State Consumer Disputes Redressal Commission
Sunita Sood vs Lic Of India And Others on 20 August, 2010
H
H.P. STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, SHIMLA-9.
CONSUMER COMPLAINT NO.10/2009.
DECIDED ON 20.08.2010.
In
the matter of:
Smt. Sunita Sood widow of late Dr. Vivan Sood, Resident of
Pushpanjli Lona, Palampur, Tehsil Palampur, District Kangra, Himachal Pradesh.
Complainant.
Versus
1. Life
Insurance of Corporation of India, Registered Office at Yogakshena, Jeevan Bima
Marg, P.B. No.19953 Mumbai-400 021, through its Managing Director.
2. The Zonal Manager, Life Insurance Corporation of India, Northern
Zonal Office Jeevan Bharti, Cannaught Circus, New Delhi.
3. The
Senior Divisional Manager, Life Insurance Corporation of India, Divisional
Office Block-14 and 15, SDA Complex, Kasumpti, Shimla-9.
..
Opposite Parties.
.
For the complainant: Mr. Ashok Kumar Sood, Advocate.
For the opposite parties: Mr. Narender Sharma, Advocate. ..
Hon'ble Mr. Justice Arun Kumar
Goel (Retd.), President.
Honble Mrs. Saroj Sharma, Member.
Honble Mr. Chander Shekhar Sharma, Member.
Whether approved for reporting? Yes.
O R D E R:
Justice Arun Kumar Goel (Retd.), President.
Only question involved in this complaint for determination is, whether deceased-life assured was guilty of having intentionally misstated material matters, or had suppressed such facts disclosure of which was material at the time of getting himself insured under the policies which is subject matter of this complaint. If this question is answered in affirmative, then whether such suppression was fraudulent. In case both these points are held against the complainant, her complaint has to be dismissed. Otherwise we shall have to determine the complaint further on merit regarding her entitlement or otherwise to any relief.
2. Facts giving rise to this complaint are within narrow compass, as such those are being briefly noted. These are, that Dr. Vivan Sood was holding a number of insurance polices. Claim in respect of all other polices, except other than following was settled and paid by the OPs to the complainant:-
Sr. No. Policy Number Date from which the policy was effective Sum assured
1.
151604398 28.05.2005 Rs.3,25,000
2. 151990996 08.09.2006 Rs.2,00,000
3. 151996215 17.02.2007 Rs. 50,000
4. 151999716 29.06.2007 Rs. 75,000 During the currency of these policies, life assured died on 03.10.2007 at Fortis Hospital, Mohali on 12.10 p.m.
3. At the time of his death, deceased was working as a Medical Officer in Mahatma Gandhi Medical Services Complex, Khaneri (Tehsil Rampur). While on duty on 02.10.2007 he was suddenly taken ill and was put under treatment. From Khaneri he was referred to IGMC, Shimla/PGI, Chandigarh. Dr. B.D. Negi, Medical Officer at Khaneri Hospital, accompanied him to Chandigarh. Instead of PGI, he was taken to Fortis Hospital, where he breathed his last on 03.10.2007 in the afternoon at 12.10 p.m. There is ample evidence on record to suggest that the parents of deceased were not in a position to accompany him, because his mother was attending upon her ailing and bedridden husband at Khaneri. As already noted, claim was lodged in respect of all insurance policies held by deceased, and except for the above four policies, amount of all other insurance policies was paid to the complainant by the OPs.
4. Claim in respect of these four policies was disputed by the OPs on the ground that deceased had wrongly answered the questions in proposal forms while obtaining each one of these policies, particularly while replying Column No.11 as envisaged in the said proposal form. After repudiation of claim, complainant approached the OPs vide representations Annexures C-14 to C-17. All the policies were separately repudiated by the OPs. Copies of repudiation letters are Annexures C-8 to C-11.
5. In this background, present complaint was filed alleging deficiency in service on the part of OPs and also they having indulged into unfair trade practice. When notice was issued in the complaint, precise stand of OPs is the same on which claim was repudiated, and the same was justified because misstatement being intentional and fraudulent, regarding his state of health.
6. In the context of repudiation, we may observe that the complainant herself has admitted in its paragraph-6, that deceased remained on medical leave from 22.03.2006 to 27.07.2006, because of having suffered from Hepatitis with Renal Calculi (Rt. side), Allergic Dermatitis. Document Annexure C-12 is medical-cum-fitness certificate having been issued by Government Medical Officer, Civil Hospital Palampur, (Dr. Jagdesh Rana).
7. Besides her own detailed affidavit in support of the complaint as evidence, affidavit of Dr. Jagdesh Rana has also been filed for allowing this complaint.
Apart from these two affidavits, statement of Dr. B.D. Negi, Medical Officer, who was working with the deceased when he was suddenly taken ill and on 03.10.2007 had accompanied him to Fortis Hospital, after having been referred to from Khaneri was got recorded on oath on 22.03.2010 in support of the claim.
8. Mr. Ashok Kumar Sood, learned counsel for the complainant submitted, that on admitted as well as proved facts, claim could not have been repudiated by the OPs on the ground that the deceased had knowingly, as well as fraudulently misstated the facts regarding his true state of health while obtaining four above referred policies which are subject matter of this complaint.
According to him, act of repudiation resorted to by them is nothing, but a gross abuse of their position as high contracting parties by the OPs. Thus according to him, this complaint needs to be allowed and consequently directing the OPs to pay the sum assured alongwith accrued benefits in terms of these policies, alongwith interest, compensation and damages. He also prayed for allowing exemplary cost against the OPs while allowing this complaint.
9. This position was seriously contested and resisted by Mr. Narender Sharma, learned counsel for the OPs. Per him contract of insurance is based on utmost good faith on the doctrine of uberrima fides under the Insurance Act, 1938. Complete lack of good faith is established on the part of life assured.
By referring to Annexure C-12, Mr. Sharma pointed out that this was a case of Hepatitis with Renal Calculi (Rt. side) with Allergic Dermatitis.
According to him, a duty was enjoined under law upon the life assured-deceased to have disclosed all these facts when insurance was obtained. Deceased was under treatment and was thus unable to attend to his duty between 22.03.2006 to 27.07.2006, when he was found fit by concerned Medical Officer, he resumed his duty from 28.07.2007. Thus he prayed for dismissal of the complaint. His further submission was that the complainant needs to be burdened with heavy cost. Mr. Sharma also referred to two decisions of Honble Supreme Court in the case of P.C. Chacko and another versus Chairman, Life Insurance Corporation of India and others, III (2008) CPJ 78 (SC) and Satwant Kaur Sandhu versus New India Assurance Company Limited, IV (2009) CPJ 8 (SC). He thus prayed for dismissal of complaint with cost.
10. We would refer to evidence produced by the parties. Dr. B.D. Negi appeared as a witness on 22.03.2010. Per him, he was working as Medical Officer in Mahatma Gandhi Medical Services Complex, Khaneri since December, 2003 till date. As per summoned record brought by him, as per discharge summary in case of Dr. V.K.Sood when he was referred to IGMC, Shimla/PGI, Chandigarh vide Annexure C-5, deceased was attended upon by Dr. Ranjan Uppal and Dr. R.S. Bisht, who had referred him to IGMC, Shimla/PGI, Chandigarh. He had gone on record to state, that the deceased was taken in Ambulance from Khaneri. Regarding deceased suffering from Hepatitis with Renal Calculi (Rt. side), as well as Allergic Dermatitis, witness stated that in common parlance, he had jaundice, stone in right kidney, and he had Allergy of skin. According to this witness deceased had G.I. bleeding, though he did not vomit blood, but was passing black stool. And according to him cause of bleeding could be either in stomach, or due to duodenum in the upper intestine. He has replied to in cross-examination on behalf of the OPs, that this problem occurs for all of sudden.
And with a view to manage the patient properly, first and foremost step to be taken is to conduct Endoscopy on the patient and this was to be followed by aggressive management to stop the bleeding.
Deceased was referred, because there was no arrangement for Endoscopy at Khaneri. He has denied the suggestion on behalf of the OPs, that the deceased was not keeping good health or he had obtained the policies (supra), or when he was referred to IGMC, Shimla/PGI, Chandigarh. He has further gone on record to state that the deceased was discharging his routine duty as a Medical Officer and was also attending regular emergency duties, whenever called upon. He referred to Annexure C-12 (Annexure R-4), and admitted that per this certificate deceased was on leave from 22.03.2006 to 27.03.2006. Three policies were obtained by the deceased between 08.09.2006 to 29.06.2007, when he was on leave for the aforesaid ailments as per Annexure C-12, medical-cum-fitness certificate issued by Dr. Jagdesh Rana. There is also the affidavit of Dr. Jagdesh Rana. This witness has deposed that the deceased was under his treatment on 22.03.2006 to 27.07.2007 at Palampur in respect of, normal ailments which are mentioned in medical certificate issued by him in Annexure P-1, ( this is copy of Annexure C-12 with the complaint). According to him there was no co-relation between ailment detailed in medical-cum-fitness certificate of Dr. Vivan Sood and cause of his death.
Smt. Sunita Sood complainant had reiterated her stand as set out by her in the complaint.
11. In addition to above, there is ample evidence to suggest that father of her husband, i.e. her father-in-law was not well as he had undertaken medical treatment including operations and was operated upon at Vimhans Lajpat Nagar, New Delhi and she incurred an expenditure of Rs.17 lacs on his treatment, ultimately he died.
Further according to her if deceased was suffering from serious ailments, she had no reason to believe that those would not have been disclosed.
12. On the other hand, OPs have placed on record affidavit of its Administrative Officer working at its Shimla Divisional Office. He has reiterated what was their stand in reply to the complaint and denied that there was any deficiency of service etc. on their part of OPs. This is the entire evidence relevant for deciding this complaint. Documents we do not intend to refer to, because issuance of policies by the OPs is not disputed. Cause of repudiation as noted hereinabove was that the deceased had not disclosed material true facts which in fact were fraudulently withheld by him. Thus they were not liable.
13. We are alive to situation that contract of insurance is based on utmost good faith and bonafide, on the doctrine of uberrima fides. In these circumstances it is expected that while obtaining a life insurance policy, life assured must state all the facts correctly and truly including reply to Column-11 of the proposal form. However question that arises in this complaint is, whether every withholding of material facts tantamounts to fraudulent withholding thereof so as to justify the repudiation as is plea set out by the OPs in their reply to the complaint. Our answer would be, no.
14. Another material fact that needs to be noted here is that insurance policy in the sum of Rs.3,25,000/-had lapsed as premium falling due was not paid on due date or within grace period. This was revived on 25.05.2007. Thus according to Mr. Sharma, this is a fresh contract again and that time, all the material facts on which the claim was repudiated were not disclosed by the life assured. We may notice here that document(s) those were executed at the time of revival of policy have not been placed by the OPs, what is its effect will be dealt with hereafter.
15. We may notice, that while selling policy of insurance to the life assured-deceased in this case, it is like any other contract of insurance, therefore Insurance Regulatory and Development Authority (Protection of Policy Holders Interests) Regulations, 2002 are attracted.
16. Regulation-3 of these Regulations enjoined a duty upon a insurer/agent/intermediatory, to bring to the notice of the life assured and also to explain to him what was best in his interest, besides telling him all inclusions, exclusions as well as exceptions. There is no such evidence placed on record by the OPs. Thus we are of the view, that in the absence of there being any evidence placed on record by the OPs, repudiation cannot be justified. For taking this view reliance is being placed on a decision of this Commission in the case of Life Insurance Corporation of India versus Smt. Chatri Devi, Latest HLJ 2009 (HP) 511. To similar effect is again, a decision of this Commission in the case of LIC of India and Ors. Versus Smt. Sumna Devi, II(2010) CPJ 167.
17. The onus in this complaint to prove that withholding/ misstatement of material and true facts with fraudulent intent at the time of getting life insured, was upon the OPs. In the absence of there being any proof that such withholding of material facts etc. was intentional, as well as fraudulent, policy should not be dealt with in a mechanical and routine manner but should have been one of extreme care and caution.
For taking this view, reliance is being placed on a decision of the Honble Supreme Court in the case of Life Insurance Corporation of India and others versus Smt. Asha Goel and another, AIR 2001 Supreme Court 549. (See also AIR 1965 Madras 357, AIR 1999 Madhya Pradesh 13, AIR 1961 Punjab 253, AIR 1981 Delhi 171 and AIR 1991 Supreme Court
392).
18. Matter regarding suppression of material facts etc. came up for consideration before the National Commission in the case of Smt. Santosh Kanwar versus LIC of India, 2009 (3) CPR 136 (NC).
This question was dealt with threadbare and thereafter while allowing the appeal, LIC was held liable for payment of compensastion. So far back as in 1962, the Honble Supreme Court in the case of Mithoolal Nayak versus Life Insurance Corporation of India, AIR 1962 Supreme Court 814 has held, that fraudulent suppression of material facts as well as deliberate concealment of facts vitiates the policy. Suffice it to say in this behalf that fraud, as well as deliberate concealment, both being purely questions of facts, were required to be established by cogent, reliable, as well as by acceptable evidence by the OPs.
19. Here their stand in preliminary objection No.4 of reply to the complaint assumes significance. According to them subsequent to lodging of death claim by the complainant, OPs investigated the claim and during such investigation, it was revealed that the life assured had concealed material facts from the OPs which was evident from medical certificate. If the matter had been investigated as pleaded by the OPs, where is the record, and why it was not produced, there is no explanation in reply, nor any evidence on record, and the learned counsel for the OPs had no answer regarding withholding of such investigation. This compels us to draw an adverse inference against the OPs, that had it been produced, it would not have supported their defence. As already noted deceased had suffered from jaundice, stone in right kidney and allergy of skin, is the meaning understood in common parlance from what is mentioned in Annexure C-12 medical-cum-fitness certificate and death was due to G.I. bleeding which occurs all of a sudden, per witness Dr. B.D. Negi. As such grounds for repudiation cannot be accepted was urged by Mr. Sharma. In such circumstances, insurance company was held liable to honour the claim of the wife of deceased by DB of Allahabad High Court in the case of Smt. Shanti Devi versus Office of Insurance Ombudsman and Ors., AIR 2008 Allahabad 72.
20. On the other hand, Mr. Narender Sharma laid great emphasis on two decisions of Honble Supreme Court in the cases of Satwant Kaur Sandhu and P.C. Chacko, (supra). When reference is made to these decisions, it is evident that both are based on their own facts and are clearly distinguishable.
21. In the case of Satwant Kaur Sandhu, deceased-life assured was on regular haemodialysis, and was also suffering from chronic diabetes and renal failure for the last 16 years. All these diseases were of very serious and grave nature with long history and it was because of this reason that the Honble Supreme Court had held that it was necessary for the life assured to have disclosed those in the proposal form after having invoked the doctrine of uberrima fides. As already noted when reference is made to the affidavit of Dr. Jagdesh Rana, who had issued the medical-cum-fitness certificate Annexure C-12, he has categorically stated that Dr. Vivan Sood was suffering from normal ailments, which had no co-relation with the cause of death and diagnose of disease mentioned in death certificate discharge slip. In the face of this position, this decision does not advance the case of OPs in any manner whatsoever.
22. Likewise when reference is made to the decision in the case of P.C. Chacko (supra), in it Honble Supreme Court held, that if a person makes a wrong statement with knowledge of consequence, he would ordinarily be estopped from pleading that even if such a fact had been disclosed, it would not have made any material change. This decision also does not in any manner advance the case of the OPs.
23. We may also take note of another material fact in this case that during pendency of this complaint, a notice was issued on behalf of the complainant to the learned counsel for the OPs, for the production of records in the face of stand of his clients that the claim was investigated before repudiation of claim.
OPs were specifically called upon to produce the records of such investigation, all documents and records pertaining to said investigation and final report of Investigator. Certified copies were also required to be produced on the record of this case. At the time of hearing receipt of this notice could not be disputed on behalf of the OPs.
This reinforces our view to draw an adverse inference against the OPs for want of production of such records.
24. When reference is made to the statement of Dr. B.D. Negi, nothing material has come out in his cross-examination which may advance the case of the OPs. To the contrary, what is established from his statement is that the deceased was on duty when he suddenly suffered from the problem of G.I. bleeding. Though he did not vomit blood, but passed black stool. This problem would occur all of a sudden per witness. At the same time the complainant, has supported as well as reinforced all the facts stated by her in the complaint in her evidence-affidavit.
She has further established on record that father of deceased was bedridden and even after her husbands death, his father had to be taken for operation to Delhi. She spent Rs.17 lacs, and ultimately he died. Likewise affidavit of Dr. Jagdesh Rana suggested that the deceased was suffering from normal ailment, which are referred to in medical-cum-fitness certificate Annexure C-12. He has also made reference to the discharge slip when deceased was referred from Khaneri to IGMC, Shimla/PGI, Chandigarh, i.e. Annexure C-5 and death notification form issued by Fortis Hospital where the deceased breathed his last on 03.10.2007 at 12.10 p.m. (Dr. Rana has referred to Annexure P-1 in his affidavit which is a copy of Annexure C-12 with the complaint). Likewise he has referred to Annexure P-2 which is a copy of Annexure C-5 with the complaint, and Annexure P-3 which is a death notification form issued by Fortis Hospital Mohali).
25. A plea has been raised by the OPs that the complaint was over valued with an intention to bring it within the jurisdiction of this Commission and it was not maintainable. Besides this it involved complex and disputed facts which could not be gone into in summary proceedings under Consumer Protection Act, 1986 and the complaint was also liable to be dismissed because of own acts, deed, conduct and omission on the part of life assured. Thus repudiation was justified.
26. So far as plea of over valuation is concerned, we are of the view that facts material for determining the jurisdiction prima facie would be as set out in the complaint. Moreover in the peculiar background of this case, there is ample evidence to suggest that after death of life assured, the complainant had incurred Rs.17 lacs on the treatment of her bedridden father-in-law who ultimately died. She had raised loan from her relations. This according to learned counsel for the complainant was due to non-settlement of claim when money was urgently required by her.
Besides this, the situation in which she was placed, can be better imagined than explained. When amount of policies alongwith amounts spent by her on the treatment of her father-in-law, who was dependent on the deceased is worked out, according to the learned counsel for the complainant this complaint is very much maintainable before this Commission. We uphold this plea.
27. In the light of facts as noted hereinabove, we hold that no complex, muchless complicated questions of either fact or law, are involved in this complaint for which the complainant needs to be referred to a Civil Court as was forcefully urged by Mr. Narender Sharma. As such this plea is rejected. Likewise the deceased had not committed any act, as such the complaint was not liable to be dismissed for the so-called omission, deeds etc. as set out in their reply by the OPs.
28. No other point was urged.
29. In view of above discussion, now the question comes as to what relief the complainant is entitled to. We are of the view in this behalf, that in addition to Rs.6,50,000/- being face value of four insurance policies, claim qua which was repudiated by the OPs vide Annexures C-8 to C-11, it is further held that all benefits in terms of policies would also be paid/disbursed by the OPs to the complainant, with interest at the rate of 9% per annum on the total amount due from the date of filing of complaint, i.e. 01.07.2009, till the date of payment/deposit whichever is earlier. In addition to this, the complainant is also held entitled to compensation in the sum of Rs.1,00,000/- in the peculiar facts and circumstances of this case alongwith cost of this complaint quantified at Rs.10,000/-.
Complaint is disposed of in these terms.
30. Learned counsel for the parties have undertaken to collect copy of this order free of cost from the Court Secretary.
SHIMLA 20.08.2010.
( Justice Arun Kumar Goel ) (Retd.) President.
(Saroj Sharma) Member.
(Chander Shekhar Sharma) Member.
/dinesh/