State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India, ... vs Smt. Resham Devi Wife Of Late Shri Aman ... on 14 May, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, HARYANA, PANCHKULA First Appeal No.778 of 2005 Date of Institution: 03.05.2005 Date of Decision: 14.05.2012 Life Insurance Corporation of India, through Senior Divisional Manager, Divisional Office, Sector 17-B, Chandigarh. Appellant (OP) Versus Smt. Resham Devi wife of late Shri Aman Kumar son of Ram Kishan, House No.159/R, Model Town, Sonepat. Respondent (Complainant) BEFORE: Honble Mr. Justice R.S. Madan, President. Mr. B.M. Bedi, Judicial Member. For the Parties: Shri K.K. Doda, Advocate for appellant. Shri Sushil Jain, Advocate for respondent. O R D E R
Justice R.S. Madan, President:
Challenge in this appeal is to the order dated 05.04.2005 passed by the District Consumer Disputes Redressal Forum, Sonepat whereby complaint bearing No.269/2004 filed by the respondent-complainant seeking insurable benefits in respect of the Life Insurance Policy obtained by Aman Kumar (now deceased hereinafter referred to as the Life Assured)-husband of complainant, has been accepted and following direction was issued:
Accordingly, the respondents have been found deficient in their services and they are, thus, directed to make the payment of Rs.one lac to the complainant against policy No.172672477 alongwith interest at the rate of 12% per annum from the date of death of the deceased LA w.e.f. 13.1.2003 till its realization,, the respondents are also directed to pay all the other benefits due against the said policy of the deceased LA Aman Kumar to the complainant.
Since the complainant has been able to prove the deficiency in service on the part of the respondents, the respondents are further directed to compensate the complainant to the tune of Rs.five thousands only for causing mental agony, harassment, humiliation & for rendering deficient services. The respondent are further directed to pay a sum of rupees two thousands only as compensation under the head of litigation expenses.
With these observations, findings and directions, the present complaint stands accepted and the respondents are directed to make the compliance of this order within 30 days from the date of this order.
The brief facts of the present case as emerged from the record are that Aman Kumar husband of respondent (complainant) had purchased a Life Insurance Policy from the appellant-opposite party for rupees one lac on 28.04.2001. It was non-medical scheme policy as the Policy Holder was employed in DDA Delhi and for that reason no medical examination of the life assured was conducted. The above said policy lapsed due to non-payment of premium which was due from April, 2002 to October, 2002. The life assured got revived the policy on 03.01.2003 by depositing the premium which was due. Unfortunately, the life assured died on 13.01.2003. Complainant submitted claim with the opposite party with respect to the above said policy. As the life assured had died within a period of two years from the date of obtaining the policy and within ten days from the date of revival of the policy, therefore, the claim was subject to the investigation in view of Section 45 of the Insurance Act. During the investigation conducted by the Investigator of the Life Insurance Corporation, it revealed that the life assured was not keeping good health at the time of obtaining the policy as well as at the time of revival of the policy because his employer Executive Engineer WD-3, DDA, Delhi had supplied the details of earned leave and medical leave availed by the life assured during his service period w.e.f. 04.06.1997 to 18.09.2002. It was revealed that the life assured had availed medical leave on 12.08.2008 and then from 30.05.2008 to 27.06.1998, 27.07.1998 to 10.09.1998 and then from 06.08.2000 to 13.08.2000. The deceased life assured had also availed the medical leave from 13.06.2001 to 06.08.2001 and again from 05.09.2002 to 18.09.2002. But this fact was not disclosed by the life assured in the proposal form at the time of taking the policy as well as at the time of revival of the policy. The life assured was suffering from epigastria C bleeding per rectum due to which he died in Maharaja Aggarsain Hospital, New Delhi on 13.01.2003 where he was earlier admitted on 04.01.2003 vide CR.No.300216. Thus, it was a clear case of concealment on the part of the life assured which was against the terms and conditions of the Insurance Policy. Accordingly, complainants claim was repudiated. Challenging the repudiation of her claim, the complainant has invoked the jurisdiction of the District Consumer Forum.
Upon notice, the opposite parties appeared and contested the complaint on the above stated ground and prayed for dismissal of the complaint.
On appraisal of the pleadings of the parties and evidence adduced on record, District Consumer Forum accepted complaint by recording a finding that the life assured was not having knowledge about the disease suffered by him prior to the obtaining of Insurance Policy and revival of the same.
Aggrieved against the order of the District Consumer Forum, the opposite parties have come up in appeal.
We have heard learned counsel for the parties and perused the case file.
On behalf of the appellants it is contended by Shri K.K. Doda, Advocate that the life assured had suppressed the true and material fact with respect to his state of health at the time of obtaining the policy on 28.04.2001 as well as at the time of revival of the policy on 03.01.2003 despite the fact that he was suffering from epigastria c bleeding per rectum due to which he died in Maharja Aggarsain Hospital, New Delhi on 13.01.2003. As per evidence collected by the Investigator, the life assured was suffering from Cirrhosis of liver and ALD for the last four to five years. This fact further finds support from the certificate issued from Maharaja Agarsain Hospital, Punjabi Bagh, New Delhi wherein it has been stated that the life assured was suffering for the last two weeks. In other words, the life assured as the time of obtaining the Life Insurance Policy as well as at the time of revival of the policy, was not having good health.
From the above evidence it is clearly established that the life assured had concealed true and material fact with respect to his state of health at the time of obtaining the Insurance Policy as well as at the time of revival of the policy. By now it has been settled in catena of judgments that the certificate issued by the doctor is sufficient evidence with respect to the health of the patient. Reference in this regard is made to case law cited as SATWANT KAUR SANDHU versus NEW INDIA ASSURANCE COMPANY, (2009) 8 SCC 316, wherein Honble Supreme Court has held that:-
29. Judged from any angle, we have no hesitation in coming to the conclusion that the statement made by the insured in the proposal form as to the state of his health was palpably untrue to his knowledge. There was clear suppression of material facts in regard to the health of the insured and, therefore, the respondent insurer was fully justified in repudiating the insurance contract. We do not find any substance in the contention of learned counsel for the appellant that reliance could not be placed on the certificate obtained by the respondent from the hospital, where the insured was treated.
This case is fully covered by SATWANT KAUR SANDHUs case (Supra).
The report obtained from Executive Engineer, W.D.S. D.D.A. Lakkar Mandi, Kirti Nagar, New Delhi reflects that the life assured remained on earnest leave on different dates during the period 4.6.1997 to 13.01.2003 and also remained on medical leave for different periods w.e.f. 12.08,.1997 18.09.2002 for 11 days, 29 days, 46 days, 13 days, 15 days and 14 days. Thus, keeping in view the medical record as well as the evidence collected from the employer of the life assured, it is established that the life assured was well aware about the disease suffered by him for which he had taken medical leave for several days but despite that he concealed this fact in the proposal form as well as in the revival form.
It is well settled law that while taking the Life Insurance Policy, the life assured is under an obligation to disclose each and every circumstance with respect to his/her state of health. Reference in this regard is made to the observation made by Honble National Commission in case cited as LIFE INSURANCE CORPN OF INDIA versus FRANCIS ANTONY DSOUZA, IV(2011) CPJ 603 (NC) has relied upon the judgment of the Honble Supreme Court in SATWANT KAUR SANDHUs case (Supra) wherein it has been observed that:-
..it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain from his ignorance of that fact and his believing the contrary.
It is well settled law that the revival of the Insurance Policy is a fresh policy because a fresh declaration and personal statement is submitted by the life assured. Reference is made to the judgment rendered by Honble National Commission in Revision Petition No.649 of 2005 titled as LIFE INSURANCE CORP. OF INDIA VERSUS SMT. M. BHAVANI decided on 14.01.2009, wherein it has been held that:-
After expiry of the policy, if the party chooses to revive the contract of policy, then, the revival, in law is, clearly a fresh contract and a duty is cast on the insurer to file a fresh declaration. In the case of revival of policy, a fresh declaration is a must. State Commission is wrong in observing that no fresh declaration was taken from the deceased at the time of revival of the policy.
Honble National Commission in LIC OF INDIA & ORS. Versus SHAKUNTALA DEVI & ANR. IV(2011) CPJ 645 (NC) has observed as under:-
The facts of the Respondents husband having taken the insurance policy from the Petitioner/Insurance Company and it having lapsed and subsequently revived are not in dispute. We agree with the Counsel for Petitioner that it is well-established through various Court rulings including of this Commission in Kajol v LIC of India, II(2011) CPJ 104 (NC), R.P. No.50-51 of 2011 (decided on 4.4.2011), that the revival of a policy amounts to a new contract and, therefore, a fresh declaration is taken at the time of revival of the policy and, therefore, no benefit can accrue to Respondent in this case by taking the shelter of Section 45 of the Insurance Act, 1938. We also agree with Counsel for Petitioner that there is adequate credible evidence on record that the Respondents husband was suffering from tuberculosis and that he had suppressed this material fact. This has been established by the medical certificate of the District Tuberculosis Officer which we note, was supplied by the Respondent herself to the Petitioner/Insurance Company. Further, it is also on record and not disputed that the insure had taken medical leave for long periods for his treatment of tuberculosis. Since, an insurance a contract entered between the parties in utmost good faith, suppression of any material facts by the insurance (as was done in this case), entitled the Petitioner/Insurance Company to repudiate the claim as per the terms and conditions of the policy.
In view of the decision rendered by the Honble National Commission, the revival of the policy by the life assured Aman Kumar was a fresh policy. The life assured had submitted a fresh declaration form for revival of the policy in which he had given wrong answers to the questions put to him with respect to his state of health, despite the fact that he was suffering from epigastria C bleeding per rectum before the date of revival of the policy and thus the life assured concealed true facts with respect to his state of health.
In view of our aforesaid discussions, the claimant is not entitled for any insurable benefits. The legal position in this regard may be noticed from para 19 of the authoritative pronouncement cited as CROWN CONSULTANTS PVT. LTD. Versus ORIENTAL INSURANCE COMPANY LTD., III(2011) CPJ 439 (NC), as under:-
19. A contract of insurance is based on the doctrine of uberrima fides, i.e., utmost good faith, in the conduct of the insured. This doctrine was enunciated as far back as in 1766 by Lord Mansfield in the celebrated case of Carter V. Boehm, (1766) 97ER 1162, 1164, in the following words:
Insurance is a contract of speculation.The special facts, upon which the contingent chance is to be computed, lie most commonly in the knowledge of the insured only; underwriter trusts to his representation, and proceeds upon confidence that he does not keep back any circumstances in his knowledge, to mislead the underwriter into a belief that the circumstance does not exist.Good faith forbids either party for concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact, and his believing the contrary.
Thus, it cannot be said that there was any deficiency in service on the part of the opposite parties in repudiating complainants claim. District Consumer failed to appreciate the above stated facts of this case. Hence, the impugned order cannot be allowed to sustain.
In view of our aforesaid discussions, this appeal is accepted, the impugned order is set aside and the complaint is dismissed.
The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellant against proper receipt and identification in accordance with rules, after the expiry of period of appeal and revision, if any, filed in this case.
Announced: Justice R.S. Madan
14.05.2012 President B.M. Bedi Judicial Member