J U D G E M E N T
This complaint is filed by the complainant u/S. 12 of the C.P. Act, 1986 alleging deficiency in service, as well as, unfair trade practice against the Ops as her legitimate insurance claim have been repudiated by the Ops arbitrarily and on whimsical pretext.
The brief fact of the case of the complainant is that her husband, since deceased, during his lifetime obtained two insurance policies from the Ops on 23.12.2010 to the tune of Rs. 1, 50,000=00 and Rs. 1, 25,000=00 respectively. The premium of those polices were of Rs. 3,709=00 & Rs. 1,531=00, which was duly paid by the husband of the complainant. At the time of filing proposal form complainant’s name was mentioned in the said form as nominee by her husband. During subsistence of those polices unfortunately and due to ill luck the insured being the husband of this complainant died on 11.9.2011 at Kolkata Medical College and Hospital. After the death of the insured the complainant being the
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nominee provided intimation of the death of her husband and accordingly claim forms were issued in favour of her by the OP. The complainant submitted the claim forms along with original death certificate, as well as, related other documents as required by the OP for settlement of the claim. Thereafter the complainant received one letter dated 24.6.2014 from the OP from where she came to know that the OP has repudiated both the claim illegally by imaginary and on flimsy ground. The complainant has submitted that her husband during his lifetime got another policy from this OP and in the said policy also the complainant was declared as nominee. After the death of her husband intimation provided for that policy to the Op and claim form lodged. But the OP had settled the said claim and disbursed the amount in favour of the complainant. It is submitted in the complaint that neither the complainant nor her deceased husband had done any act detrimental to the interest of the OP, They never violated any terms of the contract. The policy holder obtained those policies for securing monetary interest of his wife in case of his death by making payment of due premium. But without assigning any cogent ground the OP has repudiated the claim, which is an example of deficiency in service, as well as, unfair trade practice on behalf of the OP. Due to such illegal and arbitrary act of the OP the complainant had to suffer pecuniary problem along with mental pain and agony, for this reason the complainant is very much entitled to get compensation. As her grievance has not been redressed by the Insurance Company hence finding no other alternative the complainant has filed this complaint before this ld. Forum praying for direction upon the Op for making payment of Rs. 2, 75,000=00 towards the policy money along with interest @18% p.a. on the said amount due to illegal repudiation of the claim till payment of same, Rs. 25,000=00 towards compensation for harassment, mental agony and pain and litigation cost of Rs. 25,000=00.
The POC have been contested by the Ops by filing written version contending that after getting information about the death of the insured from his wife claim form was issued in her favour being nominee of the policy along with some forms namely A, B, B1, C & E. Upon receipt of the said claim forms the complainant submitted the same along with some documents duly filled in. On scrutiny of the said documents it was found by the Ops that the life assured was suffering from Chronic Liver Disease, Splennomegaly Portal Hypertension and HIV Stage-II for which he consulted physician and took treatment from CMC, Vellore and at that point of time he was on medical leave on several occasions and the entire incident occurred prior to the date of commencement of the policy in question. But the life assured did not disclose those facts in the proposal form. Instead of it in the
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proposal form dated 23.12.2010 he gave false answers in the question no. (a) to (e), (i) & (j). All those answers were false as these Ops have evidence and reason to believe that one month prior form the date of taking of this policy the life assured had been suffering from those diseases, for which he consulted doctor and took treatment from Vellore, but the life assured did not disclose the same. It is therefore evident the life assured made deliberate misstatement and withheld material information from these Ops regarding the state of his health at the time of effecting the assurance and hence in terms of the policy contract and declaration contained in the forms of proposal for assurance these ops have rightly repudiated the claim of the complainant for which they are not at all liable for making any payment under the policy along with cost and compensation as prayed for. It is further submitted by the Ops that at the time of submission of the proposal forms the life assured declared in the last page of the said proposal forms as follows:
‘I, Lalan Pawwan the person whose life is herein being proposed to be assured, do hereby declare that the foregoing statements and answers have been given by me after fully understanding the questions and the same are true and complete in every particulars and I have not withheld any information and I do herby agree and declare that these statements and this declaration shall be the basis of the contract of assurance between me and Life Insurance Corporation of India and that if any untrue averment be contained therein the said contract shall be absolutely null and void and all monies which shall have been paid in respect thereof shall stand forfeited to the corporation.’
It is submitted by the Ops that since insurance policy is a contract entered by and between the parties based on utmost good faith and concealment of any information or giving incorrect information amounts to violation of its terms and the conditions and in such cases the LICI is entitled to repudiate the claim. Accordingly considering all the aspects and the terms and condition of insurance policy the death claim lodged by the complainant was duly repudiated on 24.6.2014 by issuing repudiation letter on the ground for suppression of material facts of the life assured in the proposal form. The complainant was also informed to the said letter to make an appeal before the Zonal Manager, LICI, Eastern Zonal Office, Kolkata if she feels dissatisfaction with the decision of the repudiation of death claim, but the complainant did not make any appeal, which proved that the she had duly admitted the decision of repudiation. Therefore, the Ops did not repudiate the claim illegally, imaginary and/or flimsy ground as stated by her in the POC. It is mentioned that another claim in respect of the separate policy have been settled by
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the Ops and the policy money disbursed in favour of the complainant. In that respect the evidence of illness for aforesaid diseases was after the date of commencement of the said policy. Therefore nothing has been done by the Ops fraudulently. According to the Ops as the claim was repudiated properly and based on the terms and conditions of the policy hence complaint is untenable, misconceived and vexatious one. As there was no deficiency in service, as well as, unfair trade practice on behalf of the Ops complainant is not entitled to get any amount towards cost and compensation. On the contrary, the Ops have claimed for dismissal of the complaint with exemplary cost of Rs. 10,000=00 in view of Section 26 of the C.P. Act, 1986 as the complainant has unnecessarily harassed these Ops.
Both parties have filed several documents and papers to substantiate their respective case, Rulings and the Ops have filed written notes of argument.
We carefully perused the record and documents filed by the parties, as well as, Rulings. It is seen by us that there are some admitted facts in the case in hand that are the husbands of the complaint, since deceased, during his lifetime obtained two policies from the Ops on 23.12.2010 amounting to Rs. 1,50,000=00 and Rs. 1,25,000=00 respectively, due premiums for those policies given, the complainant was declared as nominee in the said policies, on 11.9.2011 the insured died at Kolkata Medical College and Hospital, the Ops were intimated by the complainant about the death of her husband, claim forms issued, the claim form lodged by the complainant with the Ops along with all relevant documents for settlement, the claim of the complainant have been repudiated by the Ops by issuing a letter dated 24.6.2014 upon the complainant, the insured purchased another policy wherein this complainant was declared as nominee, the amount of the said policy had duly been disbursed by the Ops in her favour after the death of her husband. The allegation of the complainant is that the Ops have repudiated her legitimate insurance claim illegally, arbitrarily and in whimsical manner, which reflects the deficiency in service, as well as, unfair trade practice of the Ops and for which the complainant had to suffer financial loss along with mental agony and pain. Hence, for redressal of her grievance this complaint has been initiated by her. On the contrary, the averment of the Ops is that the claim of the complainant was repudiated rightly, legally and properly in view of the view of the terms and conditions of the insurance policy because the insured at the time of taking out the policy did not disclose the material truth/facts in the proposal form in respect of his state of health. For such concealment the policy became void ab initio. According to the Ops such legal repudiation cannot be termed as deficiency in service, as well as, unfair trade
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practice, for this reason the Ops are not under any obligation for making payment of any amount towards cost and compensation as prayed for. Ops have prayed for dismissal of this complaint with cost.
We have noticed that admittedly the complainant obtained the insurance policy in question on 23.12.2010 and filled up the proposal form wherein some questionnaire was there as per whim of the complainant. The questions and the answers as evident from the proposal form are as follows:
Q. No. (a) During the last five years did your consult a medical practitioner for any ailment requiring treatment for more than a week?
Ans: No.
Q. No. (b) Have you ever been admitted to any hospital or nursing home for general check up, observation, treatment or operation?
Ans: No.
Q. No. (c) Have your remained absent from place of work on grounds of health during the last five years?
Ans: No.
Q. No. (d) Are you suffering from or have you ever suffered from ailments pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system?
Ans: No.
Q. No. (e) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other disease?
Ans: No.
Q. No. (i) What has been your usual state of health?
Ans: Good.
Q. No. (j) Have your ever required/at present availing /undergoing medical advice, treatment or tests in connection with Hepatitis ‘B’ or AIDS related condition?
Ans: No.
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It is seen by us that in the proposal form the complainant has declared his state of health as good in 23.12.2010 and he never suffered from any diseases as mentioned in the proposal form and not only that he did not get any admission at any hospital or nursing home either for general check up or treatment /operation whatever it may be. It is further disclosed by him that he never availed of leave during last five years due to his sickness/ailment and he is not suffering from AIDS of Hepatitis ‘B’ etc. When the complainant intimated the Ops about the death of her husband, then claim forms were issued upon her along with some other forms A, B, B1, C & E. The complainant has duly filled up all the forms and submitted the same before the insurance company. Along with the form no. ‘E’ the complainant had submitted the photo medical card of her husband and some prescriptions and leave statement obtained from his employer. Admittedly the complainant was a Govt. employee being armed guard at the unit of Sodepur area Office. From the prescription (Annex. 9) dated 06.5.2011 and 14.7.2010 it is evident that the complainant was a case of CLD (Chronic Liver Disease), Portal hypertension, spleenomegali and HIV Stage –II. The complainant was advised by Dr. S.K. Sinha being CMOH (Medical), Sanctoria Hospital to visit CMC, Vellore and accordingly he attended CMC Vellore on 03.12.2010. Thereafter he was referred to Burdwan Medical College and Hospital for further treatment. In another prescription it is written that the above disease was diagnosed by CMC, Vellore. It is also written in the prescription he went at Vellore on his own cost. Admittedly the complainant obtained the policy on 23.12.2010. Therefore it is crystal clear that prior to taking out the said policy the complainant went at CMC, Vellore on 03.12.2010. But the same statement had been withheld by him in the proposal form in respect of question no. ‘B’. Though the answer had been given by him in the negative in respect of question no. ‘A’, but it is noticed by us that he consulted a medical practitioner for his ailment prior to 20 days of commencement of the policy. Though in the prescription it is written that he was suffering from Chronic Liver Disease but in respect of specific question no. ‘B’ false statement has been provided by him. Wherein he was suffering from HIV Stage –II deliberate misstatement was given by him in respect of question no. ‘J’. Not only that though he availed of seek leave along with earned leave from the place of his work, in respect of question no. ‘C’ false information was provided. It is seen by us that when he went at CMC, Vellore on 03.12.2010 he obtained seek leave from his office which is evident from his leave statement as endorsed by his employer.
As false statement/misstatement was given by the complainant deliberately and intentionally withheld the material information regarding his state of health, as
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well as, treatment in our view the Insurance Company has rightly repudiated the claim of the complainant on the basis of the terms and the conditions for the policy. It is true that the contract of insurance based on utmost good faith, as in the case in hand, the insured being the husband of the complainant had breached the trust hence, the contract of insurance became vitiated.
The complainant has relied on some Rulings (1) 2013 (2) CPR 137 (NC), (2) 2014 (3) CPR 178 (NC) & (3) 2014 (4) CPR 711 (NC). We have carefully perused those Rulings. In the first one it is held that pre-existing ailments must be proved from medical reports. This judgment is not applicable in the case in hand because in the instant case the prescription and the leave statement of the insured have proved the pre-existing disease of him from which he was suffering from. The second Ruling has not been provided by the complainant, only citation has been given. In the third one it has been held that onus to prove that deceased had obtained policy by suppressing facts relating to his illness is on Insurance Company. We have gone through this judgment and in our view this Ruling is not applicable in the case in hand because the complaint has been initiated by the complainant stating that repudiation of claim was made by the Insurance Company illegally. Then onus to prove this allegation went to the shoulder of the Ops that there was no illegal repudiation. But the Ops have proved by producing cogent documentary evidence that since the insured was suffering from pre-existing diseases before taking out the policy, but the same had not been mentioned in the proposal form, hence the claim was repudiated. So the onus has shifted to the shoulder of the complainant to prove that he was not suffering from those diseases before commencement of the insurance policy. But the complainant has miserably failed to prove the same.
The ld. Counsel for the Ops have relied on some Rulings in support of their contentions i.e. (1) Vol - I (2014) CPJ 221 (NC), (2) Vol - IV (2014) CPJ 139 (NC), (3) Vol - IV (2014) CPJ 132 (NC), (4) Vol - IV (2014) CPJ 658 (NC), Vol - II (2014) CPJ 190 (NC).
We have carefully perused all the judgment filed by the Ops and in our view the said Rulings are very much applicable in the case in hand because in those judgments it was held by Their Lordships that repudiation of insurance claim due to concealment of material fact which was exclusively in the knowledge of the insured cannot be termed as deficiency in service. It is seen by us that in those judgments the Hon’ble National Commission placed reliance on several judgments of the Hon’ble Apex Court.
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Going by the foregoing discussion, hence, it is
O r d e r e d
that the petition of complaint filed by the complainant is dismissed on contest without any cost.
(Asoke Kumar Mandal)
Dictated and corrected by me. President
DCDRF, Burdwan
(Silpi Majumder)
Member
DCDRF, Burdwan
(Silpi Majumder)
Member
DCDRF, Burdwan
