8.      It is an admitted fact that the insured had purchased thirteen insurance policies during the period July, 2007 to January, 2009 amounting to Rs.47.00 lacs. She was admitted in Medanta Hospital, on October 05^th, 2010 and died on October 06^th, 2010.

9.      Death Summary (Annexure R-6) was drawn by Dr. R.R. Kasliwal, Chairman, Division of Clinical & Preventive Cardiology, Medanta Hospital. It has been mentioned in the Death Summary that the insured was brought to emergency with acute onset breathlessness and decreased urine output on October 5^th, 2010. She was managed on diuretics. On October 6^th, 2010 morning at 1:45 a.m. the condition of the patient deteriorated and she went into cardiogenic shock. Critical care review was taken and patient was intubated and put on ventilator support in view of falling saturation level and Inotropic support was given. At 9:45 patient collapsed. Her blood pressure was not recordable. Immediate resuscitation was started. Injections Adrenaline, Atropine, Sodabicarb were given and cardiac massage was continued for more than 30 minutes but despite of all the efforts, the patient could not be revived.

10.    LIC also sought the opinion of Dr. R.R. Kasliwal. It has been certified by Dr. Kasliwal vide Exhibit R-7 that earlier the patient (insured) was admitted in the hospital on September 22^nd, 2010 and was discharged on September 27^th, 2010.  In column No.4, the nature of ailment has been mentioned “breathlessness, RHD, Post MVR (2003) Severe TR”.  From these two documents (Exhibit R-6 & R-7), it is clear that the insured was a patient of Rheumatic Heart Disease and Mitral Valve Replacement (MVR) was performed in 2003. 

11.    Post Mitral Valve Replacement is a Cardiac Surgical Procedure in which a patient’s mitral valve is replaced by either a mechanical or bioprosthetic valve.  Mitral Valve Replacement is performed when the valve becomes too tight (mitral valve stenosis) for blood to flow into the left ventricle, or too loose (mitral valve regurgitation) in which case blood can leak back into the left atrium and thereby back into the lung. 

12.    In the proposal forms, the insured stated that her usual state of health was good and she never suffered from any heart disease, liver, stomach etc.  Thus, from the evidence available on record, it is established that insured had concealed the material fact with regard to her health.

13.    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………….”

14.    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.  ………..”

15.    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…..”  

16.          On the aforesaid facts and principle enunciated,  the right to claim insurance benefits by the complainants does not survive in view of the medical record, that is, Death Summary (Exhibit R-6) and Certificate (Exhibit R-7) issued by Dr. R.R. Kasliwal. Thus, it stands established to the hilt that the insured was suffering from heart disease prior to the date of purchase of the Insurance Policies and she suppressed this fact in her statements (proposal forms) made at the time of purchasing the insurance policies.

17.    The authorities relied upon by the learned counsel for the complainants are not applicable to the present case. In Jasbir Singh’s case (Supra) the insured was treated for hepatitis and jaundice and expired after leaving the hospital. It was the case of the LIC that the insured had concealed the fact of her disease at the time of submitting the proposal form. The said contention of the LIC was rejected by Punjab State Commission because LIC had failed to prove that the insured was suffering from heart disease prior to submitting of the proposal form. 

18.    In High Court Lawyers, Public Charitable Trust’s case (Supra), the insured was admitted to Fortis Hospital for the treatment of her gall bladder and an amount of Rs.5,38,000/- was spent on the treatment. The claim was repudiated by Reliance General Insurance on the ground that the insured had pre-existing disease. As per medical certificate issued by a competent and highly qualified doctor of Fortis Hospital, there was no pre-existing disease suffered by the insured, the plea of the Insurance Company was repelled.

19.    In Kusum Lata Jain’s case (Supra), LIC denied the claim on the ground that the insured had concealed the pre-existing disease of jaundice and piles and he was also alcoholic. It was held by Hon’ble National Commission that mere bleeding due to pile does not prove that insured was having any disease at the time of obtaining the policy.

20.    In Ram Murti’s case (Supra), no evidence was led by the LIC to prove the fact that the insured had taken treatment prior to the date of purchase of the policy.

21.    In the case in hand, LIC has proved by leading cogent evidence consisting of Death Summary (Exhibit R-6) and Certificate (Exhibit R-7) issued by Dr. R.R. Kasliwal, Medanta Hospital, Gurgaon that the insured was suffering from heart disease prior to the date of purchase of the insurance policies.  So, the authorities referred to above are no help to the complainants. 

22.    For the reasons recorded supra, the appeals are accepted, the impugned orders are set aside and the complaints are dismissed.

23.    The statutory amount deposited at the time of filing appeals be refunded to the LIC against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

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Announced 12.04.2016

Diwan Singh Chauhan Member

B.M. Bedi Judicial Member

Nawab Singh President

CL