Per Hon’ble Mr. P.N. Kashalkar, Presiding Member :

           This appeal has been filed by the original opponents against the judgement and order passed by the District Consumer Disputes Redressal Forum, Satara on 1^st June 1999 passed in CC No. 218/1998.  By allowing the complaint, the Forum below directed LIC appellant herein to pay to the Complainant the amount of `2,00,000/- against policy No. 940235384 of the deceased Bhavarlal alongwith bonus and other benefits with interest thereon @ 15% p.a. from 15.4.95 till realization within the period of 30 days from the date of this order and further directed to pay to pay `5,000/- by way of mental torture and `2,000/- as costs.

          Facts to the extent material to be stated as under :

          The widow and two sons of deceased Shri Bhavarlal M. Jain had filed consumer complaint against LIC.  They pleaded  that the policy of `2,00,000/- was purchased by late Shri Bhavarlal Jain that the husband of Complainant No.1 and father of Complainant No.s 2 & 3 vide policy No. 940235384 from LIC.  He had paid all the premiums regularly.  Late Bhavarlal died on 14.10.94 and complainants as his legal heirs filed consumer complaint to get the policy amount of `2,00,000/- alongwith all benefits, bonus etc. and with interest thereon @18% p.a. from 14.10.94.  According to the Complainant, after the death of late Bhavarlal, Complainant No. 1 had submitted necessary documents and lodged the claim with Opponent No. 1 and Opponent No. 1 repudiated the claim and directed to file review petition before the Review Committee.  The said Review Committee also rejected the claim.  According to the Complainant, act of the Opponent is illegal and contradictory to the principles of insurance.  The said Review Committee did not give any opportunity to be heard to the Complainant and took a unilateral decision and repudiated the claim of the Complainant.  Complainants learnt that Opponents have obtained a certificate from one Dr. Gondhalekar on the basis of which claim was repudiated.  According to the Complainants, Dr. Gondhalekar has no any right to issue such certificate and it is not binding on Complainant and on the basis of that certificate, LIC cannot repudiate the claim.   Complainants pleaded that late Bhavarlal taken four policies during his life time on different dates.  Out of those four policies, three policies were honoured by the LIC and payment was made in terms of those policies but in respect of the disputed policy, claim was repudiated.  Complainants pleaded that on the principle of estoppel, the LIC is estopped from repudiating this claim under this policy.  Complainants had issued legal notice dated 22.6.98 to the LIC but LIC did not take any cognizance.  Hence Complainants filed consumer complaint claiming `2,00,000/- against policy No. 940235384 of the deceased Bhavarlal alongwith bonus and other benefits with interest thereon and also `50,000/- by way of mental torture and  costs of the complaint.

          Opponent filed written statement at Exh 12 and pleaded that the insurance policy was issued subject to the terms and conditions of the policy those conditions were explained to the deceased.  The insured had committed breach of terms and conditions of the policy and therefore, Complainants’ claim was repudiated by LIC after thorough and full investigation made by the LIC.  According to the  LIC, the contract of insurance was based on “uberrimae fides”.  Under that principle, the insured had to disclose all the material facts regarding pre-existing ailments but in the proposal form, he failed to disclose pre-existing ailments.  In the proposal form, he gave all answers in negative and therefore, for want of good faith on the part of the insured, they repudiated the claim.  According to the LIC, they honoured three policies.  Those were old one and this was a latest policy purchased in the month of Feb, 1994 and Mr. Bhavarlal died on 14.10.94.  Since it was earlier claim, LIC directed to investigate in respect of latest policy.  It was found that the deceased was suffering from dyspepcia, distention of abdomen, vomiting etc. for about one year before his death.  The insured was a regular alcoholic and was taking the treatment of the doctor for the last 2 years.  From the copy of the certificate issued by Dr. Gondhalekar, it was found that the deceased had suppressed the material facts regarding pre-existing ailments and therefore, Insurance Co. rightly repudiated the claim and as such it pleaded that complaint should be dismissed with costs.

         The District Consumer Disputes Redressal Forum, Satara considering the documents and affidavits placed before it was pleased to allow the complaint and directed LIC to pay a sum of `2,00,000/- with bonus and other benefits with interest @ 15% p.a. from 15.4.95 till actual realization of the said claim within 30 days and directed to pay a sum `5,000/- by way of mental torture and `2,000/- as costs to the Complainants.  Aggrieved by this award, LIC has come up in appeal. 

          We heard submissions of Advocate Mr. Rajiv Chavan, Advocate for Appellant-LIC and Mr. Bahulekar, Advocate for Mr. Uday Warunjikar, Advocate for the Respondent.

          We are finding that the LIC took up a defence that the deceased had suppressed material facts.  Affidavit of Dr. Gondhalekar had been on record.  He ascertained that late Bhavarlal was patient for two years before his demise.  He stated further that two years before death, he had been to him for abdominal disorder, dyspepsia, anorexia and weakness.  He also gave history of consuming alcohol frequently.  About one year before his death, he consulted him again and had vomiting, severe pain in abdomen distention of abdomen and anorexia.  After going into the history of his habits, he admitted that he consumed alcohol almost every day and his provisional diagnosis was liver cirrhosis. He further stated that in August 1994, he had been to him for complaints of haematemesis (blood in vomitting) for which he was admitted in Jeevan Jyot Rugnalaya.  He was later transferred to Pune to treat the cause of haematemesis which was bleeding oesophagal virices secondary to portal hypertension which was caused by liver cirrhosis.  He further stated that in 4^th October 1994 and later on 13^th October 1994 for profused bleeding from mouth and bleeding from rectum from piles, he was treated as indoor patient in Jeevan Jyot Rugnalaya.  As his bleeding could not be controlled in Satara, he was urgently referred to Pune for further necessary treatment.  He died in Pune on 14^th October 1994.  The cause of death of late Bhavarlal Jain was haemorrhagic shock due to severe bleeding from oesophageal virices and piles which was due to portal hypertension which was secondary to liver cirrhosis.

          Another affidavit of Dr. Sanghvi was also placed on record on behalf of the LIC who stated that before the death of late Bhavarlal, he was suffering from Liver Cirrhosis.  He advised him to get admitted in Jeevan Jyot Rugnalaya at Satara and then he was transferred to Pune wherein he expired on 14.10.94.  This affidavit was filed on 10.12.98 before the District Consumer Disputes Redressal Forum.  In the written statement, primarily two grounds were pleaded by the LIC for repudiating claim.  First, age mentioned in the proposal form differed from the age mentioned in the death certificate.  In the proposal form, age of late Bhavarlal is mentioned as 38 years whereas in the death certificate, it is mentioned as 48 years.  But this cannot be a ground for the LIC to repudiate the claim because when proposal form was filled in, Mr. Bhavarlal was alive and he himself had filled up the proposal form.  Whereas death certificate was issued by doctor after his death.  The only ground on which the claim was repudiated is  that  he had suppressed liver cirrhosis. The disease was contracted three months prior to the proposal form filled in by the deceased Bhavarlal Jain.  In the proposal form dated 13.1.94, he categorically stated that he was not suffering from any disease and never consumed alcohol.  As per certificate given by Dr. Gondhalekar and Dr. Sanghvi, deceased was suffering from liver cirrhosis.  Two doctors had given affidavit in favour of the appellant in the District Consumer Disputes Redressal Forum.  In our view, there was clear-cut evidence brought on record in terms of affidavit of two doctors of Satara to prove that the deceased was suffering from liver cirrhosis and other ailments for which he was admitted in Jeevan Jyot Rugnalay at Satara and he was transferred to Pune.  Ultimately, he died on 14.10.94.

          In the circumstances, we are of the view that LIC had rightly repudiated the claim in respect of this policy though three other policies purchased much earlier were honoured by the LIC.  LIC, the appellant herein had taken practical view in respect of the three other policies wherein they made payment.  But in respect of this policy which was purchased on 13.1.94 which was proposed on 13.1.94 and accepted on 5.2.94, LIC found that this was earlier claim and therefore they had ordered investigation into the circumstances of death of late Bhavarlal and found as per two doctors version that there was liver cirrhosis and other ailments to the insured and this was suppressed by late Bhavarlal while making the proposal.  In the proposal form, it was the duty of the life insured to disclose all pre-existing ailments to the underwriting company. If he would have disclosed that he  suffered from liver cirrhosis, the appellant company would not have issued the policy at all and would have issued policy with higher premium.  But since material facts were withheld from the appellant company and since death of the life insured occurred within 8 months from the date of proposal, LIC ordered investigation into the matter and repudiated the claim rightly relying on the certificates issued by Dr. Gondhalekar and Dr. Sanghvi.  Both of them had given affidavit in favour of the appellant before the District Consumer Disputes Redressal Forum.  Ignoring the said affidavits, District Consumer Disputes Redressal Forum  erroneously allowed the complaint and directed appellant company to pay death claim to the respondents.  In our view, order passed by the District Consumer Disputes Redressal Forum
is bad in law and cannot be allowed to sustain in law.  In the instant case, life assured suppressed material facts pertaining to his illness of liver cirrhosis and other ailments mentioned in the written statement and in two affidavits filed by two doctors on behalf of the LIC.  Suppression of material facts renders to the contract of insurance void.  As mentioned in the written statement, the contract of insurance is a contract of utmost good faith and this principle has been violated by the deceased life assured.  Therefore, this claim was rightly repudiated by LIC by sending repudiation letter after thorough investigation.

         In the circumstances, we are of the view that the award passed by the District Consumer Disputes Redressal Forum in favour of the respondent is bad in law and cannot be allowed.  Therefore, we are inclined to allow this appeal to  set aside the order passed by the District Consumer Disputes Redressal Forum, Satara in Complaint No. 218/1998.  Hence the following order :

                                                   O R D E R

         i) Appeal is allowed

        ii) Impugned judgement and order passed by the District Consumer

            Disputes Redressal Forum, Satara  in Complaint No. 218/1998 is

            set aside and complaint of Respondent  stands dismissed.

      iii) Inform to the parties accordingly.

Pronounced dated 24^th May 2011.

aab