National Consumer Disputes Redressal
Surinder Kaur And Ors. vs Lic Of India And Ors. on 14 February, 2005
Equivalent citations: II(2005)CPJ32(NC)
ORDER
S.N. Kapoor, J. (Presiding Member)
1. These revision petitions arise out of one common order passed in two appeal Nos. 956 of 2000 in Surinder Kaur and Ors. v. LIC of India, allowing the appeals of complainants by setting aside the order of the District Forum and by issuing directions to LIC to make the payment against Policy No. 130946362 for Rs. 1,50,000/- dated 1.7.1994 and Policy Nr 130947874 for Rs. 1,00,000/, dated 30.3.1995 with interest @ 9% p.a. from the date of 4 months after the submission of the claims.
2. While the LIC assailed the impugned order on the ground that the insured was guilty of suppression of material facts the complainant Surinder Kaur and other complainants in two petitions claimed interest @ 18% p.a. on the amount awarded.
3. We have heard the Counsel for both the parties and gone through the record.
4. There is no dispute between the parties that the insured Manjinder Singh had three policies -- two polices for Rs. 25,000/- each and one policy for Rs. 50,000/-. On 1.7.1994, he further purchased additional policy for Rs. 1,50,000/-. On 30.3.1995 he purchased another policy of is. 1,00,000/- bearing No. 130947874. In the proposal form of LIC Policy No. 130946362 the deceased did not disclose about his health in dispute. Similar submission has been made about the other policy. According to the LIC, the deceased was chronic alcoholic for a period of about last 12 years at the time of filling the proposal forms. The insured died on 11.6.1995. Smt. Surinder Kaur informed LIC on 30.10.1995. Since the death of the insured had taken place within two years, an inquiry was made on the two proposal forms confirming the health of the deceased from the D.M.C. Hospital, Ludhiana where the deceased was last treated. On receipt of these forms, it transpired that the deceased was chronic alcoholic for about last 12 years and further inquiry revealed that he suppressed the material facts of his illness at the time of taking of the two policies. The claims were repudiated on 31.10.1995.
5. In the proposed form the deceased mentioned 'No' in answer to the following question:
"Do you use or have you ever used alcoholic drinks or any other drugs?"
6. The petitioner relied upon an expert opinion of Dr. Rishi K. Arya, a medical and heart specialist who had certified in his certificate that in view of the fact that Manjinder Singh had chronic Alcoholic Liver Disease (for short ALD) which led to hepatorenal shutdown with fatal outcome could be only due to long term alcoholic habit. His affidavit was also filed.
7. The District Forum dismissed the complaint.
8. The State Commission set aside the order of the District Forum and directed the LIC to make the payment against the two policies with interest @ 9% p.a. from the date of 4 months after the submission of the claims.
9. Only two points are required to be considered in the revision petitions, firstly, "whether the life assured had suppressed any material fact as claimed by the LIC? If so, its effect?" and secondly, whether LIC is liable to pay interest as well, if so, what should be the rate of interest -- 18% as claimed by the petitioner or interest at any lower rate?
10. Insofar as the allegation that the deceased was chronic alcoholic for last 12 years and suppressed vital factor relatable to his state of health and statement in proposal found to be false is concerned, the only evidence which is being relied upon by the LIC was Form No. 3, filed in by the doctor treating the deceased at the hospital and the opinion of Dr. Rishi K. Arya, an expert based on Form No. 3.
11. Insofar as the first part is concerned, there could not be any dispute in regard to the answer that the deceased did claim that he did not use alcoholic or other drugs.
12. As regards the Form No. 3 filled in by Dr. Nitin Sood, who attended the deceased in the hospital, while it may be taken that it was recorded by the hospital authorities and the from the hospital did indicate that the deceased was chronic alcoholic for last 12 years. Does it prove that the deceased was suffering from chronic alcoholic for last 12 years and still further does it prove that the death had occurred in account of it? Does it further propose that this material fact was suppressed by the deceased with fraudulent intention?
13. Insofar as the death is concerned there could not be any dispute. About legal proposition of law to the effect that in case the insured while filling up of the proposal form suppressed any material fact knowing that the statement was false or that it amounted to suppression of facts which it was material to disclose and it was so done with fraudulent intention of the assured person while filling up the proposal form, it would certainly adversely affect the velocity of policy and liability of the LIC to pay under the policy.
14. However, it is noticeable that this Commission in The New India Assurance Co. Ltd. and Anr. v. P.P. Khanna, II (1997) CPJ 1 (NC)=1997(2) CPR 21 (NC) held as under:
The onus probandi, in cases of fraudulent Suppression of material facts rests heavily on party alleging fraud namely the insurer. The insurer cannot avoid consequences of insurance contract by simply showing inaccuracy or falsity of statement. Burden is cast on the insurer to show that the statement was on a material matter or facts have been suppressed which it was material for the policy holder to disclose. It is further to be proved that the statement was fraudulently made by the policy holder with the knowledge of the falsity of statement or that the suppression was of material facts which had not been disclosed. The Courts will not be satisfied with proof which falls short of showing that intentional misrepresentation was made with the knowledge of perpetrating fraud." (Emphasis supplied)
15. In LIC v. Smt. Promila Malhotra, I (2004) CPJ 91 (NC) again it was held the onus to prove material concealment would lie on the insurer.
16. In Mithoo Lal Nayak v. LIC of India, AIR 1962 SC 814, the Hon'ble Supreme Court laid down following three conditions. They were:
(a) the statement must be on a material matter or must suppress facts, which it was material to disclose.
(b) the suppression must be fraudulently made by the policy holder, and
(c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
17. In the case in hand it is evident that apart from the certificate Exh. 0-15, of Dr. Rishi K. Arya, a medical and heart specialist, there was nothing on record to prove that the deceased was chronic ALD which led to hepatorenal shutdown with fatal outcome. The opinion of Dr. Rishi K. Arya was based on the history recorded in Form No. 3 which was allegedly received from the hospital indicating that Manjinder Singh was addict to such disease and it was for last 12 years he was suffering from chronic ALD. The State Commission rightly found that his opinion and affidavit was not sufficient for a number of reasons. No postmortem was conducted which was not felt necessary. Taking liquor daily per se could not be held to be a disease or ailment which could be said to have been suppressed fraudulently, unless somebody had been advised so and the concerned doctor diagnosed that he was suffering from Cirrhosis due to ALD PHT disease at the time of taking insurance policy. No record of treatment prior to proposal form had been produced by any doctor nor any reference of any doctor was received by the hospital. If the doctor who treated the deceased had recorded the same in case history that was not sufficient to say that information was given by the insured/diseased. Therefore, the case history given in the record by itself may be just based on hearsay and remained unsubstantiated, without there being any medical evidence or the statement of insured persons himself or of the complainants. It could just be recorded on the basis of ignorant attendants. But the proof in such matters could not be taken lightly, particularly, when the beneficial protection provided by the life insurance is required to be withheld on just technical grounds. Imaginations and surmises cannot take the place of proof. Thus, the very foundation on which Dr. Rishi K. Arya had given his certificate and affidavit is extremely shaky and could not be acted upon by the State Commission, in absence of any affidavit of any doctor who had treated him earlier.
18. The contention that the record of hospital from where the deceased got the treatment was sufficient would be too much to repudiate the claim. Without any proof of history based on statement of unspecified and unnamed person(s) on the date of admission of the deceased Manjinder Singh, LIC would not be sufficient to repudiate the claim unless it was substantiated with medical report for the treatment of a doctor prior to the submission of the proposal form.
19. Even, if, it is presumed that somebody informed about the fact that the deceased was suffering for the last 12 years, it would not be a proof of the fact that the deceased knew at the time of filling up the proposal form that he was suffering from the disease to make fraudulent suppression of material fact. Accordingly, LIC is held liable to pay the amounts of these two polices.
20. As regards the second point of dispute -- claim of interest @ 18% p.a. from the date after four months of submission of the claim till final payment in respect of Policy No. 130947874 for Rs. 1,00,000/- and Policy No. 130946362 for Rs. 1,50,000/-, we feel that this Commission should not interfere in the rate of interest as awarded by the State Commission. Firstly, it is matter of judicial discretion of the State Commission to a great extent. Secondly, the Hon'ble Supreme Court has also awarded interest at the rate of 9% in compensation matters. Thirdly, it is not the case where the interest has been awarded @ 6% or less than that. Consequently, we are not inclined to interfere in the rate of interest awarded by the State Commission.
For the aforesaid reasons, we do not find any force in either of these revision petitions and they are dismissed accordingly.