O R D E R
DR. SMARITA MOHANTY, MEMBER
This appeal is directed against the order dated 19.8.2016 passed by learned District Forum, Sundargarh-II, Rourkela in C. C. Case no. 88 of 2015.
The background facts of the complaint are that Complainant’s father had insured his life under the O.Ps.-Insurance Company vide policy no. 594523951 for sum assured of Rs.1,05,000/- for the period from 28.5.2013 to 28.5.2024. The yearly premium was Rs.10,564/-. Unfortunately, the policy holder died on 27.3.2014. Complainant being the nominee claimed against the said policy. The O.Ps.-Insurance Company repudiated his claim on the ground that insured had suppressed material information with regard to his health and had given false answers while signing the proposal form.
O.Ps.-Insurance Company contended that the death claim was early in nature and after investigation it was found that deceased life assured was an alcoholic and suffering from Alcoholic Gastritis for which he was treated at IGH Rourkela from 30.9.2010 to 27.1.2011. The deceased life assured remained absent from duties on different occasion in the year 2010, 2011 and 2012, which was confirmed from the certificate issued by Assistant Manager (Sports) SAIL RSP, Rourkela. Deceased life assured did not disclose the fact and gave false statements in the proposal form. The claim was repudiated on the ground of suppression of material facts about health while proposing the policy and hence complainant being the nominee is not entitled to get any claim amount. There is no deficiency of service on the part of O.Ps and prayed for dismissal of the complaint with cost.
Taking into consideration the facts and circumstances of the case learned District Forum allowed the complaint directing O.Ps.-Insurance Company to pay the full insured sum of Rs.1,05,000/- only to the complainant along with interest @ 6% per annum from the date of repudiation i.e., 20.3.2015 till date of payment within two months from the date of communication of the order. It was further directed to pay a sum of Rs.1,000/- towards cost.
Being aggrieved by the aforesaid order O.Ps.-Insurance Company have filed the present appeal on the grounds that learned District Forum committed grave illegality in not considering the documents relied by the appellants. The findings of the Forum below are illogical, unscientific and based on non-application of judicial mind. The impugned order is based on misconception of fact and law and thus liable to be set aside.
We heard Mr. N. N. Mohapatra, learned counsel for appellants and Mr. S. K. Senapati, learned counsel for respondent.
We perused the impugned order and District Forum record. We also went through the written note of submissions filed by the parties.
Learned counsel for appellants argued that the information in the proposal form before taking the policy and information gathered after the death of policy holder are just contrary to each other. From the evidence on record and pleading it is a clear case of fraud committed by deceased life assured and hence as per provision of Section 45 of Insurance Act, the onus of disproving the fraud lies upon the beneficiary i.e., respondent. The deceased life assured being an educated person cannot take the plea of ignorance of consequence of giving false information in the proposal form. LIC policy is a contract based on the principle of “utmost good faith”. It was further argued that learned District Forum is not the Expert of Medical Science to come to the finding that Alcoholic Gastritis is not a major disease and non-disclosing of the said disease in the proposal form is not that important and it has no nexus with liver disease.
Learned counsel for appellants relied on the decision of Hon’ble National Commission in case of LIC of India v. Mansa Devi, 11 (2003) CPJ 135 (NC), and laid emphasis on paras - 5 and 6 of the said judgment which read as follows:
“5. We have carefully perused all the documents and after hearing the arguments from both the parties, we find there is sufficient reason to believe that the life assured suppressed the material facts of existence of diabetes and the treatment he had undergone for eight years, to the petitioner. The learned State Commission disbelieved all the documents produced by the petitioner that they were copies of the originals and that they were not properly attested and that the Insurance Company did not file an affidavit in support of the said documents. It further observed that the opinion of the doctor cannot be authentic unless he is subjected to the examination and cross-examination. They have not considered the fact of suppression in the proposal for the policy and disbelieved the documents placed before them.
6. We find the State Commission has erred in their view that the petitioner has failed to substantiate that the respondent’s husband had suppressed material facts at the time of proposing for insurance. It is very clear from the statement of the employer of the respondent Executive Engineer, Township Division B. B. M. B., Sunder Nagar wherein he certified that the life assured was diabetes patient and that he was under treatment of doctors in P. G. I. He further certified that the life assured was on leave for illness from 17.3.1992 to 25.3.1992, 26.3.1992 to 22.8.1992 and 22.3.1995 to 15.4.1995. Further, it is also likely that leg amputation after thorn prick and renal failure of the life assured to cause his death are all clear indications of long suffering of diabetes.”
On the other hand learned counsel for respondent argued supporting the impugned order and contended that learned District Forum has clearly dealt with all the grounds of repudiation and objections with proper appreciation, assessment of material facts and evidence available on record and came to conclusion of liability of appellants.
Learned counsel for respondent relied on the decision of Hon’ble National Commission in case of Surinder Kaur and Ors. V. LIC of India and Ors. decided on 14.2.2005, and laid emphasis on Paras - 14 and 15 of the judgment which read as follows:
“14. However, it is noticeable that this Commission in The New India Assurance Co. Ltd. and Anr. v. P. P. Khanna, II (1997) CPJ 1 (NC)=1997 (2) CPR 21 (NC) held as under:
‘The onus probandi, in cases of fraudulent Suppression of material facts rests heavily on party alleging fraud namely the insurer. The insurer cannot avoid consequences of insurance contract by simply showing inaccuracy or falsity of statement. Burden is cast on the insurer to show that the statement was on a material matter or facts have been suppressed which it was material for the policy holder to disclose. It is further to be proved that the statement was fraudulently made by the policy holder with the knowledge of the falsity of statement or the suppression was of material facts which had not been disclosed. The courts will not be satisfied with proof which facts short of showing that intentional mis-representation was made with the knowledge of perpetrating fraud.’
15. In LIC v. Smt. Promila Malhotra, I (2004) CPJ 91 (NC) again it was held that the onus to prove material concealment would lie on the insurer.”
Admittedly, respondent’s father had obtained one LIC policy vide policy no. 594523951 for sum assured of Rs.1,05,000/- for the period from 28.5.2013 to 28.5.2024. After the death of the policy holder on 27.3.2015 respondent being the nominee claimed against the said policy. But the same was repudiated on the ground of suppression of material facts.
The findings and conclusion of learned District Forum are as follows:
“Issuance of policy in favour of the deceased life assured and admission into IGH, Rourkela including death on 27.3.2014 in the hospital are not disputed. In order to establish fraudulent suppression of material information by the deceased life assured, the O.P.-Insurance Company has placed Xerox copies of extract of medical book of the deceased. Annexure-A and A-1 are the copies. Annexure-B is the copy of certificate issued by the employer of the deceased. Annexure-A and A-1 claiming to the extract of medical book certified by the employer Manager (Sports), SAIL, RSP., Rourkela have been relied on wherein prescriptions with complaint and medicines have been prescribed by the doctors on various dates in 2010, 2011 but we cannot ascertain the identity of the medical officers. Complaint relating to alcoholic gastritis, pain right side abdomen had been reported and medicines were prescribed. The Xerox copies have been attested by employer concerned. The Assistant Manager A. Khatua also has signed on a printed form of LIC on 12.9.2014 vide Annexure-B. The said Annexure-B is also Xerox copy. Name of the deceased and in column No.3 record of absence from duty from 5/2010 to 5/2013 have been specified. What had been noted by the medical officer in the Annexure-A, A-1 for which only two Xerox copies are filed, cannot be accepted as providing infallible proof of the case of the O.P.-Insurance Company. Further Mr. A. Khatua, Manager (Sports), SAIL, RSP, Rourkela who issued extract of medical book by attesting true copies, Annexure-A, A-1 and leave records i.e. certificate by employer, Annexure-B, is neither examined nor his affidavit has been filed. Even the medical Officers who have undertaken treatment to the deceased life assured as per medical book are also not examined or their affidavit evidence have been filed. So, Annexure-A, A-1 and B produced by the O.P.-Insurance Company cannot be believed unless their maker will be examined or else their affidavit evidence will be produced. It is to be noted that almost all persons, now days regularly going to medical officers for treatment due to gastritis and pain on the different parts of the body. The said problems are commonly seen and those cannot be termed as major disease. A person having employed by any institution is entitled to take medical leave when such symptoms arise and consult the doctors. When the deceased life assured died due to liver disease and no evidence laid by O.P.-Insurance Company to establish that the life assured was suffering with the liver disease prior to the presentation of proposal form and if at all, he was having frequent abdominal pain and gastritis and those were not disclosed while signing the proposal form having no nexus with the cause of death the claim of the O.P.-Insurance Company that the life assured had suppressed information in regards to health of the deceased, cannot be termed as suppression of material information. In our opinion, as claimed by the O.P.-Insurance Company that the life assured had suppressed the facts to the effect that he was a alcoholic and suffering alcoholic gastritis and paid in abdomen while answering the queries relating to health on the proposal form, those are nor so fundamental which deserves to be disclosed as those are common health problems usually arises in case of every person.
With the above observations, we find and hold that there were no grounds for the O.P.-Insurance Company to repudiate the claim of the complainant. Accordingly, we hold the repudiation to be malafide and unreasonable. The complainant is entitled to get the insured value of the policy along with compensation.”
Thus the learned District Forum has observed that in the absence of any acceptable evidence on behalf of the LIC, there is no scope for the District Forum to disallow the claim of the complainant.
In the present case the claim against the said policy was repudiated. The repudiation letter dated 20.3.2015 reads as follows:
“Sri Roshan Kumar Patel
S/o- Late Hemant Kumar Patel
C/o- Smt Sunanda Patel
At/Po- Kirei, Dt- Sundargarh
PIN – 770037
Dear Sir,
Re: Repudiation of death claim under policy No: 594523951
Sum Assured: 105000, Plan/Term:14-11, Favouring Late Hemant Kumar Patel.
With reference to your claim under the above policy on the life of your deceased father, we have to inform you that we have decided to repudiate all liabilities under the above policy on account of the deceased having withheld material information regarding his health at the time of effecting the assurance with us.
In this connection, we have to inform you that in the proposal signed by him, he had answered the questions as under:
QuestionNo. Answer
11. (i) During the last five No
years did you consult a medical
Practitioner for any ailment
requiring treatment for more than
one week.
(ii) Have you ever been admitted into No
any hospital or any Nursing home for general check-up, observation, treatment, or operation ?
(iii) Have you remained absent from place No
of work on ground of health during last
5 years ?
(iv) Are you suffering from or have you No
ever suffered from Ailments Pertaining
to Liver, Stomach, Heart, Lungs,
Kidney, Brain or Nervous System ?
(v) Are you suffering from or have you No
ever suffered from Diabetes,
Tuberculosis, high or low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any Other disease?
(viii) Do you use or have you ever used No
Alcoholic drink, Narcoties, any other
drugs, Tobacco in any form.
(ix) What has been your usual state Good
of health?
We however, state that we have evidence and reason to believe that before he proposed for the above policy he was a alcoholic and suffering from Alcoholic Gastritis and pain in right side abdomen, for which he had taken treatment at I.G.H., Rourkela on 30.09.2010 and 27.01.2011. The same is evident from the Medical Book of the deceased life assured, issued by SAIL, R.S.P., Rourkela. The deceased life assured had remain absent from duties which includes Medical Leave on different occasions in the year 2010 – 2011 and 201`2 which is confirmed form the certificate issued by the Asst. Manager (Sports), SAIL, R.S.P., Rourkela. He did not however disclose this fact in this proposal form and gave false answers therein as stated above inducing us to issue the policy on the basis of the false statement.
It is therefore evident that he had made deliberate misstatements and withheld material information from us regarding his health at the time of taking the policy and hence in terms of the policy contract and the declaration contained in the forms of proposal for assurance and personal statement we hereby repudiate the claim and accordingly we are not liable for any payment under the policy and all money that have been paid in consequence thereof stands forfeited.
If you disagree with our decision and feel that we have not considered any particular facts and circumstances in support of your claim, you may send your representation within 03 months from the date of receipt of this letter for reconsideration of your claim at the following address.
The Zonal Manager,
LIC of India,
East Central Zonal Office,
“Jeevan Deep”, 6th floor, Exhibition Road,
PATNA - 800001
Yours faithfully,
Sd/-
Sr.Divisional Manager”
Nowhere in the repudiation letter there has been any allegation of fraud. It is rather stated that deceased had made false statement regarding his health at the time of taking the policy. Further it is seen that Proposal Form was not introduced as evidence by appellants-LIC. The LIC, rather, made an attempt to establish a case of fraud before the District Forum on the basis of a bunch xerox copies of unproved documents.
It is further seen that appellants relied on the decision in LIC of India v. Mansa Devi (Supra), which is not applicable in the present case. In the said case the life assured was treated for diabetes for 8 years and his leg was amputed. In the present case there was no case history with regard to the alleged disease. There is no material evidence filed by appellants to prove their case.
In view of the above, there is absolutely no scope for the LIC either in law or on the basis of materials on record to defend the letter of repudiation of the policy. The contentions raised by the appellant – LIC are not tenable and the appeal is, therefore, liable to be dismissed.
Accordingly, the appeal is dismissed and the impugned order is confirmed.
Records received from the District Forum be sent back forthwith.
