Shri B. Mukherjee, President.   

This is an application u/s.12 of the C.P. Act, 1986.

          Complainant, the wife of Late Debasish Dey by filing this complaint has submitted and alleged that husband of the complainant took two life insurance policies vide no.577969750 for a sum of Rs.10,00,000/- and Rs.5,00,000/- respectively in the month of March, 2008 and November, 2009 respectively and said Debasish Dey, the life assured had his good health at the time of purchasing the sum but suddenly in the month of November, 2009, he had swelling in the feet along with sudden significant loss of weight so he consulted the house physician who instructed him to visit CMC, Vellore for thorough investigation and treatment and, thereafter, deceased life assured visited CMC Vellore in the month of December, 2009, wherein after extensive investigation it was diagnosed that the deceased life assured was suffering from non Hodgkin lymphoma with kidney disease. 

          After that life assured since deceased returned  to Kolkata and led a normal life but suddenly on 12-02-2010 his condition was deteriorated so he was admitted in Charnock City Hospital where he breathed his last on 13-02-2010 and the doctor noted the cause of death of the deceased life assured as left ventricular failure due to chronic kidney disease. 

          Fact remains deceased life assured had four policies so, after his death complainant wrote a letter for claim form in respect of the policies.  The claim was lodged with respect to share link policy no.426002706 for Rs.1,00,000/- on 12-05-2010 and same was paid on 04-01-2011 after considering medical documents.  However, due to the delay in making payment for about 7 months the NAV value was down and the sum of Rs.94,000/- was paid to the complainant.  further OP settled the claim against the policy no.412475688 for Rs.30,000/-. However, OPs did not settle the claim in respect of Rs.10 lakhs and Rs.5 lakhs though complainant submitted the claims in respect of policies No.577285625  and 577969750 but anyhow, OP vide their letter reference No.422/claims/AAO send the discharge voucher to get the same signed by the complainant to make ex gratia payment of Rs.85,000/- against claim of Rs.5 lakh for the policies No.577969750 but did not release any further amount in respect of claim for Rs.10 lakhs and Rs.5 lakhs.  Thereafter, complainant time to time visited the office of the OP for settlement of the claim but all her efforts were in vain though OP1 gave verbal assurance but did not settle the same.  Thereafter, complainant gave several letters and reminders to the OPs requesting them to settle the claim but they did not pay any heed and in such helpless condition finding no other alternative the complainant wrote the OP1 on 07-03-2011 with a request for information under Right to Information Act, 2005 with regard to the death claim under policy nos.577285625 and 577969750 and OP on receipt of the aforesaid letter informed the complainant vide letter dated 24-03-2011 that the matter was under investigation therefore the documents sought for in the letter dated 07-03-2011.  Thereafter OP1 on 13-04-2011 by a letter repudiated the claim with respect to policy No.577285625 on the ground that the answers given in the proposal form with regard to Clause No.11(a), 11(e) and 11(i) were false and the deceased life assured had made deliberate mis-statements and materials information.  And further OP vide another letter dated 13-04-2011 repudiated the claim in respect of policy No.577969750 however, admitted the payment of ex gratia amount of Rs.85,000/- and subsequently OP by a letter dated 20-04-2011 informed the complainant to prefer an appeal u/s.19 of the R.T. Act.

          But, in fact, the repudiation of the claim on the basis of the proposal form is wholly unjustified as the complainant had no knowledge about the ailment at the time of filling up the proposal form and at any point of time deceased was not suffering from any chronic diseases and there was no direct bearing/nexus with hypertension and the disease for which he died and, in fact, the repudiation of the policy no.577969750 on the ground that the deceased life assured did not disclose that he was suffering from hypertension and non Hodgkin Lymphoma since February, 2009 there is no ground for repudiation and practically in the month of December, 2009 after proper diagnosis and biopsy it was found that complainant suffered from non Hodgkin Lymphoma.  In fact, OPs without any basis and ground and on surmise rejected the claim and further fact is the other policies were duly entertained and claim was released and in the above circumstances, complainant has prayed for releasing the entire amount of Rs.15 lakhs and also Rs.6,000/- in respect of another policy which was partly paid.

          On the contrary, by filing written statement OP admitted that deceased Debasish Dey during his life time took or purchased two policies for Rs.10 lakhs and Rs.5 lakhs on his own life.  Proposal form dated 28-03-2008 and 17-11-2009 were executed by the deceased life assured and it was submitted to the Corporation for taking the policies and in the said policies said life assured gave his status of health as good and also stated that he never suffered from any chronic disease prior to taking any policy and also at the time of taking the policy but life assured expired on 13-02-2010 and the policies were enforced approximately for 22 and ½ months and 3 months respectively. 

          It is specifically mentioned that policy No. 577969750 was submitted in the month of November, 2009 when life assured had been suffering from various diseases such as swelling of the feet along with significant loss of weight and was under treatment of his house physician who advised the deceased life assured to go to CMC, Vellore for further treatment and so, it is proved that at that time condition of the assured was not good and intentionally life assured did not disclose the aforesaid diseases and the fact that he was under treatment when the proposal form against policy No. 577969750 was submitted.

          It is further stated that CMC, Vellore diagnosed and commented that deceased Debasish Dey was suffering from non Hodgkin Lymphoma with kidney disease and it is pertinent to mention that a person must not have within one month to reach the end stage and it is evident from the biopsy report and other related medical papers and documents that his state of health was not good and the deceased life assured suppressed all those facts which is against the policy condition and terms.  Further from the report of the CMC Vellore it is clear that life assured was admitted in Nephrology Department in December, 2009 and same sufficiently proves that he was suffering from kidney disease in November, 2009.

          It is further alleged that in the present case the deceased life assured induced the Corporation to accept the risk by practicing fraud upon Corporation on the basis of the information given in the proposal form and depending upon that material took the decision whether a particular risk can be accepted or not and if accepted what will be rate of premium and this decision was taken by the underwriter of LICI.  If the underwriter files adverse statements in the proposal form regarding state of health, source of income, age proof and etc. then the underwriting decides the rate of premium and in some cases the proposal was not accepted by the Corporation.  It is further alleged that the life assured had been suffering from several chronic kidney diseases and other diseases for several years to reach the condition when kidney failure has become the cause of death.   Further it is submitted that Charnack Hospital and Research Centre Pvt. Ltd. in February, 2009 detected his disease but the said fact was not disclosed at the time of filing proposal and it is further submitted that in respect of the present two policies LICI Authority repudiated the claim for suppression of material information by the deceased life assured and further it was submitted in respect of policy No.577969750 the insurer allowed ex gratia payment of 85,000/- as because single premium of Rs.1,00,000/- was paid under the policy as the death of the life assured took place within one year from the date of commencement of the policy, so, 85% of the single premium returned as per circular No.CO/ACT/ANDCO/U&R/26/2008 dated 06-12-2008 but the death benefit could not be paid due to suppression of material information by the deceased life assured.

          In view of the above circumstances, the said policies were repudiated as because non Hodgkin Kidney Lymphoma was detected prior to taking the policy No.577969750 in November, 2009 and practically said deceased insured had been suffering from same disease(Cancer) even before taking the policy No.577285625 because no person can die of Cancer within a period of 23 months unless he was suffering from the said disease for a long time and for which the LICI Authority had repudiated the claim for justified and valid reason, there was no fault on the part of the Insurance Company. 

Decision with Reasons

Practically, in this case on behalf of the Insurance Company at the time of advancement of argument submitted that complainants produced their document along with claim application in respect of the two policies and admittedly one policy bearing No.577969750 was purchased on 18-11-2009 and premium was Rs.1 lakh and in the said application form complainant disclosed that his health was quite OK and he did not suffer from any disease but from the document filed by the complainant for releasing the claim it was found that complainant was suffering from swelling of both legs primarily and thereafter it was detected after thorough investigation at CMC that he was suffering from non Hodgkin Lymphoma and from the death certificate it is proved that he died on 13-10-2010 at Charnack Hospital and Research Centre due to acute left ventricular failure due to chronic acute disease and undisputed cause was due to non Hodgkin Lymphoma.  So, it is clear that disease has been suffering from acute cancer and liver disfunction and kidney disease but that was suppressed and it is the provision of law that an insured have to supply the details of his health before purchase any policy.  But in both cases deceased disclosed that he never suffered from any chronic ailment and he was never treated anywhere.  So, the entire disclosure of the complainant’s husband was false and fabricated.  So, as per contract that policy was considered after considering the medical documents and thereafter it was repudiated.  So, considering the argument of the Ld. Lawyer for the OP we have gathered that the OP Company repudiated the claim on the ground that deceased concealed and suppressed material information regarding his health status regarding his suffering from chronic cancer disease and other ailments i.e. Cancer non Hodgkin Lymphoma.  But question is whether OP has produced those doctors who issued those certificates to prove that the insured had been suffering prior to treatment for more than two years and fact remains OP has only relied upon the documents of treatment of the deceased at the time of considering the claim but anyhow OP insurance company has not produced the doctor to prove that the disease for which he died was a chronic disease in nature for more than two years prior to purchasing both the policies.  On the contrary it is found that just before the death of the insured on 13-02-2010 he was admitted to Charnack Hospital and Research Centre on 12-02-2010 at the age of 45 and he died on the next date but there is no such document that prior to that he was admitted for any sort of treatment or he suffered from any prolonged type of chronic diseases.  But fact remains initially he suffered from Leg swelling and he was treated by his family physician but he failed to detect for what reason he was suffering.  So, his family physician asked him to check up at Super Facility Hospital and ultimately that was done by the OP in the month of December, 2010 and in the month of December, 2009 pathological test and other tests were done at CMC and it was found that once he suffered from urinary track infection.  Thereafter, USG of abdomen was done and practically prior of medical check up at CMC on 16-12-2009 it was found that he lost weight of 9 kgs within 9 months and to ascertain the cause of loss of 9 kg. weight CMC examined him and he was diagnosed by the doctor from 16-12-2009 to 18-12-2009 and, thereafter, they evaluated the cause of signification weight loss and there was dysfunction of digestion so it was noted as chronic kidney disease but swelling of both legs was detected in the month of February, 2009 but from February, 2009 to 16-12-2009 he was never treated anywhere and he was never hospitalized and after biopsy report done at CMC it was detected that he was suffering from non Hodgkin Kidney Lymphoma.

Moreover it is settled principle of law as observed by the Hon’ble National Commission in reported judgment 2012(1)     CPR 391 (NC) that Insurance Company cannot investigate health issue before issuing the policy.  But most interesting factor is that in respect of the insurance policy being no.577969750 Insurance Company investigated the health issue and being satisfied after examination of the insured Debasish Dey issued that policy so, it is clear that in the month of March, 2008 when the policy No.5767969750 for Rs.10 lakhs was issued by the insurance company examining his health condition was satisfied that he was not suffering from any disease whatever may be of its kind but peculiar factor is that the insurance company did not release that amount also when in respect of that insurance policy.  Practically OP has not produced all the papers related to that policy which is in their custody only on the ground that somehow or otherwise the claim of the complainant may be repudiated.

          Another factor is that OPs released two other claim of policies bearing Policy No.426002706 for Rs.1 lakh and another Policy No.412475688 for Rs.30,000/- but in respect of the said claim OP did not challenge that the insured suppressed his health condition but it is clear that claim in respect of four insurance policies were submitted by the complainant on the death of Debasish Dey.  But peculiar factor is that in respect of Policy No.426002706 and 412475688 entire claim amount was paid.  But when the figure of the sum insured is Rs.10 lakhs and Rs.5 lakhs several complications were created by the OP and repudiated the claim and they came to a conclusion that at the time of purchasing the policy No.57796750 and 957969750 the declaration of the insured that he was not suffering from any chronic diseases like cancer etc. was false but truth is that prior to report of the CMC there was no medical evidence or document that Debasish Dey had been suffering from cancer but it is proved that his family physician failed to find out the cause of lose of weight but apparently it is clear that this Debasish Dey was very fair looking, smart, handsome(as evident from photo) so there was no ground to believe that she was any suffering from internal complicated disease and similarly his family physician failed to search out and so he advised Debasish Dey for thorough check up at Chennai, CMC.  So, he went there in the month of December, 2009 where after continuous investigation for about 3 or r days and ultimately after tipical type of testing it is detected that his cause of swelling of the leg was due to non Hodgkin Lymphoma.

          In this regard we have given through the medical journal, the British Medical Association illustrated medical dictionaries and after thorough study we have gathered non-Hodgkin Lymphoma cannot be derived for what reason it was caused and in most of the cases there was no external and internal effect but occasionally disease associated with suppression of immune system.  And there is usually painless swelling of Lymphoma nodes and liver and spleen may enlarge and elevated and in the abdomen may be affected and diverse symptom ranges from Hodgkin to non-Hodgkin and if it is not controlled the disease progressively increases the immune system leading to death.

          Moreover, from study of the said journal we find that lymphoma fall into two categories.  If certain categories abnormality cells are present the disease is quite the Hodgkin forms and of other forms are known as non-Hodgkin Lymphoma and practically after study of the same it is found that the diagnosis is based on biopsy usually taken from Lymphoma node, Chest X-ray, Citi Scan, MRI Bone Marrow Biopsy Lymphoma angiography of the abdomen which are needed to assess the extent of the disease.  So, considering the report of the CMC it is clear that after thorough testing adopting the aforesaid testing they came to the conclusion that it was lymphoma but prior to that they suspected it was TB and practically prior to 18-12-2009 complainant was completely OK only he was suffering from swelling of leg and he was treated by his family doctor but he failed to give any reason of swelling for which he went to CMC where after different type of test it was detected that it was non-Hodgkin Lymphoma and it was one kind of rare cancer it affects jointly the liver, spleen, kidney etc and due to said disease anyone may die within 15 days or one month or two months but there is no necessity in this case if bone marrow treatment is not adopted or a stem cell or bone marrow transplantation is adopted death is imminent.  So, the OP’s version that a person with cancer shall not die within short period but such an observation of the OP in the written version is unscientific, uncalled for and it was made only for denying the claim and repudiating the claim.  Anyhow, after considering the entire materials on record we have gathered that till his death he was quite OK even after detection of his sufferings from non-Hodgkin Lymphoma and prior to his death on 12-02-2010 he was once hospitalized on the Charnock City Hospital and then he breathed his last on 13-02-2011 and before that he never admitted to any another Hospital and no such document is produced by the OP that he was completely bed ridden and was under treatment or prior to that and fact remains OP has failed to prove the pre-existing diseases of the deceased insured prior to purchase of the present two policies but regarding first policy there is medical proof and it was done by the OP and that was suppressed and regarding second policy OP did not examine her body or physical fitness and practically at the relevant time the insured was stable with good health only he was losing weight but no doctor was able to detect the cause of weight loss and ultimately it was detected after 18-12-2009 and, thereafter, he was alive up to 12-02-2010.  So, we are confirmed that the repudiation of the insurance claim by the OP so on the basis of assessment medical papers is not sustainable in law in view of the fact that two other claim of policies were released by the OP but in that case OP did not consider about declaration of the insured about his health etc. because the amount was small and this is the method of the insurance company to repudiate the claim in respect of heavy amount but in respect of claim of Rs.10 lakhs OPs are estopped because in that case medical check up was done by the OP but in respect of Rs.5 lakhs wrong assessment of the death report was done by domesticated doctor of OP who opined in such a fashion.  In this regard Ruling reported in 2008 CTJ 700 (NC) and 2013(2) CPR 133 (NC) and further considering the ruling reported in 2001(3) CPR 120 (NC) we have relied upon those rules including the facts of the case and we are confirmed that only for repudiating this claim of the complainant OP adopted such false plea and practically in respect of Rs.10 lakhs it is proved that OP adopted unfair trade practice even after taking huge premium and regarding claim in respect of Rs.5 lakhs we have found that the insured paid premium Rs.1 lakh and fact remains as per policy Rs.85,000/- was paid out of the premium but question is what are the documents produced by the OP before this Forum to show that before 18-12-2009 insured had been suffering from cancer disease and it was known to the deceased and it is no doubt the assessment of the OP but that assessment has not been confirmed by any believable documents for which we are convinced to hold that repudiation of the claim of the OP in respect of these two policies is uncalled for, unwarranted and immoral and for the above reasons we are convinced to hold that repudiation which was made by the OP is illegal, immoral and not as per law and for which the complainant is entitled to entire amount of Rs.10 lakhs and Rs.5 lakhs with interest @8% p.a., after deducting Rs.85,000/- which has already been paid as ex gratia form and said interest shall be assessed with effect from March, 2010 and till its payment and OP shall pay the entire amount including the interest within 45 days from the date of this order failing which penal damages @Rs.500/- shall be assessed for each days delay and till full satisfaction of the decree along with litigation cost as would be awarded. 

          In the result, the case succeeds.

Hence,

Ordered

That the case be and the same is allowed on contest with a cost Rs.10,000/- (Rupees Ten thousand only) against the OPs.

          OPs are jointly and severally are directed to pay and release the entire amount of Rs.15(Fifteen) lakhs in respect of the above two insurance policies of the deceased Debasish Dey to the present complainant the wife of late Debasish Dey by handing over the said amount Rs.15 lakhs after deduction of Rs.85,000/- as already paid as ex gratia and further interest @8% p.a. since March, 2010 till its full payment along with litigation cost of Rs.10,000/-(Rupees Ten thousand only) as awarded and if OPs fail to comply the order in that case punitive damages @Rs.500/- shall be assessed over the said amount if order is not complied with the stipulated period of 45(forty-five) days and till full payment of the said and if said punitive damages are recovered it shall be deposited in this Forum.

          OPs are directed to comply this order very strictly failing which penal action shall be taken against them for which he shall be prosecuted and further penalty shall be imposed to the extent of Rs.10,000/-(Rupees ten thousand only) for each OPs.