State Consumer Disputes Redressal Commission
Lic Of India vs Krishna Devi on 12 August, 2010
H H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA. Appeal No. 01/2010. Date of Decision 12.8.2010. In the matter of: 1. Life Insurance Corporation of India, through its Divisional Manager, DO, LIC, SDA Complex, Shimla 171 009., 2. Branch Manager, LIC, Branch Office, Kangra Distt. Kangra. Appellants. Versus Smt. Krishna Devi W/o late Sh. Dhrambir Singh R/o Rehalpur, PO Kangra, Tehsil & Distt. Kangra, HP. Respondent. --------------------------------------------------------------------------------------------------- Honble Mr. Justice Arun Kumar Goel (Retd.), President. Honble Mrs. Saroj Sharma, Member. Honble Mr. Chander Shekhar Sharma, Member. --------------------------------------------------------------------------------------------------- Whether approved for reporting? Yes. For the Appellants: Mr. Navlesh Verma, Advocate. For the Respondent. Mr. Sanjay Jaswal, Advocate. --------------------------------------------------------------------------------------------------- O R D E R
Per Mr. Chander Shekhar Sharma, Member.
This appeal is directed against the order of District Forum, Kangra at Dharamshala, passed in Consumer Complaint No. 134/2008, dated 31.10.2009 whereby the complaint of the respondent was allowed and the appellants were held liable to pay jointly and severally Rs. 5 lacs, to the latter alongwith all accrued benefits of the policy totalling Rs. 10 lacs within 30 days from the receipt of copy of the order, failing which this amount shall carry interest @ 9% per annum from the date of filing the complaint till its payment. Appellants have also been directed to pay compensation to the respondent to the tune of Rs. 25,000/- for causing mental agony and harassment, besides litigation cost of Rs.3000/-.
2. Facts of the case as they emerge from the record in brief are, that Dharambir Singh husband of the respondent had got himself insured with the appellants vide policy No. 151398075 for a sum of Rs. 5 lacs on 10.12.2004. He died on 18.1.2007 in a fire accident in his house. It was also specifically mentioned in the policy Annexure RW-1 that in case of death of the policy holder, he will be entitled to an additional amount equal to the term insured.
3. After the death of the husband of the respondent, she lodged claim being legal heir/widow/nominee. This that was repudiated by the appellants on the ground, that since the policy holder had suppressed material facts in the proposal form regarding his suffering from Chronic Alcohalism and Alcoholic Withdrawal Syndrome and also the medical leave availed by him. He had thus given wrong answers to the specific columns in the proposal form Annexure RW-3, particularly columns 11(K) to 11(G), as such there was deliberate misstatement of facts and withholding of material information by the life assured regarding his state of health. This resulted in filing of the complaint by the respondent.
Appellants contested the complaint on the grounds on which the claim was repudiated. Per them the claim was rightly repudiated and there was no deficiency of service on their part.
4. Summary of evidence led by the parties in nutshell is, that appellants in support of their case have filed affidavit of Vishwanath Manager of the appellants as OP-1, and affidavit of Kanwal Ram Sharma Superintendent of Panchayati Raj Ext. OPW-2, insurance policy RW-1 Claim Form No. 300 Ex. RW-2, medical certificates Ex. RW-3 to RW-6, Form No. 3787 Ext. RW-7, letter addressed to Director Panchayati Raj dated 21.5.2007 by the appellants Ext. RW-8 and Ext. RW-9 letter sent to Smt. Krishan Devi dated 8.8.2007. Respondent in support of her case filed her own affidavit, and relied upon Annexure C-1 Form No. 300, Annexure C-2, C-3 letters of repudiation and death certificate Annexure C-4.
5. We have heard learned counsel for the parties and have also gone through the record of the case file.
6. Mr. Navlesh Verma learned counsel for the appellants argued that the claim of the respondent was rightly repudiated by his clients as the contract of insurance is based upon the principal of uberrima fides, i.e. utmost good faith. This was breached by the policy holder, i.e. the life assured, as he had defrauded the Corporation by taking the insurance policy No. 151398075 by suppression of material facts of his suffering from Chronic Alcohalism and Alcoholic Withdrawal Syndrome, which is clear from the medical certificates issued by Dr. Raj Nursing Home, Gagal Kangra vide Exhibits RW-3 to RW-6. All these were countersigned by the deceased policy holder who suppressed the fact of his remaining on medical leave, from (i) 28.5.2002 to 5.7.2002, (ii) 12.8.2003 to 31.12.2003,
(iii) 1.1.2004 to 8.2.2004 and (iv) 9.2.2004 to 30.6.2004. Further per Mr. Verma life assured had also given wrong answers relating to his state of health to the columns 11(K) to 11(G) of the proposal forms. As such there is no deficiency of service on the part of appellants, thus claim of the respondent was rightly repudiated by the appelants. He also placed reliance of decisions of Apex Court/National Commission in the case of Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., 2009 CTJ 956 (SC) (CP) and P.C.Chacko and Another V/s Chairman Life Insurance Corporation of India and Others, (2008) 1 Supreme Court Cases 321 and Life Insurance Corporation of India & Anr. Vs. Smt. Suresh Kumari & Anr., in Revision Petition No. 2756 of 2009, before the National Commission dated 8.2.2010.
7. Mr. Sanjay Jaswal learned counsel for the respondent argued that there was no material suppression of facts on the part of the life assured in the present. Per him medical certificates Exts. RW-3 to RW-6 cannot be made basis for the purpose of allowing this appeal as was urged on behalf of the appellants, because it is clearly mentioned in these documents not valid for Medico Legal Cases. Besides this, cause of death of the policy holder was accidental fire, which had no nexus with the alleged disease/suppression. As such it makes no difference.
8. After hearing the learned counsel for the parties and going through the record of the case, we are of the considered view that there is no infirmity in the order of the District Forum below. Reason being that medical certificates Annexure RW-3 to RW-6 upon which the reliance had been placed by the learned counsel for the appellants were not valid for Medico Legal Cases. Moreover, Dr. R.K. Sharma cannot be termed as an expert as he had not deposed about his qualification/degree on the basis whereof he got himself registered as medical practitioner.
9. Submission regarding the policy holder having materially suppressed the fact about his taking leave on medical ground is also not material in the present case, because the policy holder had never remained admit in the hospital for any treatment. Above all, the view that we have taken on the basis of medical certificates, no submission based of these can be accepted. Besides this, from the proposal form Annexure R-W-1, it is clear that Dr. V.K. Mahajan had examined the deceased/policy holder at the time of taking the policy by him. He had not indicated any disease from which the policy holder was suffering at that time. Besides this, the appellants have not disputed the cause of death of the deceased in its reply. This was due to accidental fire as a result of which the policy holder had died. As such the cause of death which is due to accidental fire has no nexus with the alleged disease.
10. Our view is also supported by decision of this Commission/other State Commission in the case of LIC , Bilaspur & Anr. Versus Sarojan Devi, 1 (2009) CPJ 293 that repudiation of policy is unjustified when cause of death has no connection with the disease. See also Shantaben Ratilal Patel V/s LIC of India 1996 (2) CPJ 92 Gujarat., Life Insurance Corporation off India Vs. Chatri Devi HLJ 2009 HP 511.
11. There is no dispute about the legal proposition that contract of insurance is based upon utmost good faith and bonafide on the principal of uberrima fides. In the present case, it cannot be held on facts that there was suppression of any material facts by the deceased/life assured while replying to the columns 11(K) to 11(G) of the proposal form Ext. RW-3. Moreover Chronic Alcohalism and Alcoholic Withdrawal Syndrome cannot be termed to disease. This besides the fact that those have not been proved by the appellants, upon whom was the onus to prove these.
12. Another fact was noticed while examining the complaint file, that the proposal Form No. 300 Ext. RW-2 had been filled up by some other person and not by the respondent. Even the signature of the agent who had filled up the declaration form of the proposer does not find mention in Annexure RW-2. Affidavit of the said agent had also not been filed. This omission goes to the root of the case. No cogent and convincing evidence has been led by the appellants to the effect that on the date of the death of the insured, he was under the influence of liquor and due to his act the fire took place.
13. Non disclosure of the fact about taking of medical leave by the insured is not of any significance, because the so called disease has been held to be not a disease. . Besides this, the respondent has clearly deposed in her evidence-affidavit, that her husband was not a chronic alcoholic, and he was a healthy person who was medically fit on the date of death, i.e. on 10.12.2004, and had not died due to alcoholism.
14. The legal position in the matter as per law laid down by the Apex Court in the case of Satwant Kaur Sandhu Vs. New India Assurance Company. Ltd. (supra), wherein it had been held that insurer is under solemn obligation to make true and correct disclosure of the information within his knowledge about the questions asked in the proposal form and any inaccurate information entitles the insurer to repudiate his claim in case of material suppression relating to his state of health is not disputed. Moreover in this case before Honble Supreme Court ailments were of serious nature spanning over a period of 16 years. It was thus on facts of this case.
15. Learned counsel for the appellants had also laid much stress on the fact that the deceased/insured had denied column No.11 (G) of the proposal form Ext. RW-3 regarding his using of alcoholic drink. However such concealment regarding drinking habit of the life assured is not material for repudiation of the claim of the insurer in view of the decision given in case of Life Insurance Corporation of India Vs. Krishna Devi 1999 (2) CPJ 423 Punjab, wherein it was observed that the repudiation of claim on the ground that the insured deceased concealed the fact of drinking habit is not justified.
16. Learned counsel for the appellants laid stress upon the fact that the insurance claim was rightly repudiated in the present case, as the life assured had obtained the policy by fraudulent act of non disclosure of his disease/misstatement of facts, thus this case is clearly hit by provision of Section 45 of the Insurance Act, 1938.
17. Legal Position in the matters covered under Section 45 of the Insurance Act, 1938 had been dealt in detail by the Apex Court in case of P.C.Chacko and Another V/s Chairman Life Insurance Corporation of India and Others. (2008) 1 Supreme Court Cases 321, wherein it was held that policy should not be obtained with fraudulent acts by the insured and proposal can be repudiated if fraudulent act is discovered and suppression of material facts was made fraudulently. Three conditions were held essential for application of section 45 of the Insurance Act, 1938 in this case, which are extracted below:-
(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 suppressed facts which it was material to disclose.
18. In the present case there is no reliable, cogent and convincing evidence on record to prove that there was any material concealment of facts/fraud was there by the husband of the respondent, i.e. the policy holder at the time of obtaining policy.
19. Mr. Navlesh Verma learned counsel for the appellants also argued that the compensation awarded in the case to the tune of Rs. 25,000/- is on higher side. There appears to be force in the argument of Mr. Verma, as compensation appears to be on the higher side, hence it is reduced to Rs. 10,000/-.
20. No other point was urged.
In view of the aforesaid discussion and legal position explained hereinabove and keeping in view the facts and circumstances of the case there is no reason to interfere with the order of District Forum below, save and except to the extent of reducing the compensation to Rs. 10,000/- hence the appeal is partly allowed subject to this modification, with no orders as to costs.
All interim orders passed from time to time in this appeal shall stand vacated forthwith.
Learned counsel for the parties have undertaken to collect copy of this order from the Court Secretary free of cost as per rules.
Shimla, August 12, 2010. ( Justice Arun Kumar Goel ) (Retd.) President.
(Saroj Sharma) Member.
( Chander Shekher Sharma ) *KGuleria* Member.