State Consumer Disputes Redressal Commission
Smt. Ranjana Arora Wife Of Late Shri ... vs Life Insurance Corporation Of India on 10 May, 2013
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.7 of 2009
Date of institution : 02.01.2009
Date of decision : 10.05.2013
Smt. Ranjana Arora wife of Late Shri Inder Mohan, resident of
H.No.552, Krishna Gali, Near Mandi, Gurdaspur, District Gurdaspur.
.......Appellant-Complainant
Versus
1. Life Insurance Corporation of India through its Branch Manager,
Gurdaspur.
2. Zonal Manager, LIC of India, Northern Zonal Office, Jeewan
Bharti Building, 124, Cannaught Circus, New Delhi-110 001.
3. Senior Divisional Manager, LIC of India, Post Box No.82,
Jeewan Parkash, Model Town Road, Jalandhar.
......Respondents-OPs
First Appeal against the order dated
23.10.2008 of the District Consumer
Disputes Redressal Forum, Gurdaspur.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President.
Shri Baldev Singh Sekhon, Member.
Present:-
For the appellant : Shri Arun Abrol, Advocate. For the respondents : Shri B.J. Singh, Advocate. JUSTICE GURDEV SINGH, PRESIDENT :
The appellant/complainant has preferred this appeal against the order dated 23.10.2008 passed by District Consumer Disputes First Appeal No.7 of 2009. 2 Redressal Forum, Gurdaspur (in short "District Forum"), vide which the complaint filed by her under Section 12 of the Consumer Protection Act, 1986, for directing the respondents/opposite parties to make a payment of the sum of Rs.5,00,000/-, along with interest at the rate of 18% per annum and to pay cost of Rs.10,000/- and Rs.5,000/- as damages for harassment, was dismissed.
2. The facts, in brief, are that Neelam Arora, deceased, took one insurance policy dated 28.1.2000 from the LIC for a sum of Rs.20,000/- in respect of which quarterly premium was to be paid at the rate of Rs.356/- and that policy was to mature on 28.1.2015. She obtained the second insurance policy named Anmol Jiwan on 28.9.2002 for Rs.5,00,000/- in respect of which half yearly instalments of Rs.542/- each were to be paid. In both the policies, she appointed the complainant, her mother, as her nominee. On 9.9.2003 she felt pain in her stomach for which she took medicine but had no relief. Thereafter, she went to Civil Hospital, Gurdaspur from where she was referred to Amritsar for her treatment. At Amritsar, she was admitted in H.R. Nayyar Memorial Hospital on 10.9.2003 and was referred to Escort Heart and Specialty Hospital, Amritsar on 13.9.2003 where she died on 3.10.2003. In respect of both these policies, the complainant submitted her claims. Her claim under the first policy was allowed whereas the claim under the second policy was repudiated on the ground that before submitting the proposal for the policy the deceased was suffering from diabetic mellitus and was on regular treatment and First Appeal No.7 of 2009. 3 she did not disclose that fact in the proposal form. She (complainant) preferred an appeal to the Zonal Manager challenging that order and that order was confirmed, vide order dated 6.6.2005. She again made a representation dated 16.6.2005 to the Chairman to reconsider the decision passed in the appeal and the order of repudiation but those orders were confirmed, vide letter dated 24.1.2006. The complainant averred in her complaint that at the time of obtaining the policy the deceased was serving as a teacher in DAV Girls High School, Gurdaspur where she joined on 22.1.2001 and at the time of joining she was medically examined and was issued a medical fitness certificate. She never fell ill nor she ever took any medical leave. She was physically fit at the time of obtaining the policy and she had given correct answers to all the questions, which were mentioned in the proposal form. Therefore, the decision of the LIC repudiating her (complainant's) claim is illegal. The medical report, if any, obtained from the hospital for repudiating her claim is false, ex parte, collusive, fabricated and might have been issued by the doctors to save their skin as the death of the deceased took place as a result of the wrong treatment and negligence on the part of the doctors.
3. The opposite parties (LIC) filed written reply. They averred therein that the deceased was not keeping good health at the time of obtaining the policy and she deliberately and intentionally concealed the material facts while giving answers to the questions contained in the proposal form that she was not suffering from acute Respiratory First Appeal No.7 of 2009. 4 Diabetes Syndrome and was a known case of Diabetes Mellitus, Hypothyroitism and a case of Diabetes Keto Acitosis with Renal failure with intent to play a fraud and to grab the public money. On account of the misrepresentation made and the concealment of material facts, the contract of insurance became null and void. The claim made by the complainant was thoroughly investigated by the Branch Manager and it revealed that the deceased had wilfully and fraudulently concealed the above said material facts. She was on insulin therapy from the last 7/8 years and immediately after her discharge from H.R. Nayyar Hospital, Amritsar she was treated for these diseases in Escorts Heart and Specialty Hospital, Amritsar. Not only she concealed the material facts but also made a false declaration in the proposal form. She was bound to disclose all the facts in the proposal form, which were likely to affect the mind of the LIC for the issuance of the policy. The claim made by the complainant was correctly repudiated as per the terms and conditions of the insurance policy.
4. The parties produced their evidence in support of their respective averments. After going through that evidence and hearing learned counsel for both the sides the learned District Forum dismissed the complaint, vide aforesaid order.
5. We have heard learned counsel for the parties and have carefully gone through the records of the case.
First Appeal No.7 of 2009. 5
6. It was submitted by the learned counsel for the complainant that the diabetes mellitus is not a serious disease and it was not necessary for the deceased to disclose the same in the proposal form. The claim of the complainant could not have been repudiated on the ground that the deceased was suffering from such pre-existing disease as there was no convincing evidence before the LIC and the order of repudiation could not have been recorded merely on the opinion of the doctor, which was collected after the claim was submitted by the complainant. There was no such material concealment by the deceased disentitling the complainant to the rightful claim. The LIC should not have acted in a mechanical and routine manner while rejecting the claim. The withholding of the said information cannot be said to be on the material aspect of the case. In these circumstances the appeal is to be allowed, the order of the District Forum is liable to be reversed and the directions, as prayed for by the complainant in the complaint, are to be issued to the opposite parties. In support of his submissions, he cited the following rulings:-
1. 1997 (1) CPC 275 (Smt. S.K. Chhabra v. The Divisional Manager, Life Insurance Corp.).
2. 1997(2) CPC 578 (Mansa Devi v. Life Insurance Corporation of India).
3. 1999(1) CPC 645 (Sunita Jain v. Life Insurance Corporation of India and another).First Appeal No.7 of 2009. 6
4. AIR 2001 SUPREME COURT 549 (Life Insurance Corporation of India and others v. Smt. Asha Goel and another).
5. 2003(1) CPC 74 (Shri Baljit Singh Banga v. Life Insurance Corporation of India and others).
7. On the other hand, it was submitted by the learned counsel for the LIC that the claim of the complainant was validly repudiated on the ground mentioned in the repudiation letter. There was a specific column in the proposal form under which the deceased was to state whether she was suffering from diabetes or not. She mentioned therein that she was not suffering from any such disease. The LIC obtained the report of two hospitals where the deceased was treated medically before her death. It has been reported by both those hospitals, vide reports Ex.R-8 and Ex.R-9 that the deceased was a known case of diabetic mellitus and was on insulin therapy for the last 15 years. Even the cause of her death was the same disease. Thus, she was suffering from pre-existing disease and was required to disclose that fact in the proposal form. The non-disclosure of that material fact was bound to affect the mind of the LIC to accept the proposal. By concealing that fact the deceased committed breach of the terms of the contract and the complainant cannot be given the benefit of the insurance policy obtained by concealment of facts. The complaint was rightly rejected by the District Forum and that order was to be upheld. He relied upon the following judgment:- First Appeal No.7 of 2009. 7
IV (2003) CPJ 91 (NC) (LIC OF INDIA & ORS. v.
SMT. SHASHI BALA).
8. In support of the submissions made by the learned counsel for the complainant that the finding of the LIC that the deceased was diabetic mellitus for the last many years and which was made the ground of repudiation of the claim of the complainant is based merely upon the opinion of the doctors, reliance has been placed upon Mansa Devi's case (supra). In that case it was upon the opinion of the doctor that the District Forum had based its finding. It was held by the Himachal Pradesh State Consumer Disputes Redressal Commission that the opinion of the doctor as an expert unless he is subjected to the test of examination and cross-examination in the court cannot be considered as authentic and such evidence cannot be relied upon and form the basis of opinion. In the present case, it cannot be said that the facts mentioned in the reports Ex.R-8 and Ex.R-9 are merely the opinion of the doctor. Ex.R-7 is the Medical Attendant's Certificate issued by the Escort Heart and Super Speciality Institute Limited, Amritsar, where the deceased obtained the medical treatment last time and died. It is mentioned in that certificate that the deceased died of diabetes mellitus and she was suffering from the same for the last 15 years. It is mentioned therein that this history was disclosed by the patient herself and her brother. Ex.R-8 is Certificate of Hospital Treatment of the said hospital. In that certificate it is mentioned that the deceased was suffering from diabetic mellitus for the last 15 years First Appeal No.7 of 2009. 8 and was a known case of that disease and was on insulin therapy from the last 15 years. That report was based upon the history as reported by the patient herself. Similar report was made by Nayyar Hospital, vide document Ex.R-9. The findings so recorded in the reports are not based upon the opinions of the doctors but are based upon the history as disclosed by the deceased herself and her brother and the diagnosis of the doctors. In Sunita Jain's case (supra) and in Baljit Singh Banga's case (supra) it was held that the history of the patient is not cogent evidence to repudiate the claim unless it is coupled with the medical record for treatment prior to the submission of proposal form.
Mere reference in the history sheet that the patient was suffering from a particular disease is not enough. The ratio of these rulings is not applicable to the facts of the present case as the above said reports not only contain the findings as recorded on the basis of the history disclosed by the patient and her brother but also the findings, which were arrived at by the doctors after full diagnosis. If the complainant wanted to challenge those reports, she should have summoned the concerned doctors for their cross-examination but no such efforts were made nor any objection was taken by her when those documents were tendered in evidence by the opposite parties. From this evidence of the opposite parties, it stands proved that the deceased was a known case of diabetes mellitus for the last 15 years and was on insulin therapy.
First Appeal No.7 of 2009. 9
9. In Smt. S.K. Chhabra's case (supra) the fact that the deceased was suffering from diabetic mellitus was concealed at the time of obtaining the policy. It was held therein that the diabetic mellitus is not a serious disease and it was not necessary to disclose the same at the time of obtaining the policy. Similarly, it was held in Sunita Jain's case (supra) that diabetes is not such a disease that the concealment thereof will vitiate the contract of insurance.
10. Learned counsel for the complainant has also placed reliance on the judgment of the Hon'ble Supreme Court in Smt. Asha Goel's case (supra). The relevant portion of the judgment so relied upon is reproduced below:-
"12. Coming to the question of scope of repudiation of claim of the insured or nominee by the Corporation, the provisions of Section 45 of the Insurance Act is of relevance in the matter. The section provides, inter alia, that no policy of life insurance effected after the coming into force of this Act shall, after expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate First Appeal No.7 of 2009. 10 or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy-holder knew at the time of making it that the statement was false or that is suppressed facts which it was material to disclose. The proviso which deals with proof of age of the insured is not relevant for the purpose of the present proceeding. On a fair reading of the section it is clear that it is restrictive in nature. It lays down three conditions for applicability of the second part of the section namely:- (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. Mere inaccuracy of (or) falsity in respect of some recitals or items in the proposal is not sufficient. The burden of proof is on the insurer to establish these circumstances and unless the insurer is able to do so there is no First Appeal No.7 of 2009. 11 question of the policy being avoided on ground of misstatement of facts. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material must be disclosed, otherwise, there is good ground for rescission of the contract. The duty to disclose material facts continues right up to the conclusion of the contract and also implies any material alteration in the character of the risk which may take place between the proposal and is acceptance. If there are any misstatements or suppression of material facts, the policy can be called in question. For determination of the question whether there has been suppression of any material facts it may be necessary to also examine whether the suppression relates to a fact which is in the exclusive knowledge of the person intending to take the policy and it could not be ascertained by reasonable enquiry by a prudent person."
11. The ratio of this ruling was to apply if there had been no suppression of material facts by the complainant at the time of filling the proposal form and that such material fact was not in the exclusive knowledge of the complainant and the same could not have been First Appeal No.7 of 2009. 12 ascertained by a reasonable enquiry by a prudent person. In the present case, there was concealment of material information, which was in the exclusive knowledge of the complainant and the LIC could not have ascertained the same by a reasonable enquiry as a prudent person.
12. On the other hand, learned counsel for the opposite parties has placed reliance upon Smt. Shashi Bala's case (supra) and that judgment was rendered by the Hon'ble National Commission. In that case there was concealment of material information by the insured, who was suffering from diabetes and that fact was not disclosed. She died of heart attack and nexus between diabetes mellitus and heart attack was well established. The claim repudiated by the Insurance Company on that ground was upheld.
13. The ratio of the above said ruling is to be applied by taking into consideration the facts of the present case. In the rulings cited by the learned counsel for the complainant nothing was brought before the Foras that there was a specific column in the proposal form regarding the making of disclosure regarding the disease of diabetes. In the above said ruling relied upon by the learned counsel for the opposite parties there was such a specific column in the proposal form and the reply given by the insured was in the negative and it was in those circumstances that it was said that the repudiation made by the Insurance Company on that ground was valid. The proposal form, First Appeal No.7 of 2009. 13 which was filled up by the deceased has been proved on the record as Ex.R-1. There is a specific column 11(e) which reads as under:-
"11(e) Are you suffering from or have you ever suffered from Diabetics, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?"
14. In reply thereof the deceased had mentioned "No". Thus, she made a false declaration in the proposal form. Had she disclosed that fact, the proposal might not have been accepted by the opposite parties. The contracts of insurance are based upon utmost good faith and that doctrine is known as uberrima fides. According to that doctrine, the proposer, who is a party to the contract, is to make accessible to the Insurance Company the facts in his knowledge. The proposer is bound to disclose everything affecting the judgment of the insurer no matter howsoever any important it may seem to him or her. He or she is bound to make full disclosure of all the facts and not of those which he or she thinks material. When there was specific questionnaire as to whether the proposer was suffering from diabetes, she was bound to give answer to the same in 'Yes' as it has been proved on the record that she was a known case of diabetes mellitus for the last 15 years and was on insulin therapy. It also stands proved on the record that she died of the same disease. She, thus, concealed the factum of pre-existing disease. In these circumstances, we conclude that the claim of the complainant was validly repudiated on First Appeal No.7 of 2009. 14 the ground mentioned in the repudiation letter and a correct finding to that effect was recorded by the District Forum. We do not find any merit in this appeal and the same is hereby dismissed. However, no order is made as to costs.
15. The arguments in this case were heard on 6.5.2013 and the order was reserved. Now, the order be communicated to the parties.
16. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH)
PRESIDENT
May 10, 2013 (BALDEV SINGH SEKHON)
Bansal MEMBER