National Consumer Disputes Redressal
Life Insurance Corporation Of India & ... vs Smt. Kempamma & Anr. on 24 January, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3848 OF 2007 (From the order dated 14.08.2007 in Appeal No.2177/06 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore) 1. Life Insurance Corpn. Of India Divisional Manager, No. 37, Jeevan Prakash, Mysore-Bangalore Road, Bannimantap, Mysore 2. Branch Office, LIC of India M.C., Road, Bandi Gowda Layout Mandya Through: Assistant Secretary Northern Zonal Office, LIC Jeevan Bharti, Connaught Circus, New Delhi Petitioners/OPs Versus 1. Smt. Kempamma W/o Late Hemagirigowda 2. Hemagirigowda @ Thammaiah Both R/o Yadavanahally Village, Bekkalale Post Koppahobli, Maddur Taluk Mandya, Karnataka Respondents/Complainants BEFORE HONBLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER HONBLE MR. JUSTICE K.S. CHAUDHARI, MEMBER For the Petitioners : Mr. Ashok Kashyap, Advocate For the Respondents: Mr. Jojo Jose, Advocate PRONOUNCED ON 24th January, 2013 O R D E R
PER JUSTICE K.S. CHAUDHARI, MEMBER This revision petition has been filed by the petitioner against the order dated 14.8.2007 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (in short, the State Commission) in Appeal No. 2177 of 2006 Kempamma & Anr. Vs. LIC of India & Anr. by which, while allowing appeal, reversed order of District Forum and allowed complaint and directed petitioner/OP to pay Rs.1,00,000/- along with 6% p.a. interest.
2. Brief facts of the case are that Complainant No. 1 husband and Complainant No. 2 father, Hemagirigowda obtained policy of Rs.1,00,000/- on 13.3.2001 from petitioner/respondent which lapsed due to non-payment of premium. On the application of the assured, policy was revived on 19.9.2003 but unfortunately assured died on 7.5.2005 due to heart attack.
Complainants submitted claim for policy amount which was repudiated by petitioner, hence, complainants filed complaint. Petitioner/OP filed written statement and admitted issuance and renewal of policy but submitted that policy was issued under medical scheme and on the declaration made in the proposal form and also before the medical examiner. At the time of renewal the deceased submitted his personal statement regarding health and medical report. Medical examiner also medically examined assured but assured falsely answered questions in the personal statement regarding his health and there was no discloser of material facts, so claim was repudiated. Assured died due to heart attack which had direct nexus with disease suffered by assured and prayed for dismissal of complaint. Learned District Forum after hearing both the parties dismissed complaint but on appeal learned State Commission vide impugned order set aside order of District Forum and allowed complaint against which this revision petition has been filed.
3. Heard learned Counsel for the parties and perused record.
4. Learned Counsel for the petitioner submitted that at the time of revival the assured suppressed fact of undertaking treatment and also falsely answered the questions in personal statement regarding his health and learned District Forum rightly dismissed the complaint but learned State Commission has committed error in allowing complaint, hence, petition be accepted and order of State Commission be set aside. On the other hand, learned Counsel for the respondent submitted that order passed by learned State Commission is in accordance with law as there was neither suppression of material facts nor nexus of death to treatment undertaken by assured, hence, petition be dismissed.
5. It is admitted case that assured policy lapsed which was revived on 19.9.2003 and at that time he submitted information regarding his health and treatment.
Learned District Forum in its order dated 21.8.2006 observed that assured suppressed material fact about health at the time of revival of policy. Learned District Forum observed as under:
15. Coming to the facts of this case at the time of revival of the policy i.e. on 19.9.2003 the life assured has given answers in his personal statement regarding his health as below:
Q.No.2 a) Have you suffered from any illness/ Disease requiring treatment for a week or more? :
No
b) Did you ever have any operation, accident or injury? :
No.
c) Did you ever undergo ECG, X-ray Screening, blood, Urine or stool Examination? :
No Q.No. 4 Are you at present in sound health :
Good
16. This health statement was given on 19.9.2003. The evidence of RW-2 and the documents Ex.D-6 and D-7 reveal that on 29.7.2003 the insured visited Vinayaka Hospital in Hanumant Anagara, Bangalore with a complaint of breathlessness on exertion and cough and sputum production since one month. On examination on the lungs, he found murmur sound, he is suspected bronchitis (lower respiratory tract infection) and he prescribed medicines and also X-ray as per Ex.D-6. As pere Ex.D-7 on 30.7.2003 the life assured had undergone chest X-ray and the diagnosis was right hilar and right basal pneumatics (? Kochs). According to the evidence of RW-2 as per the X-ray there was infection in the right lung at lower part in central portion and Kochs means tuberculosis. He was also advised to take the test of sputum continuously for three days. Of course, he has taken treatment as an outpatient. Though in the cross-examination, RW-2 has deposes that tuberculosis is a curable disease depending upon the infection and there was no heart problem to the life assured it is evident that at the time of renewal of the policy the deceased assured was aware that he had taken treatment for tuberculosis and under gone X-ray in spite of it he answered the questions narrated above in the negative though the treatment for tuberculosis and undergoing X-ray were within the knowledge of the deceased assured. Though it is contended that the deceased died due to heart attack and there is no nexus between tuberculosis and heart attack that the National Commission and our State Commission has held that there need not be any nexus between the decease at the time of obtaining the policy or revival to that of cause of death. It is established law that contract of insurance is of utmost good faith and the proposal statement regarding health shall be basis of contract at the time of revival and if it contains any untrue averments, the contract will be null and void. So the opposite party has proved that the deceased assured as suppressed undergoing treatment for tuberculosis for more than a week and also subjecting to the X-ray and in spite of the knowledge of tuberculosis, he concealed those facts at the time of revival of the policy though those material facts were within his knowledge. Therefore we answer point no. 1 in the affirmative.
6. Learned District Forum rightly observed that at the time of revival of lapsed policy the assured suppressed material facts about his health. Learned State Commission while allowing appeal observed as under:
No doubt the insurance company has examined one Dr. C.J. Girish in support of its defence. The said doctor in his evidence has deposed that the insured was subjected to medical tests conducted by it. In the test he has also appears to have diagnosed that the complainant was suffering from lower respiratory tract infection for which he prescribed medicine. In the cross examination he has deposed that the patient was not anemic and there was no illness pertaining to the heart and the patient had taken treatment as an outpatient and that tuberculosis infection is curable if the infection is not severe.
From this it is seen that at no point of time the insured had taken any treatment as an in-patient in any of the hospital. Further the death is due to the heart attack. The above said disease has no nexus with the cause of death. If that is so, there is no reason for the insurance company to repudiate the claim that too in the absence of any evidence to that the complainant had the knowledge of any of diseases even though he was subjected to certain medical tests by Dr. C.J. Girish.
Before the revival of the policy the insured was also subjected to medical test by the panel of doctors of the insurance company. If at all if the insured was suffering from any disease necessarily the doctor who conducted the medical examination would not have certified the insured was hale and healthy. Therefore, in our view the DF is not right in dismissing the complaint of the complainant.
7. Observances given by learned State Commission are apparently not correct because assured gave wrong answers regarding his health at the time of revival of policy which is apparent from the perusal of form and further treatment of disease which was also proved by petitioner by evidence of treating doctors before the District Forum. In such circumstances, it cannot be said that assured had not suppressed material facts and had not given wrong statement pertaining to his health.
8. Learned Counsel for the opposite party submitted that burden of proof regarding false representation and suppressing material fact lies on the Corporation. In support of his contention he placed reliance on (AIR) 1991 SC 392 LIC of India Vs. G.M. Channabasemma, IV CPJ 269 (NC) Asha Garg & Oth Vs. United India Insurance Co. Ltd. and II CPJ 9 (NC) LIC of India Vs. Badri Nageswaramma & Oth. in which it was held that burden to prove false representations and fraudulent suppression of facts by the assured lies on Insurance Company. We agree with the principles laid down in aforesaid citations but perusal of record reveals that OPs discharged its burden by proving false representation and suppression of material facts by the assured by evidence of RW1 Dr. C.J. Girish and treatment documents as well X-ray report. As the assured suppressed material facts and made false statements in the revival form the petitioner was right in repudiating claim and learned State Commission has committed error in allowing complaint.
9. Learned Counsel for the petitioner placed reliance on IV (2009) CPJ 8 (SC) Satwant Kaur Sandhu Vs. New India Assurance Company Ltd. in which Honble Apex Court held that insured is under obligation to make true and full disclosure of information within his knowledge. Where insured is on regular treatment and fully aware about his state of health and statements made in the proposal form regarding as to state of health are palpably untrue to his knowledge, repudiation of claim is justified. In the matter in hand, petitioner has proved that at the time of revival, assured suppressed material facts regarding his treatment and gave false answers to the questions and in such circumstances, petitioner rightly repudiated the claim.
10. Learned Counsel for the OP placed reliance on AIR (1962) SC 814 Mithoolal Nayak Vs. LIC of India in which it was observed The principle underlying the Explanation to S.19 of the Contract Act is that a false representation whether fraudulent or innocent, is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract.
We do not think that that principle applies in the present case. The terms of the policy make it clear that the averments made as to the state of health of the insured in the proposal form and the personal statement were, the basis of the contract between the parties, and the circumstance that Mahajan Deolal had taken pains to falsify or conceal that he had been treated for a serious ailment by Dr. Lakshmanan only a few months before the policy was taken shows that the falsification or concealment had an important bearing in obtaining the other partys consent. A man who has so acted cannot afterwards turn round and say: It could have made no difference if you had known the truth. In our opinion no question of waiver arises in the circumstances of this case, nor can the appellant take advantage of the Explanation to S.19 of the Indian Contract Act.
This citation does not help to the respondent rather supports the case of petitioner as deceased has suppressed material fact and made false representations in the revival form.
11. Learned Counsel for the respondent further argued that statement regarding his health at the time of revival of lapsed policy is not to be seen. This argument is devoid of force in the light of judgment rendered by this Commission in R.P. No. 85 of 2007 Pritam Kaur Vs. LIC of India in which it was held that At the time of revival fresh declaration is taken on the basis of which new contract is entered into. Thus, it becomes clear that at the time of revival of policy new contract comes into existence and if assured suppresses material fact or gives false declaration regarding his health, Insurance Company is entitled to repudiate claim.
12. As assured has suppressed material facts regarding his treatment before revival and gave wrong answers intentionally regarding his health and he died due to heart attack which had direct nexus with disease suffered by him, petitioner has not committed any error in repudiating claim.
Learned District Forum rightly dismissed complaint of the complainant/OPs and State Commission has committed error in allowing appeal and accepting complaint.
13. Consequently, revision petition filed by the petitioner is allowed and impugned order dated 14.8.2007 passed by learned State Commission is set aside and order of District Forum dated 21.8.2006 dismissing complaint is affirmed. There shall be no order as to cost.
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( V.B. GUPTA, J) PRESIDING MEMBER ..Sd/-
( K.S. CHAUDHARI, J) MEMBER k