Tripura

StateCommission

A/35/2016

Life Insurance Corporation of India - Complainant(s)

Versus

Smt. Shibani Guha - Opp.Party(s)

Mr. P.K Debnath

07 Jun 2017

ORDER

State Consumer Disputes Redressal Commission, Tripura.

 

 

 

Case No.A.35.2016

 

 

1. Life Insurance Corporation of India Ltd.,

Represented by Branch Manager, LICI, Br.II,

Paradise Chowmuhani,

West Tripura, Agartala,

Constituted Attorney on behalf of LICI.

 

… … … … Appellant/Opposite Party

 

•  

 

1. Smt. Shibani Guha,

W/o Late Amalendu Guha,

Vill-Banamalipur (Opp. Ramthakur Ashram),

P.O. Agartala, P.S. East 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 Sharma,

Member,

State Commission, Tripura.

 

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

For the Respondent: Mr. Saikat Saha, Adv.

Date of Hearing & Delivery of Judgment: 07.06.2017.

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

 

 

U.B. Saha,J,

This appeal is filed by the appellant, Life Insurance Corporation of India Ltd. represented by its Branch Manager, LICI, Br.II, Paradise Chowmuhani (hereinafter referred to as opposite party/Insurance Company/LICI) under Section 15 of the Consumers Protection Act, 1986 challenging the judgment dated 29.07.2016 passed by the Ld. District Consumers Disputes Redressal Forum (hereinafter referred to as District Forum), West Tripura, Agartala in Case No. C.C. 95 of 2015 whereby and whereunder the Ld. District Forum allowed the claim of the complainant, the respondent herein, (hereinafter referred to as complainant) directing the opposite party-Insurance Company to satisfy the claim of the complainant by giving the sum assured and all other benefits to the complainant within one month along with interest @9% per annum from the date of filing of the petition i.e. 09.11.2015 and also to pay compensation amounting to Rs.50,000/- and in addition to the benefits of the policy, Rs.10,000/- as cost of litigation.

2. Heard Mr. Prahlad Kumar Debnath, Ld. Counsel appearing for the appellant-opposite party, Life Insurance Corporation of India Ltd. as well as Mr. Saikat Saha, Ld. Counsel appearing for the respondent-complainant.
3. Facts of the case as narrated in the petition by the complainant are that her husband Amalendu Guha purchased Endowment Policy No.494053457 from the Life Insurance Corporation of India Ltd. with effect from 28.10.2013 to 28.10.2018 with an Annual Premium of Rs.72,167/- for an assured amount of Rs.3,25,000/-. The opposite party-Insurance Company after enquiry and observing of formalities issued the policy in favour of her husband Amalendu Guha for taking premium of Rs.72,167/-. During the existing of policy, on 11.03.2014, insured Amalendu Guha unfortunately died due to ''Acute Coronary Insufficiency''. Complainant being the nominee of the policy ‘Jeevan Vikash’ claimed the benefit of the policy, but the opposite party-LICI repudiated the claim on the ground that her deceased husband, Amalendu Guha had given false declaration at the time of entering into the contract. Complainant then filed an appeal before the Insurance Ombudsmen, but her appeal was not entertained. Finally, she filed an application before the District Forum under Section 12 of the Consumer Protection Act, 1986 in the year 2015 claiming the sum assured of Rs.3,25,000/- and Rs.1 lac as compensation for deficiency in service of LICI.
4. The opposite parties-Life Insurance Corporation of India appeared and filed their written statement denying the claim of the complainant. It is contended by the Insurance Company that the deceased had a history of consumption of alcohol and he was also a diabetic patient and suffering from various illness before he purchased the said policy. As the assured husband of the complainant suppressed the facts regarding his illness and gave false declaration in the proposal form, she is not entitled to get any benefit of the policy purchased by her deceased husband though she is admittedly a nominee. The opposite parties-Insurance Company relied upon some medical prescriptions and some laboratory reports regarding analysis of blood and also forensic reports to show that the deceased assured was a patient of Type 2 DM (Diabetes Mellitus) i.e. diabetic and also an alcoholic.
5.  On the basis of the pleadings of the parties, the Ld. District Forum framed the following points for deciding the case;

1. Whether the deceased husband of the petitioner suppressed the material facts before purchasing the Endowment Policy and therefore repudiation of the claim was proper or not?
2. Whether the petitioner being nominee of the policy is entitled to get all the benefits of the policy certificate issued by LICI along with compensation?

6. Complainant in support of her claim produced the Policy Proposal, Policy Certificate, Death intimation letter, Claim form, copies of medical prescription, forensic report, enquiry report, repudiation letter, letter of DM, LICI, Silchar and also examined herself as P.W.1.
7. Opposite parties, on the other hand, produced the Policy Proposal Certificate, death intimation, claim form, medical attendant's certificate, prescriptions, forensic report, claim enquiry report, repudiation letter which were marked as Exhibit-A series. Opposite parties also examined one witness, namely, Sri Nabarun Ghosh, Branch Manager of LICI, Agartala Branch No-II as O.P.W.1.
8. The Ld. District Forum considering the pleadings of the parties and evidence on record in its findings noted, inter alia, that “How the insurance authority determined that false statement was given by life assured? No specific evidence given by Insurance Company to support their contention. They relied on the prescription and medical reports, forensic report submitted by petitioner to them. We have gone through the prescription issued by Dr. Dibyendu Roy on 15.07.13, 20.07.13. No where it is found that Amalendu Guha required treatment for more than 7 days. His blood pressure was 70 to 110. Nothing written to support that he was diabetic. Another prescription was issued by Dr. Mridul Das on 10.08.13. In that prescription nothing written about his addiction to alcohol. His blood pressure was found 70-104/118. Blood report of diagnostic laboratory, Agartala is produced. There his blood sugar on random shown 161 on 10.08.2013. On 13.08.13 it was shown 136. On 24.12.13 his plasma glucose on PP was 133. Normal accepted range is up to 140. So from the report it is found that he was not diabetic. From the prescription and another report on 21.08.13, it is found that Amalendu Guha had no health disturbance and blood pressure was normal and nothing is there to support that he was diabetic. From the report of the laboratory, it is found on plasma glucose the PP was 140 on 01.12.13. We have gone through the prescription issued by Dr. Swapan Kumar Das, MD (Medicine). Nothing found in those prescriptions in our naked eyes that he required treatment for more than a week or had been suffering from liver, stomach, heart, lung ailment or had been suffering from diabetes, T.B., High Blood Pressure. Nothing found from those medical prescriptions that he was alcohol addicted. Concerned doctors were not produced to support the views taken by Insurance Company. Postmortem report, forensic report also produced. From those report is not possible to come to a clear finding that the deceased, Amalendu Guha was alcoholic or had been suffering from diabetes or high blood pressure. It is found that without consulting any medical officer without any investigation only by going through naked eyes on the prescriptions the insurance company authority had come to the conclusion that the deceased, Amalendu Guha was Diabetic, Alcoholic and had been suffering from heart, lung disease before purchasing the policy certificate. Policy certificate was purchased on 28.10.13. O.P. LICI failed to produce any cogent evidence to support that before 28.10.13 Amalendu Guha life assured was suffering from high blood pressure, diabetes and also suffering from heart, lung disease. When the contention is raised by the Insurance Company it is their duty and burden to prove the same lies on it. Otherwise, whims or any inferences cannot be drawn to come to the conclusion that the deceased had made false declaration.”
9. It also appears from the impugned judgment that the Ld. Counsel for the opposite parties placed reliance on the decision of this Commission in Appeal No. FA/64/2013 and the decision of the Hon'ble National Commission in Revision Petition No.3340/2014 wherein also, this Commission and the Hon’ble National Commission dealt with almost a similar issue, but the Ld. District Forum without discussing the aforesaid decisions of this Commission as well as the Hon’ble National Commission allowed the claim of the complainant directing the Insurance Company to satisfy the claim of the complainant by giving the sum assured and other all benefits within one month along with interest @9% per annum from the date of filing of the petition and also an amount of Rs.50,000/- as compensation and in addition to that Rs.10,000/- towards the cost of litigation.
10. Mr. Debnath, Ld. Counsel has taken us to the Sub-para (i) to (viii) of Paragraph-11 of the Proposal Form which are as follows:-

1. Last 5 years did you consult a Medical Practitioner for any aliment requiring treatment for more than a week?
2. Have you ever been admitted to any hospital or nursing home for general checkup, observation, treatment or operation?
3. Have you remained absent from place of work on grounds of health during the last 5 years?
4. Are you suffering from or have you ever suffered from ailments pertaining of Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous System?
5. Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? 
6. Do you have any bodily defect or deformity?
7. Do you have any accident or injury?
8. Do you use or have you ever used Alcoholic Drink, Narcotics, any other drugs, Tobacco in any form?

And the assured answered to those question as ‘No’. He has specifically contended that though in question 11. (v), the assured was asked as to whether he was suffering from diabetes and in question 11. (viii), assured was asked as to whether he used alcoholic drink, but the assured knowing fully well that he was a diabetic and alcoholic suppressed the facts. In support of his aforesaid contention he has relied upon the prescription of Dr. Mridul Das dated 10.08.2013 submitted by the complainant along with her claim wherein it is specifically mentioned that the assured was known Type 2 (DM) and also an alcoholic and also advised him to avoid addiction, but the assured though filled-up his proposal form on 28.09.2013 suppressed those facts. He further submitted that the Ld. District Forum though considered those prescriptions, but did not mention in its judgment regarding those suppression, rather considered the blood report, which is the result of after taking medicine. As evident from the prescription dated 10.08.2013, wherein the doctor advised the assured to take 'Tab. Gemer 1', which is used by the diabetic patient.  He has also relied upon the judgment of Hon’ble National Commission in Revision Petition No.3340/2014 (Subinoy Majumdar Vs Life Insurance Corporation of India, Agartala Branch-II & 2 others). In that case, the Hon’ble National Commission considered the First Appeal No.64 & 65 of 2013 of this Commission wherein this Commission set aside the judgment of the Ld. District Forum in Complaint Case No.19/2013 and 20/2013 whereby and whereunder the District Forum allowed the claim petition. The Hon’ble National Commission dismissed the appeal of the complainants in those cases and affirmed the judgment of the State Commission.

11. Mr. Saha, Ld. Counsel while supporting the impugned judgment passed by the District Forum would contend that in Revision Petition No.3340/2014, the Hon’ble National Commission considered the C.C. No.19 of 2013 as well as C.C. No.20 of 2013 wherein the complainants admitted the facts regarding the treatment of the assured before purchasing of the policy, but in the instant case, the complainant did not admit the fact that her deceased assured husband was suffering from Type 2 (DM) before purchasing of the policy. He has also contended that none of the doctors who issued the prescriptions and who gave the blood report was examined.
12. We have gone through the judgment of the Hon’ble National Commission in Revision Petition No.3340/2014, wherein the Hon’ble National Commission considered the order of this Commission dated 29.05.2014 passed in Appeal No.65/2013. In that case also, this Commission considered almost the similar facts and in its common order dated 29.05.2014 while allowing both the appeals preferred by the Insurance Company observed as under:-

“16. Both the polices are non-medical in nature. The learned counsel drawing our attention to the chapter IX of non-medical business at page 121 of the Under Writing Manual of the LICI submitted that the assured Ratna Das aged about 45 years Branch Manager/Grade III officer of the Tripura State Co-operative Bank Ltd. and a graduate as mentioned in the proposal forms were considered as non-medical case. He also submitted that in a non-medical case the medical test before acceptance of the proposal for issuance of the policy is not compulsory and in that case the insurance company relies upon the statement, information which are in his/her exclusive knowledge furnished by the proposer in the proposal forms and the insurance company acts on  this information on good faith. He also submitted that referring to Regulation 2(1) (d) of the Insurance and Development Authority (Protection of Policy Holders’ Interest) Regulations, 2002 that ‘proposal form’ means a form to be filled in by the proposer for insurance, for furnishing  all material information 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. He also submitted that 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. He also submitted 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. It the proposer has knowledge of said fact, he is obliged to disclose it particularly while answering question in the proposal form and any inaccurate answer will entitle the insurer to repudiate its liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance.

19. Question may arise as to what was the authenticity in respect of said two medical prescriptions dates 20.04.2010 and 23.04.2010. In this regard the deposition of claimant/complainant Subinoy Majumdas As PW 1 in both the complaint case is very vital. This Subinoy Majumdar as PW 1 stated in his cross-examination in case No.C.C. 19/2013 that “ it is true that on 20.02.2010 and 23.04.2010 I got my wife checked up in Apollo Gleneagles Hospital, Kolkata and AMRI Hospital, Kolkata. I have also enclosed two prescriptions of my wife with the letter addressed to the Manager, LICI I did not submit copy of prescriptions before Forum”. From the above it is evident that the complainant himself after the death of his wife Ratna Das submitted these two prescriptions before the Manager, LICI (appellants) and the appellants herein being the respondents produced the said photo copy of two medical prescriptions dated 20.04.2010 and 23.04.2010 before the Ld. District Forum with a view to establish that the proposer Ratna Das was medically examined by the doctors of Apollo Gleneagles Hospital and AMRI Hospital, Kolkata and in course of examination the doctor noted the statement of Ratna Das in the said two medical prescriptions. So, there is no room to think that the photo copy of the two prescriptions produced as documentary evidence from the side of the insurance company before the ld. District Forum are manufactured or false documents created for the purpose of repudiating the claim of the complainant.  

20. Furthermore, there is no scope to think that the doctor while examining a patient in course of check-up whimsically on his own noted in the prescription regarding the condition of the patient. The noting “diabetes” and also “Type 2 DM-1 year” as appearing in the prescription have been recorded on the basis of the statement of Deceased Life Assured “(DLA)” Ratna Das while she was examining by the doctors of AMRI Hospital and Apollo Gleneagles Hospital, Kolkata. This has clearly established that the DLA had been suffering from diabetes in Type 2 DM for about a year before the submission of the first proposal form for the first LIC policy out of two. It is unthinkable that a person who had been suffering from Type 2 DM was not aware regarding his or her suffering from diabetes and this presumption to the effect that at the material point of time the DLA had been suffering from diabetes has also been confirmed as appearing from the bed head ticket of  the Tripura Hospital. So, there exists cogent reason to believe and hold that DLA Ratna Das had been suffering from diabetes in the category of Type 2 DM on and before the submission of the first proposal form on 27.01.2010 and also submission for second proposal form on 31.03.2010. From the decision of the Hon’ble national Commission cited hereinbefore has made it clear that the suffering of the DLA on or before the date of submission of proposal forms from diabetes and also status of her health is material fact and that material fact has been suppressed by the DLA in her two proposal forms submitted for two insurance policies. So, it is found that the DLA Ratha Das is guilty of suppression of material fact with a view to including and/or influencing the insurer i.e. insurance company fraudulently to accept the proposals and also to issue insurance policies in favour of the DLA.

21. On the basis of the provision of law embodied in section 45 of the Insurance Act and also on the basis of the principle of law enunciated in the decision of the Hon’ble Apex Court as well as Hon’ble National Commission, we are of the view that the material facts regarding answer to the Q. No.11 of the two proposal forms have been suppressed by the proposer Ratna Das while submitting the proposal forms. The proposer Ratna Das was a graduate and was also holding a responsible post in Tripura State Co-operative Bank Ltd. The DW 2 Latika Bhowmik, the agent of LICI in respect of proposal No. 22886 dated 31903.2010 deposed in complaint case no. C.C. 19/2013 and also Babul Shil, the agent of LICI of proposal No. 15421 dated 27.01.2010 examined as DW 2 in complaint case No.C.C.20/2013 have categorically stated in their respective cross-examination that the proposal form was filled up by her/him as per version of the insured. It also appears that barring merely a denial suggestion, nothing has been adduced to falsify this unrebutable evidence of the DW 2 in both the cases. Furthermore, the facts and circumstances also establishes that the DLA at the time of submission of proposal forms was well aware that she had been suffering from diabetes and she knew that her answer to the Q. No. 11 of the proposal forms was false and such answer was given by her intentionally with a view to inducing the insurance company to accept to the proposal and also to issue both the insurance policies in favour of her. On perusal of the judgments under appeals, it is our view that the Ld. District Forum considered diabetes in the category of Type 2 DM as nominal being a common disease.

22. On-going through the impugned judgments, it appears to us that it was the impression of the Ld. District Forum that as the insured Ratna Das did not die due to diabetes, but died due to septicemia, the non-disclosure of her suffering from diabetes in the proposal forms is not at all a vital factor. It further appears that the Ld. District Forum shifted the burden upon the insurance company for proving that the death of the insured Ratna Das was caused due to diabetes. In our view, the Ld. District Forum dealt with the said matter from a wrong approach as the Ld. District Forum failed to appreciate that the cause of death is not a vital factor for repudiating the claim of the claimant, rather the claim of the claimant has been repudiating on the ground of suppression of material facts concerning the answer to the Q. No. 11 of the two proposal forms whereby the proposer Ratna Das suppressed her suffering from diabetes and also falsely stated about status of her health with a view to inducing the appellant insurance company to accept the proposals.

23. It was argued by the learned advocate for the complaint and also as pleaded in both the complainants that the prosper was medically checked up by the doctors of the appellants before the issuance of the polices. On the other hand, it was specifically pleaded in the written objections by the present appellants that the proposals were accepted O.P.s based on the information, declaration and signature provided in the proposals by the proposer life assured. Not only so, the learned advance for the appellants submitted that both the insurance policies were non-medical cases where medical examination of the prosper before acceptance of the proposals is not compulsory and the insurance company accepted the proposal relying of the information, declaration or the proposer made in the proposals. From the discussions and findings made above, it is palpable that the proposer Ratna Das suppressed her disease ‘diabetes’ in the proposal forms. It has also been established that it is suppression of material facts which alone sufficient to repudiate the claim of the complainant. That being the position, we are of the view that the Ld. District Forum decided both the complaint cases from a wrong approach and as such the findings of the Ld. District Forum in both the impugned judgments are not based on sound reasonings and both the judgments have been passed without appreciating the provisions of laws and the principle of law enunciated by the Hon’ble National Commission and the Hon’ble Apex Court mentioned hereinbefore applicable in the facts and circumstances of the present appeals.

24. On the basis of our discussions made above, we are unable to accept the findings of the Ld. District Forum made in both the judgments which are found not legal and justifiable and as such the same are liable to be set aside and the complaint petition in both the complaint cases are also liable to be dismissed and the appeals should be allowed.

25. In the result, both the appeals are allowed. The impugned judgments dated 21.10.2013 passed in Case No.C.C.19/2013 and in case No.C.C.20/2013 by the Ld. District Forum, West Tripura, Agartala are hereby set aside. The complaint in C.C. 19/2013 and the complaint in C.C. 20/2013 are, accordingly, dismissed.”

In this case also, admittedly the assured husband of the complainant was suffering from Type 2 (DM) and also was an alcoholic before purchasing the policy, which would be evident from the prescription of Dr. Mridul Das dated 10.08.2013. It cannot be said that when a doctor examining a patient in course of check-up, whimsically on his own in the prescription regarding the condition of the patient noted “Known T2 DM” and “Ch. Alcoholic” unless the said information was disclosed by the assured and it also appears from the documents submitted by the respondent-complainant that she has also put her signature in the prescriptions issued by the concerned doctor at the time of filing the claim petition. Therefore, the same cannot be disbelieved.

13. In Paragraph-16 of the judgment of Hon’ble National Commission in the Revision Petition No.3340/2014, the Hon’ble National Commission took note of Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd, IV (2009) CPJ 8(SC), particularly in Paragraphs - 12,13,17 and 18 of the said judgment which are as follows:-

“12.. ………Nonetheless, it is a contract of insurance falling in the category of contract ‘uberrimae fidei’, meaning, ‘a contract of utmost good faith, on the part of the assured’. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment (See: Joel Vs. Law Union & Crown Ins.Co. [1908] 2 K.B. 863).

13. In United India Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC)=(1996)6 SCC 428, this Court has observed that it is a 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.(Also see: Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000)SLT 323 = I(2000) CPJ 1 (SC)=(2000)2 SCC 734).

17. The term “material fact” is not defined in the Act and, therefore, it has been understood and explained by the courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be “material”.

18. As stated in Pollock and Mulla’s Indian Contract and Specific Relief Acts, any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact”.   

14. In view of the findings of this Commission in Appeal Nos.FA/64//2013 & FA/65/2013, which was affirmed by the Hon’ble National Commission in the Revision Petition No.3340/2014, we are unable to accept the findings of the Ld. District Forum as the case in hand is fully covered by the judgment of the Hon’ble National Commission and accordingly, the impugned judgment is set aside and in consequent thereto, the complaint petition filed by the complainant also stands dismissed.

It is made clear that appellants are entitled to withdraw the statutory deposit lying with this Commission on filing an application, if so advised.

In the result, the appeal is allowed. 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