::BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AT BIDAR::
C.C. No.85/2017.
Date of filing: 12.12.2017.
Date of disposal: 31.07.2018.
P R E S E N T:-
(1) Shri. Jagannath Prasad Udgata, B.A., LL.B.,
President
(2) Shri. Shankrappa (Halipurgi),
B.A.LL.B.,
Member.
COMPLAINANT/S: 1. Sri.Shankar S/o Lakappa Chande,
Age:58 years, Occ: Agriculture,
R/o Village Islampur
Tq:Basavakalyan Dist: Bidar.
( By Sri.Vijaykumar.K.Jothgond., Adv.)
VERSUS
OPPONENT/S: 1) The Chief Manager LIC
Of India Branch Basavakalyan.
2) The Senior Divisional Manager
L & H.P.F. Department
Divisional office Raichur.
(By. Sri.Basavaraj Udgir., Adv.)
:: J UD G M E N T ::
By Shri. Jagannath Prasad Udgata, President.
This case arises out of the complaint filed u/s 12 of the Consumer Protection Act, 1986. The subject matter of the complaint is as hereunder.
2. That, the complainant is father of one Avinash, who has expired on 28.07.2016 as would be evident from death certificate (Annexure-B). Said Avinash during his life time on 22.06.2016 had obtained Insurance Policy bearing No.661779186 under Table No.815/21 (Jeevan Anand) from the Basavakalyan branch of the L.I.C. for an amount of Rs.2,00,000/- by paying the required premium (Annexure-A). It is avered that, deceased Avinash was a Government school teacher on permanent basis, hale and hearty and had purchased the policy through the agent and Development officer of Basavakalyan Branch. The complainant was the nominee in the policy.
3. It is further avered that, consequent upon the death of Late Avinash, the complainant had approached the opponents for settlement of the claim which was not heeded by them. The death was due to stomach pain and chest pain and the patient died on the way to hospital. The original policy bond has been submitted to the opponent corporation.
4. Owing to the non settlement of the claim arising due to death of the policy holder, the complainant, his nominee has approached this Forum.
5. Surprisingly, in the entire complaint there is no mention of rebuttal of the claim by opponent corporation, even though such letter has been submitted by the complainant vide Annexure-E of the complaint.
6. Upon notice, the opponents have appeared in the case and with initial hiccups have filed written version. In the same, though the opponents have admitted about the facts of issuance of the policy and nomination aspect but have asserted that, the claim was rebutted vide their letter date.08.09.2017 on justifiable grounds. It is further claimed that, the death was not due to simple reason of chest or stomach pain, but the life assured was a chronic patient of CROHNS disease (Inflammation of Elleum i.e. inflammation of small intestine) from 2013 and was under treatment at Diggiker hospital, Omerga and also had undergone treatments from time to time. At the time of proposing, he had concealed the facts of his preexisting disease and answered in negative to the entire questionnaire in Col.No.11 of the proposal form and therefore the opponents were well within their rights defined u/s 45 of the Insurance Act in repudiating the claim.
7. Both sides have submitted documents listed at the end of this order, and have filed evidence affidavits. While the complainant has filed written arguments, the opponents counsel by filing a memo on 07.07.2018 has urged to adopt the contents of the versions as arguments. On 21.07.2018, the complainants’ counsel was further heard at length, wherein, he only reiterated his earlier stand point that, the agent and Development officer of Basavakalyan Branch though elucidated all in formations truthfully from the proposed, filled up the form on their own and obtained the signatures of the Life Assured without disclosing the contents of the form.
8. Considering the rival contentions of the parties, the following points arise for our consideration.
- Has there been any deficiency of service in the part of opponents as alleged by the complainant?
- Is the repudiation of claim by the opponents justified?
- What orders?
9. Our answers to the points raised are as following:-
- In the negative.
- In the affirmative.
- As per final orders owing to the following:
:: REASONS ::
10. Point (1) & (2): Being intimately webbed are being answered collectively. The complainant here in alleges deficiency in service vis-à-vis to which the O.P.s claim that, their repudiation was justified u/s 45 of the Insurance Act, since the statutory time of two years was not over. They further claim that the Life Assured was undergoing treatment out right from 29.08.2013 and was diagnosed with ailment of Colitis (Annexure-R1 and R2) by the Labs. Once again he had undergone treatment on 12.06.2016 with S.B. Medical Centre, Gulbarga and subsequently on 17.06.2016 at Diggikar Hospital, Omrga followed by further bouts of treatment on 05.07.2016 in the same hospital and was later referred to Ashwini Sahakari Rugnalaya Ani Sansodhana KendraWiy. Solapur for management of his illness. The most important document is Annexure R12 date: 05.09.2013 being the endoscopy diagnosis at Centre for liver Gl disorders and Endoscopy, Solapur. During the investigation he was found to be suffering from “COLITIS WITH SKIP LESIONS? ACUTE INFECTIVE IN VIEW OF SHORT HISTORY? CROHNS DISEASE.” Health hazard Crohns disease is serious inflammation of the illeum (small intestine) of obstructive type.
11. At the time of proposing the policy on 22.06.2016 he has never disclosed about the pre-existing disease and all the querries in Col.No.11 of proposal form was answered in negative.
12. The complainant, even after knowing the causes of the opponents’ contentions nowhere has denied about the pre-existing diseas since 2013. In evidence affidavit and written arguments he has merely harped that, he has disclosed full acts to the Agent/Development officer of the opponents and that, he was made to sign the form without disclosing the contents. The late life Assured was a permanent Government teacher and quite educated and it is incorrigible to accept that, he had signed the form blindly.
13. Touching the subject matter of the issue, there are plethora of judgements of the Hon’ble National Commission where in concealment of pre-existing disease by the proposer has been disapproved here under listed.
2013(1) CPR-278(NC)
Gian Singh and Ors
V/s
Life Insurance Corporation of India, Rohtak and Ors.
As far merits of the case are concerned, learned State Commission rightly dismissed complaint on account of false declaration about his habits and health and observed as under.
Annexure R-5 issued from Nav Jiwan Drug De-Addiction and Rehabilitation Centre reflects that the life assured was addicted to drug (Opium) for the last twelve months and he was admitted in the aforesaid institute on 29.12.2001 for taking treatment. It is a matter of common knowledge that the person involved in the habits of drugs, take shelter in an institute, when his habits increases to a high level. The claim Enquiry Report Annexure R-2 reveals that the Investigator of the Corporation had collected evidence from the neighbourhood with respect to the habits of addiction of the life assured but this fact was not disclosed by the Life Assured while making his personal statement at the time of submitted the proposal form and gave wrong answers to question No.11 (d) (h) and (i) which are reproduce as under:
Questions | Answers |
11(d) Are you suffering from or have you ever suffered from ailments pertaining to liver, Stomach, Heart, lungs, Kindnyey, Brain or Nervous System? | No. |
11(h) Do you use or have you ever used alcoholic drinks, narcotics, or any other drugs? | No. |
11(i) What has been your usual state of health? | Good. |
From the statement of the life assured reproduced above, it is established that he had concealed true and material facts with respect to his habits as well as the state of health at the time of obtaining the insurance policy. The medical report Annexure R-5 issued from Nav Jiwan Drug De-Addiction and Rehabilitation Centre clearly reflect that the life assured was addicted to opium for the last twelve months. It has been held in catena of judgments that the contract of insurance is based on good faith and it is the life assured who can give the correct information with respect to his health, which in the instant case the life assured Om Parkash had not given and as such we feel that the corporation had rightly repudiated complainants’ claim. The district Forum has not appreciated Annexure R-5 i.e. the Medical Report issued from Nav Jiwan Drug De-Addiction and Rehabilitation Centre, which is duly signed by the Director of the institute and as such the impugned order under challenge in this appeal is not sustainable in the eyes of law.
Thus, it becomes clear that even on merits petitioner are not entitled to any claim and learned State Commission has not committed any error in dismissing complaint. I do not find illegality, material irregularity or jurisdictional error in impugned order and revision petition is liable t be dismissed.
Consequently, revision petition filed by the petitioner is dismissed with no order as to cost.
2016(2) CPR 510 (NC)
Bajaj Allianz Life Insurance Co. and Anr.
V/s
Jaspal Kaur
The learned counsel for the complainant/respondent submits that since no doctor was examined by the insurance company to prove the alleged ailments, no reliance on the above referred reports can be placed. In support of her contention, she has relied upon the decision of this Commission in LIC of India Vs. Smt. Charanjit Kaur, RP No.3653/2006 decided on 14.10.2011. However, on a perusal of the decision, I find that the said decision is clearly distinguishable on facts. In the above referred case, the insure was relying only upon a certificate purporting to be issued by the Registrar, BMC, Ludhiana whereas in the case before us, the entire medical record including the investigation report of the deceased has been filed by the insurer. The learned counsel for the petitioner company, on the other hand has drawn my attention to the decision of this commission in RP No.1935/1999, LIC of India Vs Krishan Chander Sharma. In the above referred case, neither the treating doctor was examined, nor was his affidavit filed by the insurer LIC of India. It was held by this Commission that non filing of the affidavit and/or non-examination of the treating doctor was not ruinous. The above referred decision of this Commission was challenged before the Hon’ble Supreme Court in SLP(c) No.10421/2006 decided on 15.02.2007, which found no reason to interfere with the said order.
In Mithoolal Nayak Vs. LIC of India, the Hon’ble Super Court inter-alia observed as un-der:
The terms of the policy make it clear, that the averments made as to the state of health of the insured in the proposal from and the personal statement were the basis of the contract between the parties and the circumstances that mahajana Deolal had taken pains to falsify or conceal that he had been treated for a serious ailment by Dr. Laxmanan only a few month before the policy was taken shows that the falsification or concealment had an important bearing in obtaining the other party’s conset.
I find from a perusal of order passed by the state Commission that the said Commission relied upon the provisions contained in Section 45 of the insurance Act, while dismissing the appeal filed by petitioner company.
Section 45 of the insurance Act, to extent it is relevant for our purpose provides that no policy of life insurance shall, after 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 in any 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 disclosed and that it was fraudulently made by the policy holder who knew, at the time of making it, that the said statement was false or that it suppressed facts which it was material to disclose.
In the present case, even two years had not expired from the date of policy when the insured died. Therefore, the policy could be questioned by the petitioner corporation, if it is shown that a statement made in the proposal was inaccurate or false. It was observed by the Hon’ble Supreme Court in life insurance co. Ltd. Vs. Asha Goel & Anr. (2001) 2 SCC 160 that the contracts of insurance including the contract of life assurance are contracts uberrima fides and every materials fact must be disclosed, otherwise, it would be a good ground for rescinding of the contract. It was observed that the duty to disclosed material facts continues right upto the conclusion o the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any misstatement or suppression of material facts, the policy can be called in question. It was further observed that for determining whether there is a suppression of material facts, it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.
In P.J. Chacko vs. Chairman, L.I.C of India, AIR 2008 SC 425 the insured was required to disclose in the application form for obtaining the policy, as to whether he ever had any accident or injury and had remained absent from place of work on the ground of health during last five years. The insured answered in negative to both the questions and also claimed that the state of his health was good. Later, it was found that the insured had undergone adenoma thyroid operation four years prior to submitting the proposal though cause of his death was polyneuritis, which had no connection with the operation he had undergone. The suit filed bye the legal heirs of the deceased for recovery of the amount of insurance was decreed by the Trial Court. On an appeal preferred by LIC, the learned single judge of the Hon’ble High Court held that since there was nothing to indicate that had the insured disclosed the factum of previous operation, the corporation might not have been inclined to insure him and would have insisted on a higher premium, non-disclosure was not a material fact justifying repudiation of the policy. On an intra court appeal, the Division Bench of the High Court, however, opined that the parties were bound by the warranty clause contained in the agreement and the non-disclosure was the material fact which were required to be answered correctly. Being aggrieved from the rejection of their claim, the plaintiffs approached the Hon’ble Supreme Court, by way of an appeal and inter alia submitted that insurance being a requirement of social security, the suppression in question could not have led to repudiation of the policy. The learned counsel for the LIC on the other hand submitted that undergoing operation had a direct nexus with the health of the insured and the suppression therefore was on a material fact. It was also contended by him that on account of untrue averments made in the declaration, the contract of the Insurance itself was null and void. It was also pointed out by him that the policy had been repudiated within two years.
Rejecting the appeal, filed by the plaintiffs, the Hon’ble Apex Court, inter alia, noted the following three conditions for application of the second part of Section 45 of the Insurance Act, which postulates repudiation of the policy within a period of two years in case a statement made in the proposal for Insurance was found to be inaccurate or false:
“a. The statement must be on a material matter or must suppress facts which it was material to disclose:
b. The suppression must be fraudulently made by the policy holder and
c. The policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose”.
The Hon’ble Supreme Court observed that if a person makes a wrong statement, with the knowledge of consequence there from, he would ordinarily be stopped from pleading that even if such a fact had been disclosed it would not have made any material change. It was further observed that the proposer must show that his intention was bonafide and a proposal can be repudiated if a fraudulent act is discovered. It was also observed that in such a case, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. The Hon’ble Apex Court quoted its earlier observation that the effect of mis-representation on the contract is precisely the same as that of non-disclosure; it affords the aggrieved party a ground for avoiding a contract.
In Satwant Kaur Sandhu Vs. New India Insurance Co., the Hon’ble Supreme Court emphasized 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.
Though the term “material fact” has not been defined in the Insurance Act, it is understood to mean 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”.
In the present case, the deceased died within two years from the date on which the policies were taken by him. He took as many as three insurance policies within a span of one week and he died less than one month after the last policy was taken by him on 22.02.2008. In clause 14 of the proposal form, the deceased insured was required to answer certain questions with respect to his health and the treatment if any taken by him in the past. The said questions and the answers thereto, to the extent they are relevant read as under:
Question Answers:
f). Any diseases and disorders of the genitourinary system such as but not limited to blood in urine, infected urinary bladder or tumor, kidney disease calculus, venereal disease or any disease related to sexual organs or urinary system? No.
I). In the last 5 years, have you ever had, or been advised to have, or likely within the next 30 days to undergo medical examination or any investigations such as but not limited to blood test, urine test, x-ray, ECG or biopsy, CT scan or test by any other special instrument? No.
m). Injured, sick, operated, given a medical consultation, given a medical advice on health, care in any hospital? No.
Since the deceased was suffering from chronic renal failure, it is evident that he gave false answers to the above referred questions and thereby committed a fraud with the insurer by making a wilful misrepresentation as regards the state of his health and the treatment taken by him in the past. Therefore, Section-45 of the insurance company would certainly not be of any avail to the complainant.
For the reasons stated herein above, the impugned orders cannot be sustained and the same are accordingly set aside. The complaint filed by the respondent is consequently dismissed with no order as to costs.
2016 (3) CPR 380 (NC)
Swadesh Pal Singh
V/s
HDFC Standard Life Insurance Company Ltd. and Anr.
It is more pertinent to quote the relevant observation madeby the State Commission, it is reproduced as hereunder:-
“14. Xxxxx
“After submitting the proposal on 29.12.2004 she was bound to communicate any change i her health condition. There is an application ex. R-25 on record which was written by the wife of the complainant informing the block education officer, Tijara that she has been suffering from Cancer and was absent from her duty for 29 days. She rejoined her duty through this letter on 12.032005. This letter is sufficient to believe that she had knowledge of her disease, as she was suffering from Cancer and was absent for 29 days. This fact is further strengthened by her leave record, she was on long leave for 14 days from 26.02.2005 to 11.04.2005 then leave for 29 days from 14.03.2005 to 11.04.2005 and leave for 28 days from 13.04.2005 to 10.05.2005.
15. It is evident from the medical record produced by the insurance company that she had knowledge of the disease. On 16.03.2005 she was diagnosed positive for malignant cell-metastatic. The prescription of the doctor Rajesh Kapoor Ex R-15 also mentioned results FNAC Test. The prescription of the Dr.GP ElhenceEx.R-14 dated 07.03.2005 shows that she had been advised FNAC on 07.03.2005. There is sufficient evidence on record to prove that between December 2004 to 28.03.2005 her medical condition has changed and she was under obligation to inform the company the subsequent developments in her health. Thus it is apparent that she concealed the material facts from the Insurance Company”.
8. On the basis of forgoing discussion, it is clear that she underwent FNAC on 07.03.2005 and diagnosed as malignancy (Metastatic Carcinoma). She paid extra premium of Rs.4041/- on 28.03.2005, thus, the proposal was accepted on 28.03.2005. Thus the instant case is a clear case of concealment of material facts by the insured (deceased) person. It was the duty of the proposer, that she should have communicated the change in her health condition, after submitting proposal form on 29.12.2004.
9. We do not find any reason to interfere with the order of State Commission. The revision petition is without merits, therefore, the same is hereby dismissed.
I (2017) CPJ 256 (NC).
LIC of India
V/s
Jyothi Sudhir.
It was observed by the Hon’ble Supreme Court in Life Insurance Co.Ltd. v. Asha Goel and Anr., I (2001) SLT 89=(2001) 2SCC 160 that the contract of insurance including the contract of life assurance are contracts uberrima fides and every material fact must be disclosed, otherwise, it would be a good ground for rescinding of the contract. It was observed that the duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and its acceptance. If there are any misstatements or suppression of material facts, the policy can be called in question. It was further observed that for determining whether there is a suppression of material facts, it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person.
In P.C. Chacko V. Chairman, L.I.C. of India, IX (2007) SLT 533=IV (2007) ACC 773 (SC)=III (2008) CPJ 78 (SC)=IV (2007) CLT 229 (SC)=AIR 2008 SC 425 the insured was required to disclose in the application form for obtaining the policy, as to whether he ever had any accident or injury and had remained absent from place of work on the ground of health during last five years. The insured answered in negative to both the questions and also claimed that the state of his health was good. Later, it was found that the insured had undergone adenoma thyroid operation four years prior to submitting the proposal, though cause of his death was polyneuritis, which had no connection with the operation he had undergone. The suit filed by the legal heirs of the deceased for recovery of the amount of insurance was decreed by the Trial Court. On an appeal preferred by LIC, the learned single Judge of the Hon’ble High Court held that since there was nothing to indicate that had the insured disclosed the factum of previous operation, the corporation might not have been inclined to insure him and would have insisted on a higher premium, non-disclosure was not a material fact justifying repudiation of the policy. On an intra Court appeal, the Division Bench of the High Court, however, opined that the parties were bound by the warranty clause contained in the agreement and the non-disclosure was to the material fact which were required to be answered correctly. Being aggrieved from the rejection of their claim, the plaintiffs approached the Hon’ble Supreme Court, by way of an appeal and inter alia submitted that insurance being a requirement of social security, the suppression in question could not have led to repudiation of the policy. The learned Counsel for the LIC on the other hand submitted that undergoing operation had a direct nexus with the health of the insured and the suppression therefore was on a material fact. It was also contended by him that on account of untrue averments made in the declaration, the contract of the Insurance itself was null and void. It was also pointed out by him that the policy had been repudiated within two years.
Rejecting the appeal, filed by the plaintiffs, the Hon’ble Apex Court, inter alia, noted the following three conditions for application of the second part of Section 45 of the Insurance Act, which postulates repudiation of the policy within a period of two years in case a statement made in the proposal for insurance was found to be inaccurate or false:
“(a) the statement must be on a material matter or must suppress facts which it was material to disclose:
(b) the suppression must by a fraudulently made by the policy-holder; and
(c) the policy-holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose”.
The Hon’ble Supreme Court observed that if a person makes a wrong statement, with the knowledge of consequence there from, he would ordinarily be stopped from pleading that even if such a fact had been disclosed it would not have made any material change. It was further observed that the proposer must show that his intention was bona fide and a proposal can be repudiated if a fraudulent act is discovered. It was also observed that in such a case, it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. The Hon’ble Apex Court quoted its earlier observation that the effect of mis-representation on the contract is precisely the same as that of non-disclosure; it affords the aggrieved party a ground for avoiding a contract.
In Satwant Kaur Sadhu V. New India Insurance Co., VI(2009) SLT 338=IV (2009) CPJ8(SC)=(2009)8 SCC 316, the Hon’ble Supreme Court emphasized 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.
14. Basing on the dictas of the Hon’ble National Commission, we answer the points NO.1 and 2 accordingly and proceed to pass the following:-
ORDER.
- The complaint stands dismissed. There would be no order as to costs and otherwise.
(Typed to our dictation then corrected, signed by us and then pronounced in the open Forum on this 31st day of July 2018).
Sri. Shankrappa H. Sri. Jagannath Prasad
Member. President.
Documents produced by the complainant
- Annexure.A-Copy of premium receipt pertaining to policy
No.661779186. - Annexure.B– Original death certificate of Late Avinash.
- Annexure. C– Copy of Aadhar Card of the complainant.
- Annexure.D—Copy of Voter ID of the complainant.
- Annexure. E– Original rebuttal letter of LIC date:08.09.2017.
- Annexure.F- Office copy of legal notice date: 09.10.2017.
- Annexure.G to J(I-ommited)- Original postal receipts of legal notice.
- Annexure.K to L- Postal acknowledgement card.
- Annexure.M – Letter of LIC of India South Central Zone in the
address of counsel for the complainant.
Document produced by the Opponents. (All copies).
- Annexure.R.1-Medical investigation report of Late Avinash
date:29.08.2013 of Shree Diagnostic Center Omerga. - Annexure.R.2-Medical investigation report date:16.09.2013 of
Mr. Avinash from Dr. Potdar Laboratories Solapur. - Annexure.R.3-Medical investigation report of Late Avinash from
S.B.Medical Center Gulbarga date:12.06.2016. - Annexure.R.4-Treatment details date: 05.11.2016 of Diggikar
Hospital Omerga in respectof Late Avinash. - Annexure.R.5-Diagnostic report in respect of Late Avinash of Jadhav
Laboratory Omerga (six sheets). - Annexure.R.6- Discharge card in respect of Late Avinash by
Diggikar hospital, Omerga date:05.07.2016 (02
sheets). - Annexure.R.7- Complete medical records of Late Avinash from
Ashwini Sahakari Rugnalaya Ani Sanshodhan
Kendra Nyt. Solapur date:05.07.2016. - Annexure.R.8- Voter ID card of complainant.
- Annexure.R.9- Voter ID card of Late Avinash.
- Annexure.R.10- Proposal form duly filed by Late Avinash.
- Annexure.R.11- Agent’s confidential report i n respect of proposal of
Late Avinash. - Annexure.R.12- Letter of Authorisation by Late Avinash.
- Annexure.R.13- Endoscopy images of Late Avinash date:05.09.2013
from Center for GI DISORDERS AND
ENDOSCOPY, Solapur.
Witness examined.
Complainant.
- P.W.1- Sri.Shankar S/o Lakappa Chande (complainant).
Opponent.
- R.W.1- Sri.C.K. Ravikumar S/o Late C.A. Krishakumar Manager
(L & H.P.F) at L.I.C. of India.
Sri. Shankrappa H. Sri. Jagannath Prasad
Member. President.
