National Consumer Disputes Redressal
Life Insurance Corporation Of India vs Smt. Minu Kalita on 19 March, 2002
ORDER
Rajyalakshmi Rao, Member
1. This revision petition is preferred against the order dated June 24, 1997 passed by the State Commission, Gauhati whereby the petitioner's appeal No. 133/96 was dismissed on 3.3.1996. Petitioner, Life Insurance Corporation of India is the Opposite Party in complaint No. 11/95 filed by Complainant/Respondent Smt. (SIC) Kalita in the District Forum, Jorhat wherein the original complaint was allowed and the petitioner was directed to pay three lacs with interest @ 18% p.a. to the complainant. Petitioner's appeal in the State Commission was dismissed and hence this review petition. Brief of the case are:
1) Shri Kumal Kalita, husband of the respondent took a life insurance policy No. 440277142 for a sum of Rs. 3 lacs, commencing from September 21, 1992. In the proposal form, he declared his age to be 35 years and annual income as Rs. 48,000/-. In the said proposal form dated 3rd September, 1992, Shri Kumal Gupta answered to all the questions as per Clause 11(a) to (h) in the negative and in reply to Sub-clause (l) regarding usual state of health, the answer was "good" to a question in the proposal form whether he was never admitted to the hospital or nursing home for check up, observation, treatment, he answered "No" in personal history of health. Shri Kumal Kalita died on 18.2.1993, shortly after taking the policy with effect from 21.9.92 i.e., within six months of the commencement of the policy.
2) The Petitioner was duty bound to make necessary investigations of early death claim and the enquiry revealed that the life assured had suppressed material facts pertaining to his (a) health, (b) his age, and (c) also his income. As for (a), it is on record that the life assured was admitted in the Civil Hospital, Jorhat for treatment of upper airway obstruction as per hospital registration No. 101/92 according to letter dated 5.1.1994 from the Civil Hospital. Based on further investigations on medical records, the petitioner come to the conclusion that the deceased life assured was suffering from Cancer and also was treated for the same before he took the policy. As for (b) and (c), investigations by the Petitioner revealed that he was actually 45 years old and not 35 as he submitted in the policy and his income statement as confirmed by his employer was Rs. 18,000/- p.a. and not 48,000/- p.a. as declared in the proposal form. On the ground that the life assured had intentionally suppressed material facts regarding the state of his health, his age and income, the petitioner repudiated the claim.
3) District Forum allowed the complaint and directed the petitioner to pay the policy amount of Rs. 3 lacs with interest @ 12% p.a. from the date of repudiation i.e. 22.8.94. The petitioner preferred an appeal in the State Commission and his appeal was dismissed. Being aggrieved by both the orders, the petitioner has preferred this review petition. We heard the arguments by the petitioner and perused the reply by the respondent on record and come to following conclusions.
4) District Forum cross-examined Dr. Suren Dutta and Dr. S.M. Das and came to the conclusion that the Doctors were not sure if the life assured Shri Kumal Kalita is the same person that they have treated since there is another person with the same name in the village. Since the name of the father of Shri Kumal Kalita is not mentioned in the proposal form, the District Forum held that the burden of proof is on the petitioner to prove it is the same Shri Kumal Kalita who had Cancer. Dr. S.M. Das had stated that Shri Kumal Kalita was suffering from cancer and the case history sheet was also produced. But District Forum decided the matter on the basis of the evidence of the two doctors and decided "While D.W.2 Dr. Suren Dutta from Jorhat Civil Hospital has stated that Kumal Kalita had upper airway obstruction and was referred to Assam Medical College. D.W.3 Dr. S.M. Das from Assam Medical College has stated that Kumal Kalita had cancer in his left tonsil and his case was registered for cobalt therapy. Another interesting part of his evidence is that according to the case history sheet (ex Ja) Kumal Kalita's right tonsil was affected.
No other evidence is available to prove the fact."
The State Commission agreed with the finding and reasons of the District Forum and held that the deceased insured no knowledge that he was suffering from cancer and that the petitioner did not bring sufficient evidence to prove the grounds of repudiation of the claim. As regards the allegations of giving wrong age and wrong income by the policy holder in the proposal form, State Commission and District Forum held that these allegations were not proved by satisfactory evidence.
5) Although on facts and the evidence led in the District Forum and the appreciation of this by the State Commission and the District Forum and their conditions have to be believed in the normal course, we find both the forums below have ignored the basic evidence on record which comes from the complaint itself. In para 6 of the complaint, it is the respondent's version 'That the policy holder insured was suffering from Cancer about 5 months before the proposed for the above policy and he was undergoing treatment at Jorhat Civil Hospital and at A.M.C. at Dibrugarh from 8.4.92, 29.4.92 were not raised at the time of effecting the proposed - 3.9.92." It is stated further in the complaint that the Medical Officer found him cancer on his check up and since he did not report on 3.9.92 about the hospitalisation of the insured, they cannot now take up these investigations after death and after taking the premium amount. The respondent in the complaint in para (10 and 11) further stated "That the O.P. the authority of Life Insurance Corporation of India, Jorhat could have rejected the proposal for insurance at time before effecting the same on the ground as stated afterward. The O/P could have also communicated their decision of repudiation of liability to the insured policy holder at his life time." "That the O/P could have stopped from receiving payment of due premium amount before maturity in the life time of the insured policy holder."
5) From the records before us and the arguments made by the petitioner, we are convinced that the respondent rightly repudiated because the said policy had been rendered void and invalid abinitio in view of the false and wrong answers given by the life assured and the policy was unenforceable. It is not disputed by anybody about the death of the insured arising out of cancer and the treatment for the same given in the hospitals. To take the view after the death of the insured that the treatment given to the insured is in doubt or which side of the tonsils did he have Cancer is not clear by the District Forum and State Commission is not correct. The respondent in his complaint has clearly taken the objection to repudiation mainly on one ground that the petitioner cannot question the State of health of the insured after issuing the policy on the basis of their own medical officer's approval of good health of the insured.
6) It is settled law that the contract of Insurance is based on good faith. The information as to the insured having suffered from Cancer before the policy was taken and the hospitalisation for the same came to light afterwards and the petitioner is not to know this by an examination of their medical officer. It is for the respondent to give the correct information on his health which he did not disclose at that time. This ground of incorrect information and false statements regarding age of the insured and income make the insurance contract null and void. We find there is no deficiency of service by the petitioner, Life Insurance Corporation of India. Both the District Forum and the State Commission have not appreciated the facts brought out by the petitioner in repudiating the claim. With the aforesaid discussions, we pass the following order.
2. We set aside the order of District Forum and State Commission and the revision petition is allowed. No order as to costs.