National Consumer Disputes Redressal
Lic Of India vs Lakshmamma on 10 February, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.4198 OF 2007 (From the order dated 08.08.2007 in Appeal No.313/2007 of the State Commission, Karnataka) Life Insurance Corporation of India Petitioners(s) Versus Lakshmamma Respondent(s) BEFORE : HONBLE MR.JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioners(s) : Mr.Buddy A.Ranganadhan, Advocate For the Respondent(s) : NEMO. Pronounced on 10th February, 2012 ORDER
PER VINEETA RAI, MEMBER Life Insurance Corporation of India (Petitioner herein) have filed the present revision petition being aggrieved by the order of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the State Commission) in Appeal No.313/2007 in favour of Lakshmamma (Respondent herein) who was the original complainant before the District Forum.
The facts of the case according to the Respondent are that her late husband (hereinafter referred to as the insuree) had taken a life insurance policy on 10.08.2000 for an assured sum of Rs.75,000/- from the Petitioner/Insurance Corporation and the premium for the same was being deducted from his salary. After the death of the insuree, Respondent being his nominee and sole survivor through the office of the insuree filed a claim amounting to Rs.75,000/- which was repudiated by the Petitioner/Insurance Corporation on the grounds that at the time of taking the insurance policy, the insuree has not disclosed the fact that he was suffering from Alcohol Dependence Syndrome, Mycloneuropathy, Alcoholic Liver Disease, Delusional Disorder etc. and that subsequently he died due to these Diseases. Refuting these contentions and since the insuree had paid the required premium on time, Respondent filed a complaint before the District Forum requesting that the Petitioner/Insurance Corporation be directed to pay her Rs.75,000/- being the sum assured with interest @ 12% from the date of filing of the complaint till realization as also other reliefs including litigation costs as the District Forum may deem proper.
The above contentions were denied by the Petitioner/Insurance Corporation who stated that the insuree had knowingly suppressed the fact of his pre-existing ailments and that he was an alcoholic which had severely affected his liver, by replying in the negative to specific questions that he never took alcohol, that he had never consulted a medical practitioner for any ailment requiring treatment for more than a week or that he had been absent from work on grounds of ill-health during the last 5 years. On the other hand, there was credible documentary evidence on record that the deceased/insuree had been admitted on 20.06.2000 as an in-patient and was discharged on 04.08.2000 from National Institute of Mental Health & Neuro Sciences, (NIMHANS), Bangalore and as per the records of the Hospital, he had been admitted with complaints of alcohol related problems which affected his liver for the last 17 years. He was again admitted in the same Hospital from 06.11.2001 to 13.11.2001 with similar symptoms and therefore, keeping in view that insuree suppressed of material facts, the claim was rightly repudiated.
The District Forum after hearing both parties and considering the evidence on record dismissed the complaint by observing as follows:
We find the justification in the defence set out by the OP that deceased has suppressed the material fact and failed to give the correct information in Para 11 of the Proposal Form.
On the plain reading of the exclusion clause this liver disease is covered under the said clause.
Complainant and her husband were aware of the same, but still they suppressed to mention the said fact. It is said he who seeks equity, must do equity and must come with clean hands. But here the approach of the complainant and her husband does not appear to be as fair and honest. In our considered view there is no proof of deficiency in service on the part of the OP.
Under the circumstances the complainant is not entitled for the relief claimed.
Aggrieved by this order, Respondent filed an appeal before the State Commission which allowed the same on the grounds that the contents of the Discharge Summary issued by the NIMHANS Hospital and produced by the Petitioner/Insurance Corporation in its defence has not been proved in the absence of any affidavit filed by any doctor or official of the said Hospital. The State Commission, therefore, directed the Petitioner/Insurance Corporation to pay the Respondent, the assured sum of Rs.75,000/- with interest @ 6% per annum from the date of filing of the claim before the District Forum till realization.
Hence, the present revision petition.
Counsel for Petitioner was present. None appeared on behalf of the Respondent. However, since service is complete, the case is being heard and decided ex parte.
Counsel for Petitioner stated that the State Commission erred in not taking note of the Discharge Summary in respect of the insuree which had been produced by NIMHANS at the instance of the Petitioner/Insurance Corporation and which confirmed through detailed diagnostic and clinical records of the insuree that he had been admitted as an indoor patient for chronic Alcoholic Dependence Syndrome, Alcoholic Liver Disease and Delusional Disorder. Counsel for Petitioner further stated that the deceased/insuree had been suffering from Alcoholic Dependence Syndrome for over 15 years and this had severely affected his liver and general health. Further, there is documentary evidence on record that the insuree had also taken medical leave from his place of work for treatment of these ailments. As is well established, an insurance policy is a contract entered between the parties in utmost good faith and any breach of its terms and conditions by the insuree would justify repudiation of the claim by an Insurance Company. In the instant case the deceased/insuree suppressed material information pertaining to his pre-existing diseases by replying in the negative that he did not take alcohol that he had not taken any leave for his illness and that he had never been an indoor patient. In view of this the Petitioner/Insurance Corporation was fully justified in repudiating the insurees claim. Since, NIMHANS is a highly reputed institute of national excellence and had filed the documents related to the deceased/insuree before the Fora below at the instance of the Petitioner/Insurance Corporation and no documentary evidence to controvert this report has been filed, the State Commission erred in not relying on it merely on the grounds that its contents were not proved through an affidavit.
We have heard learned Counsel for Petitioner and have also considered the evidence on record. Admittedly Respondents late husband took an insurance policy and in the concerned Insurance Proposal Form in response to specific queries seeking information viz. (i) whether he consulted a medical practitioner during the last 5 years for ailments requiring treatment for more than a week; (ii) whether he had been admitted to a Hospital for treatment etc., (iii) whether he remained absence from his place of work on grounds of ill-health during the last 5 years and (iv) whether he consumed alcoholic drinks in any form, he had written NO. On the other hand, as per the case history of the insuree from NIMHANS, Bangalore which is extensively documented, it is a fact that he was admitted to NIMHANS and diagnosed there with Alcohol Dependence Syndrome, Mycloneuropathy, Alcoholic Liver Disease, Delusional Disorder etc. on 19.06.2000 and was discharged on 04.08.2000 after being an indoor patient for nearly 40 days. It is further not in dispute that he took an insurance policy just 10 days after his discharge from NIMHANS. Even after having taken the insurance policy, he was admitted in NIMHANS with the same diagnosis on two more occasions i.e. on 06.11.2001 and 28.01.2003 and he finally expired due to these diseases on 07.02.2003 at K.C.Jain Hospital which confirms that the insuree died of cirrhosis of the liver. It is also on record that the insuree had taken medical leave on grounds of ill-health during this period. These facts were not controverted or disputed by the Respondent before the Fora below. The State Commission by not accepting the report of NIMHANS merely on the grounds that no affidavit had been filed by any doctor or functionary of that institute erred, by not taking into account the fact that these documents from NIMHANS was produced directly by the said Institute itself and no evidence whatsoever has been produced to question or challenge its veracity. Apart from this, it has also not been disputed that the deceased/insuree died because of cirrhosis of the liver. It is also pertinent to state that the Insurance Ombudsman who had been approached by the Respondent after repudiation of her claim also dismissed her complaint. Further, Respondent in her complaint before the District Forum has also nowhere denied that her husband was suffering from these ailments caused as a result of Alcoholic Dependence. Respondent had sought relief only on the grounds that the premium for the insurance policy had been regularly paid and, therefore, insuree had a valid insurance policy at the time of his death. It is well settled as per a number of judgments of this Commission as well as of Honble Supreme Court (e.g. in LIC of India Vs. Asha Goel (2001) 2 SCC 160) that a contract of insurance including the contract of life assurance are contracts made in uberrima fides (utmost good faith) and every fact of material must be disclosed; otherwise there is good ground for repudiation of the contract. In the instant case there is doubt that the insuree had suppressed several material facts relating to his health status in the Insurance Proposal Form and therefore, he had breached the terms and conditions of the insurance policy. Under the circumstances, the Petitioner/Insurance Company was justified in repudiating the claim on these grounds.
In view of the above facts, we have no option but to set aside the order of the State Commission and restore that of the District Forum. The revision petition is allowed with no order as to costs.
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(ASHOK BHAN J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/