PER SURESH CHANDRA, MEMBER This revision petition has been filed by LIC of India which was OP before the District Forum. Respondent herein who is mother of the deceased insured life is the complainant in the matter. For the sake of convenience, parties have been referred to according to their status before the District Forum. 2. Briefly stated, complainant’s son Azimuddin had taken the following policies during his life time:- Schedule-A S.No. | Policy No. | Sum Assured | Date of commencement | 1 | 120843735 | Rs 5 lacs | 23.8.1998 | 2. | 120846944 | Rs 5 laks | 23.8.1998 | 3 | 112619591 | Rs 2 lacs | 28.11.1998 | 4 | 112619609 | Rs 2 lacs | 28.11.1998 | | Total | Rs 14 lacs | |
Schedule -B S.No. | Policy No. | Sum Assured | Age at entry | Period of insurance | Date of commencement of insurance/ date of effecting insurance | Duration after which death took place | 1 | 121178981 | 5 lacs | 18 yrs | 25 yrs | 15.12.1999 / 29.02.2000 | 2 yrs 1 month | 2 | 121179440 | 1 lacs | 18 yrs | 20 yrs | 28.2.2000/ 13.3.2000 | 2 yrs. 1 month | 3 | 121181932 | 2 lacs | 18 yrs | 20 yrs | 1.4.2000/ 06.06.2000 | 1 yr. 11 months | 4 | 121184660 | 3 lacs | 19 yrs | 25 yrs | 1.7.2000/ 24.10.2000 | 1 Yr. 5 months | 5 | 121177721 | 1 lac | 18 yrs | 25 yrs | 12.1.2000 / 13.1.2000 | 2 yrs. 3 months | | Total | 12 lacs | | | | |
3. The said Azimuddin died on 18.4.2002 and thereupon the complainant Shahida Begum who is mother of the deceased person and nominee in all the aforesaid polices, lodged a claim for all the policies with the OP Corporation. The OP Corporation treated the policies mentioned in Schedule-A above as non-early claim and paid the entire insured amount under those polices without any investigation. However, in the case of 5 policies mentioned in Schedule-B above, the OP Insurance Corporation found that since the polices were early-claim and have been obtained by the assured person concealing material facts about the taking of other policies worth Rs.14 lakhs as mentioned in Schedule A, it declined payment as the same were wroth Rs.12 lakhs. Aggrieved by the repudiation of her claim for 5 policies mentioned in Schedule-B, the complainant filed complaint before the District Forum which allowed the claim vide its order dated 30.7.2008 in respect of the remaining 5 policies. Aggrieved by this order of the District Forum, the Insurance Co. challenged it before the Delhi State Commission which vide its impugned order dated 2.8.2010 dismissed the appeal and uphold the order of the District Forum. It is against this order of the State Commission that the present revision petition has been filed. 4. We have heard learned counsel for the petitioner/OP Insurance Co. at length and perused the record and orders of the fora below. It is submitted by learned counsel that the life assured by not disclosing the earlier polices escaped/avoided the special medical examination as the polices obtained by him were of more than the sum of Rs.6 lakhs for which various tests and reports are mandatory as per rules. He submitted that had the life assured disclosed about the existence of earlier policies stated in Schedule-A worth Rs.14 lakhs, the life assured would have been called for special medical reports such as ECG, CVC, ESR, TELE, SMA-12, RVA, ELISA, HIV, etc. etc. and also would have been called for additional documents in respect of his present financial status to satisfy as to whether he was actually entitled for such an insurance amount of Rs.26 lakhs. Learned counsel further submitted that even though the non-early claims in respect of 4 polices mentioned in Schedule-A had been fully paid by the Insurance Co., since the 5 policies mentioned in Schedule-B had been obtained within a period of about 2 years approximately previous to the date of the death, these 5 policies were treated as early-claim and an investigation was carried out. It was after carefully going through the investigation report that the competent authority of petitioner Corporation repudiated the claim in question on the ground that the principle of observance of “utmost good faith” had been violated by the life assured at the time of effecting insurance and as per the conditions subject to which the insurance is granted, the claim filed by the complainant in respect of the policy mentioned in Schedule-B was repudiated. Learned counsel pleaded that the well-known principle of ‘Uberima Fides’ or ‘utmost good faith’ is so important and basic to the insurance policies that its violation by itself is enough to repudiate the insurance claims and this has been successfully upheld by catena of judgements of this Commission as well as the Apex Court. He, therefore, submitted that the impugned order of the State Commission as well as the District Forum having ignored this principle suffer from serious infirmity and hence are liable to be set aside. 5. Perusal of the record indicates that there were two rounds of litigation before the fora below in this case. In the first round, the District Forum accepted the complaint but in the appeal filed by the OP Co., the order of the District Forum was set aside and the matter remitted back to the District Forum for further consideration and fresh decision. The District Forum vide its impugned order dated 3.7.2008 maintained its earlier order and again allowed the complaint unsuiting the claim of the OP Insurance Co. When this impugned order of the District forum was challenged in appeal before the State Commission, the State Commission vide its impugned order dated 2.8.2010 confirmed the order of the District Forum and dismissed the appeal. Thus, there are concurrent findings of the fora below in favour of the complainant and rejecting the defence of the OP Insurance Co. In fact, we find that by its own admission, the OP Co. accepted and paid up the claims in respect of the 4 policies mentioned in Schedule-A, out of which 2 were issued on 23.8.1998 and the remaining 2 issued on 28.11.1998. It is stated by the OP Insurance Co. that the claims under these policies were cleared as non-early claims. Applying the same principle to the remaining 5 policies, it would be seen that the three policies in Schedule-B bearing Nos. 121153721, 121178981 and 121179440 should also have been cleared and paid up since all the three of them were issued before 2 years from the date of death of the assured life on 18.4.2002. Therefore, only the remaining two policies bearing nos. 121181932 and 121184660 were such which, even in the light of the criteria decided and the approach adopted by the OP Co., could be taken up for investigation since they were issued within two years period before the death of the life assured. But this approach also would not be justified since it is noted that there are no allegations of pre-existing ailment or any complaints about the health of the life assured or any other aspect except non-disclosure about the previous policies. Perusal of the impugned orders shows that these aspects have been carefully considered by the fora below while returning their concurrent finding in favour of the complainant. In this context, the following observations of the State Commission in its impugned order are quite relevant:- “8. On the plea of the appellant regarding observance of utmost good faith by the contacting parties, Hon’ble Supreme Court in case of M/s Modern Insulators Ltd Vs Oriental Insurance Co. Ltd.- I (2000) CPJ 1 (SC) has held that it is fundamental principal of insurance law that utmost good faith must be observed by the contacting parties and good faith forbids either parties from non-disclosure of the facts which the parties know. The assured has a duty to disclose and similarly it is the duty of the Insurance company and its agent to disclose all material facts in their knowledge since obligation of good faith applies to both equally. 9. Applying the ratio of the above said decisions in the present case it can be safely concluded that the assured person cannot be held liable for non-disclosure of the previous policies as mentioned in Schedule –A while taking the policies as mentioned in Schedule –B especially when there is not even an iota of evidence to suggest that there was malafide intention on the part of the assured person to do so. There is no material on record to prove the fact that assured person was not keeping good health at the time of taking insurance policies in large number but paying huge sums of insurance premium. We are, therefore, of the considered view that applying the exclusion clause to repudiate claim of the respondent in this case was unjustified, because simply saying that had the appellant/corporation known the fact of previous policies they would not have issued subsequent insurance policies in this case. 10. Since it is admitted fact that the policies in question were issued by Mori Gate Branch of the Appellant-Company and these were obtained through the same agent and same Development Officer .therefore, the appellant cannot take the plea that they had no knowledge of the previous policies or that the assured person was guilty of concealment of existence of previous policies. Concealment can be of a fact which could not be in the knowledge of the appellant. 11. In the present case, the officials of the insurance company were well-aware of the earlier policy being held by the assured person when the subsequent policies were issued. We fully agree with the Ld. District Forum, as held in the case of Bhagani Bai VS LIC AIR 1984 SC 125, referred to in the impugned order that “ the insurer cannot repudiate the liability by showing some in accuracy or falsity of statement nor can it avoid the liability for immaterial misrepresentation or for material mis-representation which had no bearing on the risk. Similarly mere non-disclosure of some immaterial facts would not pre se give right to rescission . In other words, a misrepresentation would not IPO- facto and be a ground available to the aggrieved party to avoid the contract unless it is found that consent of opposite party was secured by practicing some deception. Thus on every misrepresentation or concealment of a fact, a contract cannot be avoided merely on trival and inconsequential misstatement or non-disclosure”. 12. Considering the facts as are borne on the record we fail to find any infirmity in the impugned order and reason to interfere in the findings recorded by the Ld. District Forum in this case. Order is very well written reasoned and self speaking. The appeal being meritless is dismissed with cost of Rs.5000/- to be deposited in State Consumer welfare Fund.” 6. We completely agree with the view taken by the State Commission in the matter. In addition to the aforesaid observations of the State Commission, it is interesting and yet very relevant to note that the information in all the five policies in question, copies of which are placed on record, has been filled up in English by the agent of the Insurance Co. and the life assured, i.e, Azimuddin, has signed in Urdu. It is also seen from these policies that polices at Sl Nos. 1 & 5 in Schedule-B have been issued by one agent and the remaining three polices at Sl Nos. 2, 3 & 4 have been issued by another agent and all the five polices have been processed and routed through the same branch of the petitioner Corporation. In such a situation, we are of the view that leveling the allegation against Azimuddin of non-disclosure of the existence of the previous polices is absolutely frivolous and baseless and hence of no consequence. In fact, the entirety of the facts and circumstances of this case would certainly lead one to the conclusion that the agents and the branch officials of the petitioner Co. were quite in the know of all these aspects in regard to the life assured and it is they who should have recorded the requisite information already available with them as per the procedure and rules of the OP Co. in the proposal forms. 7. In view of above, we do not find any substance or ground in this revision petition which would justify our interference with the concurrent finding returned by the fora below. Consequently, the impugned order of the State Commission is confirmed and the revision petition stands dismissed. |
