Tamil Nadu

StateCommission

A/240/2017

D.Ravi - Complainant(s)

Versus

The Manager, Life Insurance Corporation of India - Opp.Party(s)

G.Purushothaman-Applt.,

28 Apr 2023

ORDER

 IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:   Hon’ble THIRU. JUSTICE R. SUBBIAH  :     PRESIDENT

                 THIRU R   VENKATESAPERUMAL           :      MEMBER

 

F.A. No. 240 of 2017

[Against the order passed in C.C. No.90 of 2015 dated 17.04.2017 on the file of the D.C.D.R.F., Chennai (North)].

Friday, the  28^th day of April 2023

D. Ravi

H/o. (Late) R.Jayanthi

No.82, Sivan Nagar

III Street, New Washermanpet

Chennai – 600 081.                                            ..  Appellant/     Complainant          

 

- Vs –

The Manager

Life Insurance Corporation of India

C47, II Avenue, Anna Nagar Plaza

3^rd Floor, Chennai Divisional Office-II

Anna Nagar, Chennai -600 040.                           .. Respondent/           Opposite Party

 

 Counsel for Appellant/Complainant     : M/s.Purushothaman

 Counsel for the Respondent/  Opposite Party   : M/s. M.B.Gopalan Associates

 

This appeal came up before us for final hearing on 31.03.2023, and on hearing the arguments of the counsel for the Appellant and the counsel for the respondent and on perusing the material records, this Commission passes the following order:-

O R D E R

R.SUBBIAH J., PRESIDENT

 

                This appeal has been filed under Section 15 of the Consumer Protection Act, 2019 as against the order dated 17.04.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.90 of 2015, dismissing the complaint filed by the Appellant herein.

 

        2.  The case of the complainant, as given in the complaint filed before the District Forum, is that his wife R.Jayanthi took LIC Jeevan Saral policy in the opposite party branch, on 28.08.2013, for a sum assured of Rs.2,00,000/-, under Policy No.708030840.  The date of commencement of the policy was on 28.08.2013 and the date of maturity is on 28.08.2033.  The 1^st premium of Rs.2525/- was paid on 28.08.2013 and subsequently the renewal premium of Rs.2565/- along with late fee was paid on 10.02.2014.  In such a situation, the complainant’s wife R.Jayanthi died on 04.03.2014 at Government Stanley Hospital, Chennai.  Hence, the complainant submitted a claim for the sum assured, to the opposite party on 08.09.2014, enclosing the original LIC policy, Death certificate, claim forms.  The opposite party sent a letter on 18.08.2014 stating that the complainant's wife had been taking treatment for Diabetes and Polyarthralgia for a period of 7 years.  But, the same has been suppressed in the proposal form by the deceased, at the time of taking policy.  In reply to the said letter, the complainant sent a letter stating that he is not aware of the fact that his wife Jayanthi was suffering from diabetes.  She was admitted in the Hospital only for fever but she died on the 3^rd day due to heart attack.  The opposite party sent another letter dated 05.02.2015 to the complainant stating that the answers given by the policy holder in the proposal form were false and the Insurance company has got evidence and reasons to prove that the life assured was suffering from diabetes for 7 years and Polyarthralgia for 4 years, before the date of proposal.  But, these facts were not disclosed in the proposal form.  Further, there are deliberate mis-statements made by the deceased and the material information has been withheld from the opposite party regarding her health, at the time of effecting assurance and hence in terms of the policy contract and the declarations contained in the proposal forms for assurance, the opposite party is constrained to repudiate the claim.  Therefore, the complainant after issuing legal notice on 05.05.2015, has filed the present complaint seeking to direct the opposite party to pay the policy sum assured amount of Rs.2 lakhs and Rs.30,000/- as compensation towards pain and sufferings of the complainant and Rs.20,000/- towards mental shock.

 

                3.  Resisting the same, the opposite party had filed a version stating that the complainant's wife obtained Life Insurance Policy No.708030840 on 28.08.2013 under Plan 165-20 for an assured sum of Rs.2 lakhs by submitting a proposal form to the City Branch No.3 of the opposite party.  The information disclosed in the proposal form was the basis of which the contract of insurance was entered into by the opposite party covering the life insurance of the complainant’s wife.  The various questions in the proposal form are all framed to elicit information which are material facts on which the opposite party relies upon to assess the risk and charge the premium.  Those questions were framed as such, itself gives all the information that relates to “material facts” for the contract of insurance.  The proposer was required to disclose truthfully, completely and specifically the correct facts for each question and there cannot be any excuse for any suppression or misrepresentation of such “material facts”.  Question No.11(e) specifically enquired whether the proposer was suffering from or had ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer etc.  Thus, the enquiry was not only of the specific diseases at the time of proposal but at any earlier point of time.  Even if the proposer was having any disease under control at the time of proposal, he is bound to disclose the same or atleast that it was previously diagnosed and treated.  Failure in proper disclosure, the proposer would be guilty of suppression/ misrepresentation of “material facts” and the contract of insurance would become void.  The opposite party particularly referred to and relied upon the ‘Declaration by the Proposer’ in the proposal form filed by the complainant’s wife herself, inter alia affirming the truth of the information and also that the proposal/information therein shall be the “basis of the contract of assurance” and in the event of any untrue averment contained therein, the contract shall be absolutely null and void and all monies paid to the opposite party shall be forfeited.  The complainant had submitted Medical Attendant’s Certificate and Certificate of Hospital Treatment as part of the claim documents, issued by a Civil Assistant Surgeon, Government Stanley Medical College Hospital, which revealed that the complainant’s wife was suffering from Diabetes Mellitus for 7 years and Polyarthralgia for 4 years before her death and the primary cause of death was Type 2 Diabetes.  Thus, there are clear evidence to show that the complainant’s wife was suffering from Diabetes and Polyarthralgia, much before taking the policy and was bound to disclose the same in the proposal form but she had simply answered “No” in response to Question No.11(e).  Hence, the policy availed by the complainant’s wife was null and void, due to suppression of material facts in the proposal form and that no benefit could be claimed under the policy.  Thus, the opposite party repudiated the claim of the complainant, in view of the suppression/misrepresentation of material facts in the proposal form and the same cannot be considered to be deficiency of service.  When the Stanley Hospital has confirmed that the complainant’s wife was suffering from Diabetes Mellitus for 7 years and Polyarthralgia for 4 years, the complainant cannot deny knowledge of the same.  Further, the complainant himself had obtained and filed the Medical Attendant’s Certificate issued by Civil Assistant Surgeon of Government Stanley Hospital for the purpose of claim, which would reveal the cause of death of his wife, as not due to ‘cardiac attack’ but due to Diabetes Mellitus.   Therefore, there is no deficiency of service on the part of the opposite party and the decision of the opposite party repudiating the claim is legally sustainable and factually correct.  Thus, sought for dismissal of the complaint. 

 

                4.  In order to prove the case, both the parties have filed their proof affidavits and on the side of the complainant, 17 documents have been marked as Exhibits A1 to A17 and 4 documents were filed on the side of the opposite party and marked as Exhibits B1 to B4.  

 

                5.   The District Forum, after analyzing the entire evidence on records had observed that the opposite party had repudiated the claim for suppression of material fact that the complainant’s wife was suffering from Diabetes Mellitus for 7 years.  Therefore, the opposite party has not committed any deficiency of service in repudiating the claim of the complainant and hence dismissed the complaint.  Aggrieved over the same, the present appeal has been filed by the complainant.

 

                6.  Counsel for the complainant submitted that the complainant’s wife had taken a policy from the opposite party namely LIC Jeevan Saral on 28.08.2013.  The maturity period of the said policy is 28.08.2033 for the assured sum of Rs.2 lakhs.  The premium amount has been paid regularly.  In the meantime, the complainant’s wife Jayanthi was admitted in the Government Stanley Medical College Hospital, Chennai on 01.03.2014 with a complaint of fever.  But, she died on 04.03.2014.  The primary and foremost reason for the cause of death is cardiac arrest, as per the mortuary report, which is marked as Ex.A4.  After the death of the complainant’s wife, on 08.09.2014, the complainant sent a letter to the opposite party enclosing the Original LIC Policy, Death Certificate, Claim Form, with a request to pay the sum assured amount. The said claim was repudiated by the opposite party on 18.08.2014 stating that the complainant’s wife was having Diabetes Mellitus for the past 7 years and Polyarthralgia for 4 years.  Therefore, by citing non-disclosure of true facts the claim was repudiated and the premium amount was forfeited.  Hence, the complaint was filed but the District Forum dismissed the complaint stating that there is suppression of material facts.  The District Forum had failed to take note of the fact that the proposal form was filled up by the Agent of the opposite party.  Moreover, Dr.Padmavathy, the Medical Officer of the opposite party only after due thorough check up and personal examination of the complainant’s wife had noted in the proposal form that there is no sign of diabetes and the proposal form was duly signed and attested by the concerned Medical Officers.  Thus, it is clear that at the time of taking the insurance proposal, the wife of the complainant was not affected with Diabetes.  Further, the counsel for the appellant submitted that the District Forum has not taken note of the fact that the complainant’s wife was admitted in the hospital for the symptoms of fever, as evident from Ex.A4.  As per Mortuary Report the primary cause of death was sudden cardiac arrest.  Therefore, the complainant’s wife has not suppressed any material facts relating to Diabetes and that wife of the complainant also had no symptoms of Diabetes.  If she had really taken treatment for Diabetes, she would have disclosed the same or the Medical Officer would have examined her and noted down the past history ailments of the complainant’s wife.  The fact remains that the complainant’s wife did not have any previous ailments like diabetes at the time of taking policy.  Therefore, there is no question of suppression of facts.  In this regard, learned counsel referred to the judgements reported in (2015)7 MLJ 147 in the case of Manimekalai Vs. Insurance Ombudsman Forum for Insurance Fathima Akthar Court, Teynampet, Chennai and sought to set aside the order of the District Forum. 

 

                7.  Countering the same, counsel for the respondent submitted that the complainant’s wife R.Jayanthi had taken Jeevan Saral Policy for Rs.2 lakhs on 28.08.2013.  Within a period of 7 months, on 01.03.2014, she was hospitalised at Government Stanley Medical College Hospital and died of illness on 04.03.2014, after 3 days. Thereafter, the complainant submitted a claim form and other documents such as Medical Attendant Certificate (Ex.B3) and Certificate of Hospital Treatment (Ex.B4), which revealed that the complainant’s wife was suffering from Diabetes Mellitus for 7 years and Polyarthralgia for 4 years.  The complainant’s wife had died due to Type 2 Diabetes Mellitus as primary cause and other complications as per Ex.B3, Certificate of Civil Assistant Surgeon of Government Stanley Hospital.  Though the complainant’s wife was suffering from Diabetes and Polyarthralgia for several years, in the proposal form she has not disclosed the same, despite specific questions with regard to Diabetes Mellitus and other ailments, in Question No.11.  Therefore, the opposite party Insurance Company has denied their liability for the claim of the complainant under Ex.A8.  Considering these aspects, the District Forum had rightly dismissed the complaint holding that the specific questions in the proposal form regarding ailments have been answered negative and thereby material facts have been suppressed by the proposer.  Therefore, such a well considered judgment need not be interfered with and sought to dismiss the appeal.

 

                8.  Keeping in mind the submissions of the learned counsel for the appellant/complainant and the respondent/opposite party, we have carefully perused the entire material available on records. 

 

                9.  It is the main submission of the counsel for the appellant/ complainant that the complainant’s wife has not suppressed any material facts.  Moreover, the proposal form was filled up by the agent of the opposite party.  The Medical Officer Dr.Padmavathy after due thorough check up and personal examination had noted in the proposal form that there is no sign of Diabetes and the proposal form was also duly signed and attested by the concerned medical officers.  Therefore, it is clear that at the time of taking the proposal, the complainant’s wife had no sign of diabetes.  Therefore, there is no suppression of material facts.  But, on perusal of Ex.B4, the Certificate of Hospital Treatment issued by the Government Stanley Medical College Hospital, we find that the complainant’s wife was suffering from Diabetes for 7 years and Polyarthralgia for 4 years.  But, this fact was not disclosed in the proposal form.  When the questions in the proposal form are themselves proof of the materiality of the facts and the same is not correctly answered, the insurer is entitled to deny liability.  It is the specific contention of the Insurance Company, as per Ex.B3 Hospital Treatment Certificate, the complainant’s wife is suffering from Diabetes Mellitus for 7 years.  But, while answering Question No.11 in the proposal form, she had not disclosed this fact, especially, when there is a specific question in the proposal form under Question No.11(e), “Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Cancer, Epilepsy, Hernia, Leprosy or any other disease?”, for which she had given a negative answer.   Hence, the District Forum had rightly come to a conclusion that there is suppression of material facts.  Though the complainant had stated that his wife was not suffering from Diabetes, Ex.B3 Hospital Treatment Certificate marked on the side of the opposite party disprove the contention of the complainant.  It is well settled legal principle that, in matter of insurance policies like the present instance, suppression and misrepresentation of material facts would render the policy invalid in the eye of law.  Such an instance enables the Insurance Company to repudiate the claim arising from the policy for the reason that the principle of uberrima fides/ utmost good faith is flouted due to suppression of material facts.  If the insured has knowledge of facts which others cannot know, she should not resort to suppressio veri/suppression of truth.  In the case on hand, since the insured had suppressed the material facts about her medical history which is the criterion for considering the issuance of the policy itself, by simply referring to the examination by the panel doctor, the complainant cannot expect any positive consideration of the claim.  With regard to the same, it would be appropriate to rely upon some of the following judgments submitted by the counsel for the appellant/opposite party:

1. (2019) 6 SCC 175 [Reliance Life Insurance Co.Ltd. & anr. Vs. Rekhaben Nareshbhai Rathod] wherein it is held that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitles the insurer to repudiate the claim under the policy.
2. 2020 SCC Online SC 848 [Branch Manager, Bajaj Allianz Life Insurance Co. Ltd., & Ors  Vs. Dalbir Kaur]  wherein it is held that,
   • A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed. It is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, so as to enable the insurer to arrive at a considered decision based on the actuarial risk. In the present case, as we have indicated, the proposer failed to disclose the vomiting of blood which had taken place barely a month prior to the issuance of the policy of insurance and of the hospitalization which had been occasioned as a consequence. The investigation by the insurer indicated that the assured was suffering from a pre-existing ailment, consequent upon alcohol abuse and that the facts which were in the knowledge of the proposer had not been disclosed. This brings the ground for repudiation squarely within the principles which have been formulated by this Court in the decisions to which a reference has been made earlier. In Life Insurance Corporation of India vs Asha Goel, this Court held:

“12…The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) must be disclosed, otherwise, there is good ground for rescission of the contract. 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 risk which may take place between the proposal and its acceptance. If there is any mis-statements or suppression of material facts, the policy can be called into question. For determination of the question whether there has been suppression of any 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.” 

 

The above judgements squarely applicable to the facts of this case also.  Even in this case, the proposer has failed to disclose the fact that she was suffering from Diabetes Mellitus for 7 years and Polyarthralgia for 4 years, which is evident from Medical Attendant Certificate and Certificate of Hospital Treatment, which were marked as Ex.B3 and Ex.B4 respectively.  Therefore, there is clear suppression of material facts in this case.  Considering these factual aspects, the District Forum had correctly dismissed the complaint.  Therefore, the said order is legally sustainable.  We find no valid reason to set aside the orders passed by the District Forum and hence the same is liable to be confirmed.

 

                9.  In the result, the Appeal is dismissed and the order dated 17.04.2017 passed by the District Consumer Disputes Redressal Forum, Chennai (North) in C.C. No.90 of 2015 is confirmed.  No order as to costs.

 

 

R  VENKATESAPERUMAL                                                                                                          R.SUBBIAH

         MEMBER                                                                                                                                PRESIDENT

 

Index :  Yes/ No

AVR/SCDRC/Chennai/Orders/April/2023