National Consumer Disputes Redressal
Divisional Manager, Lic Of India & Ors. vs Smt.Anupama & Ors. on 17 April, 2012
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NOS.3794-3796 OF 2007 (From the order dated 24.08.2007 in Appeal No.24-26/2006 of the State Commission, Haryana) Divisional Manager, LIC of India & Ors. Petitioners(s) Versus Smt.Anupama & Ors. Respondent(s) BEFORE : HONBLE MR.JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Petitioners(s) : Mr.S.P.Mital, Advocate For the Respondent(s) : Mr.Subhash C.Sharma, Advocate Pronounced on 17th April, 2012 ORDER
PER VINEETA RAI, MEMBER The Divisional Manager, Life Insurance Corporation of India (hereinafter referred to as the Petitioner) has filed these revision petitions being aggrieved by the order of the State Consumer Disputes Redressal Commission, Haryana (hereinafter referred to as the State Commission) in Appeals No.24, 25 and 26 of 2006 in favour of Smt.Anupma and others, Respondents herein who were the original complainants before the District Forum.
Since, the facts and issues involved in these cases are similar, these revision petitions are being disposed of through a single order by taking the facts from R.P.No.3794/2007.
The facts of the case according to the Respondent/Complainant are that her late husband Manoj Kumar (hereinafter referred to as the insuree) had taken 4 life insurance policies from the Petitioner/Insurance Company the details of which are as follows:
S.No. Policy Number Amount (Rs.) Commencement date 1 170739201 3 Lakhs 28.05.1994 2 171012515 1 Lakh 28.05.1995 3 172328642 5 Lakhs 28.10.2000 4 173314234 15 lakhs 28.01.2003 The insuree expired on 24.07.2003 at Apollo Hospital, Delhi and Respondent being the nominee of the insuree lodged claim with the Petitioner/Insurance Company.
Petitioner/Insurance Company indemnified the claim in respect of policy No.170739201 for Rs.3 lakhs. However, claims in respect of three other policies were repudiated on the grounds that the insuree had suppressed material facts regarding his pre-existing diseases. Since, according to the Respondent, her late husband maintained good health, Petitioner/Insurance Company had fraudulently repudiated the claim in respect of three policies and that too without giving even an opportunity for personal hearing. Further, the insuree had been examined by the doctor of the Petitioner/Insurance Company and there was no adverse report about his health. Respondent being aggrieved filed a complaint before the District Forum on ground of unfair trade practice and deficiency in service and requested that the Petitioner/Insurance Company be directed to pay her the insured amount in respect of the three policies with interest @ 18% per annum from the date of filing of the claim till its realization and compensation of Rs.50,000/- for mental agony and harassment as also any other admissible relief.
Petitioner/Insurance Company while admitting that insuree had taken 4 insurance policies and that after his death, Policy No.170739201 had been settled, however, stated that the claim in respect of three other policies was rightly repudiated because it has been proved that insuree had withheld material information regarding his health by giving wrong answers in his insurance proposal forms because investigations conducted by the Petitioner revealed that insuree was a chronic alcoholic and an old patient of Cirrhosis of Liver as per the hospital treatment and certificate of the Sr. Consultant of Apollo Hospital wherein he was admitted for treatment before his death. Regarding the releasing of the insured amount in respect of Policy No.170739201, since it was a non-early claim and did not cover the period/history of ailment from its commencement date, hence the same had been paid whereas this was not the case in respect other three policies. Petitioner contended that a contract of insurance being based on utmost good faith was breached by the insuree and the claim was rightly repudiated and there was no unfair trade practice or deficiency in service on the part of the Petitioner/Insurance Company.
The District Forum after hearing both parties and on the basis of evidence led by the parties and allowed the complaint. The relevant part of the order of the District Forum reads as follows:
It was an admitted fact that the insured was medically examined by the MO of the OPs and was found fit. The OPs relying on the history recorded in the hospital where the insured was admitted. The history recorded in the hospital can not be treated as substantive evidence on material to base any decision. The OPs corporation failed to lead direct evidence that the deceased was suffering from the alleged disease, it is wrong approach to the matter that the insured purchased the policy for heavy amount and died soon after the purchase or revival of the policy, it was case of early death, hence deserve repudiation, it amount to deficiency in service. The proposal form was filled out by the LIC agent in English, the insured did not know English and he signed the papers in vernacular. LIC failed to lead expert evidence of doctor to prove nexus with the alleged disease and cause of death, as the burden of proof lies upon the LIC, LIC has failed to discharge the burden. There is no evidence that contents of proposal form were explained to other insured in his own language. The insured/deceased obtained number of policies and claim on one or two policies were settled, while in respect of three were repudiated. The action of the OPs in repudiating the claim held to be wholly arbitrary, unwarranted, illegal one as held in referred case Sunit Jain Vs. LIC of India & Anr. 1999(1) CLT, 678(Pb.). The LIC relied upon the fact that based upon mere opinion of doctor, who was never subjected to examination and cross examination. The alcoholic habit is not such a disease the suppression of which would be sufficient ground for repudiation of the claim.
Aggrieved by this order, Petitioner/Insurance Company filed an appeal before the State Commission. While President of the State Commission allowed the appeal, it was dismissed by a majority order of the State Commission comprising two Members who upheld the order of the District Forum and observed as under:
The appellants doctor had thoroughly examined the life assured at the time of proposal and later on before the revival of the policies, the appellants had accepted the premium amount without any objection and also issued the insurance policy. The appellants company alleged in their case that the life assured was suffering from disease of Cirrhosis Liver for the last 10 years, which was concealed by the deceased at the time of proposal/revival of the policy.
The appellants-company did not produce any evidence, except case history of Apollo Hospital, in form of treatment taken by the deceased prior to the date of submission of proposal form/revival of the policy. Mere giving of case history of the deceased by the attendant is not the sufficient ground to repudiate the claim. In view of the above, there is no fraudulent suppression of material facts on the part of the life assured. The policy can be repudiated if three contents of Section 45 of the Insurance Act apply which are, (a) The statement must be on a material matter or must suppress fact 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 was material to disclose; but we find that there is no such evidence on file adduced by the appellants. It was so held by the Apex Court in Mithoolal Nayak case (supra) also.
Counsel for both parties made oral submissions. Counsel for Petitioner stated that the learned Fora below erred in not appreciating the credible evidence filed by the Petitioner as proof that the Petitioner was an alcoholic because of which he developed Cirrhosis of Liver and subsequently expired from this disease within 7 months of his taking the last insurance policy for Rs.15 lakhs from which itself an adverse inference can be drawn. It was further pointed out that the President of the State Commission who ruled in favour of the Petitioner had taken note of the report of a Senior Consultant from Apollo Hospital who had recorded the following case history after examining the patient:
Mr.Manoj who is a chronic alcohol consumer 10 years 1-1 litres/day. History of jaundice off and on for 6 months. Presented this time with history of haematemcsis 3-4 times-200-250 ml. 2 days prior to admission. History of malena + No history of altered sensorium/pain abdomen/distension of abdomen/fever and decreased urinary output. UGI endoscopy done at local hospital, then referred to Apollo Hospitals.
The authenticity of the Hospital documents was proved by the Record Keeper of the Apollo Hospitals before the Fora below. The insuree had not disclosed these facts in Column No.4 of Declaration of Good Health and had also replied in the negative on the question whether he consumed alcoholic drinks.
At the time of revival of his policies that had lapsed on account of non-payment of premium he again did not disclose his pre-existing disease. Respondent has also not been able to submit any credible evidence to rebut the facts in the documents/records produced from Apollo Hospital. The various documents produced from Apollo Hospitals indicated his treatment for his pre-existing disease of Cirrhosis of Liver caused by heavy consumption of 1 and 1 litres alcohol per day. Since there is close nexus between his disease and his death, it is clear that insuree had suppressed material facts regarding his health and therefore the revision petition deserves to be allowed.
We have heard the averments made by the learned Counsel for both parties at length and have carefully considered the evidence on record led by the parties.
The facts pertaining to the issuance of 4 policies by the Petitioner to the Respondents late husband are not in dispute. It is also an admitted fact that the insuree expired on 24.07.2003 in Apollo Hospital because of Cirrhosis of Liver. Counsel for Respondent had contended before us that the case summary and other medical records produced from Apollo Hospital where the insuree had been admitted and subsequently died is not adequate proof that he was a known case of Cirrhosis of Liver with previous UGI bleeds because the case history was based on the version given by an attendant. We are, however, unable to accept this contention because this was not the only evidence available on file to prove that the insuree had been suffering from Cirrhosis of Liver.
This diagnosis was reached by a well-qualified medical expert in a reputed hospital who after examining the insuree recorded a diagnosis of chronic alcohol related liver disease. It is medically well established that Cirrhosis of Liver does not develop overnight and one of the most common causes of this disease is alcoholism. In view of these irrefutable facts, it is clear that the insuree had a pre-existing disease the information about which he had suppressed in his insurance proposal form. We are also unable to accept the reasoning of the District Forum that merely because the affidavit of the doctor who had given the said certificate has not been filed, the same is adequate reason to reject the documents from the Hospital even though these were certified by an official of the said Hospital. This Commission in LIC of India Vs. Krishan Chander Sharma II(2007) CPJ 53(NC) has ruled that if there is other credible evidence to prove the fact of a pre-existing disease, mere absence of an affidavit of the concerned treating doctor is not an adequate reason to reject the proof.
We note that the insuree who was a young man of 33 years took 4 insurance policies, the last one for an amount or Rs.15 lakhs on 28.01.2003 i.e. just a few months before he expired which would justify drawing of an adverse inference. We have also carefully gone through the majority order of the State Commission and we do not find any specific reasons that have been recorded by them to controvert or challenge the records of Apollo Hospital as proof that the insuree was an alcoholic and a patient of Cirrhosis of Liver for quite long time. It is well established that a contract of insurance is made in utmost good faith and suppression of any material fact by the insuree would entitle the Insurance Company to repudiate the claim.
Since it is clearly proved as discussed in the foregoing paras that insuree had suppressed material facts regarding his pre-existing disease which eventually led to his death, we are unable to uphold the majority order of the State Commission and the same is set aside. The revision petitions are therefore allowed. No costs.
Sd/-
..
(ASHOK BHAN J.) PRESIDENT Sd/-
..
(VINEETA RAI) MEMBER /sks/