BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

O.P. No. 328/2002 Filed on 29.07.2002

Dated : 16.11.2009

Complainant:

A. Vasanthakumari, W/o late K. Rajappan, residing at Bhakathivilasom Police Quarters, Door No. 58, DPI Junction, Jagathy, Thycaud, Thiruvananthapuram-14.

(By adv. Emmanuel Chathenchira)

Opposite parties:

1. The Divisional Manager, Life Insurance Corporation of India, Jeevan Prakash, P.B. No. 1001, Pattom Palace P.O, Thiruvananthapuram-4.

    

2. The Zonal Manager, Life Insurance Corporation of India, Southern Zonel Office, LIC Building, Annasalai, Chennai-2.

(By adv. P.P. Balakrishnan Nair)

This complaint is disposed of after the period so specified under the Consumer Protection Act, 1986. Though the case was taken up for orders by the predecessors of this Forum on 18.01.2005, the order was not prepared accordingly. This Forum assumed office on 08.02.2008 and re-heard the complaint. This O.P having been heard on 30.09.2009, the Forum on 16.11.2009 delivered the following:

ORDER

SRI. G. SIVAPRASAD: PRESIDENT

The facts leading to the filing of the complaint are that complainant is the legally wedded wife of late K. Rajappan, Head Constable, working in Kerala Police Orchestra Wing, Police Training College, Thycaud, that while K. Rajappan was in service he had taken 2 life insurance policies from the opposite parties through an agent M.V. Baby, that the policy Nos. are 772050101 for Rs. 10,000/- dated 16.03.1999 and No. 772050406 for Rs. 50,000/- dated 25.09.1999 and that the said policies were included in Kerala Government Salary Deduction scheme and as per the terms of the contract the policy premiums were deducted by the employer and forwarded the same to the opposite party. The said K. Rajappan expired on 17.07.2000 due to chest pain. At the time of death the aforesaid policies were in force. At the time of taking policies the deceased was medically and physically in good health and the same was mentioned in the proposal form also. While taking policy the deceased K. Rajappan appeared before the Medical Examiner for detailed medical check up. After careful examination the doctor concerned certified that the proposer was having good health and eligible for taking insurance policy. Before taking the said insurance policies, Rajappan availed medical leave from 13.11.1998 to 17.11.1998 due to chest pain which was caused due to viral problem. On this ground opposite party repudiated the death claim moved by the complainant. Complainant preferred an appeal before the 2^nd opposite party. The same was also dismissed. Hence this complaint to direct the opposite parties to pay the policy amount with interest thereon along with compensation and costs.

Opposite party entered appearance and filed version contending that two insurance policies bearing Nos. 772050101 and 772050406 were issued on the life of K. Rajappan for a sum assured of Rs. 10,000/- and Rs. 50,000/- respectively. The said policies were issued through LIC Agent Sri. K.V. Baby. Both policies were KGSD in nature and premiums were deducted by the employer and forwarded to the opposite parties. Opposite party has received the death certificate of the life assured and the policies were in force on the date of death (17.07.2000) of the life assured. Opposite parties have made an enquiry on the statement and facts stated in the proposal form. Though in the proposal form the usual state of health of the life assured was stated as good, it has been brought to the notice of the opposite parties that prior to the issuance of both policies the assured was suffering from Coronary Artery disease, Latero posterior, MI (OCD) and also from respiratory infection in addition to acute AWMI in the year 1998. The life assured has purposefully and with the full knowledge and intention of making unlawful gain by way of illegal means suppressed the said facts in the proposal form. Death claim was repudiated on the ground that the life assured had pre-proposal illness. Opposite parties have got ample concrete evidence to prove the fact that the deceased life assured had heart disease before taking policies. Hence opposite parties prayed for dismissal of the complaint.

The points that arise for consideration are:-

1. Whether the deceased insured was suffering from coronary Artery disease before taking policies?

2. Whether the said disease and its treatment was in his knowledge?

3. Whether the complainant is entitled to get the amount of insurance on the death of the insured?

4. Whether there has been deficiency in service on the part of the opposite party?

5. Whether the complainant is entitled to get compensation and cost? If so, at what amounts?

In support of the claim, complainant has filed affidavit as PW1 and Exts. P1 to P18 were marked. Two witnesses have been examined as PW2 and PW3 and cross examined by the opposite party. In rebuttal, opposite party has filed affidavit as DW1 and Exts. D1 to D9 were marked. DW1 has been cross examined by the complainant.

Points (i) to (v):- It is not in dispute that two insurance policies bearing numbers 772050101 and 772050406 were issued on 14.04.1999 and 16.10.1999 respectively on the life of K. Rajappan for a sum assured of Rs. 10,000/- and of Rs. 50,000/-. It is also not in dispute that the life assured K.Rajappan had named Vasantha Chellappan as his nominee under the policy. It is also not in dispute that the aforesaid policies were KGSD(Kerala Government Salary Deduction) in nature and premiums were deducted by the employer and forwarded to LIC of India. Admittedly, the policy holder/life assured expired on 17.07.2000 and the said policies were in force on the date of death of the life assured. It has been the case of the complainant that at the time of taking the insurance policies the life assured/the deceased person was medically and physically in good health and the same was mentioned in the proposal forms also. It is also submitted by the complainant that on the request of the insurance agent the life assured was examined by the opposite party's doctor and certified that the proposer is having good health and that repudiation of the death claim of the complainant by the opposite party is without sufficient reason or cause. It is the say of the opposite parties that though in the proposal forms, the usual state of health of the life assured was stated as good, on investigation it has been brought to the notice of the opposite parties that prior to the issuance of both the policies the assured was suffering from coronary artery disease latero posterior MI (OCD) and also from Respiratory infection in addition to the acute AWMI in the year 1998 and that contracts of insurance are uberime fides and are founded upon against good faith. Exts. P1 and P2 are copies of the proposal forms. Exts. P3 and P4 are copies of the insurance policies. Ext. P7 is the copy of the death certificate. Ext. P8 is the copy of medical report issued by Dr. Tiny Nair. Ext. P9 is the copy of the repudiation letter issued by opposite parties to the complainant. Ext. P10 is the copy of the letter addressed to the 2^nd opposite party by the complainant requesting him to reconsider the decision to repudiate the claim. Ext. P12 series are the postal receipts. Ext. P13 series are acknowledgement cards. Ext. P14 is the copy of the reply notice to Ext. P11. Submission by the opposite parties is that the claim was repudiated on account of the deceased having withheld material information regarding his health at the time of effecting the assurance with opposite parties. Ext. D7 is the original proposal for insurance. As per Ext. D7 proposals, the life assured has to answer to additional question in connection with family history and personal history. The relevant questions in connection with personal history and his answers for the same as stated in Ext. D7 are as follows:

Questions Answers

a) During the last five years did you consult a

medical practitioner for any ailment regarding

treatment for more than a week? No

b) Have you ever been admitted to any hospital or

nursing home for general check-up, observation,

treatment or operation? No

c) Have you remained absent from place of work

on grounds of health during the last 5 years? No

d) Are you suffering from or have you ever suffered

from ailments pertaining to liver, stomach, heart,

lungs,kidney, brain or nervous system? No

e) Are you suffering from or have you ever suffered from

diabetes, Tuberculosis, High Blood Pressure, Low

Blood Pressure, cancer, Epilepsy, Hernia, Leprosy

or any other disease? No

f) Do you have any bodily defect or deformity? No

g) Did you ever have any accident or injury? No

h) Do you use or have you ever used alcoholic drinks,

narcotics or any other drugs? No

i) What has been your usual state of health Good

j) Have you ever received or at present availing/

undergoing medical advice, treatment or tests in

connection with Hepatitis B or AIDS related

condition? No

Ext. D1 series include medical certificates dated 08.05.2000, 15.06.2000, 03.05.2000, 06.04.2000 and 02.06.2000 issued to K. Rajappan by various medical officers. Ext. D2 is the certificate of hospital treatment dated 16.05.2001 issued by Dr. Tiny Nair, PRS Hospital, Tvpm. Ext. D3 is the certificate by employer(in connection with claim under policy No. 772050101 and 772050406) showing the details of leave availed by Mr. K. Rajappan from 16.03.1996 to 17.07.2000. Ext. D4 is the case summary and death summary of Mr. K. Rajappan issued by Department of Cardiology, Sree Chitra Tirunal Institute for Medical Services and Technology, Thiruvananthapuram. On perusal of Ext. D4, it is seen stated under death summary: History: that “50 years, Police Constable (patient Rajappan. K) had acute AWMI in 1998 following that he had AoE FC II. He had acute IW+ Posterior wall MI on 29.03.2000. He had recurrent LVF and was admitted here on 03.05.2000 with congestive heart failure. At that time he did not have any evidence of ischemia. Because of severe LV dysfunction which did not change following use of any ionotropes he was initially put on medical follow up. He was readmitted with CHF on 11.05.2000. Then CAG + PTCA was done on 26.05.2000. CAG showed 3 vessel disease. (LAD-Proximal tight, LCX-total, RCA diffuse severe disease) and PTCA with stent to LAD and RCA was done there. At discharge his symptoms had improved though LV function did not show significant improvement. Ex-smoker dyslipidemic, family history of CAD+. He was readmitted with CHF shock and pulmonary oedema on 27.06.2000, which was controlled with medication. He was again readmitted with gross CHF on 16.07.2000 night. He had orthopnea, increased JVP. Tender Hepatomegaly. He was significantly breathless. He had severe hypertension”.

It is pertinent to point out that Ext. D4 report is seen furnished by Sri Chitra Tirunal Institute of Medical Science as per direction of this Forum on application of the opposite parties. As per Ext.D4 report, the life assured was having acute AWMI in 1998 and following that he had AoE FC II. Complainant never challenged the Ext. D4 report given by HOD of Cardiology, Sri Chitra Tirunal Institute of Medical Science. We cannot disbelieve report given by the competent doctors of the reputed hospital which treated the life assured. It is evident from Ext. D4 that the life assured was suffering from acute AWMI in 1998 before taking policy and the same was suppressed in the proposal forms by the insured even though he was aware of the same. In so far as filing of the proposal forms are concerned, the insured was a Police Constable as such it is reasonable to believe that he would have the minimum knowledge of these matters. Consequently it could not be believed that he had simply put his signature on the proposal form without understanding the contents of the relevant items. It is the very case of the opposite party that the life assured have purposefully and with the full knowledge and intention of making unlawful gain by way of illegal means suppressed many facts with regard to the health conditions of the life assured,which was denied by the complainant in her affidavit. In his cross examination PW3, Dr. Prince Sleeva (medical examiner) has deposed that he has examined the deceased, prior to the issuance of policy, but detailed check up was not conducted since prior diseases/prior treatment was not disclosed to him by the party at the time of the check up. Insurance agent has been examined as PW2. It is seen deposed by PW2 that proposal form was filled by him after obtaining the details given by the life assured. At the time of filling the proposal form the life assured never told him that he was suffering from any disease. In his cross examination, insurance agent has deposed that he had filled the personal history column (column 11) in the proposal form as told by the party. It is to be noticed that neither the agent nor the medical examiner who examined the insured at the time of taking of policy probed that the matter in right earnest leaving many loopholes in the system. In this context we need to say that insurance contracts are uberima fides and are founded upon against good faith. If any party fails to observe this utmost good faith, the contract may be avoided by the others. This legal proposition has been reiterated time and again by the Supreme Court as well as various High Courts. In this case there is material to show that non-disclosure was related to material facts which was required to be answered correctly and insured was aware of the consequence of making misstatements of facts. It is to be noted that not only the insured had given wrong answers to the questions but a declaration was also given by the insured that no untrue averment was made therein. The purpose for taking a policy of insurance is not very material. It may serve the purpose of social security, but then the same should not be obtained with fraudulent act by the insured. Proposal can be repudiated if a fraudulent act is discovered. The proposer must show that his intention was bonafide. It must appear from the face of the record. A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law. In view of the above discussion, we find LIC has proved beyond doubt that the insured had suppressed material facts while obtaining the policy. We do not feel that there is any error for taking any view different from the view taken by the opposite party in repudiation of the claim. Deficiency in service not proved. Complaint has no merits which deserves to be dismissed.

In the result, complaint is dismissed. Parties are left to bear their own costs.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 16^th day of November 2009.

G. SIVAPRASAD,

President.

BEENAKUMARI. A : MEMBER

S.K. SREELA : MEMBER

jb

O.P. No. 328/2002

APPENDIX

I COMPLAINANT'S WITNESS :

PW1 - M.V. Baby

PW2 - Dr. Princi Sleeba

II COMPLAINANT'S DOCUMENTS :

P1 - Photocopy of proposal form of policy No. 772050101.

P2 - Photocopy of proposal form of policy No. 772050406.

P3 - Photocopy of policy certificate of policy No. 772050101.

P4 - Photocopy of policy certificate of policy No. 772050406.

P5 - Photocopy of previous policy's loan record (policy No.

780428869 for Rs. 15,000/-)its date of maturity is 16.11.06

P6 - Photocopy of previous policy's loan record (policy No.

780428870)its date of maturity is 16.11.2003.

P7 - Photocopy of death certificate of policy holder.

P8 - Photocopy of medical report.

P9 - Photocopy of claim rejection letter dated 01.01.2002 issued

by opposite party.

P10 - Photocopy of appeal petition.

P11 - Photocopy of advocate notice dated 22.05.2002.

P12 - Original copy of postal receipt dated 25.05.2002.

P13 - Original acknowledgement card addressed to opposite

parties.

P14 - Photocopy of claim rejection letter dated 04.06.2002 issued

by the 1^st opposite party.

P15 - Photocopy of legal heirship certificate dated 14.11.2000.

P16 - Photocopy of memo addressed to policy holder dated

30.12.1995.

P17 - Photocopy of memo addressed to policy holder dated

23.11.1995.

P18 - Photocopy of medical certificate issued by Sree Chitra

Thirunal Institute for Medical Science & Technology dated

18.05.2004.

III OPPOSITE PARTY'S WITNESS :

DW1 - Deepa Sivadasan

IV OPPOSITE PARTY'S DOCUMENTS :

D1 - Photocopy of medical certificates dated 08.05.2000, 15.07.2000, 03.05.2000, 06.04.2000 and 02.06.2000.

D2 - Original certificate of hospital treatment dated 16.05.2001 issued by PRS Hospital.

D3 - Original certificate of employer dated 05.10.2000.

D4 - Original case summary dated 17.07.2000.

D5 - Photocopy of proceedings of the Principal, Police Training College dated 23.01.2001.

D6 - Original policy certificate of policy No. 772050101 and 772050406.

D7 - Original proposals for insurance No. 772050101 dated 14.03.1999 and policy No. 772050406 dated 12.09.1999 .

D8 - Photocopy of claim repudiation letter dated 01.01.2002.

D10 - Photocopy of medical certificate dated 17.11.1998.

PRESIDENT