Tripura

StateCommission

A/18/2016

Life Insurance Corporation Of India - Complainant(s)

Versus

Smt. Anjali Bhattacharjee - Opp.Party(s)

Mr. P.K Debnath

23 Feb 2017

ORDER

Tripura State Consumer Disputes Redressal Commission, Agartala.

 

Case No.A.18.2016

 

 

1.Life Insurance Corporation of India,

Represented by its Branch Manager, LICI Br.II,

Agartala, West Tripura. 

 

… … … … Appellant/Opposite Party No.4

 

 

 

1.Smt. Anjali Bhattacharjee

W/o Late Dr. Ashim Chowdhury,

C/o Shishu Bihar Higher Secondary School,

P.O. Agartala, P.S. West Agartala,

District - West Tripura, Pin:799001.

 

… … … … … Respondent/Complainant

 

 

Present

 

Mr. Justice U.B. Saha,

President,

State Commission, Tripura.

 

Mrs. Sobhana Datta,

Member,

State Commission, Tripura.

 

Mr. Narayan Ch. Sharma,

Member,

State Commission, Tripura.

 

 

For the Appellant:             Mr. Prahlad Kumar Debnath, Adv.

For the Respondent:        Mr. Ratan Datta, Adv.

Date of Hearing and Delivery of Judgment: 23.02.2017.

J U D G M E N T [O R A L]

 

 

U.B. Saha,J,

This appeal is filed under section 15 of the Consumer Protection Act, 1986 by the appellant, Life Insurance Corporation of India (hereinafter referred to as Insurance Company/LICI/opposite party), represented by the Branch Manager, LICI Branch-II, Agartala who was the opposite party no.4, against the Judgment dated 16.03.2016 passed by the Ld. District Consumers Disputes Redressal Forum, West Tripura, Agartala (hereinafter referred to as District Forum), in Case No.CC-21 of 2015 whereby and whereunder the Ld. District Forum allowed the complaint petition filed by the respondent-complainant (hereinafter referred to as complainant/petitioner) directing the appellant - Insurance Company to give all benefits of the policy to the complainant-petitioner and also to pay the complainant-petitioner an amount of Rs.25,000/- for deficiency of service and Rs.5,000/- towards costs of litigation. The District Forum also directed the Insurance Company to pay the aforesaid amount within 2 months, if not paid, it will carry interest @9% per annum.

2. Heard Mr. Prahlad Kumar Debnath, Ld. Counsel appearing for the appellant - Insurance Company as well as Mr. Ratan Datta, Ld. Counsel appearing for the complainant, Smt. Anjali Bhattacharjee.
3. The facts in brief are that the appellant - Insurance Company issued Endowment Assurance Policy No.492740388 for a sum of Rs.2,15,000/- on the life of husband of the complainant deceased Dr. Ashim Chowdhury on 03.11.2010. The said policy was issued on the basis of proposal and personal statement submitted by the deceased husband of the complainant Dr. Ashim Chowdhury. Premium amount was Rs.25,364/-. After payment of one premium, the husband of complainant i.e. the assured died on 20.08.2011 at Bangalore Institute of Oncology Hospital, Karnataka due to Acute Renal Failure. The complainant being the wife and nominee of the insured placed her demand before the appellant Insurance Company immediately after the death of her husband, but the Insurance Company repudiated the claim of the complainant on 04.12.2013 on the ground of suppression of material facts by her husband. The complainant-petitioner then approached the Ombudsman of the Insurance Company, but there she did not get any positive result. Being aggrieved by the action of the appellant-opposite party, Insurance Company, she filed a petition under section 12 of the Consumer Protection Act, 1986 before the District Forum for a direction to the opposite party, Insurance Company to pay the death claim of Rs.2,15,000/- only as assured by Life Insurance Corporation of India Ltd. under Endowment Assurance Policy No.492740388, on the life of her deceased husband Dr. Ashim Chowdhury with 12% interest from the date of claim to till the date of making payment and further Rs.1,00,000/- only as compensation for non-payment of the claim money in time.    
4. The claim before the Ld. District Forum was contested by the opposite party - Insurance Company by taking number of preliminary objections including that the assured is under obligation to make full disclosure of material facts which is relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. It is also stated that the complainant placed the medical documents of her husband and on scrutiny of all those documents, Insurance Company rightly repudiated the claim and the same was informed to her on 04.12.2013. Therefore, she is not entitled to get any compensation from the Insurance Company. On the basis of the pleadings as well as the evidence adduced by the parties, the Ld. District Forum has taken up the following points for deciding the complaint case.

1. Whether there was any suppression of material fact by the insured.
2. Whether the petitioner is entitled to get all the benefits of the policy and any compensation for deficiency of service by the O.Ps.

5. After hearing the Ld. Counsel for the parties, the Ld. District Forum allowed the claim of the complainant as stated (supra).
6. Mr. Debnath, Ld. Counsel for the appellant - Insurance Company vehemently contended that the Ld. District Forum without taking notice of the contents of the proposal form and personal statement submitted by the deceased Dr. Ashim Chowdhury, the insured and the repudiation letter dated 04.12.2013, has passed the impugned order. He has also contended that the declaration was made by the deceased Dr. Ashim Chowdhury falsely. He has also taken us to the Medical Attendant’s Certificate issued by the Department of Integrative Oncology, Bangalore Institute of Oncology Hospital to show that the deceased Dr. Ashim Chowdhury was suffering from one year before his death. He has also taken us to the Column No.11 of the proposal form to show that the insured Dr. Ashim Chowdhury made deliberate misstatements and withheld the material information regarding his health at the time of effecting insurance and hence, in the terms of policy contract and the declaration contained in the Proposal Form of the insured, the appellant – Insurance Company bonafide repudiated the claim and was justified accordingly saying that they are not liable for any payment under the life policy. He has further submitted that mere receiving the premium accepted in the proposal does not itself bind the Insurance Company for paying the assured amount to the complainant i.e. the wife of the deceased insured. He has also relied upon the judgment of the Hon’ble National Consumer Disputes Redressal Commission (hereinafter referred to as National Commission) in Revision Petition No.1585/2011 between Life Insurance Corporation of India Vs Kusum Patro, wherein the National Commission held that by not disclosing the facts of the prior accident and subsequent in-patient treatment, at the time of proposal on a later date, to the Corporation or his Medical Examiner, the deceased husband of the respondent Kusum Patro of that case was guilty and the Insurance Company rightly repudiated the claim.
7. Mr. Datta, Ld. Counsel per contra while supporting the judgment of the Ld. District Forum would contend that admittedly, the Insurance Company failed to prove that during five years i.e. from 2005 to 2010, deceased Dr. Ashim Chowdhury had consulted any doctor for aliment requiring treatment for more than one week or he had been suffering from disease pertaining to Liver, Stomach, Heart, Lungs, Kidney, Diabetes, TB, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease. He further submits that the observation of the doctors’ of Bangalore Institute of Oncology Hospital in the Medical Attendant’s Certificate issued after death of the deceased Dr. Ashim Chowdhury was not known to him at the time of filling-up the Proposal Form. He has further submitted that as per treatment summery, the patient had history of multiple joint pain since one year, FNAC revealed NHL (Non Hodgkins Lymphoma) by December, 2010 i.e. after two months of filling-up the Proposal Form. Thus, there was no scope to the deceased insured to know about such disease and disclose the same in the Proposal Form. He further submits that sufferings of joint pain is almost a common disease after the age of 50 and in the case of deceased insured, the pain was not so severe in nature. Thus, he did not visit any doctor. He again contended that the Insurance Company did not adduce any evidence to prove that the insured was treated by any doctor for such joint pain. He has further submitted that the Agent of the Insurance Company namely, Niva Datta filled-up the Proposal Form and the insured only put its signature in the said form and one approved Doctor of the Insurance Company has also after examining the insured, endorsed the Proposal Form, but the Insurance Company neither produced the Agent Niva Datta nor produced the approved Doctor to prove that the petitioner was suppressed the material facts in the Proposal Form. He finally submits that there is no dearth common-man taking the traditional self-medication for small joint pain even without consultation with any doctor. In support of his aforesaid contention, he has placed reliance on a decision of Hon’ble Punjab State Consumer Disputes Redressal Commission, Chandigarh in Life Insurance Corporation of India Vs Smt. Paramjit Kaur Gill, 1999 (1) CCC 30 (SS), wherein, in a similar matter, the Hon’ble Punjab State Commission relying on a judgment of the Hon’ble National Commission in Life Insurance Corporation Vs Sanjeev Mahendralal Shah, 1996 (1) CPR-129 dismissed the appeal preferred by the Insurance Company holding that there is no evidence to show that the insured was on medication for stone in the Gall Bladder or as he was ever aware of it. It is also held by the State Commission of Punjab that, the Insurance Law is a social welfare legislation and in construing the provisions of the said law, the construction of the provisions has to be so adopted as would fulfil the policy of Legislation and that construction which would uphold the claim of the policy holder should be preferred as against the one which would deny his claim. In the instant case, as the Insurance Company alleged that the insured had made false representation in the Proposal Form, the suppressed material facts undoubtedly has to be proved by the Insurance Company Ltd. which they could not do in the instant case.
8. In Kusum Patro (supra) admittedly, the deceased husband of the Kusum Patro suffered an accident and he was hospitalized for weeks for treatment before the proposal was submitted in January, 1995 and which was issued in February, 1995 and he answered the Question no.4 which is as follows:-                                                   

4.	Question	Answer
	Ascertain from the life to be assured whether at any time in the past whether he/she- has been hospitalized? was involved in an accident? has undergone any Radiological, Cardiological, Pathological or any other tests? is currently under any treatment?	No

Moreover, the Insurance Company in that case proved that the deceased husband of the respondent Kusum Patro was hospitalized for weeks due to an accident for his treatment. In the instant case, the Insurance Company did not produce any cogent evidence to show that the petitioner suppressed the facts regarding his illness, which was within his knowledge at the time of submitting the Proposal Form. Thus, according to us, the facts of Kusum Patro (supra) is totally different than the case in hand.  

9. In Smt. Paramjit Kaur Gill (supra) the Life Insurance Corporation of India contested the case by taking number of preliminary objections and on merits as well and one of the objection was that the insured in that case made deliberate misstatements and withheld the material information regarding his health at the time of effecting insurance and hence in the terms of policy contract and the declaration contained in the Proposal Form of the insured, the appellant – Insurance Corporation bonafide repudiated the claim and was justified accordingly, saying that they are not liable for any payment under the life policy, but the Hon’ble State Commission of Punjab dismissed the appeal of the Insurance Company relying upon the judgment of the Hon’ble National Commission in Sanjeev Mahendralal Shah (supra) which are as follows:

“We are supported by the judgment of the National Commission “1986-1996 CONSUMER 1950 (NS) : 1996 (1) CPR-129, Life Insurance Corporation vs. Sanjeev Mahendralal Shah”. Moreover, there is no dearth common man taking the traditional self medication for small stomach pain and headache. It is not easy to take treatment for such minor troubles for a common man from a Government Hospital in our country where one is to wait for hours together for his turn for consultation with the doctor. One cannot afford to pay fee of consultation with an expert. Hence, we do not find any modicum of merit in the much-raised contention of the learned counsel for the appellant that the insured has obtained Insurance Policy, in question, by making any mis-statement or playing any fraud. Hence, we find the Insurance Company has rejected the claim not in a bonafide manner and rejection has been absolutely on the arbitrary and non-sustainable grounds. It is not disputed by the learned counsel that Consumer Fora can scrutinize the validity of the repudiation made by the insurer atleast for the limited purposes for finding out whether the repudiation has been made in good faith after considering all the relevant facts and circumstances of the case.

We reiterate that there is no evidence to show that the insured was on medication for stone in the Gall Bladder or as he was ever aware of it. Even alleged medical certificate obtained from the P.G.I. make mention of intermittent abdominal pain and fatty dyspepsia for three years. The Insurance Law is a social welfare legislation and in construing the provisions of the said law, the construction of the provisions has to be so adopted as would fulfil the policy of Legislation. That construction which would uphold the claim of the policyholder should be preferred as against the one which would deny his claim. Even in the 1991, Supreme Court - 392 - Life Insurance Corporation vs. Smt. G.M. Channabasemma, relied upon by the learned counsel for the appellant – Insurance Company, the Lordship of the Supreme Court had held that the burden of providing that the insured had made false representation and suppressed material facts is undoubtedly on the Life Insurance Corporation of India. In this case, no evidence, whatsoever, has been led by the Insurance Corporation even remotely to indicate that insured at any time prior to taking of policy ever took the treatment for stone in the Gall Bladder for which he was admitted in the P.G.I. and operated. Even otherwise also the name of the Doctor who treated the insured either for alleged intermittent abdominal pain or fatty dyspepsia has not been mentioned. It, therefore, cannot be gathered from the certificate that insured suffered from such alleged ailment prior to the proposal. We are, therefore, satisfied from the material on record that the insured did not suppress any material with regard to the state of health at the time of proposal and that therefore the repudiation of the liability by the opposite party is arbitrary and amounts to deficiency in service.”

10. In the instant case, the Insurance Company admittedly did not produce any doctor to support their allegation that deceased Dr. Ashim Chowdhury suffered from all these diseases in between the year 2005 to 2010. They relied upon the documents submitted before them by the complainant, the wife of the deceased Dr. Ashim Chowdhury. We have gone through the photocopy of those medical documents, treatment summery of Health Care Global Enterprises Ltd. wherein, it is written that patient had history of multiple joint pain since one year, but whether for that multiple joint pain, deceased was treated for a duration of more than seven days or not, is not clear. On the Treatment Report Discharge Summery of Manipal Hospital, it is written that Dr. Ashim Chowdhury, life assured presented to them with history of joint pains since two months associated with fever for last one week and such statement was made on 02.04.2011. Thus, such discloser was not relating to 2005 to 2010 and that was also not known to the insured while he submitted the Proposals Form. The plea of the Insurance Company that the deceased was on ‘Commuted Leave’ for some time that itself is not enough that the deceased was either hospitalized or treated by any doctor for more than seven days. The Insurance Company is to prove the period of leave and the actual ailment supported by medical certificate. The application of the deceased for his commuted leave was also not produced before the District Forum, as the commuted leave is not reimbursable.
11. The District Forum while dealing with the contention of the Insurance Company regarding the suppression of medical facts, it has noted that “Insurance Company without any proper enquiry came to a wrong conclusion that her husband made suppression of material fact and repudiated the claim. This was improper. Therefore, it appears there was no suppression of material fact by the life assured, Ashim Chowdhury. He was diagnosed with the dreaded disease after 6 months of purchasing the policy and he was not aware about such a dreaded disease when he purchased the policy certificate. There is no suppression of material fact at all. So, repudiation of claim was not proper. Petitioner is entitled to get compensation and all benefits of the policy, purchased by her husband.” Regarding the contention of Insurance Company in the affidavit of opposite party no.1, that the deceased had history of multiple joint pain since one year during treatment from 26.07.2011 to 02.08.2011 i.e. from 26.07.2010, it is clear that after three months of his knowledge about the disease and medical leave he made the proposal of insurance on 28.10.2010, that does not mean that the deceased insured was either hospitalized or treated by any doctor for week for such joint pain. More so, neither the Agent, who filled-up the form nor the approved doctor, who certified have been examined to establish that the deceased insured suppressed the material facts in Column No.11 of the Proposal Form while submitting the same. In case of Kusum Patro (supra), the insured’s brother was an Agent of Life Insurance Corporation of India and it was he, who had asked the insured to take the Insurance Policy and he being an authorized agent of the Life Insurance Corporation, presumably knew the effect of misstatement of facts. Misstatement by itself, however, was not material for repudiation of the policy unless the same is material in nature. In the instant case, the Insurance Company failed to prove that the multiple joint pain is linked with his (decease Dr. Ashim Chowdhury) cause of death i.e. Acute Renal Failure.  
12. As per section 45 of the Insurance Act, “no policy shall 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 matter 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 it suppressed facts which it was material to disclose.”

Before repudiation of a claim the insurer should keep in mind – (i) insurer must establish that the wrong statement in the proposal form is on material matter; (ii) the policyholder made suppression fraudulently; (iii) inaccuracy or falsity only would not be sufficient for repudiation. It has to be shown that policyholder had knowledge that it was false; (iv) about misstatement of fact burden of proof lies on the insurer; (v) insurer should not take advantage of unfair terms of contract.

13. In the instant case, the insurer failed to discharge its function while repudiated the claim of the complainant.

For the reasons recorded above, we find the present appeal devoid of merit and the impugned order of the Ld. District Forum is quite legal and justified. No interference, whatsoever, is called for with the said order and the same is upheld in its entirety. The opposite party,  Insurance Company is directed to give all the benefits of the policy to the complainant and also to pay an amount of Rs.25,000/- for the deficiency of service and Rs.5,000/- towards costs of litigation in terms of the order of the Ld. District Forum within a period of two months from today, if the same is not paid, it will carry interest @9% per annum. No order as to costs.

Send down the records to the Ld. District Forum, West Tripura, Agartala.

 

MEMBER State Commission Tripura MEMBER State Commission Tripura PRESIDENT State Commission Tripura