Per K.V.Krishna Murthy:   

            The complainant’s husband Rudrappa had taken a Max Life Whole Life Participating Insurance to age 100 policy for Rs.10.,00,000/-.  The effective date of coverage was from 22-10-2012.  The policy holder died on 04-11-2012.  The claim for the sum assured was made by wife of the policy holder, who is the registered nominee under the policy.  A detailed investigation was conducted as to the cause of death of the deceased by the Insurance Company.  The claim was repudiated by the letter dated: 31-12-2013 vide Ex.A3.  Hence this complaint seeking the sum assured plus compensation.

            2.  The letter of repudiation reads as follows;

            “Subject: Claim Reference Number (201324901015), Policy Number (872511688)

This is with reference to the captioned death claim.  The proposal form was received by us at our branch office on 22OCT2012 and the policy was issued on 28OCT2012.

We refer to the proposal form wherein late Mr.Rudrappa K had given a declaration that he had made complete, true and accurate disclosure of all the facts and circumstances as may be relevant for the acceptability of the proposal form.  However, the following questions in the proposal form, have been answered as ‘NO’.

Ques.3) Have you ever been investigated, treated or diagnosed with any of the following conditions.  If yes, please provide details including doctor’s name and dates (or attach relevant questionnaires).

(Xiv) Have you ever been tested positive for HIV/AIDs or hepatitis B or C or have you been tested/treated for sexually transmitted disease.

However during investigation we have noted ‘that late Mr.Rudrappa K was suffering from Human Immunodeficiency virus prior to signing this proposal form.

Therefore, it is evidence that medical disclosure as required in the proposal form was not made by late Mr.Rudrappa K.  At the stage of underwriting, had the above stated facts been disclosed to us, the captioned policy would not have been issued as proposed.

In life of the above information, we are declining the death claim against the above mentioned policy for reascns of material medical non-disclosure of Human Immunodeficiency virus by late Mr.Rudrappa.K.”  

            3.  Section 13(2) of the Consumer Protection Act – 1986 lays-down procedure for dealing with the complaint before the District Forum on admission of the complaint, which provides 30 days time for the opposite parties to give his version of the case as extension or such extension period not exceeding 15 days as may be granted by the District Forum.  In the instant case, the written version filed on 18-7-2014.  Therefore not required to be considered by the District Forum.  Also see the decision in 2014 (IV) CJ – 103 (NC).

            4.  The contention that the deceased policy holder was suffering from HIV has not been established before this Forum.  The investigation was conducted by Stellar Insurance Management Services Pvt.Ltd.,  The investigation report has been marked as Ex.B.5, wherein the investigators remarks (opinion)/(conclusion) mentioned may be noticed as follows;

1. Investigator’s Remarks/Opinion/Conclusion : Suspicious.

“During our investigation we were informed that LA had tumor in his stomach since one year prior to his death and he was underwent operation in VIMS Hospital, Bellary and he died due to stomach pain at his residence.

We have applied for the medical records in the above said Hospital the concerned authorities are searched for the medical records of LA and informed that there are no records found on the name of LA.

We are suspecting that LA was admitted with another name and taken treatment for tumor in his stomach, such that we could not procure the medical records of LA.

We have also searched for the medical records in Govt. Taluk Hospital, Kanakapura but we have not found any clue regarding the past medical history of LA.  

            5.  The investigator had not given his opinion or conclusion that the deceased was suffering from HIV disease as on the date of proposal.  The observations made by him is only on suspicion.  Therefore, on the basis of this report, it is not possible to conclude that the life assured as suffering from HIV disease.

            6.  In the case of P.Vankat Naidu V/s Life Insurance Corporation of India & Anr., - IV (2011) CPJ 6 (SC), the LIC contended that the complainant therein was not entitle to insurance amount.  At the time of taking policy, the insured has suppressed the facts relating to his illness.  In paragraph – 7, the Supreme Court observed as follows;

“7. Since the respondents had come out with the case that the deceased die not disclose correct facts relating to his illness, it was for them to produce cogent evidence to prove the allegation.  However, as found by the District Forum and the State Commission, the respondents did not produce any tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment.  Therefore, the National Commission was not justified in interfering with the concurrent finding recorded by the District Forum and the State Commission by making a wild guesswork that the deceased had suppressed the facts relating to his illness.”

            7.  The above observations are aptly applicable to the facts of the case on hand.  In this case also, the Insurance Company utterly failed to prove the factum of illness, which according to the insurance Company the insured was suffering from HIV on the date of proposal for the insurance policy.

8.  In LIC and Others V.Asha Goyal and Another, I (2001) SLT 89=AIR 2001 S.C. 549 Hon’ble Apex Court held thus:

Insurance Act (4 of 1938) Section 45 – Life Insurance Corporation Act (31 of 1956) Section 303 – Repudiation of claim by insured – Merely on grounds that dec4eased had withheld correct information regarding his health at the time of effecting insurance with Corporation – Not proper – Matter of repudiation of policy should not be dealt with in a mechanical and routine manner but should be one of extreme care and caution.

9.  Alia Begum V. LIC, reported in III (1997) CPJ 106 (NC)=1997 (III) CPR 60 (NC), The Hon’ble National Commission has held,

“that, in order to discharge its onus it was or Insurance Company to place material on the record to show that the deceased suppressed the facts which it was material to disclose, whether a fact is material depends upon the circumstances of a particular case.  The test to determine materiality is whether the fact has any bearing on the risk undertaken by the insurer.  If the fact has any bearing on the rist it is a material fact, if not it is immaterial.”

10.   In LIC V. Harish Joshi, reported in III (2003) CPJ 743, the Hon’ble National Commission relying on the Hon’ble Supreme Court case Life Insurance Corporation of India V. G.M. Chennabasamma, reported in (1991) 1 SSC 357, held that;

“Life Insurance Corporation of India was not justified, in repudiating the complainant’s case merely on the basis of certificate of hospital treatment without any corroborative evidence especially in view of the fact that the burden of proving that the insured had made false representation and suppressed material facts lay on the LIC of India, and if the latter failed to discharge the said burden the repudiation of the claim of the policy holder was unjustified and amounted to deficiency in service on the part of LIC of India.”

            11.  In the given facts and circumstances, the Insurance Company has failed to establish before the Forum that the deceased policy holder has suppressed medical problem as alleged and therefore the company is liable to pay the sum assured as per the policy terms.

            12.  In the result, the Insurance Company is directed to pay sum of Rs.10,00,000/- (Rupees ten lakh only) to the complainant along with interest at 10% p.a. from the date of filing of the complaint till actual payment as compensation for deficiency in service.  A sum of Rs.5,000/- (Rupees five thousand only) is awarded as litigation expenses.  The compliance of this order shall be reported by the Insurance Company before the expiry of the present calendar year.

Complaint Partly Allowed.

// ANNEXURE //

List of Documents Exhibited for the Complainant / Respondent.

Documents filed by the Complainant:

Witnesses examined for the Complainant / Respondent.