Heard learned counsel for the appellant.
2. Captioned appeal is filed u/s 15 of the erstwhile Consumer Protection Act, 1986 (hereinafter called the ‘Act’). Parties to this appeal shall be referred to with reference to their respective status before the District Forum.
3. The case of the complainant in nutshell is that the complainant’s husband has purchased the policy from the opposite party on 23.3.2005 for a sum assured at Rs. 1,00,000/- for twenty years.
4. It is alleged inter alia that the complainant’s husband died on 14.12.2013. So, complainant being the nominee filed the claim petition before the opposite party but the latter repudiated the claim on the ground that complainant had suppressed the material facts of pre-existing disease because the insured was suffering from renal disease mild hepatomegally, mildly thickened urinary bladder wall with high residual urine volume disease during revival of the policy on 22.2.2013. Since the insured has suppressed the material fact by not mentioning in the declaration form/proposal form, they have repudiated the claim.
5. Challenging the repudiation, the complaint was filed. The opposite party filed written version denying the entire allegation and as such, it is averred that the claim being made illegal, complaint should be dismissed.
6. After hearing the parties, learned District Forum passed the following order:-
“xxx xxx xxx
In resultant the complaint petition stands allowed in part on contest against the O.P.
The O.Ps are ordered to pay the sum assured of LIC Policy no. 570965677 together with accrued bonus to the complainant. Parties are left to bear their own cost.
The Ops ordered to make compliance the aforesaid Order within 3 (three) months from the date of receipt of this order failing which an interest @ Rs.9% per annum would accrue on the sum assured amount from the date of repudiation i.e. on 15.7.2017 till realization.”
7. Learned counsel for the appellant vehemently argued that learned District Forum committed error in law by not considering the true fact and law emerged in this case. According to him, the insured has defaulted in payment of the instalments and it was only revived in 2013. At the time of revival of the policy and subsequently also, the insured has not informed about the previous disease suffered by him. Since suppression is one of the material ground as per Section 45 of the Insurance Act, it is submitted to set aside the impugned order by allowing the appeal.
8. Considered the submissions, perused the DFR including the impugned order.
9. It is admitted fact that the complainant had purchased the policy and it is not a fact that the policy was in a lapse condition but revived during 2013 and thereafter the policy holder died on 14.12.2013.
10. Reliance has been placed in a decision of the Hon’ble Supreme Court of India in the case of Mithoolal Nayak Vrs. Life Insurance Corporation of India, reported in 1962 SCR Suppl. (2) 571, where Their Lordships have held as follows:-
“ ........In the case before us the policy was issued on March 13, 1945, and it was to come into effect from January, 15, 1945. The amount insured was payable after January 15, 1968, or at the death of the insured., if earlier. The respondent company repudiated the claim by it letter dated October 10, 1947. Obviously, therefore, two years had expired from the date on which the policy was effected. We are clearly of the opinion that s.45 of the Insurance Act applies in the present case in view of the clear terms in which the section is worded, though learned counsel for the respondent company sought, at one stage, to argue that the revival of the policy some time in July, 1946, constituted in law a new contract between the parties and if two years were to be counted from July, 1946, then the period of two years had not expired from the date of the revival. Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is clear from the wording of the operative part of s.45 that the period of two years for the purpose of the section has to be calculated from the date on which the policy was originally effected; in the present case this can only mean the date on which the policy was effected......”
It is necessary to quote Section 45 of the Insurance Act, 1938 which reads as follows:-
“S.45. Policy not to be called in question on ground of mis-statement after two years.- No policy of life insurance effected before the commencement of this Act shall after he expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of 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 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.
Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”
11. The aforesaid provision is clear to show that after two years from the commencing of the policy no repudiation can be made on any other ground as per Section 45 of the Insurance Act. In the Mithoolal Nayak Vrs. Life Insurance Corporation of India (supra) and subsequent decision, it is made clear that two years to be computed under the unamended Section 45 of Insurance Act, 1938. from the date when the policy was effective originally. In the instant case, the policy became effective from 2005 but the death of insured took place in the year 2013. Even if it is revived in 2013, but such revival will not help the learned counsel for the appellant because two years will be computed from the date of the original policy commenced and not from the date of revival of the policy.
12. In the result, Section 45 of the Insurance Act does not apply and the repudiation of the claim being made after two years from the date of commencement of the original policy, there is deficiency of service on the part of the appellant. On the other hand, we have gone through the impugned order of the learned District Forum and do not find any error committed by the Forum. Even if we go to plea of appellant, we find O.P. has not proved suffering of pre-existing disease by Policy Holder through any cogent evidence. Hence the impugned order is confirmed with the direction that the impugned order should be complied within 45 days by O.P.
13. The appeal lacks merit and accordingly the same is dismissed. No cost.
DFR be sent back forthwith.
Supply free copy of this order to the respective parties or the copy of this order be downloaded from Confonet or Website of this Commission to treat same as copy supplied from this Commission.
