State Consumer Disputes Redressal Commission
Smt.Sarita Rajput vs Lic on 8 November, 2019
Daily Order M. P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PLOT NO.76, ARERA HILLS, BHOPAL FIRST APPEAL NO. 796 OF 2012 (Arising out of order dated 01.02.2012 passed in C. C. No.176/2011 by District Forum, Damoh) SMT. SARITA RAJPUT, W/O LATE SHRI MOORAT SINGH RAJPUT, R/O SANJAY WARD, PARASHAR GALI, HATA, DISTRICT- DAMOH (M.P.). .... APPELLANT. Versus 1. REGIONAL MANAGER, LIFE INSURANCE CORPORATION OF INDIA, JEEWAN PRAKASH, P. B.-17, MADAN MAHAL, JABALPUR (M.P.) 2. LIFE INSURANCE CORPORATION OF INDIA, BRANCH-DAMOH THROUGH BRANCH MANAGER, BEHIND CENTRAL SCHOOL, DAMOH (M.P.) .... RESPONDENTS. BEFORE : HON'BLE DR. (MRS) MONIKA MALIK : PRESIDING MEMBER
HON'BLE SHRI S. S. BANSAL : MEMBER COUNSEL FOR PARTIES : Shri V. K. Saxena, learned counsel for the appellant. Shri Neelesh Khare, learned counsel for the respondents. O R D E R (Passed On 08.11.2019)
The following order of the Commission was delivered by Dr. (Mrs) Monika Malik, Member:
This appeal by the complainant/appellant is directed against the order dated 01.02.2012 passed by the District Consumer Disputes Redressal Forum, Damoh (for short the 'Forum') in C. C. No. 176/2011, whereby the complaint filed by the complainant/appellant has been dismissed.
2. Briefly put, facts of the case are that the complainant's late husband Shri Moorat Singh Rajput (hereinafter referred as deceased-insured) during his life time had obtained a life insurance policy no. 355244722 from the opposite parties, under which the complainant was the nominee. During the currency of the policy cover period, the deceased-insured died on 24.08.2008. The insurance claim was lodged with the opposite parties, who repudiated the same vide their letter dated 19.02.2010. Alleging deficiency in service on part of the opposite parties, the complainant filed a -2- complaint seeking sum assured of Rs.3,00,000/-, along with other damages and costs.
3. The opposite parties resisted the complaint on the ground that the deceased-insured had suppressed material information with regard to his illness and earned leaves taken in this regard, while filling up of the proposal form. He had suppressed that he was suffering from cirrhosis of liver, hepatitis-C, and anemia, at the time of filling up of the proposal form, whereas he had received treatment in Ashish Hospital, Jabalpur in the above regard. The policy holder had died within five months of obtaining the insurance policy. His was an early death claim and therefore proper investigations were carried out in the matter. The opposite parties rightly repudiated the claim on the basis of the aforesaid ground.
4. Heard learned counsel for parties. Perused the record.
5. Learned counsel for the complainant/appellant argued that the Forum has erroneously dismissed the complaint on the basis of the certificates issued by Dr. M. P. Gupta, which are not supported by the medical papers. The certificates are also not supported with the affidavit of the concerned doctor. Therefore, the impugned order which has been passed, merely relying on the certificates with no evidence including affidavit of the doctor, cannot be sustained in the eyes of law. He further argued that no cogent evidence was produced by the opposite parties/respondents in order to prove that the deceased-insured had concealed any facts about his illness while filling up of the proposal form. Learned counsel relied on the judgment passed by the Supreme Court in P. Vankat Naidu Vs Life Insurance Corporation of India & Anr. 2011 (3) CPC 350 and the judgments passed by the National Commission in Life Insurance Corporation of India Vs Badri Nageswaramma (Deceased) & Others 2005 (1) CPC 501, Rasheeda Khatoon Vs Life Insurance Corporation of India 2009 (3) CPC 269, National Insurance Company Limited Vs Sardar Kulbir Singh 2010 (3) CPC 488 and in PNB Metlife -3- Insurance Company Ltd Vs Vinita Devi I (2019) CPJ 441 (NC) in order to substantiate his submissions.
6. Learned counsel for the opposite parties/respondents vehemently argued that the deceased-insured, Shri Moorat Singh Rajput was suffering from cirrhosis of liver, hepatitis-c and anemia before he had obtained the aforesaid insurance policy. He had received treatment in the above regard from Dr. M. P. Gupta, Ashish Hospital, Jabalpur. The deceased-insured was admitted in Ashish Hospital, Jabalpur from 09.02.2006 to 16.02.2006, thereafter from 08.03.2006 to 14.03.2006 and also from 01.04.2006 to 08.04.2006 and had obtained medical leaves in the above regard. Learned counsel further argued that the deceased-insured had obtained many earned leaves and he was also on leave on the day when he had filled up the proposal form, in order to obtain the policy cover. The deceased-insured had suppressed material information in the above regard and had replied in negative to the queries asked from him in the proposal form in column 11 (a) to 11 (e) and also in column 11(j), which amounts to violation of principle of utmost good faith, on part of the proposer.
7. He further argued that the deceased-insured had obtained aforesaid insurance policy after wilful suppression of material facts and therefore the policy is vitiated and his claim is not payable. Appellant has filed appeal on new ground, which were previously not taken at the time of the complaint. Learned counsel relied on the judgments of the Supreme Court in Appeal (Civil) 5322 of 2007 P. C. Chacko & another Vs Chairman, Life Insurance Corporation of India decided on 20.11.2007 and M/S Modern Insulators Ltd Vs Oriental Insurance Company Limited I (2000) CPJ 1 (SC) through which he argued that the parties cannot urge new facts at the time of the appeal. He also relied on the judgments of the National Commission in Pushpa Chauhan Vs Life Insurance Corporation of India II (2011) CPJ 44 (NC), Revision Petition No. 3794-3796/2007 Divisional Manager, LIC of India & Ors Vs Anupama & Ors decided on 17th April 2012, Revision Petition -4- No. 991 of 2010 LIC of India Vs Chhaya Hanmayya Ghante decided on 3rd September, 2014. He also referred to the judgment of this Commission in First Appeal No. 1549 of 2007 Smt. Asha Gupta Vs Life Insurance Corporation of India decided on 28.05.2009, whereby he urged that liver cirrhosis is an illness of the severe nature and cannot develop overnight. The proposer was suffering from this illness for quite long time, which is evident from the fact that the insured died within 5 months of obtaining the policy cover. The proposer was suffering from cirrhosis of liver and had concealed the material information in this regard. Learned counsel reiterated that mere absence of an affidavit from the treating doctor cannot be the valid reason to reject the evidence produced.
8. As we carefully peruse the clinical notes of treatment of Late Moorat Singh Rajput, we observe that at page 47, it is mentioned that he is a known case of cirrhosis of liver with ascites. At page 48 of the clinical notes dated 22.08.2008, it is clearly mentioned that the patient has cirrhosis of liver, since one year with decompensation with hepatic encephalopathy with? hepatio renal syndrome.
This is enough evidence to prove that the deceased-insured was suffering from cirrhosis of liver since last one year.
9. The aforesaid fact is further supported by certificate dated 08.04.2006 from Dr. M. P. Gupta, MS wherein it is mentioned that Late Shri Moorat Singh Rajput was hospitalized from 01.04.2006 to 08.04.2006. He is a case of chronic hepatitis with ascites and hypoproteinemia with anemia. Another certificate dated 08.03.2006 from Dr. M. P. Gupta mentions that Shri Moorat Singh Rajput has been under his treatment for anemia, hypoproteinemia and ascites. He was advised rest up to 14.03.2006. Document at page 38 (Exhibit R-5) is the chart regarding medical leaves, earned leaves and casual leaves obtained by Shri Moorat Singh Rajput in the duration from 21.03.2005 to 21.03.2008. This chart provided by the Employer of the deceased indicate towards leaves obtained by the deceased-insured for the purpose of his treatment.
-5-10. To illustrate Cirrhosis of Liver is a late stage and scarring (fibrosis) of the liver caused by many forms of liver diseases and conditions, such as hepatitis and chronic alcoholism. As cirrhosis progress more and more scar tissue forms, making it difficult for the liver to function (decompensated cirrhosis). Aforesaid discussion leaves no doubt that the deceased-insured was having liver cirrhosis since quite long time. Indeed he could be observing various health related symptoms and was consulting medical practitioner in this regard.
11. In the aforesaid light, when we go through the declaration made by the deceased-insured in the column 11, regarding personal history filled by him in the proposal form dated 19.03.2008, we observe his reply to the queries mentioned therein:
11Personal History Answer 'Yes' or 'No' If yes please give full details
(a) During the last five years did you ever consult a Medical Practitioner for any ailment regarding treatment for more than a week?
No
(b) Have you ever been admitted to any hospital or nursing home for general checkup, observation, treatment or operation?
No
(c) Have you ever remained absent from place of work on grounds of health during the last 5 years?
No
(d) Are you suffering from or have you ever suffered from ailments pertaining to Liver, Stomach, Heart, Lungs, Kidney, Brain or Nervous system?
No
(e) Are you suffering from or have you ever suffered from Diabetes, Tuberculosis, High Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease?
No
(j) What has been your usual state of health?
Good
12. Clearly the deceased-insured had suppressed material information regarding his health in the proposal form filled by him. The deceased-insured also concealed information regarding leaves obtained by him from his employer/place of work. He had also concealed the fact that he had consulted medical practitioner, for any ailment. The deceased-insured had stated that his usual state of health is good, -6- which as evident from the evidence placed before us is a wrong declaration on his part.
13. The Hon'ble Supreme Court in P.C.Chako Vs LIC of India (2008) 1 SCC 321 has quoted Section 45 of the Insurance Act:
"..... Section 45 of the Insurance Act, 1938 (which prescribes that a life insurance policy cannot be called in question on ground of misstatement after two years) postulates repudiation of insurance policy within a period of two years.
There are three conditions for application of the 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 suppresses facts which it was material to disclose."
With regard to "Misstatement";
"..... Misstatement by itself was not material for repudiation of the policy unless the same is material in nature. But, a deliberate wrong answer which has a great bearing on the contract of insurance, if discovered may lead to the policy being vitiated in law..."
In Life Insurance Corporation of India and Ors. Vs Asha Goel (Smt.) & Anr. (2001) 2 SCC 160, it was held:
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 to 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.
The Hon'ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company Limited (2009) 8 SCC 316 has observed:
"The term 'material fact' is not defined in the Insurance Act, 1938 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 that goes to the root of the contract of insurance and has a bearing on the risk involved would be "material". The Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002 defines the word "material" to mean and include all "important", "essential" and "relevant information" in the context of guiding the insurer to decide whether to undertake the risk or not.-7-
Thus in a contract of insurance, any fact which would influence the mind of a prudent insurer in deciding whether to accept or not to accept the risk is a "material fact". If the proposer has knowledge of such fact, he is obliged to inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for the proposal form is material for the purpose of entering into a contract of insurance."
The Hon'ble Supreme Court in Satwant Kaur Sandhu Vs New India Assurance Company Limited (supra) has observed in Paragraph 12:
"Thus it needs little emphasis is that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment."
The Hon'ble Supreme Court further in para 19 has observed:
In this regard it would be apposite to make reference to Regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of Policyholders' Interests) Regulations, 2002, which explains the meaning of term "material". The Regulation reads thus:
"2 Definitions--In these regulations, unless the context otherwise requires--
xxx xxx xxx xxx xxx xxx xxx xxx xxx
"Proposal Form" means a form to be filled in by the proposer for insurance for furnishing all material information required by the insurer in respect of a risk, in order to enable the insurer to decide whether to accept or decline to undertake the risk, and in the event of acceptance of the risk, to determine the rates, terms and conditions of a cover to be granted.
Explanation:- "Material" for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer."
Thus the regulation also defines the word "material" to mean and include all "important", "essential" and "relevant" information in the context of guiding the insurer to decide whether to undertake the risk or not.
Therefore, the upshot of entire discussion is that in a contract of insurance any fact which would influence the mind of a prudent insurer in deciding whether to accept -8- or not to accept the risk is a 'material fact'. If the proposer has knowledge of such fact, he is obliged to disclose it particularly while answering to the questions in the proposal form.
Relying on the aforesaid judgments of the Hon'ble Supreme Court, the National Commission in Revision Petition No. 1585 of 2011 Life Insurance Corporation of India Vs Smt. Kusum Patro decided on 19th March 2012 has observed:
Fuller reading of the Apex Court's observations, particularly those in para.20 of the order in the Satwant Kaur Sandhu's case would leave no doubt that in not disclosing the facts of his March 1994 accident and subsequent in-patient treatment to the Insurance Company at the time of furnishing the details of personal history and also to the Medical Examiner for the third insurance policy obtained in February 1995, the deceased Narasingha Patro was guilty of knowingly withholding correct information about the status of his health. Hence the Insurer was within its rights to repudiate the insurance claim of his nominee subsequent to his death, even though the cause of the death had no medical nexus with the accident that he suffered or the consequential disability. In fact, the latter (i.e., presence or absence of any nexus between pre-insurance status of health of the life-to-be-assured and the cause/s of his post-insurance death) is of no consequence insofar as the observance of the duty of disclosure of all material facts while/before seeking an insurance coverage is concerned.
As a result, the revision petition is allowed and the orders of the Fora below are set aside, leaving the parties to bear their own costs.
14. The averment of the complainant/appellant that no evidence including affidavit of treating doctor has been filed, is not sustainable. In this regard, we observe that the opposite party/respondent have filed the entire medical record of the treatment of the deceased-insured. The certificate issued by the doctor is there on record to support the evidence which is available in the form of treatment-sheets of the patient.
15. It is a settled position that the insured was under obligation to fill up the details correctly in the proposal form, either the proposal for insurance would have been rejected or the insured would have been subjected to further investigations before providing the policy cover. The aforesaid discussion leaves no doubt that the deceased had filled incorrect information in the proposal form, meant to obtain the insurance policy in question. Therefore, we are of a considered opinion that the respondent LIC cannot be held negligent in repudiating his death claim.
-9-16. In view of the above, the order passed by the District Forum cannot be held to be improper or illegal and is therefore affirmed. This appeal being devoid of merits is dismissed. No order as to costs.
(DR. (MRS) MONIKA MALIK) (S. S. BANSAL) PRESIDING MEMBER MEMBER