Tripura

StateCommission

A/25/2015

The Branch Manager , Life Insurance Corporation Of India & Others. - Complainant(s)

Versus

Smt. Anita Das & Others. - Opp.Party(s)

Mr. Nepal Majumdar

08 Mar 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL

COMMISSION,

TRIPURA

APPEAL CASE No. A/25/2015.

1. The Branch Manager,

Life Insurance Corporation of India,

Agartala Branch No.1, Agartala, West Tripura.

2. The Divisional Manager,

Life Insurance Corporation of India,

Silchar Divisional Office, Silchar-15.

3. The Zonal Manager,

Life Insurance Corporation of India,

Eastern Zonal Office, Kolkata-72.

                   ….    ….    ….    ….    Appellants/Petitioners.

                   Vs

1. Smt. Anita Das,

W/o Late Brajendra Das of

Katasheola, P.O. Jogendranagar,

Agartala, West Tripura, PIN-799004.

                   ….    ….    ….    ….    Respondent/Complainant.

2. Sri Kajal Biswas,

Development Officer of LICI,

Agartala Branch No.1, Paradise Chowmuhani, P.O. Agartala,

Agartala, West Tripura, PIN-799001.

3. Sri Swapan Das, (Agent, LICI)

Agartala Branch No.1, Paradise Chowmuhani, P.O. Agartala,

Agartala, West Tripura, PIN-799001.

4. Medical Superintendent,

A.G.M.C & G.B.P. Hospital, P.O. Kunjaban,

Agartala, West Tripura, PIN-799006

                             ….    ….    ….    ….    Respondents/Opposite Parties.

PRESENT

HON’BLE MR.JUSTICE S.BAIDYA,

PRESIDENT,

STATE COMMISSION

MRS. SOBHANA DATTA,

MEMBER,

STATE COMMISSION.

MR.NARAYAN CH. SHARMA,

MEMBER,

STATE COMMISSION.

For the Appellants           :         Mr. Nepal Majumdar, Adv.

For the Respondent No.1  :         Mr. Uttam Kr. Majumder, Adv. 

Date of Hearing               :         15.02.2016.

Date of delivery of Judgment:    08.03.2016.

J U D G M E N T

S. Baidya, J,

This appeal filed on 21.09.2015 by the appellants, Life Insurance Corporation of India and its Divisional Manager and Zonal Manager under section 15 of the Consumer Protection Act, 1986 is directed against the Judgment and Order dated 10.06.2015 passed by the Ld. District Consumer Disputes Redressal Forum (in short District Forum), West Tripura, Agartala, in case No.CC-76/2014, whereby Ld. District Forum allowed the complaint filed under section 12 of the C. P. Act, 1986 filed by the complainant, the respondent No.1 herein, directing the opposite party, Life Insurance Corporation of India (LICI) to pay to the complainant the sum assured Rs.1.25 lakhs with interest @9% per annum from the date of repudiation of the claim on 28.03.2013 till the payment is made with a further direction to the said opposite party to pay Rs.5,000/- as compensation for mental agony and harassment together with Rs.2,000/- as costs of litigation.     

2. The case of the appellants, as narrated in the memo of appeal, in brief, is that the respondent No.1 Smt. Anita Das being the complainant filed a complaint under section 12 of the Consumer Protection Act, 1986 before the Ld. District Forum, West Tripura, Agartala alleging that the husband of the respondent No.1 was holding the insurance policy bearing No.492711713 for sum assured Rs.1.25 lakhs under Life Insurance Corporation of India. It is also stated that the proposal of policy was made on 30.03.2010 with quarterly premium of Rs.1531.00 and policy was likely to be matured on 28.03.2025, but the husband of the respondent No.1 died on 29.03.2011 at AGMC & GB Panth Hospital, Agartala and the cause of death was Hepatic Encephalopathy direct consequence of alcoholism and as such, the claim was made for the sum assured amounting to Rs.1.25 lakhs along with compensation of Rs.75,000/-, but the appellants LICI by reply dated 28.03.2013 repudiated the claim of policy No.492711713 of Brajendra Das, the deceased husband of the respondent No.1 for which the respondent No.1 as complainant filed the complaint claiming for sum assured and compensation.
3. It is also alleged that the present appellants being the O.P.nos.1 to 3 contested the claim by filing joint written objection stating that at the time of proposal for the insurance policy, the policy holder i.e. husband of the petitioner-complainant suppressed the material facts, withheld the correct information, gave false information and made incorrect statement and as such, the appellants repudiated the claim and cancelled the policy for suppression of material facts and informed that the complainant is not entitled to anything as per terms and conditions of the insurance policy contract.
4. It is also alleged that the Ld. District Forum after hearing the parties and considering the evidences and other facts passed the impugned Judgment and Order dated 10.06.2015 and thereby being aggrieved and dissatisfied, the appellants LICI have preferred the instant appeal on the grounds that the Ld. Forum miserably failed to interpret and construe the law applicable to the facts and circumstance of the case resulting in miscarriage of justice, that the Ld. Forum did not appreciate the evidence on record and also did not apply its mind to the evidences as well as to the documents and as such, came into a wrong decision, that the Ld. Forum failed to appreciate that the Deceased Life Assured (DLA) had a history of consuming alcohol for the last 20 (twenty) years, that the Ld. Forum failed to appreciate that every information is material in regard to the reply of the questionnaire of proposal form of insurance policy, but the life assured suppressed the true information in the proposal form submitted for getting insurance policy, that the Ld. Forum failed to take into consideration that there was no deficiency in service on the part of appellants-LICI, but the Ld. Forum erroneously allowed assured sum of Rs.1.25 lakhs and also compensation with interest and the litigation cost, that the Ld. Forum has acted illegally and with material irregularity and passed the impugned judgment which is unsustainable in law and hence, the instant appeal has been preferred.

Points for Consideration

5. The points for consideration are (i) whether the Ld. District Forum was legal, proper and justified in passing the award by the impugned judgment and (ii) whether the impugned judgment under challenge in this appeal is liable to be set aside as prayed for.

Decision with Reasons      

6. Both the points are taken up together for the sake of convenience and brevity.
7. At the outset, it is found necessary to mention that the respondent No.2 Shri Kajal Biswas (Development Officer of LICI), the respondent No.3 Shri Swapan Das (Agent of LICI) and the respondent No.4 Medical Superintendent, AGMC & GBP Hospital, Agartala who were the O.P.No.4,5 and 6 respectively in the complaint case No.76 of 2014 did not turn up to contest the appeal, in spite of proper service of notices.
8. Considering the pleadings of the parties and the evidences, we find certain admitted facts. Admittedly, deceased Brajendra Das during his lifetime submitted a proposal form on 30.03.2010 for insurance policy before the LICI, the appellants herein, for a sum assured of Rs.1.25 lakhs with quarterly premium of Rs.1531.00 and the said policy is due to be matured on 28.03.2025. It is also admitted fact that the said Brajendra Das, the deceased husband of the complainant-respondent No.1 died on 29.03.2011 at AGMC & GBP Hospital, Agartala. It is also admitted fact that the claim for sum assured was submitted by the complainant before the LICI, but that claim was repudiated by a letter dated 28.03.2013 by the LICI alleging that at the time of submission of proposal form for insurance policy, the proposer Brajendra Das suppressed material facts concerning his alcoholic habit.
9. The Ld. Advocate Mr. Nepal Majumdar appearing for the appellants LICI submitted referring to the cross-examination of PW-1 Anita Das, the wife of the life assured Brajendra Das that she admitted in her cross-examination that her husband used to take liquor occasionally. He also submitted referring to the point No.11 of the proposal form of insurance policy that the proposer Brajendra Das while submitting proposal form answered “No” in respect of clauses (i) to (viii) and (x) and in respect of clause (ix), he answered “good”. He also submitted that clause (viii) speaks “Do you use or have you ever used Alcohol Drink, Narcotics, Any other Drugs, Tobacco in any form?” He also submitted that the proposer answered simply “No”. He also submitted that every information which may influence the authority as to whether the proposal is to be accepted or not, is a material fact. He also submitted that by answering “No”, the DLA Brajendra Das suppressed the information of his alcoholic habit in the proposal form. He also submitted that the contract of insurance is a contract on good faith and if the life assured suppressed any material fact in respect of his answers to the clauses mentioned in point No.11 of the proposal form, this suppression of material fact legally entitles the insurance company to repudiate the claim on the ground of suppression of material fact.
10. Ld. Counsel for the appellants also submitted that the DLA Brajendra Das died within 2 (two) years of submission of the proposal form. He also submitted that under section 45 of the Insurance Act, 1938, if the life assured died within 2 (two) years of the date of issuance of the insurance policy, such policy can be called in question in case of any inaccurate information or fraudulent suppression of material fact by the life assured. He also submitted that the appellants applied for certified copy of the Bed Head Ticket including medical treatment papers of Brajendra Das under RTI Act and the State Public Information Officer, AGMC & GBPH supplied the same and the appellants submitted the same in the Ld. District Forum. He also submitted that the said medical treatment papers have made it clear that the Life assured was admitted in that hospital with the history of regular intake of alcohol since last 20 (twenty) years (eye-opener type). He also submitted that the life assured suppressed his alcoholic habit in the proposal form and this suppression of material fact has vitiated the insurance contract based on utmost good faith and accordingly, the LICI repudiated the claim of the complainant concerning that policy, but the Ld. District Forum failed to appreciate the same and passed the award illegally in the impugned judgment which is unsustainable in law and is liable to be set aside. In this regard, the Ld. Counsel for the appellants has relied on the judgment pronounced on 15^th October, 2014 by the Hon’ble National Commission in Revision Petition No.409 of 2013 in between Ramratti (petitioner) Vs LIC of India and another (respondents) which has been published in April/July, 2015 circulation of Legal Digest.
11. On the other hand, the Ld. Counsel for the respondent No.1 in support of the impugned judgment passed by the Ld. District Forum submitted that the appellants-LICI could not prove in the District Forum by adducing cogent and material evidences that the Deceased Life Assured (DLA) Brajendra Das was suffering from any pre-existed ailment at the time of submission of the proposal form of insurance policy. He also submitted that it is true that the DLA was hospitalized after one year of his taking of the insurance policy and in the hospital at AGMC & GBP Hospital, Agartala he was diagnosed as a Hepatic and Encephalopathy. He also submitted that only in the medical treatment paper and certificate of the medical attendance, there is an endorsement that the patient was of alcohol dependence syndrome on withdrawal state with delirium tremens. He also submitted that as per medical attendance certificate in Form-B when the DLA was brought to the hospital, he was unconscious. He also submitted that as per Bed Head Ticket, the patient was admitted with the history of intake of alcohol for last 20 (twenty) years (eye opener type). He also submitted that there is nothing in the medical papers on what basis this was noted in the Bed Head Ticket of the DLA on 25.03.2011. He also submitted that as per certificate of hospital treatment in Claim Form “B1”, the history of the patient was reported by the patient party, but who was that patient party, and what was the relation of that patient party with the patient, that has not been recorded anywhere. He also submitted that although it is mandatory to mention the same specifically, but the certificate of hospital treatment paper is quite silent in this regard.
12. Ld. Counsel for the respondent No.1 also submitted that the LICI did not examine the doctor who attended the DLA and also recorded the said note. He also submitted that in the absence of examination of the said doctor, the alleged history of the patient as noted is bound to be treated without any basis and that being the position, it is quite impossible to draw any conclusion that the DLA was alcoholic at the time of submission of the proposal form for insurance policy. He further submitted that the Ld. District Forum rightly held that the Insurance Company miserably failed to establish that the DLA had been suffering from alcoholic syndrome immediately before taking of the insurance policy which resulted into his death. He also submitted that the Ld. District Forum rightly held that it has not been proved that the DLA had suppressed material facts regarding his pre-existed disease which eventually led to his death. He also submitted that the Ld. District Forum rightly arrived at the conclusion that the Insurance Company repudiated the claim of the complainant without any justifiable cause which being proper and justified, should be affirmed and the appeal preferred by the Insurance Company is liable to be dismissed.
13. Admittedly, the DLA Brajendra Das submitted proposal form for insurance policy before the LICI for an assured sum of Rs.1.25 lakhs on 30.03.2010. It is also admitted fact that the complainant-respondent No.1 Anita Das, the wife of DLA Brajendra Das is the nominee in respect of that policy bearing No.492711713 dated 28.03.2010. It is also admitted position that about one year after that policy i.e. on 25.03.2011, the DLA was admitted to AGMC & GBP Hospital in his unconscious state suspecting alcohol withdrawal symptom with the history of intake of alcohol for last 20 (twenty) years (eye opener type). From the treatment paper dated 28.03.2011 attached to the Bed Head Ticket (BHT) of the DLA, it transpires that the DLA on that date was also examined by a phychiatrist who also recorded that the patient was alcohol intake since 7-8 years on regular basis. It is also founded admitted position that the DLA died on 29.03.2011 at 06:35 am and the cause of death was Hepatic Encephalopathy. As per medical dictionary, acute Hepatic Encephalopathy develops because of serious liver disease which may cause by exposure to alcohol, chemicals, drugs or supplements etc. As per medical journal,  is a syndrome observed in patients with  negatively impacts patient survival. 
14. In the instant case, we find that the DLA was admitted in the hospital in his unconscious state followed by abnormal movement on the whole body and also irrelevant talking for which the DLA was also examined by a psychiatrist in that hospital. Therefore, it clearly indicates that the DLA had been suffering from liver-cirrhosis.
15. Admittedly, at the time of admission in the hospital, the DLA was unconscious. From the certificate of hospital treatment, it transpires that the history of the patient was reported by the patient party. Although, there is some defect in the said certificate as to the name and relationship of the party with the patient, but the fact remains that in such state of the DLA, it shall be presumed that the near relation or the friend of the patient brought the DLA to the hospital. From the B.H.T. it is found that the complainant Smt. Anita Das has been recorded as the relationship of the patient. So, it can safely be presumed that the wife of the DLA brought the DLA to the hospital. It is not expected that the doctor recorded the history of the patient at his own whim and without any basis. It is expected that the patient party who is aware about the condition and habit of the patient only can state the history of the patient to the doctor who then records it. The B.H.T. makes it clear that the complainant Smt. Anita Das was present in the hospital, although her name has not been mentioned in the certificate of medical treatment, but her name is appearing in the B.H.T. as relative of the patient. So, it can safely be presumed that Smt. Anita Das, being the wife of the DLA, was well-aware about the alcoholic habit of her husband. This practically has been admitted by Smt. Anita Das in her cross-examination as PW-1 stating that her husband used to take liquor occasionally.
16. The claim of the complainant has been repudiated by the LICI, not for the death of the DLA for his suffering from Hepatic Encephalopathy, but for suppression of the material fact of his taking alcohol drink in the proposal form for insurance policy. We are also not in favour of doubting the cause of death of DLA due to his suffering from Hepatic Encephalopathy. The DLA in the questionnaire No.11 (viii) of the proposal form simply answered “No” in respect of the following question “Do you use or have you ever used Alcohol Drink, Narcotics, Any other drugs, Tobacco in any form?” From the medical treatment papers as well as the admission of Smt. Anita Das as PW-1 in her cross-examination, it has been established that the DLA used to take alcohol drink at the time when he submitted proposal form for insurance policy, but the DLA suppressed that fact of his habit of taking alcohol drink in the proposal form by answering simply “No”
17. Now, what is proposal form? The Regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of Policy Holders’ Interests) Regulations, 2002 provides that ‘proposal form’ means a form to be filled in by the proposer for insurance, for furnishing all material informations required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline, to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted. The ‘material’ for the purpose of the said regulations shall mean and include all important, essential and relevant information in the context of under-writing the risk to be covered by the insurer and also to decide whether to undertake the risk or not. It is well settled that in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a material fact. If the proposer has knowledge of said fact, he is obliged to disclose it particularly while answering questions in the proposal form and any inaccurate answer entitles the insurer to repudiate its liability because there exists a clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance.
18. It has been held by the Hon’ble Supreme Court in Smt. Satwant Kaur Sandhu Vs New India Assurance Company Ltd. as quoted in the decision of the Hon’ble National Commission in Revision Petition No.527 of 2007 between LICI Vs Francis and Antony D’Souza, “............it is fundamental principle of insurance law that utmost faith must be observed by the contracting parties. 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”. The Hon’ble Apex Court in the said reported case also quoted Mac-Gillivrary on Insurance Law (Tenth Edition) regarding the insured’s duty to disclose which is as follows:- “………..the assured must disclose to the insurer all facts material to an insurer’s appraisal of the risk which are known or deemed to be known by the assured, but neither known nor deemed to be known by the insurer. Breach of this duty by the insured entitles the insurer to avoid the contract of insurance so long as he can show that the non-disclosure induced the making of the contract on the relevant terms.”
19. The Hon’ble Apex Court in the decision in appeal (Civil) 4186-87 of 1988 between Life Insurance Corporation of India & others Vs Smt. Asha Goel and another pronounced on 13.12.2000 has been pleased to hold that the scope of repudiation of claim of the insured or nominee by the insurance company, the provision of section 45 of the Insurance Act is of relevance in the matter. The Section 45 provides, inter alia, that no policy of life insurance effected after the coming into force of the Act shall, after the expiry of 2 (two) years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false unless the insurer shows that such statement was on a material matters or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that is suppressed facts which it was material to disclose.
20. In the instant case the DLA died within 2 (two) years from the date of issuance of the insurance policy. So, it is found that the Insurance Company is well within its authority to call in question into the said policy regarding the suppression of any material fact, if the said material fact is concealed by the DLA while submitting the proposal form for insurance policy. In this regard, the principle of law enunciated by the Hon’ble Apex Court is very clear.
21. It has already been mentioned that the claim of the complainant was not repudiated for the death of the DLA on account of his suffering from Hepatic Encephalopathy, but for the suppression of the material fact of his habit of taking alcohol drink at the relevant period in the proposal form for insurance policy by answering simply “No” in clause (viii) of questionnaire no.11 thereof. Going through the impugned judgment, we find that the Ld. District Forum was not correct in arriving at the conclusion that the Insurance Company miserably failed to establish that the deceased life assured has been suffering from alcohol syndrome before taking of the policy which resulted into his death. That being the position, we are not in agreement with the said finding of the Ld. District Forum. It is palpable that the DLA in the proposal form suppressed the truth while answering to the clause (viii) of the questionnaire no.11 of the proposal form for insurance policy. It is well settled principle of law that the suppression of material fact in the proposal form entitles the Insurance Company to repudiate the claim under that policy on the ground that the suppression of such material facts vitiates the contract of insurance policy. That being the position, we are of the view that the repudiation of the claim of the complainant by the Insurance Company vide letter dated 28.03.2013 is found correct and justified and as such, the awarding of the sum assured Rs.1.25 lakhs with interest @9% per annum from the date of repudiation of the claim on 28.03.2013 till the payment is made along with the awarding of compensation of Rs.5,000/- to the complainant for mental agony and harassment together with Rs.2,000/- as cost of litigation by the impugned judgment are not sustainable in the eye of law and therefore, the impugned judgment is liable to be set aside and the appeal is liable to be allowed.
22. In the result, the appeal succeeds. The impugned judgment dated 10.06.2015 passed by the Ld. District Forum, West Tripura, Agartala in case No.CC-76/2014 is hereby set aside.
23. The appellants LICI are directed to deposit a sum of Rs.10,000/- as cost of appeal in the Legal Aid Account of this Commission within 4 (four) weeks from the date of judgment, failing which this amount shall carry interest @9% per annum after the expiry of 4 (four) weeks till the deposit is made.