State Consumer Disputes Redressal Commission
L.I.C. Of India & Anr. vs Smt. Kaleshwati Bai & Anr. on 6 December, 2013
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR(C.G.)
Appeal No.FA/12/629
Instituted on : 03.11.2012
1. L.I.C. of India,
Through : Branch Manager,
Branch Office - Chirmiri West, Malviya Nagar,
Tahsil - Baikunthpur, District Korea (C.G.)
2. Divisional Manager, L.I.C. of India,
Divisional Office,
Ahuja Market, Budhar Road,
Shahdol (M.P.) ... Appellants.
Vs.
1. Smt. Kaleshwati Bai, W/o Late Anandiram,
R/o : Masjid Dafai, Korea Colliery,
P.S. Chirmiri, Tah. Baikunthpur, Dist. Korea (C.G.)
2. Deputy Area Manager,
S.E.C.L. N.C.P.H. Colliery, Chirmiri Area,
Jhagrakhand, Tah. Baikunthpur, Dist. Korea (C.G.) ... Respondents.
PRESENT: -
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE MISS HEENA THAKKAR, MEMBER
COUNSEL FOR THE PARTIES: -
Shri Mukesh Sharma, for appellants.
Shri Rajesh Singh, for respondent No.1.
Shri O.P. Agrawal, for respondent No.2.
ORDER
Dated : 06/12/2013 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. This is an appeal of the Life Insurance Corporation of India (henceforth called "Insurance Corporation", for short), which felt aggrieved from the order dated 05.10.2012, passed by District Consumer Disputes Redressal Forum, Baikunthpur - Korea (C.G.) (henceforce //2 // called "District Forum" for short), in Complaint Case No.51/2010, whereby the Insurance Corporation, has been directed to pay the sum assured of three insurance policies bearing nos.378782459, 378771199 and 378358919, issued in favour of deceased Anandi Ram during his lifetime along with interest @ 9% p.a. from the date of filing of the complaint till date of payment and also to pay compensation of Rs.5,000/- towards mental agony and Rs.2,000/- towards cost of litigation.
2. The facts of the case before the District Forum are that husband of complainant, Anandi Ram, was working in the post of Carrier (04) in S.E.C.L. at Chirmiri area. The Policy Nos.378782459, 378771199, 378358919 and 378235414 were purchased by the deceased Anandi Ram from the appellants Insurance Corporation and premium was regularly paid. Anandi Ram died on 04.12.2008 on account of illness. Claim was preferred by the respondent No.1/ complainant (widow) before the Insurance Corporation, but the Insurance Corporation refused to pay amount of policy No.378782459, 378771199 and 378358199 on the ground that policy no. 378771199 and 378358199 were already in lapsed condition and policy no.378782459 was obtained by the deceased by suppressing material facts regarding state of his health.
3. The OPs/appellants filed their reply before the District Forum and denied the allegations made in the complaint by the respondent no.1/complainant. The appellant had taken defence that the complainant and deceased Anandi Ram suppressed material fact and //3 // obtained insurance policies by suppressing the material fact, therefore, the OPs/appellants repudiated the claim of the complainant.
4. Learned District Forum has allowed the complaint by the impugned order and directed the appellants/ OPs directed to pay the sum assured of three insurance policies bearing nos.378782459, 378771199 and 378358919, issued in favour of deceased Anandi Ram during his lifetime along with interest @ 9% p.a. from the date of filing of the complaint till date of payment and also to pay compensation of Rs.5,000/- towards mental agony and Rs.2,000/- towards cost of litigation.
5. In the in instant case, the appellants filed an application under Order 41 Rule 27 CPC for taking some documents on record as additional evidence at the appellate stage. Firstly we have considered the aforesaid application.
Order 41 Rule 27 CPC reads as under :-
"27. Production of additional evidence in Appellate Court -
(1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if -
(a) the Court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or (aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or
(b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for //4 // any other substantial cause, the Appellate Court may allow such evidence or document to be produced, or witness to be examined.
(2) Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission."
6. It is well settled law in that no parties should be permitted at the appellate stage to remove the lacuna in presenting it's case. It is equally well settled law that Order 41 Rule 27 of Code of Civil Procedure confers discretion on appellate court to receive additional evidence which is judicially one of the circumscribe by the limitation specified in Order 41 Rule 27 CPC. The true tests to be applied in dealing with applications for additional evidence is whether the appellate court is able to pronounce judgement on the material before it, without taking into consideration additional evidence sought to be adduced.
7. In the instant case, the document sought to be adduced as additional evidence by the appellants is discharge summary of Apollo Hospital, Bilaspur in respect of Anandi Ram (deceased). Looking to the facts and circumstances of the case, the above document is relevant for proper adjudication of the case, therefore, the application filed by the appellants under Order 41 Rule 27 CPC is allowed and appellants are permitted to file additional evidence (document) at the appellate stage.
8. Document which has been filed by the appellants at the appellate stage is Discharge Summary of Apollo Hospital, Bilaspur in respect of Anandi Ram. In the said document it has been mentioned that Anandi //5 // Ram (deceased) was admitted in Apollo Hospital, Bilaspur on 19 July, 2005 at 01.47 PM and he was discharged from the Hospital on 06.08.2005 at about 03.51 PM. In page 2, under the head "Operative Notes it has been mentioned that "Under G.A. cystoscopy + Rt RGP was done. Which confirms findings of Rt PUJ impacted big stone deviated medially Rt. lateral position 11'th rib bed incision muscles were cut and rib was excised for proper dissection. Kidney was ballooned out, it was drained first turbid infected fluid was drained. Ureter was indentified and ligated and cut. Renal vessels were doubly ligated and cut one normal renal artery and one lower polar vessel was ligated. Post nephrectomy Hemostasis was achieved kidney parenchyma was very much thinned out. Tube drain was kept. Wound closed in layers."
9. In rebuttal, the respondent no.1 has also filed document, which is taken on record.
10. So far as merit of the case is concerned, learned counsel for the appellants submitted that Late Anandi Ram, husband of the respondent no.1/complainant was admitted in the Apollo Hospital, Bilaspur and was treated on many occasions for kidney problem and his one kidney was removed and ultimately he died on 04.12.2008. The above fact was suppressed by the deceased in his proposal form therefore, the appellants have rightly repudiated the claim of the respondent no.1/complainant. He further submitted that the order passed by the learned District Forum, suffers from irregularity and illegality and is liable to be set aside.
//6 //
11. Learned counsel for the respondent no.1/complainant and respondent no.2/O.P.No.2 have supported the impugned order and submitted that it does not call for any interference by this Commission.
12. We have heard learned counsel for both the parties and have also perused the record of the District Forum.
13. In document D-4(a) which is nkok @vLohd``r letter dated 01.06.2010 the Insurance Corporation mentioned that the policy holder had given following information in the proposal form :-
11- oS;fDrd bfro``Rr mRrj gka ;k ugh esa nhft, d- D;k vkius fiNyh iakp o"kksZ ds Hkhrj fdlh ,slh ugh chekjh ds fy, ftlesa ,d lIrkg ls vf/kd le; rd mipkj dh vko';drk jgh gks fdls fpfdRld ls ijke'kZ fd;k gS \ ?k- D;k vki ;d``r] isV] g``n;] QsQM+]s xqnkZ] efLr"d ,oa ugh
Luk;qe.My lacaf/kr fdlh jksx ls dHkh ihfM+r jgs gSa ;k bl le; ihfM+r gS \ Document D-7 and D-8 are and D-8 are Medical Attendant's Certification. Looking to above documents, it appears that deceased Anandi Ram was admitted in the Hospital on 17/11/2008. Against column 5 (a) of document D-7, it is mentioned that "chest pain perspiration giddiness urination.". Against column 5(b) of document D-7 it is mentioned "Patient Relative". In reply of the questions contained in column 4 it has been stated by deceased Anandi Ram :-
//7 // 4(a) What was the exact cause of (a) Primary cause Pulmonary Death ? edema VT VF.
(besides defining the disease Secondary cause Acute Ant wall or other cause of death in such MI, CHF. Post Nephrectomy terms as you consider CKD.
appropriate kindly add the distinctive technical name).
(b) Was it ascertained by
examination after death or (b) Post PTCA.
inferred from symptoms and
appearance during life ?
(c) How long had he been
suffering from this disease (c) 8 days.
before this death.
14. Looking to the above documents it appears that the deceased Anandi Ram was suffering from renal problem prior to obtaining above insurance policies from the appellants and it also appears that when the proposal form was sent by the appellants to the deceased and sought information regarding his health then the deceased Anandi Ram had withheld material information regarding his health status at the time of making proposal for insurance on his life as he was not keeping good health and was suffering from renal problem. Anandi Ram had died on 04.12.2008 and his one kidney was removed during the period between 19.07.2005 to 05.08.2005. It appears that deceased Anandi Ram had suppressed material fact regarding health while filling the proposal form for insurance on his life.
//8 //
15. In the case of Life Insurance Corporation of India and others Vs. Asha Goel (Smt.) and another, (2001) 2 Supreme Court Cases 160, Hon'ble Supreme Court has observed in paragraph Nos.12 & 14 as under :-
"12. The contracts of insurance including the contract of life assurance are contracts uberrima fides and every fact of material (sic material fact) 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 its acceptance. If there are any misstatements or suppression of material facts, the policy can be called into 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.
14. This decision was relied upon in LIC of India v. G.M. Channabasamma in which the following observations were made : (SCC pp. 359-60, para 7) :-
It is well settled that a contract of insurance is contract uberrima fides and there must be complete good faith on the part of the assured. The assured is thus under a solemn obligation to make full disclosure of material facts which may be relevant for the insurer to take into account while deciding whether the proposal should be accepted or not. While making a disclosure of the relevant facts, the duty of the insured to state them correctly cannot be diluted. Section 45 of the Act has made special provisions for a life insurance policy if it is called in question by the insurer after the expiry of two years from the date on which it was effected. Having regard to the facts of the present case, learned counsel for the parties have rightly stated that this distinction is not material in the present appeal. If the allegations of fact made on behalf of the appellant Company are found to be correct, all the three conditions mentioned in the section and discussed in Mithoolal Nayak v. LIC of India must be held to have been satisfied. We must, therefore, proceed to examine the evidence led by the parties in the case."
//9 //
16. In the case of Satwant Kaur Sandhu v. New India Assurance Company Ltd., 2009 CTJ 956 (Supreme Court) (CP) Hon'ble Supreme Court has observed in paragraph No.17 as under :- "17. The term "material fact" is not defined in the Act and, therefore, it has been understood and explained by the Courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be "material".
17. In the case of P.C. Chacko & Anr. Vs. Chairman, Life Insurance Corporation of India & Ors., III (2008) CPJ 78 (SC), Hon'ble Supreme Court has observed in paragraph Nos.13 & 17 as under :-
"13. There are three conditions for application of Second Part of Section 45 of the Insurance Act which are :
(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.
[See Mithoolal Nayak (supra]
17. It is no doubt true that there exists a distinction between a 'representation' and a 'warranty'. A Division Bench of the Madras High Court in S.P. Maheshwari (supra) upon taking into consideration the history of insurance laws in United States of America , in England and in India stated :
""10. One great principle of insurance law is that a contract of insurance is based upon utmost good faith uberrima fides; in fact it is the fundamental basis upon which all contracts of //10 // insurance are made. In this respect there is no difference between one contract of insurance and another. Whether it be life or fire or marine the understanding is that the contract is uberrima fides and though there may be certain circumstances from the peculiar nature of marine insurance which require to be disclosed, and which do not apply to other contracts of insurance, that is rather an illustration of the application of the principle than a distinction in principle. From the very fact that the contract involves a risk and that it purports to shift the risk from one party to the other, each one is required to be absolutely innocent of every circumstance which goes to influence the judgment of the other while entering into the transaction."
18. In view of above finding and law laid down by the Apex Court the respondent no.1/complainant is not entitled for any insurance claim and the appellants / Insurance Corporation has rightly repudiated the claim of the respondent no.1/ complainant, therefore, the impugned order passed by the learned District Forum is not sustainable. The appeal filed by the appellants is hereby allowed and impugned order of the learned District Forum, is set aside. Consequently, the complaint of the respondent no.1/complainant is dismissed. No order as to the cost of this appeal.
(Justice R.S. Sharma) (Ms. Heena Thakkar)
President Member
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