State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Jaswinder Kaur Wd/O Sh.Supinder Singh ... on 6 October, 2009
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
SCO NOS.3009-12, SECTOR 22-D, CHANDIGARH.
First Appeal No.1487 of 2005
Date of institution: 18.11.2005
Date of decision : 06.10.2009
1. Life Insurance Corporation of India through its Senior Divisional Manager,
Sector 17, Chandigarh.
2. Senior Divisional Manager, Sector 17, Chandigarh.
3. Senior I.O.R., Branch Manager, LIC of India, Mandi Gobindgarh, District
Fatehgarh Sahib.
.....Appellants
Versus
Jaswinder Kaur wd/o Sh.Supinder Singh alias Surpinder Singh r/o village Bhuchi,
P.O. Dhunde, Via Bassi Pathana, Distt. Fatehgarh Sahib.
.....Respondent
First Appeal against the order dated 03.10.2005
passed by the District Consumer Disputes
Redressal Forum, Fatehgarh Sahib.
Before:-
Hon'ble Mr.Justice S.N.Aggarwal, President
Lt.Col. Darshan Singh (Retd.), Member
Present:-
For the appellant : Sh.S.K.Mahajan, Advocate For the respondent : Ms.J.K.Gurna, Advocate JUSTICE S.N.AGGARWAL, PRESIDENT Supinder Singh alias Surpinder Singh husband of Jaswinder Kaur respondent had taken the life insurance policy in the sum of Rs.1 lac. He had died on 03.06.2004. The respondent was the widow and nominee of her husband Supinder Singh. The insurance claim was lodged by her with the appellants. It was repudiated. Alleging deficiency in service on the part of the appellants, the respondent filed the complaint against them in the learned District Consumer Disputes Redressal Forum, Fatehgarh Sahib (in short "the District Forum") for insurance claim. Compensation, interest and costs were also prayed. First Appeal No.1487 of 2005 2
2. The appellants filed the written reply. It was admitted that Supinder Singh had taken the life insurance policy by filling the proposal form on 09.08.2003 in the sum of Rs.1 lac with commencement date as 28.05.2003. It was also admitted that Jaswinder Kaur was the widow and nominee of her husband Supinder Singh. It was not disputed that Supinder Singh had died on 03.06.2004 and the insurance claim was repudiated.
3. It was pleaded that Supinder Singh was a chronic Alcoholic for the last 26 years and he had suppressed these material facts. Therefore, the contract between the insured and the appellants was void ab-initio and the repudiation of the insurance claim was legal and valid. Hence, dismissal of the complaint was prayed.
4. Jaswinder Kaur respondent filed her affidavit AW1/A. She also proved documents Ex.C/1 to Ex.C/4. On the other hand, the appellants filed the affidavit of H.K.Chaudhary, Manager (Legal) as Ex.R/1. They also proved documents Ex.R/2 to Ex.R/8.
5. After considering the pleadings of the parties and the affidavits/documents produced on the file by them, the learned District Forum accepted the complaint with costs of Rs.500/- and compensation of Rs.2000/- vide impugned order dated 03.10.2005 and the appellants were directed to make the payment of Rs.1 lac with interest @ 9% p.a.
6. Hence, the appeal.
7. The submission of the learned counsel for the appellants was that the appeal be accepted and the impugned judgment dated 03.10.2005 be set aside.
8. On the other hand, the submission of the learned counsel for the respondent was that there was no merit in the present appeal and the same be dismissed.
9. Record has been perused. Submissions have been considered.
10. It was pleaded by the respondent that her husband Supinder Singh had taken the life insurance policy for an amount of Rs.1 lac from the appellants. First Appeal No.1487 of 2005 3 This fact is admitted by the respondent that Supinder Singh was the husband of Jaswinder Kaur respondent and she was also the nominee of the life assured and the life assured had filled the proposal form on 09.08.2003 and had taken the life insurance policy for an amount of Rs.1 lac with commencement date as 28.05.2003. The proposal form dated 09.08.2003 has been proved by the respondent as Ex.C/2. It is also proved by the appellants as Ex.R/2.
11. It was pleaded by the respondent that Supinder Singh had died on 03.06.2004. This fact was admitted by the appellants.
12. The appellants had repudiated the insurance claim on the plea that Supinder Singh was a chronic alcoholic for the last 26 years and he had suppressed these material facts. Reference was made to the information given in Column No.11 of the proposal form Ex.R/2 as under : -
" Questions Answers
11(H) Do you use or have you ever used NO
(i) Alcoholic Drinks
11(J) What has been your usual rate of health? GOOD"
13. In order to prove that Supinder Singh alias Surpinder Singh was a chronic alcoholic, the appellants have proved the certificate of hospital treatment in Column No.3816 as Ex.R/7. The life assured was admitted in this hospital on 02.06.2004 and he was discharged on the same day in which it was reported that he was an alcoholic. He died of Alcoholic cirrhosis. However, the age of alcoholic cirrhosis is given as only three months. The appellants also proved the medical attendant certificate Ex.R/8 issued by the Senior Resident, Department of Medicines, Government Hospital, Sector 32, Chandigarh.
14. The appellants have not been able to prove from any authentic record if Supinder Singh was a chronic alcoholic for the last 20 years or more.
15. The learned counsel for the appellants relied upon the judgment of the Hon'ble Supreme Court reported as "P.C.Chacko & Anr. v. Chairman, Life Insurance Corporation of India & Ors. 2008 (3) CLT 380" and another judgment First Appeal No.1487 of 2005 4 dated 01.12.2006 passed in "Civil Appeal No.5334 of 2006, Life Insurance Corporation of India v. Surinder Kaur and others". Reliance was also placed on the judgment of the Hon'ble National Commission reported as "Panni Devi v. L.I.C. and Ors, III (2003) CPJ 15 (NC)" and another judgment reported as "Life Insurance Corporation of India v. Smt.Minu Kalita, 2003 (2) Judicial Reports Consumer, 100". Reliance was placed on still another judgment of the Hon'ble National Commission reported as "Shankar Soni v. Life Insurance Corporation of India, 2008 (3) CLT 637".
16. All these judgments have been perused but none of these is applicable to the facts of the present case. The law has been settled by the Hon'ble Supreme Court in the judgment reported as "Mithoolal Nayak v. Life Insurance Corporation of India, AIR 1962 Supreme Court 814" that it is not the concealment of every information which gives the right to the insurance company to repudiate the claim. It is only the concealment or suppression of material information with a fraudulent intention which debarred the nominee to claim the insurance claim. It was held by the Hon'ble Supreme Court in the aforesaid case that the following must be proved by the insurance company before a claim is repudiated : -
"(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."First Appeal No.1487 of 2005 5
17. It has also been held in a number of judgments by the Hon'ble Supreme Court that the onus is on the life insurance company to prove that the life assured had concealed the material information.
18. So far as the judgment in P.C.Chacko's case (supra) is concerned, the suppression of material information by the life assured was proved as was noticed by the Hon'ble Supreme Court in para 4 as under : -
"4. It now stands admitted that the insured had undergone an operation for Adenoma Thyroid. The particulars furnished by him while filling up the application form for obtaining the said policy were as under :
(a) Did you ever have any operation, accident or injury? The answer was "No", (b) Have your remained absent from place of your work on ground of health during the last 5 years? To which answer was "No",
(c) What has been your state of health? The answer was "good".
The fact that the said answers were incorrect is not in dispute. The suit filed by the appellants, however, was decreed."
19. It was also observed by the Hon'ble Supreme Court in para 14 as under : -
"14. The insured's brother was an agent of the Life Corporation of India. It was he, who had asked the insured to take the insurance policy. He, being an authorized agent of the Life Insurance Corporation, presumably knew the effect of misstatement of facts. Misstatement by itself, however, was not material First Appeal No.1487 of 2005 6 for repudiation of the policy unless the same is material in nature. (emphasis supplied)
15. The insured furthermore was aware of the consequence of making a misstatement of fact. If a person makes a wrong statement with knowledge of consequence therefor, he would ordinarily be stopped from pleading that even if such a fact had been disclosed, it would not have made any material change.
16. The purpose for taking a policy of insurance is not, in our opinion, very material. It may serve the purpose of social security but then the same should not be obtained with a fraudulent act by the insured. Proposal can be repudiated if a fraudulent act is discovered. The proposer must show that his intention was bona fide. It must appear from the face of the record. In a case of this nature it was not necessary for the insurer to establish that the suppression was fraudulently made by the policy holder or that he must have been aware at the time of making the statement that the same was false or that the fact was suppressed which was material to disclose. A deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law."
20. In the present case, it is not proved if the life assured was alcoholic for the 20 years or if he had concealed the material information.
21. So far as the judgment in Surinder Kaur's case (supra) is concerned, it was nowhere held by the Hon'ble Supreme Court if taking of liquor is a disease First Appeal No.1487 of 2005 7 or if suppression of this fact amounted to suppression of material fact. So far as the other judgments referred by the learned counsel for the appellants are concerned, in none of these judgments, the suppression of information about the life assured being a chronic alcoholic had come up for consideration. These judgments related to different diseases and different kinds of evidence produced by the insurance companies.
22. In the present case, it is not proved by the appellants if the life assured Supinder Singh alias Surpinder Singh was taking liquor prior to the filling of the proposal form if so since when or in how much quantity. Even if the plea of the appellants is accepted that he was chronic alcoholic for the last 26 years that becomes no ground to repudiate the claim as the taking of liquor is not fatal in itself nor it is a disease.
23. It has been held by this Commission in First Appeal No.1585 of 2006 titled as "Branch Manager, LIC, Unit No.2, Hall Bazar, Amritsar and another Versus Rahul Sehgal" decided on 20.12.2007 as under : -
"11. The learned counsel for the appellants submit that this medical record has proved that Rohit Sehgal was alcoholic for the last 15 years, and therefore, this habit of the insured led to the disease and had become a cause of his death.
12. This submission has been considered. It is a far fetched argument. Taking liquor is not a material fact. Moreover, taking liquor is not a disease. Almost everybody takes liquor with few exceptions. Again, it varies whether one takes liquor in larger quantity or takes only small dose like medicine; whether one takes regularly or occasionally. This report does not clarify these details. If consumption of liquor First Appeal No.1487 of 2005 8 was a disease, the insured would not have survived for 15 years. He would have died even prior to filling of revival form. Therefore, taking alcohol was not a material fact the suppression of which can entitle the appellants to repudiate the claim."
15. It cannot be believed if heavy intake of liquor needs 20 years for a person to die. Heavy intake of alcohol could have consumed a person in a short time and if Kulwant Singh had been taking heavy alcohol as opined by Dr. Yash P. Mehra in his report, Ex.R5, he could not have survived for 20 years and would have died before filling the proposal form."
24. The submission of the learned counsel for the appellants was that taking of liquor has direct nexus with the liver disease which became the cause of the death of Supinder Singh alias Surpinder Singh. Hence it was prayed that taking of liquor has a direct nexus with the cause of death of Supinder Singh.
25. This submission has been considered.
26. As has been held in a number of judgments that taking of liquor is a matter of habit with a large percentage of people in our country. It may lead to a number of medical problems but taking of liquor in itself is not a disease. Had it been a disease the patient would not have survived for 20 years after taking the liquor.
27. The learned counsel for the appellants further submitted that the learned District Forum has awarded interest @ 9% p.a. which was highly excessive.
28. This submission has been considered.
First Appeal No.1487 of 2005 9
29. It was held by the Hon'ble Supreme Court reported as "Dharampal & others v. U.P. State Road Transport Corporation", AIR 2008 S.C. 2312 that the rate of interest should be awarded at the Bank rate
30. Keeping in view the discussions held above, the appeal is partly accepted and the rate of interest is reduced from 9% to 7.5% p.a.
31. The appellants had deposited an amount of Rs.25,000/- with this Commission at the time of filing of the appeal. This amount of Rs.25,000/- with interest accrued thereon, if any, be remitted by the registry to the respondent by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellants.
32. The interest on the amount of Rs.25,000/- shall stop running with effect from the date the appellants had deposited the same in this Commission. Interest on this amount of Rs.25,000/- shall be what has accrued on this amount when it remained deposited by this Commission in the Bank.
33. Remaining amount shall be paid by the appellants to the respondent immediately.
34. The arguments were heard in this case on 25.09.2009 and the order was reserved. Now, the order be communicated to the parties.
35. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE S.N.AGGARWAL) PRESIDENT (LT. COL. DARSHAN SINGH-RETD.) MEMBER October 06 , 2009.
Paritosh