National Consumer Disputes Redressal
Lic Of India & Ors. vs Smt.Surekha Rameshrao Mankar on 3 November, 2011
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 2837 OF 2007 (Against the order dated 09/4/2007 in Appeal/ Complaint No.1892/99 of the State Commission, MAHARASHTRA) LIC OF INDIA & ORS. ........ Petitioners Vs. SMT. SUREKHA RAMESHRAO MANKAR ........ Respondent BEFORE:- HONBLE MR.JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS.VINEETA RAI, MEMBER For the Petitioners : Mr. Ashok kashyap, Advocate For the Respondent : NEMO Pronounced on 3rd November, 2011 ORDER
PER VINEETA RAI, MEMBER This revision petition has been filed by Life Insurance Corporation of India & Ors. (hereinafter referred to as the Petitioners) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Maharashtra (hereinafter referred to as the State Commission) in Appeal No.1892/1999 in which Smt.Surekha Rameshrao Mankar was the Respondent.
The facts of the case according to the Respondent who was the original complainant before the District Forum are that her husband Rameshrao Gangaramji Mankar (hereinafter referred to as the insuree) had obtained two insurance policies (Policy Nos.980170633 and 980192491) from the Petitioner/Insurance Corporation in December, 1992 and March, 1994 for Rs.1 lakh and Rs.50,000/- respectively. On 12.04.1995, he expired due to a heart attack for which a death certificate was issued by the concerned medical officer. Thereafter, Respondent being the nominee of the deceased insuree lodged claims with the Petitioner/Insurance Corporation in respect of both policies in June, 1995 along with relevant documents.
Petitioner/Insurance Corporation repudiated the claim vide letter dated 25.03.1996 and suggested that Respondent could file a review application which she did but again the claim was repudiated on the ground that the insuree had suppressed material facts that he had suffered from a disease called Herpes Zoster relating to the eye. According to the Respondent, this was a curable viral infection of the eye and was thus not suppression of a material fact and therefore, the claim was wrongly repudiated. Respondent, therefore, filed a claim before the District Forum requesting that the Petitioner/Corporation be directed to accept the claims of the Respondent in respect of both policies along with interest @ 18% and any other compensation as deemed appropriate.
Petitioner/Insurance Corporation denied the above contentions and stated that it is on record that in the Insurance Proposal Form relating to his health status, insuree had suppressed the fact regarding his having suffered from Herpes Zoster and had stated that his health was good.
Since an insurance policy is a contract between two parties entered into in utmost good faith, the aforesaid suppression of a material fact justified the repudiation of the insurance claim of the Respondent.
The District Forum after hearing both parties and considering the evidence on record, allowed the complaint by concluding that the insuree did not suppress any material information by not mentioning about an eye disease in the proposal form because this disease did not have any nexus with the insurees death due to a heart attack. The District Forum therefore, directed the Petitioner/Insurance Corporation to pay the Respondent a sum of Rs.1 lakh and Rs.50,000/- respectively in respect of the two policies along with interest @ 18% per annum from the date of filing the original claim till the date of payment as well as Rs.500/- as compensation.
Aggrieved by this order, Petitioner filed an appeal before the State Commission which dismissed the same by observing as follows:
In the instant case there is no dispute that husband of the complainant died on account of heart attack. It has also come on record that he had developed eye disease in the year 1992.
He had taken treatment in Ankur Netralaya at Aurangabad and elsewhere. Now question arises whether non-mentioning about the eye disease in the proposal form amounts to suppression on the part of the deceased. Deceased died on account of heart attack and not on account of Herpes Zoster. Non-disclosure of Herpes Zoster certainly does not amount to suppression of material fact. The cause of death has no relation whatsoever with the disease which the deceased had.
Certainly, disease Herpes Zoster did not contribute to his death. Non-mentioning of the disease in question by the deceased cannot be said to have been made fraudulently. It is not the case of the appellant that, if complainant would have disclosed disease about his eye the proposal would have been refused by them. The suppression is required to be fraudulently made by the policy holder. As there is no nexus between death of complainants and disease it cannot be said that the suppression was made fraudulently.
Hence, the present revision petition.
When the case came up before this Commission on 24.09.2007 for admission hearing, the Bench hearing the case ruled that in respect of the first policy (Policy No.98017633) taken in 1992 amounting to Rs.1 lakh, the State Commission after consideration of the provisions of Section 45 of the Insurance Act, rightly allowed the claim of the insured along with interest. This Commission, therefore, dismissed the revision in respect of first policy (policy No.980170633) and issued notice re admission hearing was issued limited only to the second policy (Policy No.980192491) amounting for Rs.50,000/-. The relevant part of the said order is as follows:
In this case, there were two policies obtained by un-insured-since deceased; the first policy was obtained on 28.12.1992 for a sum of Rs.1,00,000/- and the second policy was obtained on 22.3.1994 for a sum of Rs.50,000/-. Unfortunately, the insured died on 12.4.1995 and when the claim was preferred, it was repudiated and when the complaint was filed before the District Forum, it allowed the complaint with interest @ 18%. Two separate appeals were filed before the State Commission. The State Commission after going through the material dismissed both the appeals. Hence this revision petition.
There is no dispute to the fact that the repudiation by the LIC was made on the ground of Suppression of Information relating to the insured having Herpes Zoster disease which is an eye-disease.
The State Commission after consideration of the provision 45 of the Insurance Act, in our view rightly allowed the first claim of the insured along with interest. The second policy taken on 22.3.1994 amounting to Rs.50,000/- is obviously not covered by provisions of Section 45 of the Insurance Act.
I admit this revision petition, limited to the policy taken in the second instance amounting to Rs.50,000/- along with interest.
Ld. Counsel for the petitioner submits that they have deposited an amount of Rs.2,69,276/- before the State Commission.
The respondent/complainant is directed to draw from this deposit an amount of Rs.1 Lac along with interest @ 12% p.a. from the period of claim till the date of payment.
Counsel for petitioner essentially reiterated that the Fora below erred in dismissing its appeal by not appreciating the fact that Herpes Zoster from which insuree had suffered was serious enough for him to have taken medical leave on a number of occasions over a period of two years and, therefore, not revealing this fact in the insurance policy was suppression of material fact. It was thus a breach of contract, made in utmost good faith between the parties and it is settled law that in such cases the petitioner insurance company would be justified in repudiating the claim.
We have heard learned counsel for petitioner and have carefully gone through the evidence on record. The facts pertaining to the insurance policy, the death of the insuree due to a heart attack and the fact that he underwent treatment for Herpes Zoster of the eye are not in dispute. The point at issue, therefore, is whether by concealing the fact that he had suffered from Herpes Zoster of the eye amounted to suppression of a material fact. As per medical literature on the subject, Herpes Zoster is a viral infection commonly known as shingles which can affect various parts of the body. 10% to 25% of all Herpes Zoster cases reportedly affect the eye and is called Herpes Zoster OPTHAMICUS (Source: C Stefan Foster, MD, Eye Research and Surgery Institute, Harvard Medical School). This is a viral infection and is a curable disease like most viral infections. In fact, the Herpes Zoster virus can also cause chicken pox which is a common disease. No doubt the insuree suffered from this viral infection and was cured as per the documents on record. This disease was in no way related to the heart attack. Normally while filling up an insurance proposal form, it is not expected that the insuree has to also state all incidents of viral infections from which he may have suffered since these are frequent, common place and curable. In the instance case, this infection apart from having been cured was in no way related to the heart attack from which the insuree died. We are therefore of the view that not revealing information about this curable viral infection did not amount to suppression of any material fact. We agree with the well-reasoned order of the Fora below that repudiation of the policy No.980192491 was not justified and, therefore, dismiss the revision petition and restore the order of the State Commission also in respect of insurance policy No.980192491 with the following modification:
The Petitioner/Insurance Corporation is directed to pay the Respondent, Rs.50,000/- along with interest @ 12% per annum instead of 18% p.a. from the date of the passing of the order by the District Forum till the date of payment.
The learned counsel for petitioner has stated that he had earlier deposited Rs.2,69,276/- before the State Commission and out of this amount as directed by the National Commission in its order dated 24th September, 2007 the respondent withdrew an amount of Rs.1,00,000/- alongwith interest @ 12% from the date of claim till the date of payment. The remaining amount, if any, may be adjusted against Rs.50,000/- alongwith 12% interest yet to be paid by the petitioner to the respondent in compliance of our above orders.
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(ASHOK BHAN, J.) PRESIDENT Sd/-
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(VINEETA RAI) MEMBER /sks/