State Consumer Disputes Redressal Commission
Mrs. Anuradha Anand Naik, vs Life Insurance Corporation Of India on 10 July, 2012
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PANAJI- GOA Complaint No. 12/2010 Mrs. Anuradha Anand Naik, Satta Adhar Arcade, Flat No.207, Building No.C-4, II Floor, Peddem, Mapusa, Bardez, Goa ..Complainant V/s. Life Insurance Corporation of India (through its Sr. Divisional Manager) Jeevan Vishwas, Plot No.2, E.D.C. Complex, Patto, Panaji Goa 403 001. .. Opposite Party -1 Life Insurance Corporation of India(through its Zonal Manager, Western Zonal Office, Yogakshema Jeevan Bima Marg, P.B. No.:19953, Mumbai 400 021. Opposite Party - 2 Complainant in person Opposite Party/L.I.C. is represented by Adv. Shri S. V. Kamat Coram: Shri Justice N.A. Britto, President Smt. Vidhya R. Gurav, Member Dated:10/07/2012 ORDER
[Per Justice Shri N.A. Britto, President] The Complainant is the widow and nominee of late Shri Anand Laxman Naik who expired on 25/01/2008.
In this complaint filed on 22/07/2010, under section 17 of Consumer Protection Act, 1986, the Complainant seeks to recover from the Opposite Party, the insurer, a sum of Rs.16,10,000/- plus bonus with interest @12% and compensation of Rs.6,00,000/- besides cost of Rs.25,000/-.
2. The Complainants husband the said Anand Laxman Naik (deceased, for short) had obtained from the Opposite Party, 12 policies on his life. He did not allow 4 of them to lapse, and upon his death, the sum due on the said 4 policies has been paid by the Opposite Party to the Complainant, his nominee, and there is no dispute about it. The Complainant allowed 8 policies to lapse by not paying quarterly premia for 3 quarters. The details of the said policies are as follows:
Sr. No. No. of Policy Date Sum Assured Date of last premium paid Due date of premium
1.
930781973 06.01.06 1,00,000/-
06/04/07 06/07/07
2. 930781980 06.01.06 2,00,000/-
06/04/07 06/07/07
3. 930781979 14.01.06 5,00,000/-
04/04/07 14/07/07
4. 930781981 14.01.06 2,00,000/-
06/04/07 06/07/07
5. 930787634 28.03.06 2,00,000/-
28/03/07 28/06/07
6. 930787638 28.03.06 1,00,000/-
28/03/07 28/06/07
7. 930787639 28.03.06 2,00,000/-
28/03/07 28/06/07
8. 930787661 28.03.06 1,10,000/-
28/03/07 28/06/07 TOTAL 16,10,000/-
3. The above mentioned policies were revived on 22/01/2008 by payment of Rs.66,158/- including penalty, payable on the same. At the time of revival of the said policies the deceased had to file and had filed a revival form
- form no.680 - and he had answered the following questions:
QUESTIONS ANSWERS Q.No.2 - Since the date of your proposal for the above mentioned policy:
a) Have you ever suffered from any illness/ Disease requiring treatment for a week Or more? No
b) Have you had blood, urine or stool No examination
4.) Are you at present in sound health? Good
4. The deceased was required to subscribe and had subscribed at the foot of the said revival form a certificate, as follows:
I, Anand Naik do hereby declare that the foregoing statement and answers are true and complete in every particulars and agree and declare that this statement and this declaration along with my proposal for insurance under the lapsed policy shall be the basis of contract of revival of the lapsed policy between me and the Life Insurance Corporation of India and that if any untrue element be contained therein the said contract shall absolutely be null and void and all moneys which shall have been paid in respect thereof shall stand forfeited to the Corporation. (emphasis, ours)
5. Prior to filing the said proposal for revival on 22/01/2008, on 20/01/2008 at about 2.a.m. the deceased became sick and was admitted at about 3.11 a.m. in Vrundavan hospital in unconscious state. At the time of admission the Complainant gave history that the deceased was vomiting from 2.30 a.m. followed by unconscious state; was suffering from diabetes mellitus for 2 3 years and was on regular medication. This was certified by one Dr. Pramod K. Varma. The deceased did not recover, and the end came at about 11.45 a.m. on 25/01/2008 and the case summary cum death report dated 13/03/2008 shows that the deceased, 43 years old, was admitted in the hospital on 20/01/2008 at about 3.11 a.m. with history of unconsciousness, profuse sweating, and continuous frothing from the mouth and that he was a known case of diabetes - mellitus, hypertension. He was admitted in the intensive care unit on ventilatory support. He was managed intensively in the intensive care unit. Despite all intensive management patient expired on 25/01/2008 at 11.45 a.m. due to metabolic encephalopathy.
6. The Complainant informed the death of the deceased vide her letter dated 29/05/08 and on 16/06/2008 laid her claim for the amount due on the said policies but the Opposite Party vide their letter dated 13/09/2008 repudiated her claim stating that the policies which were lapsed were revived on 22/01/2008 on the strength of a personal statement regarding health made by the deceased on 22/01/2008 and that they had evidence and reasons to believe that the assured/ deceased was admitted to the hospital on 20/01/2008 with history of unconsciousness, etc. and he was also known to be a case of diabetes mellitus and hypertension which facts he had not disclosed in the said personal statement. The Opposite Party stated that it was evident that the deceased had withheld material information from them regarding his health at the time of getting the policy revived and therefore in terms of the declaration signed by him at the foot of the said revival form/personal statement the revival of the policy was declared as void and all moneys paid would belong to them. A copy of the said personal statement was enclosed and the Complainant was further informed that in case she disagreed with their decision (of the Sr. Divisional Manager) she could send a representation to the Zonal Office.
7. Accordingly, the Complainant sent a representation dated 20/10/2008 to the Zonal Manager, and the Claims Review Committee of the Opposite Party, rejected her representation. Complainant then approached the Insurance Ombudsman on or about 27/10/2009 but the Ombudsman by order dated 04/03/2010 rejected her representation. The Ombudsman took note of the certificate dated 24/03/2008 signed by Dr. Pramod K. Varma as well as the case summary cum death report issued by Dr. Digamber Naik and observed as follows:
The policies were revived on 22/01/2008 by submitting a declaration of good health. Infact it must be noted that the life assured was admitted in the hospital in an unconscious state and was in the ICU with ventilator support. However, the policies were revived on 22/01/2008 during hospitalization that too when he was in the ICU, by declaring state of health as good. The fact that he was admitted in the hospital was not disclosed to the insurer. However, in the DGH, it was declared that he was in good health. The life assured expired within 3 days of the revival of the policies.
The contract of Insurance is a contract of utmost good faith and the parties to the contract are bound to disclose all the material information at the time of entering into a contract. Failure to do so, the contract can be avoided.
In view of this legal position LIC cannot be faulted for repudiating the claim on the ground of making mis-statement and withholding material information regarding the health of the assured at the time of revival of his policies.
8. The case of the Complainant is that the deceased due to some personal difficulty had not paid the quarterly premium on the said 8 policies which was due on different dates and as such he contacted the agent one Mr. Vishwanath R. Halarnkar for revival of the policies. On 19/01/2008 the deceased had informed the Complainant that he had signed the proposal form and the cheque for revival of the policies and she was under the impression that after signing the same he had handed over the same to the said agent on that day but after making enquiries in this regard she came to know that her husband had signed the cheque and the form on 19/01/2008 and thereafter he had requested the office clerk Shri Hanif Sheikh to file the details of the policies and submit them by Monday in the office of the Opposite Party, as 19/01/2008 being a Saturday the bank as well as the Opposite Partys transactions get over, early. Complainant stated that the deceased developed severe chest pain on 20/01/2008 and was admitted to the said Vrundavan hospital and as such the office staff remained busy assisting the family and could deposit the cheque only on 22/01/2008. According to her, prior to 20/01/2008 the deceased had not complained of any pain and was keeping very good health but unfortunately he died on 25/01/2008 of metabolic encephalopathy.
9. According to her, the deceased was not suffering from any disease and that the statement of Dr. Digamber Naik in the said death report dated 13/03/2008 that the deceased was a known case of diabetes and he was a diabetic since 2 3 years is wrong as it is the same doctor who had examined the deceased at the time of issuing the policy in the year 2006 and had certified that his condition was good. According to the Complainant, the Opposite Party did not wait to think that the person admitted to an ICU with ventilator support could fill a form with intention to suppress material facts and sign the same. According to her, the Opposite Party nor the Ombudsman considered the applicability of section 45 of the Insurance Act, 1938 and therefore the Opposite Party is debarred from repudiating the claim of the Complainant on the policies on the ground of mis-statements and withholding of material information regarding the health of the deceased, after the expiry of 2 years from the date the policies were effected, as the date of commencement of 4 policies was 06/01/06 and the date of the other 4, was 28/03/06 while the Opposite Party repudiated the claim on 13/09/2008. The Complainant stated that it was not the case of the Opposite Party that at the time of issuing of the policies in the year 2006 the deceased had made mis-statements in the personal statement but the alleged mis-statements were made by the deceased during the year 2008 at the time of the revival of the policies which is not relatable to the original policy and therefore they were not entitled to declare the revival of the policies as void. Complainant states that when the policies were revalidated, the revalidation related back to the date on which the policies were originally effected and that was in January and March of the year 2006 but the repudiation on 13/09/2008 was still beyond the period of 2 years as contemplated under section 45 of the Insurance Act, 1938.
10. The Complainant has referred to the decision of the Apex Court in the case of Mithoolal Naik V/s LIC (AIR 1962 SC 814) which was relied upon by the Honble National Commission in LIC V/s. Kulwant Kumari 2009 (2) CPR 385 (NC).
11. On the other hand, it is the case of the Opposite Party that the complaint was time barred as it was filed beyond 2 years of letter of repudiation dated 13/09/2008.
According to them, the claim was repudiated for non-declaration of material information at the time of revival. According to the Opposite Party, the forms for personal statement regarding health were dated 22/01/2008 and not 19/01/2008.
According to Opposite Party, the relative claim form B and B1 filled up by Dr. Pramod K. Verma, reveal that the patients medical history was reported to the doctor by the Complainant at the time of patients admission to the hospital to enable the doctor to arrive at correct diagnosis and to decide proper line of treatment, to ultimately save the patients life and as such the deceaseds history recorded on claim forms assumes great importance in the instant case.
Opposite Party denies that the death report dated 13/03/2008 was false. According to the Opposite Party, the Complainant was very much aware that the statements made in the personal statements were false and that the material information regarding the health of the deceased at the time of getting the policy revived, was withheld and therefore in terms of the declaration at the foot of the said personal statement, the revival of the policies was declared void and all moneys paid towards the revival of the policies belong to the Opposite Party.
12. The Opposite Party expressed serious doubts whether form no.680 was filled up and signed by the deceased himself. According to the Opposite Parties section 45 of the Insurance Act, 1938 also applies in case of revived polices, with equal force, when the revival is obtained by fraud and misrepresentation and in the case at hand the deceased was hospitalized and was admitted to ICU due to his critical health condition which information was suppressed from the Opposite Party. According to the Opposite Party, the contract of insurance being a contract of utmost good faith, the suppression of material fact at the time of revival by itself constitutes a breach of faith which leads to repudiation of claim.
According to the Opposite Party, the policies were revived based upon false representations. According to them, the decision of repudiation of the claim which was conveyed to the Complainant on 13/09/08 is well within 2 years from the date of revival of the policies i.e. to say 22/01/2008 and therefore the provisions of section 45 of the Insurance Act, 1938 squarely apply. According to Opposite Party, the repudiation of the Complainants claim was on valid grounds and that there is a big difference between an in-force policy and a lapsed policy (without paid up value) and in-force policy allows the life assured to enjoy the insurance benefits and that is not in case of a lapsed policy (without paid up value).
13. Both parties have chosen to file written arguments and we have perused the same.
14. As revival form no.680/ personal statement regarding the health of the deceased - and the payment was made on 22/01/2008 at a time when the deceased was admitted in the said hospital from 20/01/2008 in an unconscious state, the Opposite Party by application dated 25/10/2011 sought to send the said form for the opinion of handwriting expert, and this Commission by order dated 21/02/2012 dismissed the said application. The application was dismissed, inter alia, observing that the Opposite Party had no occasion to doubt the handwriting of the deceased husband of the Complainant on 22/01/2008 when they accepted the application for revival and the cheque and the doubt appeared to have arisen, only thereafter, based on the medical certificate dated 13/03/2008 issued by the Vrundavan Hospital stating that the said deceased husband was admitted on 20/01/2008 at 3.11 a.m. and that the Opposite Party had ample time of almost 3 years to obtain the opinion of the handwriting expert, as they had all the necessary documents with them.
15. Admittedly, the policies had lapsed on account of non payment of premiums for 3 quarters. On the basis of the application for revival dated 22/01/2008 and on payment of arrears of premium and penalties payable, that the application of the deceased was accepted and it is on the basis of the same that the policies were revived.
16. Complainants version that the revival form Form No.680 was signed by the deceased on 19/01/08 and so also the cheque, appears to be true. It is not the case of the Opposite Party that the cheque for Rs.66,158/- was signed by the Complainant and the payment was made by her. Opposite Party has also not proved that the Form No.680 was forged. However, the fact remains that the deceased had not filled in Form No.680 on 19/01/08 and had asked his clerk Shri Hanif Sheik to fill in the same and submit on Monday, 21/01/08. If the Form No.680 was filled in on 19/01/08 the truthful answer to Question No.2(a) instead of being a no would have been a yes. I am suffering from diabetes for last 2 3 years or more, as certified later by Dr. P. K. Verma of Vrundavan Hospital. Likewise, the answer to Question 4 would have been a no instead of good. However, we must hasten to add that Revival Form No.680 was filled in on 22/01/08 as it is dated 22/01/08 and also submitted on 22/01/08, and by then, the health condition of the deceased had entirely changed, and the deceased was lying in unconscious state in Vrundavan Hospital from 3.15 a.m. of 20/01/08, and it was expected, of whoever filled the form or was authorized to fill in the same, to have stated correctly the state of health of the deceased at the time of submitting the Form. It is therefore obvious that the proposal for revival Form No.680 was fraudulently submitted by suppressing vital material and relevant information regarding the health of the deceased. If correct information regarding the health of the deceased was given on 22/021/08 no insurer, in his right senses, would have revived the lapsed policies.
17. As rightly submitted on behalf of the Opposite Party, it was duty of the person authorized to fill the form to have disclosed at the time of filling and submitting the Form that the deceased had suffered a heart attack and was lying unconscious in Vrundavan Hospital. Form No.680 cannot be disowned by the deceased or now by the Complainant as it is the basis of revival of the policies. Likewise the Complainant cannot also disown the statements made therein and duly signed by the deceased, her husband. The deceased would be bound by the said statement, particularly answers to question no.2 (a), (b) and 4 whether the said form was filled in either by the deceased or for that mater by his clerk Sheikh Hanif or their accountant Shri Tejan Haldankar whose affidavit has not been filed to say that it is he who had filled in the details. The answers given by the deceased particularly to questions 2 (a) and 2 (b) and 4 certified by him at the bottom, were palpably false, as he stood admitted in the hospital in unconscious state and died subsequently due to metabolic encephalopathy being primary cause and diabetic mellitus being secondary cause. The certificate signed by the deceased at the foot of the said form no.680 clearly stipulates that answers given by him were complete in every particular and that they would be the basis for the contract of revival of the lapsed policy and in case any untrue element was contained therein the contract of revival would be null and void and all moneys paid would stand forfeited to the Corporation. It is in terms of the said certificate that the Opposite Party has repudiated the claim because they found that the information given by the deceased particularly in answers to question on. 2(a) & (b) were found to be false and that should have been the end of the controversy.
18. A contract of insurance is based on the principle of uberrimae fidei utmost good faith applicable to both parties. The rule of non disclosure of material facts vitiating a policy still holds the field.
The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts, the insurer is unaware of anything which may be material to the risk. Very often, it is the insured who is the sole person who has this knowledge.
The insurer may not even have the means to find out facts which would materially affect the risk. The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made reasonable inquiries. A contract of insurance, therefore, can be repudiated for non disclosure of material facts. What are material facts? Every circumstance and the law leans in favour of the insurer is material which would be relevant for a prudent insurer to fix the premium or to decide whether he should take the risk at all. That a proposer does not consider certain facts as not material is not relevant and if it is relevant for the insurer, it must be disclosed. As the Apex Court would say in Satwant Kaur Sandhu v/s. New India assurance Co. Ltd., (IV 2009 CPJ 8) 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 disclose it particularly while answering questions in the proposal form. Needless to emphasise that any inaccurate answer will entitle the insurer to repudiate his liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a Contract of Insurance.
19. Section 45 of the Insurance Act, 1938 reads as follows:
"45 policy not to be called in question on ground of mis-statement after two years. No policy of life insurance effect before the commencement of this Act shall after there expirty of two year from the date of commencement of this Act and no policy of life insurance a effect after the coming into force of this Act shall after the expirty to two year from the date on which it was effected. be called in question by an insurer on the ground that a statement made in the proposal four insurance or in any report of a medical officer, or referee or friend of the insured or in any other document learning to the issue of the policy was in accurate or fails unless the insure shows that such a statement was no a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose".
20. The Opposite Party has not repudiated the claim on the ground that the information given by the deceased at the time of obtaining the policies in the year 2006 was found to be false, though they could have done so and might have succeeded in view of the fact that at that time the deceased, as stated hereinabove, was on regular medication for diabetes, but they have made it very clear that they are not doing so.
21. The Complainant contends that the Opposite Party was legally debarred from repudiating the claim, after expiry of two years from the date the policies were effected.
According to her the policies were effected on 06/01/06 and 28.03.06 and were repudiated on 13/09/2008 and therefore section 45 of the Insurance Act would apply. Further submission is that the alleged misstatements fraudulent suppression of material statements by the deceased in the year 2008 at the time of the revival of the policies is not related to the execution of the original policy and therefore the Opposite Party was not entitled to declare the revival of the policy as void. Complainant submits that their contentions are supported by the decision of the Apex Court in Mithoolal Nayak (AIR 1962 SC 814) relied upon by the National Commission in LIC v/s Kulwant Kumari (2009 (2) CPR 385).
22. We are not impressed with the submissions made by the Complainant. There can be no dispute that the word effected has been interpreted to mean as the date of the acceptance of the proposal and not the date when a formal policy in cold print is issued (AIR 1971 Bom 304). Likewise, when a policy is revived or revalidated the revival dates back to the date of execution i.e. acceptance of the proposal (AIR 2008 Allah 72). In our view neither the case of Mithoolal Naik (Supra) or .
Kulwant Kumari (Supra) is of any assistance to the case of the Complainant.
23. The case of Mithoolal Naik was in respect of a policy issued to one Mahajan Deolal. We fail to understand how this judgment in the case of Mithoolal Naik is of any assistance to the case of the Complainant. On the contrary, it would have gone against the Complainant had the Opposite Party taken the stand that the Complainants husband had also suppressed the fact that he was suffering from diabetes at the time of giving his first proposal because according to the Complainant the deceased was suffering from diabetes for 2 3 years, and if the Complainant - wife knew about the same, the deceased would have also known about the same. A submission is made that at that time the deceased was examined by Dr. Digamber Naik. A similar submission was made in the case of Mithoolal Naik that he was examined by 4 doctors. The submission was rejected by the Apex Court observing that they had no means of knowing that he was treated for the serious ailments. Dr. Digamber Naik would not have known about the deceased suffering from diabetes, hypertension, unless he was told about the same. In this case the Apex Court has interpreted Section 45 as having two parts. The first part is regarding inaccurate statements or misstatements made in the proposal form which cannot be called in question after expiry of two years but has hastened to add that they were relieved of the task of examining the legal position that would follow as a result of inaccurate statements made by the insured in the proposal form or the personal statement in a case where Section 45 does not apply and held that the second part of the Section 45 is in the nature of proviso which creates and exception and would apply even after a period of two years if three conditions were fulfilled namely
(a) the statements must be on a material matter or there was suppression of 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 the making of the statement that it was false or that it suppressed facts which were material to disclose.
The bare facts of the case would show that the said Mahajan had made a proposal for insurance on his life in December 1942.
He was examined by one Dr. D. D. Dessai who submitted 2 reports, one through the agent one Shri Khan and the other he sent confidentially to say that the said Mahajan Deolal had dilated heart; that he was a physical wreck, etc. and his life was uninsurable. Mahajan Deolal was then to be examined by Civil Surgeon but after expiry of 6 months the proposal lapsed. A second proposal was made on 16/07/1944 through the same agent for a sum of Rs.25,000/-. This proposal was accepted. One of the questions which was answered by the said Mahajan Deolal in the negative is that for the past 5 years he had not consulted any medical man for any ailments, not necessarily confining to his house. This answer, according to the case of the respondent was found to be deliberately false because according to the evidence of Dr. P. B. Lakshamanan, consulting Physician at Jabalpur, Mahajan Deolal was examined and treated by the said doctor between 07/09/1943 and 06/10/1943 when the doctor found that Mahajan Deolal was suffering from anaemia, oedima of the feet, diarrhea and panting on exertion. In his personal statement also whether he had suffered from shortness of breath, anemia etc. the said Mahajan Deolal had given negative answers. In July 1944 Mahajan Deolal was examined by Dr. D. V. Kapadia but no mention was made of anaemia, oedima, shortness of breath, etc. On 13/03/1945 policy was issued to Mahajan Deolal on usual terms. The first premium due on the policy was taken from the amount which was already in deposit with the Insurer company in connection with the proposal made in 1942.
24. On 22/05/1945 Mahajan Deolal informed the Company that he would not be able to pay the premium and requested for cancellation of the policy. After the policy lapsed, on 28/10/1945 Mahajan Deolal made a request for revival of the policy and prior to that on 18/10/1945 the policy was assigned in favour of the said Mihoolal Nayak and the endorsement was duly registered. Inquiry was made with Mithoolal Naik whether he had any insurable interest in the life of Mahajan Deolal and it was informed that Mahajan Deolal was a friend of Mithoolal Nayak and the latter had purchased the policy for Rs. 427.12 being the premium paid by him so far. On his request for the revival of the policy, Mahajan Deolal was again medically examined, this time by one Dr. Bellapurkar and later by Dr. Clarke and the policy was then revived on payment of all arrears of premium, the same having been by Mahajan Deolal.
25. Mahajan Deolal died in November 1946 and the certificate of Dr. Clerke who attended Mahajan Deolal at the time of his death showed that the primary cause of death of Mahajan Deolal was Malaria followed by severe type of diarrhea and the secondary cause was anemia, chronic bronchitis and enlargement of liver. One of the other medical practitioners who had attended the said Mahajan Deolal was the said Dr. Laxamanan and on receipt of the certificate the Insurer company got in touch with the said Dr. Laxamanan who had treated Mahajan Deolal in September October, 1943 for ailments which according to Dr. Laxamanan were of serious nature. The policy was repudiated by the letter dated 10/10/1947 i.e. after a period of 2 years from the date of issue of the policy on 13/03/1945 had expired and the Apex Court clearly held that section 45 of the Insurance Act applied to the facts of the case.
26. One of the questions raised in the Civil Suit filed was whether policy was vitiated by fraudulent suppression of facts by Mahajan Deolal. It was answered in the negative by learned trial Judge and in the affirmative by the High Court and the Honble Supreme Court, on consideration of the evidence, came to the conclusion that the conclusion of the High Court is correct.
The Honble Supreme Court referred to section 45 of the Insurance Act, 1938 and noted that the 3 conditions for the application of the second part of section 45 were :
a) the statement must be on a material matter or must be suppress facts which it was material to disclose,
b) the suppression must be fraudulently made by the policy holder;
c) the policy holder must have known at the time of making statement that it was false or that it suppressed facts that it was material to disclose.
27.The Honble Supreme Court thereafter proceeded to find out whether the said 3 conditions were fulfilled in that case and answered the same in the affirmative. The Honble Supreme Court held that the ailments for which Mahajan Deolal was treated by Dr. Laxamanan in September October 1943 were not trivial or casual ailments. It further noted that they did not think that Mahajan Deolal was likely to forget that in July 1944 he had been treated by Dr. Laxamanan for certain serious ailments only a few months before that date.
Thereafter the Honble Supreme Court proceeded to consider the evidence of Dr. Lakshamanan who had stated that when he had first examined Mahajan Deolal on 07/09/1943 he had found that his condition was serious as a result of the impoverished condition of his blood he was suffering from anemia, oadema of the feet, diarrhea and panting on exertion, etc. After considering the evidence of Dr. Lakshamanan the Honble Supreme Court came to the conclusion that they were unable to hold that the ailments from which Mahajan Deolal was suffering were trivial or casual. Ultimately the Honble Supreme Court held that Mahajan Deolal in his answer to the questions put to him not only failed to disclose what was material for him to disclose but he made a false statement to the effect that he had not been treated by any doctor for any such serious ailments as anemia or shortness of breath or asthma. In other words there was deliberate suppression fraudulently made by Mahajan Deolal. The appeal was ultimately dismissed.
28.The case of Kulvanth Kumari (Supra) stood on its own facts. Kailash Chander the deceased had taken out a policy on 09/04/2000 for Rs. 1,00,000/-. The policy had lapsed, and was revived on 07/05/2002.
Kailash Chander died of heart failure on 04/04/2003. The policy was repudiated on 13/09/2003 on the ground that he deceased was suffering from diabetic mellitus, 2 years before the date of revival and was getting treatment for the same for the said 2 years prior to the revival of the policy. The question to which answers were given by the deceased at the time of revival of the policy on 07/05/2002 which are seen from para 5 of the judgment did not refer to diabetic mellitus as such though one of the questions was whether he was in sound health which he answered in the affirmative. The repudiation was sought to be proved with a certificate of one Dr. Rajesh Sharma exhibit-0-3/B to say that the deceased was suffering from diabetic mellitus. On facts it was found that the said Dr. Sharma was not qualified to give allopathic medicines in as much as he had not stated in his affidavit that he had given any ayurvedic medicine to the deceased Kailash Chander for the treatment of diabetes and it was held that such type of certificate or affidavit could not be relied upon to prove that the deceased was suffering from diabetes which could have resulted in heart failure.
29. Reverting again to the facts of the case, the original policies, issued to the deceased, were issued in January and March 2006. They lapsed on account of non-payment of 3 quarterly premiums. They were dead for all practical purposes. They had to be revived i.e. given life again. It is true, revival relates back to the date of acceptance of proposal or issuance of the policy but as already stated, fraudulent suppression of facts which are material to be disclosed, if not disclosed, no immunity of 2 years would be available from the date the policy was effected and on the same principle from the date the policy was revived. The deceased might have had the best of intentions on 19/1/08 but did nothing of any consequence and by the time the policies were actually revived things had drastically changed, with the deceased lying unconscious in Vrundavan Hospital. The Complainant should stand or fall with the revival form filed on 22/01/2008 which is the very basis of reviving of the policies which had lapsed. The revival form was filed on a date when the deceased who was suffering from diabetes and hypertension was admitted in coma in Vrundavan hospital and yet in the application for revival it is fraudulently mentioned that the state of his health was good. The revival form carried a certificate at the foot of it by virtue of which the deceased had agreed that in case of any untrue element was contained therein the contract would be absolutely null and void. We have already concluded that the deceased has no other option but to own the information submitted by him in the said revival form whether it was given by the insurers agent or by his office clerk or his general manager. The said revival form was fraudulently filed.
30.We have already concluded that a contract of insurance is a contract uberrimae fidei of utmost good faith. Can a contract of revival of the same, be anything different, even if Section 45 of the Insurance Act, 1938 does not apply to a contract of revival as held by the Apex Court? The answer has got to be an emphatic `no. A contract of revival has also got to be uberrimae fidei and the same principle needs to be applied to a contract of revival, as can be seen from various decided cases. In the case at hand it was stipulated in the revival Form itself that any false information in the revival form would make it void and that is exactly what the Opposite Party has done. The O.P. have treated the revival as void. The revival has been repudiated because it was based on fraudulent suppression of material facts.
31. The case of Marketing Manager, LIC v/s Smt. S. Vijaya (I 1995 CPJ 122) was a case where the husband of respondent Smt. S. Vijaya had taken a life insurance policy for Rs.30,000/- which had lapsed due to non-payment of the premium for January, 1989. The policy was revived on 30/11/1989, after a lapse of 10 months. The insured died on 06/12/1989. The widows claim was repudiated by the LIC on the ground that the insured had suppressed the ailments from which he had suffered, namely hepatic encephalopathy and cirrhosis of liver and jaundice. At the time of revival in November 1989 the insured was required to submit a personal statement of health. In support of repudiation the LIC had produced case summary and discharge record of St. Johns Medical College Hospital, Bangalore which showed that the deceased insured was admitted from 11/09/89 to 14/09/89 and he was suffering from cirrhosis of liver and was chronic alcoholic for about 10 years and had 3 attacks of jaundice. The National Commission held that he insured had suppressed material facts concerning his health and as such the repudiation of the policy by LIC was fully warranted and as such there was no deficiency of service because of such repudiation.
32.The case of Smt. S. Vijaya was followed in LIC of India and another v/s Naveen Dingra (I 2004 CPJ 88). This was a case where the deceased Ashok Dingra had taken out 2 policies in the year 1980 and 1982 and both the policies lapsed in the year 1992 for non-payment of premium. They were got revived by the deceased on 08/09/1993 and 09/03/1994 and after that the insured Ashok Dingra died on 09/10/1994. The claim of the widow of Ashok Dingra ws repudiated on the ground that he was suffering from liver disease and had suppressed information of his ailment at the time of revival of policies. The National Commission, from the material on record, found that the leave record of the employer of the deceased went to show that the deceased was on frequent periods of leave almost on regular basis during 1992, 1993 and 1994.
The learned Commission further noted that prescriptions of the doctor and deceaseds admission in hospital were on record to establish and corraborate the facts that the deceased indeed was ailing at times requiring hospitalization. Records showed that he replied in the negative (No) in his form for revival of policy dated 08/02/1993 to all the questions including Have you every suffered from any illness/ disease requiring treatment for a week or more. Answer No was contradictory to his leave record and the prescription on record. The learned National Commission observed that there was no doubt left in their mind that the deceased was having ailment on the date he filed in the policy revival form which information he suppressed at the time of filing the same. The National Commission referred to the said case of Smt. S. Vijaya and then held that the case at hand was not covered by section 45 of the Insurance Act or the case of Mithoolal Naik and ultimately held that the deceased knowingly had given incorrect information on the personal health in the personal statement in the revival of lapsed policy form and further held that the petitioner LIC was right in repudiating the claim.
33. In LIC of India and ors v/s Shakuntala Devi and anr. (Unreported order dated 15/11/2011 in RP No.3050/2007) the learned Commission held that they agreed with counsel for Petitioner that it is well established through various court rulings including of that Commission in RP N.50-51 of 2011 (decided on 04/04/2011), that the revival of policy amounts to new contract and therefore a fresh declaration is taken at the time of revival of the policy and therefore no benefit can accrue to respondent in this case by taking the shelter of section 45 of the Insurance Act, 1938. We also agree with counsel for petitioner that there is adequate credible evidence on record that the respondents husband was suffering from tuberculosis and that he had suppressed this material fact. This has been proved by the medical certificate of the district tuberculosis officer which the Learned Commission noted was supplied by the respondent herself to the insurance company. Further, the Commission observed that it is also on record and not disputed that the insuree had taken medical leave for long periods for his treatment of tuberculosis. Since, an insurance is a contract entered between the parties in utmost good faith suppression of any material facts by the insuree ( as was done in this case), entitled the insurance company to repudiate the claim as per the terms and conditions of the policy.
34. In the case of Kajol V/s LIC (unreported order dated 04/04/2011 in RP 50 51 of 2011 the National Commission held as follows:
the law on the need for full disclosure clearly enunciated through a string of decisions of the Supreme Court of India ending with a reiteration in Satwant Kaur Sandhu v/s New India Assurance Co. Ltd., (IV 2009 CPJ 8 (SC). It was held that a contract of insurance is one of utmost good faith on the part of the assured. Thus, it needs little emphasis that when any 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 information sought for is material for the purpose of the policy or not.
35. The case of Smt. S. Vijaya has now been followed in the case of Smt. Kamoda Devi (2012 (1) CPR 245). We see no conflict in any of the decisions of the Lr. National Commission, cited hereinabove, as contended by the complainant.
36. In our opinion, the Opposite Party cannot be faulted in repudiating the policy. So also the Ombudsman. There is no deficiency of service on the part of Opposite Party giving a cause of action to the Complainant to approach this Commission.
37. The complaint, therefore is hereby dismissed, and considering the facts, with no order as to costs.
[Smt. Vidhya R. Gurav] [Justice Shri N. A. Britto] Member President