KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD THIRUVANANTHAPURAM APPEAL NO.231/2007 JUDGMENT DATED 7.8.2010 PRESENT SRI.M.V.VISWANATHAN -- JUDICIAL MEMBER 1. The Manager, LIC of India, Pathanamthitta. 2. Sr.Divisional Manager, LIC of India, Jeevan Prakash, Nagampadom, Kottayam. -- APPELLANTS 3. The Zonal Manager, LIC of India, Zonal Office, Anna Road, P.B.No.2450 LIC Building, Chennai -2. (By Adv.G.S.Kalkura) Vs. 1. Sreelakshmi Santhosh (Minor) reptd. by the Natural Guardian and mother Smt.Mini Santhosh, Chirackal House, Cherukulanji.P.O, Valiyakulam, Ranni. 2. John T Varkey -- RESPONDENTS Siniji Villa, LIC Agent, Pathanamthitta. (R1 by Adv.Padmini.N) JUDGMENT SRI.M.V.VISWANATHAN,JUDICIAL MEMBER Appellants were the opposite parties 1 to 3 and respondents 1 and 2 were the complainant and 4th opposite party respectively in OP.No.32/04 on the file of CDRF, Pathanamthitta. The complaint therein was filed by the miner complainant Sree Lakshmi Santhosh as nominee of the life assured late Sobhana C.K alleging deficiency in service on the part of the opposite parties 1 to 3 in repudiating the insurance claim with respect to the Policy No.391107290 in the name of the policy holder Sobhana C.K. Opposite parties 1 to 3 filed versions denying the alleged deficiency in service. They contended that the life assured Sobhana C.K suppressed material facts regarding her state of health at the time of submitting proposal for the policy. Thus, the opposite parties 1 to 3 justified their action in repudiating the insurance claim. The 4th opposite party filed written version stating that he acted only for canvassing the life policy and that the proposer/life assured did not disclose anything about her illness. The 4th opposite party denied deficiency in service on his part. During the pendency of the complaint in OP. 32/04 opposite parties 5 to 7 were deleted from the party array at the instance of the complainant. 2. Before the Forum below, the mother and next friend of the minor complainant was examined as PW1 and other 6 witnesses were examined on her side as PWs 2 to 7. Exts.A1 to A4 documents were also marked on the side of the complainant. From the side of opposite parties 1 to 3, the Manager Legal and House Property Finance has examined as DW1 and Exts.B1 to B5 documents were also marked on their side. On an appreciation of the evidence on record, the Forum below passed the impugned order dated 27th February 2007 allowing the complaint and thereby directed the opposite parties 1 to 3 to disburse the insured amount of Rs.1 lakh with interest and cost of Rs.2000/-. The complainant was also allowed compensation of Rs.15,000/-. Opposite parties 1 to 3 were made jointly and severely to pay the decreed amount. Aggrieved by the said order, the present appeal is filed by the opposite parties 1 to 3 therein. 3. When this appeal was taken up for final hearing, there was no representation for the respondents 1 and 2 (complainant 1 and 4th opposite party). We heard the learned counsel for the appellants/ opposite parties 1 to 3. He submitted his arguments based on the grounds urged in the memorandum of the present appeal. He much relied on the documentary evidence, especially Ext.A2 postmortem certificate of the life assured Sobhana C.K. A3 discharge summary with respect to the treatment of the life assured and B1 proposal for the Policy No. 391107290 and argued for the position that there was suppression of material facts regarding the health condition of the life assured and thereby the opposite party/LIC is justified in repudiating the Insurance claim. 4. The points that arise for consideration are:- 1. Whether there was any suppression of material facts as contended by the appellants/opposite parties 1 to 3? 2. Whether the appellants can be justified in repudiating the insurance claim preferred by the first respondent/complainant with respect to the life assured Policy No. 391107290? 3. Whether the complainant has succeeded in establishing the alleged deficiency in service on the part of the opposite parties 1 to 3? 4. Is there any legally sustainable ground to interfere with the impugned order dated 27.2.07 passed by CDRF, Pathanamthitta in OP.32/04? 5. POINTS 1 TO 4:- There is no dispute that late Sobhana C.K had taken a life policy bearing No. 391107290. As per the said policy, the minor complainant Sreelakshmi Santhosh is shown as the nominee. The minor complainant is represented by her natural guardian/mother as the next friend. Admittedly, the life assured Sobhana.C.K expired on 22.6.02. Ext.A1 is the death certificate of the deceased Sobhana.C.K. It would show that the life assured Sobhana.C.K died on 22.6.02. 6. Admittedly, after the death of the life assured, the complainant being the nominee of the life assured preferred the insurance claim and that the said claim was repudiated by the opposite party/LIC of India as per the repudiation letter dated 15.3.03. The reason stated for repudiating the Insurance claim is that the life assured with-held material information regarding her health at the time of effecting the assurance. It was also specified that the answers given by the proposer to the questions enumerated in the proposal Form were wrong answers and the said answers were given suppressing or with holding material information regarding her health at the time of submission of the proposal for the policy. Aggrieved by the aforesaid repudiation the complainant filed OP.No.32/04 before the CDRF, Pathanamthitta. 7. The opposite parties 1 to 3 reiterated their contention regarding suppression of material facts by the life assured while submitting the proposal for the policy. 8. A perusal of the complaint in OP.32/04 would make it clear that the life assured Sobhana C.K had illness of goitre and that she had undergone an operation for the said illness. Thus, in effect the complainant herself had admitted the fact that the life assured Sobhaa C.K was suffering from such an illness and she died due to myxoedema crisis. Ext. A2 is copy of the postmortem certificate issued by the District Police Surgeon, Pathanamthitta. In A2 postmortem certificate, it is clearly stated that the deceased died due to myxoedema crisis. It is to be noted that the complainant has also admitted in the written complaint that myxoedema crisis is a slow developing disease caused by deficiency of Thyroid hormones leading to lack of energy, thickening of the skin and tissues beneth the skin. Ext.A3 discharge summary issued from Cosmopolitan Hospital (Private) Limited, Thiruvananthapuram would make it clear that the deceased Sobhana C.K had admitted in that hospital as an inpatient on 27.3.99 and she had undergone surgical procedure for sub total Thyroidectmy on 5.4.99 and the said surgery was done for multi nodular goitre. A3 document would also show that the patient Sobhana C.K was discharged from that hospital on 5.4.99. It would also show that the sub total Thyroidectmy was done under general Anastasia. Thus, it would make it abundantly clear that the life assured Sobhana C.K. had undergone treatment for multi nodular goitre and she was admitted in the hospital on 27.3.99 and had undergone surgery for sub total Thyroidectmy on 5.4.99. 9. Ext.B1 is the proposal submitted by the life assured for obtaining the life Policy No. 391107290. A perusal of B1 proposal would make it clear that the life assured (proposer) withheld the material information regarding her state of health while submitting the aforesaid proposal. It is to be noted that B1 proposal was submitted on 13.12.2000. On that date, the proposer Sobhana.C.K had undergone treatment for multi nodular goitre and she had also undergone surgery for sub total Thyroidectomy on 5.4.99. In such a situation it was incumbent upon the proposer (life assured) Sobhana C.K. to disclose that fats in the proposal form. It is to be noted that the questions were asked to the proposer to be answered under the sub heading personal history. But those questions were answered by the proposer by suppressing the material facts regarding her health condition and also regarding her previous illness. 10. It is to be noted that the following questions and answers given to those questions would make it clear that the proposer withheld material informations regarding her health. Question - a) During the last 5 years, did you consult a Medical Practitioner for any ailment requiring treatment for more than a week? Answer - No. b) Have you ever been admitted to any hospital or nursing home for general check up, observation treatment or operation? A – No c) Have you remained absent from place of work on ground of health during the last 5 years? A- No G) What has been your usual state of health? A- Good. 11. The aforesaid answers to those questions would make it clear that the life assured suppressed or withheld material facts regarding her health while submitting the B1 proposal for the policy. So, it can very safely be concluded that the life assured suppressed material facts. 12. The complainant has got a case that the proposal form was filled by the 4th opposite party, the LIC agent. But, the aforesaid case of the complainant has been denied by the LIC agent. On the other hand, he has categorically stated that the proposer did not disclose anything about her illness or treatment. It is a settled position that the LIC agent is not expected to fill the proposal form and even if the proposal form has been filled with the assistance of the LIC agent, the Life Insurance Corporation of India cannot be made answerable. It is also held that in rendering such assistance, the LIC agent will be acting only as an agent of the proposer. The mere fact that the LIC agent rendered some assistance to the proposer in submitting the proposal form cannot be taken as a ground to hold that the suppression of material facts would not bind the proposer or that the said suppression will affect the LIC of India. 13. The complainant has also got a case that the policy was issued after undergoing medical examination by the panel doctor of LIC. But a certificate or approval given by the panel doctor will not absolve the life assured/proposer from his/her liability to disclose the material facts. It is also a settled position that the issuances of the policy after medical check up or examination will not absolve the proposer from the liability to disclose the material facts. So, the mere fact that the policy was issued after medical check up by the panel doctor of LIC cannot taken as a ground to hold that the LIC is bound to honor the insurance claim, even if there was suppression of material facts. 14. Admittedly, the life assured Sobhana C.K was working as an accountant in the Office of a Chartered Accountant. She was well educated to read and understand the contents of the proposal form and also to know about the consequences of giving false answers to the questions. It is further to be noted that the proposer had also given a declaration stating that the facts stated in the proposal are true and correct and in the event it is found that the answers are not correct, the LIC will be at liberty to rescind the contract of insurance and to forfeit the monies remitted by the proposer. Thus, in all respects it could very safely be held that the life assured suppressed material facts regarding her health while submitting B1 proposal for the said policy. 15. It is a settled position that the insurer will be at liberty to cancel the policy, if it is found that there was suppression of material facts. If that be so, the appellants/opposite parties can be justified in repudiating the insurance claim preferred by the complainant being the nominee of the life assured. The Forum below has not properly appreciated evidence on record and the case law on this field. It has been held by the Hon.Supreme Court in P.C Chacko & Another Vs. Chairman, LIC of India and Ors. Reported in 2008 (1) SCC 321 that the Insurance Company is to be justified in repudiating the Insurance claim on the ground that the insured suppressed material facts. In a subsequent decision “LIC of India and Ors. Vs. T.Venkateshwaralu” in Civil Appeal Nos.1602/04 & 1682/04. Hon. Supreme Court has given the direction that the Judgment of the Hon. Supreme Court rendered in P.C Chacko & Another Vs. Chairman, LIC of India and Ors. Shall be strictly followed by courts and Consumer Fora in the country. Thus, the impugned order passed by the Forum below is liable to be quashed. Hence, this State Commission is pleased to allow this appeal. These points are answered accordingly. In the result, the appeal is allowed. The impugned order dated 27.2.07 passed by CDRF; Pathanamthitta in OP.32/04 is set aside. The parties are directed to suffer their respective costs through out. M.V.VISWANATHAN -- JUDICIAL MEMBER s/L | 
