KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM APPEAL NO.292/03
JUDGMENT DATED.21.02.08
PRESENT: JUSTICE SRI.K.R.UDAYABHANU : PRESIDENT SMT.VALSALA SARANGADHARAN : MEMBER
A.Valsala Kumari, Vazhottuvilasom Bunglow, : APPELLANT Nedoorkolla, Amaravila.PO., Neyyattinkara. (By Adv.B.Vasudevan Nair & Others)
Vs
1.The Zonal Manager, LIC of India, Southern Zonal Office, LIC Building, Annasala, B.No.2450, Chennai – 600 002. 2. The Divisional Manager, Divisional Office (LIC), : RESPONDENTS Pattom, Thiruvananthapuram. (By Adv.S.S.Kalkura & Others)
3. K.Ramachandran Nair,
LIC Agent, Neyyattinkara. (By Adv.T.K.Ajith) JUDGMENT JUSTICE SRI.K.R.UDAYABHANU, PRESIDENT The appellant is complainant in OP.13/01 in the file of CDRF, Thiruvananthapuram and the order sought to be set aside is the dismissal of the complaint with respect to the claim of the insurance amount of the policy in the name of her son who died. The Forum dismissed the complaint holding that there was suppression of material facts as the operation for hydrocele undergone by the assured was not disclosed in the proposal form. 2. The case of the complainant that her son who was having only primary education and engaged in hardware business was the holder of LIC policy No.781908523 and that he died on 19.2.2000 due to cardiac arrest at the age of 22. The amount assured was Rs.1 lakh. The claim was repudiated alleging that the deceased had concealed material information that he underwent hydrocele operation. It is contended that the deceased who was not educated obtained the policy through the 3rd opposite party/the agent; and the agent took him to the doctor in the panel of LIC for medical check up, and that the deceased had disclosed the entire history of his health to the doctor. The deceased was not aware of the purport of the questions in the proposal form. All the columns in the proposal were filled up by the 3rd counter petitioner. Premium was paid without any default in submitting that the deceased had hydrocele and inguinal hernia and had undergone herinorrhapy. Death was caused due to cardiac arrest which has no connection with hernia problems which he was having earlier. There was no wilful suppression of any material fact. If any indiscretion is made it is on account action of the 3rd opposite party/the agent. It is alleged that the doctor in the panel of LIC had examined him and that he had mentioned about the history of his health to the doctor and after the medical check up the doctor certified the deceased is fit to take the policy. The 3rd opposite party along with the doctor has suppressed the previous history of hydrocele. 3. The opposite parties 1 and 2 the Zonal Manager and the Divisional Manager have filed a detailed version that coverage of the instant policy from 28.1.99 as per the proposal dated.24.1.99. It is alleged that on investigation it was revealed that the assured suppressed the fact that he had undergone surgery at PRS hospital, Thiruvananthapuram on 27.9.98 for Inguinal swelling and scrotal swelling. He was diagnosed as having indirect inguinal hernia and hydrocele. He underwent herinorrhapy and lords plication procedure under general anesthesia and was discharged on 30.9.98. He was admitted on 27.9.98. It is contended that the above suppression of the material fact rendered the policy liable to be repudiated. It is point out that in the relevant columns of the proposal columns the assured had put the answer as no; as to whether during the fast five years did he consult a medical practitioner for any ailments requiring treatment for more than one week and whether he had suffered from diabetes . . . hernia, hydrocele . . . or any other disease. It is point out that had the assured revealed his ailment of hydrocele and hernia, and the treatment undergone the proposal would not have been accepted. It is also alleged that the evidence in the matter required elaborate oral and documentary evidence and hence matter is to be tried in a civil court. It is also contended that the policy issued was a non medical one and therefore there was no occasion for any of the panel of the doctors to examine the deceased. It is also contended that the 3rd opposite party/the agent had no authority to fill up the proposal form. It is also alleged that the assured had given the copy of the SSLC certificate as proof of age. It is contended that the assured was sufficiently educated. 4. The 3rd opposite party has filed a version supporting the contentions of the opposite party 1 and 2. It is mentioned that he took the deceased to the doctor prior to the issuance of the policy and that all querries in the proposal form was explained to the proposer. 5. The evidence adduced in the matter consisted of the proof affidavit of the complainant and Exts.P1 to P7 and the affidavit of the second opposite party and Exts.D1 to D8. 6. The Forum has not considered in detail the evidence adduced in the matter at all. It is only noted that the assured has given false answer as to whether he was suffered from hydrocele and that he suppressed the fact of operation undergone. The Forum has considered the matter in a cursory manner with one of the Members dissenting. 7. In the proof affidavit filed by the petitioner she has reiterated the statement mentioned in the complaint that her son was examined by the doctor of the panel of LIC and that deceased had disclosed all details and that her son was not educated and had no knowledge of the questions in the proposal form and that all the columns in the proposal form were fill up by the LIC agent. It is also alleged that the surgery undergone for hernia and hydrocele together has no relevance with the cause of death due to cardiac arrest. It is also alleged that the doctor has certified that her son is fit in to take the policy. PW1 the complainant was not cross examined and hence the version of PW1 virtually stands unchallenged. She has also produced Exts.P1 to P7 which are the receipt of premium paid up to 28.1.2000 (death was on 19.2.2000), the intimation received by her from the opposite party no.1, copy of the lawyer notice and the reply as well as the death certificate of the deceased. 8. The documents produced at the instance of the opposite parties are Ext.D1 copy of the reply notice received; Ext.D2 letter repudiating the claim; Ext.D3 photo copy of the discharge summary of the deceased and Ext.D4 photo copy of the certificate issued from PRS hospital wherein the surgery undergone for inguinal hernia and hydrocele and Lords plication procedure under general anesthesia is mentioned, Ext.D5 the claim statement and Ext.D6 the covering letter enclosing the policy sent by the complainant; Ext.D7 copy of the policy and Ext.D8 copy of the proposal form. 9. Evidently the son of the applicant ie, the assured died just after one year of the date of policy. The proposal is dated.24.1.99 and the policy was issued with coverage from 28.1.99. The assured died on 19.2.2000. The appellant/complainant has contended that there is no connection with the operation undergone and ailment of on account of which death took place. It is also contended that the operation undergone is a minor one. It is further contended that the three conditions as contemplated under section 45 of the Insurance Act 1938 is to be established by the opposite parties. It is point out that it is for the opposite parties to establish that the suppression was with respect to a material matter and that alleged non disclosure was on a material matter which was material to disclose and that the suppression was fraudulently made by the policy holder and that the policy holder knew at the time of making the statement that it was false. The counsel has relied on the decisions in S.B.M., L.I.C of India Vs Leelawati Gupta I (2000) CPJ 566; LIC of India Vs G.M.Channabasemma, AIR 1991 SC 392; and LIC of India Vs Smt.Sushma Guleria I 1999 CPJ 366; in support. On the other hand the counsel for the respondent/LIC has relied on the unreported decision in civil appeal No.5322 of 07 of the Supreme Court to support the contention that suppression of a material fact would amount to rendering the policy void. 10. We find that in the above decision relied on by the respondents ie., P.C.Chacko Vs Chairman, LIC of India and another, dated.20.11.07 the assured died within a period of 6 months of taking the policy. Further the surgery involved was a major one which is repeatedly mentioned in the judgment ie; for Adenoma Thyroid. Of course, the assured died due to polyneuritis. It was also found that the evidence of fraudulenty misrepresentation stood proved as the agent was the brother of the deceased himself. It is mentioned that the mis-statement by itself is not material for repudiation of the policy unless the same is material in nature. Quoting section 45 of the Insurance Act, the court has reiterated that the three conditions of section 45 should be compiled with for enabling the repudiation of the policy. It is also restated that from the very fact that the contract involves the risk factor and that it purposes to shift the risk from one party to the other, each one is required to be absolutely innocent of every circumstances which goes to influence the judgment of the other while entering into the transaction. It can also be seen that in the above case detailed evidence was adduced by the insurer. 11. The other decision relied on by the respondent is Ajay Prakash Mittal Vs LIC of India 1 (1998) CPJ 2 (NC). The above was with respect to the claim based on the death of a lady after 6 months of delivery. She died due to jaundice . It was found that when the policy was issued while she was pregnant and that the same was concealed. In the above case the LIC relied on the specific clause in the manual of instructions given to the Agent that the proposal for assurance on the life of a lady after child birth can be considered only 6 months after delivery and that had it been revealed that she was pregnant as per the details sought in the proposal form it would have influenced the LIC while considering the policy proposal. There was also detailed evidence adduced in the above case. In Mithulal Nayak Vs LIC of India, AIR 1992 SC 814 relied on by the respondent, we find that there was considerable evidence adduced at the instance of the LIC. A number of doctors were examined. It was found that earlier proposal of the above person was not acted upon. There was adverse medical reports. The court also consider the contention of allegation of suppression of material fact in the light of section 17 and 19 of the Indian Contract Act. It was held that the principle underlying the explanation in section 19 that a false of representation, whether fraudulent or innocent, is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract. It was found that on the facts of the above case the principle cannot be applied. It was found that insured had suffered previously during different from malaria, pneumonia, cholera, anaemia, oedema of the feet, diarrhea and panting on exertion. 12. Evidently suppression should be of a material fact and non disclosure should be fraudulent, in the instant case the complainant in the complaint it self and in the proof affidavit had reiterated that her son revealed everything to the agent as well as the doctor of to the panel of the doctors of the LIC who examined him. It is restated that such a doctor examined her son at the time of the proposal and that he revealed all health details to him. PW1 the complainant was not cross examined. Although the opposite parties in the version has contended that it is a matter that requires elaborate oral and documentary evidence, no contra evidence was adduced at the instance of the opposite parties/respondents. Evidently allegation of the respondents/opposite parties is fraudulent suppression of material facts. The opposite parties were aware that detailed evidence is required. The explanation of the counsel for the respondent is that the operation undergone was admitted. But we find that it is to be further established that it is a material fact in the sense that the above fact would have influenced the respondents at the time of accepting the risk. It is the contention of the complainant that the operation undergone is a minor one and has no relation at all with the cause of death ie., cardiac arrest that was responsible for the death of her son. There is no contra evidence in this regard also. In the circumstances we find that it would not be proper, in the absence of evidence, to consider that the operation undergone for hernia and hydrocele was a major operation and that the above would have influenced the opposite parties in entering into the contract of insurance. It is also to be noted that the person at the time of death was only aged 22. PW1 in her proof affidavit has also stated that her son was not sufficiently educated and not in a position to understand the querries in the proposal form and that he revealed the fact of operation and the detail of his health conditions to the agent and also that he was examined by the doctor of the LIC and the details of his health and the fact of operation was revealed to the doctor also. In the circumstances we find that the opposite parties/respondent have failed to establish the wilful nondisclosure amounting to fraudulent suppression of facts and that the facts were material. In the circumstances we find that the order of the Forum is liable to be set aside; and we do so. The opposite parties 1 and 2 are directed to pay a sum that is Rs.1 lakh with interest at 9% per annum from the date of the petition and also cost of Rs.2500/-. The amount shall be paid within two months from the date of receipt of this judgment failing which the amount of Rs.1 lakh will carry interest at 12% per annum from the due date. The appeal is allowed.
JUSTICE SRI.K.R.UDAYABHANU, PRESIDENT
SMT.VALSALA SARANGADHARAN, MEMBER
R.AV | 
