State Consumer Disputes Redressal Commission
M/S Shriram Life Insurance Co. Ltd., And ... vs Smt. Gade Rajani, W/O Late Srinivas on 18 January, 2012
BEFORE A BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD F.A.No.700 OF 2010 AGAINST C.C.No.48 OF 2008 DISTRICT FORUM KHAMMAM Between 1. The Asst. General Manager, M/s Shriram Life Insurance Co. Ltd., 3-6-478, 3rd floor, Anand Estate, Liberty Road, opp.Indian Bank, Himayath Nagar Hyderabad. 2. Shriram Life Insurance, R/o H.No:2-3-99, II floor, Gandhi Chowk Khammam. Appellants/ opposite parties No.1&2 A N D Smt. Gade Rajani, w/o late Srinivas, age:33 years, R/o H.No.1-5-70, Saradhinagar, Khammam. Respondent/complainant Counsel for the Appellants Sri K.Rajeswara Rao Counsel for the Respondent Sri S.Venkateswara Rao QUORUM: SRI R.LAKSHMINARSIMHA RAO, HONBLE MEMBER
& SRI THOTA ASHOK KUMAR, HONBLE MEMBER WEDNESDAY THE EIGTEENTH DAY OF JANUARY TWO THOUSAND TWELVE Oral Order ( As per R.Lakshminarsimha Rao, Member) ***
1. The opposite party insurance company is the appellant. The respondents husband during his life time obtained insurance policy of Shri Plus with the appellant, vide insurance policy bearing number LN100600125572 with its commencement from 28-12-2006 for a sum assured amount of Rs.1lakh.He died on 30-06-2008. After the death of her husband, the respondent filed claim with the appellant insurance company which repudiated it on the ground that the insured suppressed the fact that he was suffering from chronic disease like cirrhosis of liver and hyper tension. The respondent got issued notice dated 12-01-2009 for which the appellant gave reply on 28-01-2009 and the matter reached the District Forum.
2. The learned counsel for the respondent contended that the deceased did not suppress any fact in regard to his health at the time of submitting the proposal .
3. The learned counsel for the appellant contended that the deceased suppressed material fact relating to his health at the time of submitting the proposal that he was suffering from cirrhosis of liver and hypertension.
4. The respondent has filed her affidavit and the documents, ExA1 to A8.On behalf of the appellant insurance company ExB1 to B14 were marked.
5. The District Forum allowed the complaint on the premise that the deceased suffered from Cirrhosis of liver in the year,2007 and as such it is not a preexisting disease nor the deceased suppressed any fact as regards his health at the time of obtaining the insurance policy.
6. Aggrieved by the order of the District Forum, the opposite party insurance company filed the appeal contending that during the course of investigation of the claim they came to know that the deceased was in the habit of chewing gutka and as per the medical records of Mahavir Hospital, he was suffering from Cirrhosis of liver which he suppressed to mention in the proposal. The respondent gave statement that her husband used to chew gutka.
7. The counsel for both parties have filed written submissions.
8. The point for consideration is whether the repudiation of the claim is justified?
9. The appellant insurance company issued life insurance policy in favour of the respondents husband on 28-12-2006 for the sum assured of `1,00,000/-. The insurance policy commenced from 28-12-2006. The respondents husband died on 30-06-2008. The respondents claim was rejected through repudiation letter dated 20-09-2008 that her husband was suffering from preexisting health problem at the time of applying for insurance and the conclusion was arrived at, on the basis of the investigator report. After the claim was repudiated , the respondent got issued notice dated 12-01-2009 that the appellant insurance company subjected her husband to medical examination and having satisfied with his health condition, the appellant had issued the insurance policy. The appellant insurance company issued reply dated 28-01-2009 stating that basing on information furnished by the respondents husband, they have issued the insurance policy. It is not denied nor disputed the appellant subjecting the insured to medical examination for coming to conclusion as to accept the proposal on the basis of the medical reports.
10. For determination of the question whether there has been suppression of any material facts by the insured, it is necessary to examine whether the suppression relates to a fact which is in the exclusive knowledge of the respondents husband. The investigators opinion does not show the respondents husband suffering from Cirrhosis of liver or suppression of any of his health conditions in terms of the proposal which more often referred to, by the appellant as the basis of the insurance policy. In the first page of his report the investigator refers to under other relevant information column that the insured had liver problem since one year prior to his death and got treatment at Mahavir Hospital, Hyderabad.
These records were not provided. He is a tobacco chewer(Gutkha). He had sugar problem since about 6 months(emphasis supplied). The records of Mahavir Hosptial on 30-07-2007 shows that he had cirrhosis of Liver with partial HTN and a diabetic. Cirrhosis does not develop in a shot time. Therefore, the history was suppressed from insurers. (emphasis supplied). The observation that Cirrhosis does not develop in a short time is that of the investigator and not borne of the records of Mahavir Hospital.
11. In the second page of his report the investigator again reiterates his opinion, that Cirrhosis does not develop in short span of time, though he relied upon the medical record of Mahavir Hospital that the insured was diagnosed with Cirrhosis with partial HTN and DM in mid 2007. The prescription dated 31-08-2007 of the doctor Rupendra Prasad of Mahavir Hospital shows that the respondents husband was for the first time diagnosed with diabetes and pedal edema.
12. The investigator made a guess work that the deceased might have suffered from the disease prior to the time the policy was obtained and the appellant insurance company in order to strengthen its decision taken on the basis of the investigators report relied upon the medical literature downloaded from the website. What all the appellant insurance company attempts to state that the deceased was suffering from Cirrhosis at the time of obtaining the insurance policy.
13. The appellants attribute knowledge of Cirrhosis to the respondents husband and its suffering him at the time of submitting the proposal. The appellant has not placed any document on record in support of its plea. The respondents husband was not treated for any disease prior to obtaining the insurance policy. In order to decide whether he had knowledge of the disease that crept inside his liver, it is essential to refer to the literature filed by the appellant insurance company which goes to show that Cirrhosis is a condition in which the liver slowly deteriorates and malfunctions due to chronic injury. Scar tissue replaces normal healthy liver tissue preventing the liver from working as it should . Heavy alcohol consumption and chronic hepatitis C have been the most common causes of cirrhosis. Obesity Hepatitis B, Hepatitis D and auto immune hepatitis, diseases that damage or destroy bile ducts, inherited diseases and nonalcoholic fatty liver disease and drugs and toxins and infections are the other causes of Cirrhosis.
14. The symptoms of cirrhosis as seen from the literature include weakness, fatigue, and loss of appetite, nausea, vomiting, weight loss, abdominal pain, bloating, itching and spider like blood vessels on the skin. It is specifically mentioned that many people with cirrhosis have no symptoms in the early stages of the disease. As the liver function deteriorates one or more complications may develop and in some people the compilations may be the first sign of the disease. The complications include edema, ascites, bruising, bleeding, portal hypertension, esophageal varices, gastropathy, splenomegaly, jaundice etc. Thus, in the light of the literature relied upon by the appellant insurance company it cannot be said that the respondents husband had knowledge of cirrhosis prior to or at the time of submitting the proposal. He had not exhibited any of the symptoms and the doctors at Mahavir Hosptial had to conduct various test in order to come to conclusion that he was sufferting from cirrhosis. The literature coupled with the medical record of Mahavir Hosptial .
15. Even otherwise, the claim of the respondent is not an early claim. The appellant insurance company cannot resort to ascribe suppression of the material fact as regards to health condition of the insured in respect of the claim arising two years after the issuance of the insurance policy.
16. Admittedly the claim in question arose two years and three months after the issuance of the policy. As such it cannot be said that the claim is an early claim. Section 45 of the Insurance Act prohibits the insurance company after expiry of two years from the date of issuance of the insurance policy from raising question in regard to mis-statement or incorrect statement made by the insured in regard to his health.
Section 45 of the Insurance Act, 1938
45. Policy not to be called in question on ground of mis- statement after two years. No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the 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 or false, unless the insurer shows that such statement 2[ 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 3[ or that it suppressed facts which it was material to disclose]:
1[ Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.]
17. Section 45 of the Insurance Act comes into operation as the claim was lodged after expiry of two years and three months from the date of issuance of the insurance policy. The medical reports in respect of the tests that were conducted at the instance of the respondent insurance company had shown all the parameters within the normal range and the appellant insurance company having accepted the values in respect of the tests determining the condition of the respondents husband as on the date of submission of the proposal form, cannot turn round and say that insured has suppressed material fact in regard to his health condition.
18. The panel doctor of the appellant insurance company subjected the respondents husband to medical examination and various tests. After satisfying itself with the result of the tests report and taking into consideration of the panel doctors report, the appellant insurance company accepted the proposal and issued the insurance policy in favour of the respondents husband. It is not the case of the appellant insurance company that its doctor had withheld correct information in regard to the health condition of the insured as also it is not the case of the appellant insurance company that the investigations conducted at the time of accepting the proposal are not sufficient to come to conclusion that the insured was under treatment prior to the date of his examination by its panel doctor. In any view of the matter, the appellant insurance company failed to establish that the respondents husband has suppressed his health condition and that the facts so concealed are material as also that the respondents husband had fraudulently suppressed the diseases he suffered.
19. In Venkata Naidu Vs LIC of India IV (2011) CPJ 6 (SC) the Honble Supreme Court held that the insurance company has to prove by cogent evidence that the insured did not disclose correct facts relating to his illness and in the absence of tangible evidence to prove that the deceased had withheld information about his hospitalization and treatment, the repudiation of claim is not justified. It is also held that there should be nexus between the cause of the death and the disease concealed by the insured.
20. It is not the case of the appellant that the respondents husband tried to take advantage of any wrong/suppression of information at the time of taking the policy in 2006. The case of the respondent has been covered/protected by Section 45 of the Insurance Act and also the decision of the Honble Supreme Court in Mithoolal Naik Vs LIC of India 1962 AIR 814. In that case issue was related to concealing the information at the time of taking the policy, hence the Hon'ble Supreme Court held it in favour of the insured by affording protection to the insured under the provisions of Section 45 of the Insurance Act.
21. In the present case, the appellant insurance company has not shown by cogent evidence that the respondents husband suppressed his illness and hospitalization as also the insurance company failed to prove that the respondents husband has fraudulently withheld the information relating to his health condition. The appellant insurance company has not been able to establish how the first limb of Sec.45 of the Insurance Act cannot be made applicable to the facts of the case.
Taking into consideration of the facts of the case and by applying the ratio laid in the aforementioned decisions, we are of the considered opinion that the repudiation of the claim made by the appellant insurance company is arbitrary and not justified. The findings recorded by the District forum in regard to the arbitrary decision of the appellant insurance company in repudiating the claim of the respondent does not warrant any interference in the appeal.
22. In the result the appeal is dismissed confirming the order of the District Forum. The costs of the proceedings quantified at `3,000/-.
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MEMBER Sd/-
MEMBER Dt.18.01.2012 KMK*