State Consumer Disputes Redressal Commission
Palwinder Kaur vs Lic Of India on 17 October, 2012
PUNJAB STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 47 of 2008
Date of institution: 17.01.2008
Date of decision : 17.10.2012
Palwinder Kaur w/o Sh. Gurmail Singh r/o village Rara Sahib, P.O.
Ghundani Kalan, Tehsil Payal, District Ludhiana.
.....Appellants
Versus
1. Life Insurance Corporation of India, Divisional Office, Phase - I,
Urban Estate Dugri, Ludhiana through its Divisional Manager.
2. The Branch Manager, Life Insurance Corporation of India, Branch
Unit No.IV-16-U, Dhyan Singh Complex, Near Bus Stand, Ludhiana.
3. The Chairman, Claim Review Committee, Life Insurance Corporation
of India, Yogakshema Nariman Point, Central Office, Mumbai.
.....Respondents
First Appeal against the order dated 17.09.2007
passed by the District Consumer Disputes
Redressal Forum, Ludhiana.
Before:-
Sardar Jagroop Singh Mahal,
Presiding Judicial Member
Sardar Jasbir Singh Gill, Member Argued by:-
For the appellant : Sh. Munish Goel, Advocate For the respondents : Sh. Rakesh Verma, Advocate JAGROOP SINGH MAHAL, PRESIDING JUDICIAL MEMBER This is complainant's appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) against the order dated 17.9.2007 passed by the learned District Consumer Disputes Redresal Forum, Ludhiana (in short the District Forum) vide which the complaint was dismissed.
2. The case of the complainant is that Daljit Singh was her only son who was working as Pharmacist and had purchased Anmol Jeewan (without profit) policy from the OP-respondents for Rs.10 lacs. The proposal form was filled up on 30.12.2002 which First Appeal No.47 of 2008 2 was accepted by the OP and the premium was paid. Before issuing the policy, Daljit Singh was duly medico-legally examined by the authorised doctor of the OP. Daljit Singh was, thereafter, issued a policy on 13.1.2003. Unfortunately, Daljit Singh died on 28.1.2003 after a brief illness regarding which intimation was given to the OP and a claim was submitted. The OPs, however, repudiated the claim against which a review application was filed but the same was also dismissed. The complainant then served a legal notice on the OP-respondents and, thereafter, filed the present complaint seeking payment of Rs.10 lacs as the sum assured along with interest @ 18% per annum from the date of death i.e. 28.1.2003 till payment, Rs.50,000/- on account of mental tension and agony and Rs.5500/- as litigation expenses.
3. The complaint was opposed by the OPs on the ground that Daljit Singh concealed material particulars about the previous policies taken by him which had lapsed. According to them, in reply to question No.9 in the proposal form, Daljit Singh did not intimate if earlier he had obtained 3 policies which had lapsed. According to them, the contract of insurance depends upon good faith and where there is concealment of material facts, the policy of insurance becomes void, ab-initio. It was admitted that the present policy was issued to Daljit Singh on 31.12.2002 and he died on 28.1.2003. It was maintained that the repudiation of the claim was legal and valid and the complaint be dismissed.
4. Both the parties were given opportunity to produce evidence in support of their contention.
5. After hearing the arguments of the learned counsel for the parties and perusing the record, the learned District Forum First Appeal No.47 of 2008 3 vide impugned order dated 17.9.2007 dismissed the complaint against which the present appeal has been filed.
6. We have heard the arguments of the learned counsel for the parties and have perused the record including the written arguments filed by the OPs.
7. The short question involved in the case is whether the concealment of previously obtained insurance policies which have lapsed was a material fact, on the basis of which, the claim could be repudiated by the OP or not. The learned District Forum agreed with the contention of the OP-respondents and dismissed the complaint. We are, however, of the opinion that the impugned order cannot sustain because the previous policies are not material concealment which could justify the repudiation of the claim. There is no allegation nor any proof if Daljit Singh was suffering from any disease. Before issuing the policy, he was got medically examined and was found to be perfectly fit, hale and hearty. Even if the information about the lapsed policies had been conveyed by Daljit Singh, the OPs could not refuse to issue him the present policy. The OPs have not produced any such document to suggest that no policy is issued to a person who had earlier obtained the insurance policies which lapsed. It, therefore, cannot be said that the present policy was issued to Daljit Singh on account of concealment of the previous policies.
8. The learned counsel for the complainant has referred to the DO letter dated 18.2.1971 issued by the LIC of India, Central Office, Bombay to Shri Rangrajan. In this DO letter, the problem arising out of non-disclosure in the proposal form of an earlier First Appeal No.47 of 2008 4 policy which had lapsed during the three preceding years was dismissed at top level and the decision was taken as follows : -
"ii. If earlier lapsed policies were not
disclosed and if such non-disclosure
comes to light either during the life time of the assured or after his death, the proposer will not be relieved of his responsibility for the non-disclosure but the policy will not be declared null and void or the claim will not be repudiated merely on the count of mis-statement regarding status of earlier policy. Such claims may be admitted and paid in the normal course and not on an ex-gratia basis, if the omission or incorrectness about the position of earlier policies is the only non-disclosure. If, however, in such a case there is any suspicion of mis-
statement or fraud or any other grounds then, the non-disclosure of the status of earlier policies may also be taken as one of the grounds of repudiation alongwith others."
9. This letter was considered by the State Commission, UT, Chandigarh in Appeal No.559 of 2008 Shashi Puri v. LIC decided on 29.9.2008. It was held that the concealment of the previous lapsed policies cannot be a ground to reject the claim of the subsequent policy. In some what similar circumstances, the First Appeal No.47 of 2008 5 insurance company rejected the claim on the ground of suppression of material fact of being overweight. The Hon'ble Punjab & Haryana High Court in case "Life Insurance Corporation of India v. Smt. Narinder Kaur Batra" 2003 RCR (Civil) 653 held that such non-disclosure would not be material and the claim cannot be denied on this ground. In another case, it was held that the age is not a material fact and the claim could not be repudiated if the insured told his wrong age as held in case "Anand Kumar Kejriwal v. LIC of India & anr." 2011 (3) CLT 414, the Hon'ble National Commission in case "LIC v. Smt. Shahida Begum" Revision Petition No.4502 of 2010 decided on 06.07.2011 approved the observations of the State Commission that the insured cannot repudiate the liability by showing some accuracy or falsity of statement nor can it avoid the liability for immaterial misrepresentation or for material mis-representation which had no bearing on the risk. It was also held that mere non- disclosure of some immaterial facts would not per-se give right to rescission. The learned counsel for the respondents has not been able to show as to how the lapsed policies were material in the present case. We are, therefore, of the opinion that the concealment, if any, was not a material fact which could authorise the OP-respondents to repudiate the claim.
10. In view of the above discussion, we are of the opinion that the order of the OPs in repudiating the claim is totally unjustified and bad in law and, therefore, amounts to deficiency in service on their part. The impugned order passed by the learned District Forum therefore, cannot sustain, the appeal is accordingly accepted and the said order is set aside. The complaint, therefore, First Appeal No.47 of 2008 6 succeeds and the same is, accordingly, allowed with costs. The OPs are directed to pay to the complainant a sum of Rs.10 lacs along with interest @ 8% per annum with effect from 15.7.2003 (30 days after the issuance of repudiation letter Ex.C7) till the amount is actually paid. If the amount is not paid within 30 days from the date of receipt of a copy of the order, the OPs would be liable to pay the same along with penal interest @ 12% per annum since 15.7.2003 till its payment to the complainant. The OPs shall also pay Rs.10,000/- as costs of litigation.
Copies of the orders be supplied to the parties free of costs.
(JAGROOP SINGH MAHAL) PRESIDING JUDICIAL MEMBER (JASBIR SINGH GILL) MEMBER October 17, 2012.
Paritosh