State Consumer Disputes Redressal Commission
Geeta Devi vs Lic Of India on 3 March, 2009
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION, RAJASTHAN, JAIPUR APPEAL NO: 1809/2006 Smt. Geeta Devi r/o Gagaur Teh. Rajgarh Distt. Churu (Raj.) Complainant-appellant Vs. 1. Regional Manager, Life Insurance Corporation of India, Jeevan Bharti Bldg., Cannauht Circus, New Delhi. 2. Sr. Divisional Manager, Life Insurance Corporation of India,Bikaner. 3. Br.Manager, Life Insurance Corporation of India, Churu. Opposite parties-respondents Date of judgment Before: Mr.Justice Sunil Kumar Garg-President Mrs.Vimla Sethia-Member Mr.Asgar Khan counsel for the appellant Mr.J.P.Sharma counsel for the respondents 2 JUDGMENT
BY THE STATE COMMISSION ( PER HON. MR.JUSTICE SUNIL KUMAR GARG, PRESIDENT ) This appeal has been filed by the complainant appellant against order dated 5.9.06 passed by the District Forum, Churu in complaint no. 112/06 by which the complaint of the complainant appellant was dismissed.
2. It arises in the following circumstances-
That the complainant appellant had filed a complaint before the District Forum,Churu on 15.6.06 inter alia stating that her husband Rohitash Singh now deceased had taken LIC policy from the respondents for a sum of Rs.2 lacs bearing policy no.501416490 on 12.2.04 and the maturity date of the policy was 12.2.2019 and the date of birth of the deceased was 11.7.1959, meaning thereby at that time he was of the age of 45 years and the policy was issued with accidental benefit. It was further stated in the complaint that the deceased had died on 16.5.04 due to snake bite when he was doing some work in the field and thus the death of the deceased was accidental one.It was further stated in the complaint that after the death of the deceased claim was preferred by the complainant respondent being the wife and nominee of the deceased before the office of the respondents but that claim was repudiated by the respondents through letter dated 26.10.05 on the ground that at the time of taking the policy the deceased had filled in up a declartion form 3 regarding his health on 11.2.04 in which he had not mentioned that he was suffering from any kind of disease but they had the sufficient proof to prove the fact that prior to taking the policy i.e. on 11.2.04 , the deceased was suffering from Cancer in Penis for which he had consulted a medical man and had taken treatment from SMS Hospital, Jaipur for the period 20.1.04 to 22.1.04 and since these facts were not disclosed by the deceased in his declaration form on 11.2.04 at the time of taking the policy, therefore, the deceased was guilty of suppression of material facts regarding his health. Thereafter the present complaint was filed.
A reply was filed by the respondents on 10.8.06 and in the reply they have taken the same pleas which were taken by them in the repudiation letter dated 26.10.05. and it was prayed that complaint of the complainant be dismissed as claim of the complainant was rightly repudiated by the respondents.
After hearing the parties, the District Forum, Churu through impugned order dated 5.9.06 had dismissed the complaint inter alia holding-
(i) That in this case since the respondents had proved the fact that before filing in up the declaration form on 11.2.04 the deceased was a patient of Cancer and since that fact was not stated in the declartion form dated 11.2.04 , therefore, it was a case of suppression 4 of material facts regarding health on the part of the deceased.
(ii) That the respondents were justified in repudiating the claim of the complainant appellant.
Aggrieved from the said order dated 5.9.06 passed by the District Forum, Churu, this appeal has been filed by the complainant appellant.
3. In this appeal, the main contention of the learned counsel for the appellant complainant is that since in this case death of the deceased was due to snake bite and if for the sake of argument the deceased was a patient of Cancer in Penis and that fact had no nexus with the cause of death of the deceased and hence, repudiation of claim of the complainant appellant by the respondents was wholly illegal and arbitrary and in view of this the findings of the District Forum dismissing the complaint of the complainant appellant could not be sustained as they suffer from basic infirmity, illegality and perversity and it was prayed that appeal be allowed.
4. On the other hand, the learned counsel appearing for the respondents has supported the impugned order of the District Forum.
5. We have heard the learned counsel for the appellant as well as for the respondents and gone through the entire materials available on record.
6. There is no dispute on the point that the deceased had taken 5 LIC policy from the respondents for a sum of Rs.2 lacs bearing policy no.501416490 on 12.2.04 and the maturity date of the policy was 12.2.2019.
7. There is also no dispute on the point that at the time of taking the policy a declaration was made by the deceased and in that declaration on 11.2.04 , he had not mentioned that he was suffering from any kind of disease .
8. There is also no dispute on the point that deceased had died on 16.5.04 meaning thereby within four months of issuance of the policy.
9. There is no dispute on the point that the claim of the above mentioned policy was repudiated by the appellants through letter dated 26.10.05 on the grounds mentioned therein.
10. It may be stated here that no doubt as per the case of the complainant appellant the deceased had died due to snake bite but on file there is a bed head ticket of the SMS Hospital, Jaipur which shows that the deceased was admitted in the hospital on 20.1.04 and the disease which was diagnosed by the doctors was Cancer in Penis and further on 22.1.04 the deceased was referred to surgical OPD where apart from the disease of Cancer , disease of HIV was also found and since in this case declaration form regarding his health was filled in up by the deceased on 11.2.04 and since prior to that he was admitted in the SMS Hospital, Jaipur on 20.1.04 and the disease which was diagnosed by the doctors was Cancer in Penis and disease of HIV was also found.
11. Thus, in the facts and circumstances just narrated above, the 6 question for consideration is whether the findings recorded by the District Forum could be sustained or not and whether the repudiation of the claim of the complainant appellant by the respondents was justified or not.
12. Taken into consideration that the policy in question was taken by the deceased on 12.2.04 and declaration regarding his health was filled in up by the deceased on 11.2.04 and the respondents had established the fact that prior to that the deceased was admitted in the SMS Hospital, Jaipur on 20.1.04 and Cancer in Penis alongwith HIV was found and since being aware he had not mentioned these facts in his declartion form dated 11.2.04 which clearly goes to prove the fact that the deceased had knowingly, fraudulently and intentionally suppressed the above mentioned diseases and had taken the policy in question by suppressing material facts and therefore, it would amount to suppression of material facts regarding health on the part of the deceased in real sense.
13. The learned counsel for the complainant appellant had argued that if for the sake of argument , the deceased was admitted in the hospital where the disease of Cancer in Penis alongwith HIV was found, but since it has no bearing and nexus with the cause of death of the deceased, therefore, non-disclosure of that disease in the declaration form would not amount to suppression of material facts regarding health on the part of the deceased.
14. In our considered opinion, the above argument could not be appreciated as issue of nexus stands on different footing in the present case as non-disclosure of disease of Cancer in Penis for 7 which deceased had taken treatment from the doctors prior to filling in up the declaration form regarding his health on 11.2.04 has been found to be suppression of material facts regarding health in real sense on the part of the deceased.
15. It may be stated here that it is well settled law in the field of insurance is that contracts of insurance including the contracts of life assurance are contracts uberrima fides and every fact of materiality must be disclosed otherwise there is good ground for rescission and this duty to disclose continues upto the conclusion of the contract and covers any material alteration in the character of the risk which may take place between the proposal and acceptance.
16. It may be stated here that if for the sake of arguments it is found that the deceased had died due to snake bite, that too would not make any difference as the deceased had suppressed the diseases of Cancer & HIV and therefore, it was a case of suppression of material facts regarding health on the part of the deceased.
17. For the reasons stated above, the respondents were justified in repudiating the claim of the complainant appellant on the ground of suppression of material facts regarding health on the part of the deceased and the findings of the District Forum rejecting the claim of the complainant appellant are based on correct appreciation of entire materials and evidence available on record and they do not suffer from any basic infirmity or illegality or perversity and hence, no interference is called for with the same and this appeal deserves to be dismissed.
818. During the course of arguments the learned counsel for the complainant appellant has stated that in case the appeal of the appellants is going to be dismissed, in such circumstances some amount of compensation as ex-gratia be allowed to the complainant respondent who is an illiterate widow and poor lady.
On ex-gratia payment
19. Ex-gratia payments are made as an act of grace, if the damage caused is outside the scope of the policy terms, or the liability under the policy is doubtful. In such cases the payment is made as an act of grace on humanitarian grounds. As a matter of fact, the loss or damage is outside the terms of the policy but the insurer takes a lenient view on humanitarian grounds. In such cases, full amount to indemnify the damages is not made. Such payments do not place the insurer under an obligation to make such payments in similar circumstances in future.
20. Further ex-gratia payment of claim would arise where there was no legal liability on the Life Insurance Corporation to make payment as in the case of repudiated claim or unconcluded contract. Such claims are paid to mitigate hardship to the claimants by way of equitable relief. The analysis, particularly of a repudiated claim for consideration of an ex-gratia payment, would be a skilful exercise on the part of the concerned officers of the opponent Life Insurance Corporation of India. Ex-gratia payment cannot be claimed as a matter of right. For that the law laid down by the Hon'ble National Commission in the case of LIC Vs. Shashi Gupta ( 1994) 2 CPR 622 (NC) ) may be referred to.
921. Further the word 'ex-gratia' payment itself means a payment which is voluntarily and charitable in nature and since the C.P.Act,1986 is based on the principle of equity, therefore, hypertechnicalities could be ignored and equitable consideration should be kept in mind while deciding the matter.
22. However, looking to the entire facts and circumstances of the case and looking to the fact the LIC policy was for a sum of Rs.2 lacs and on humanitarian consideration, this Commission thinks it just and proper to award ex-gratia amount of Rs.30,000/- in lumpsum to the complainant appellant.
23. It is further made clear that ex-gratia payment to the tune of Rs.30,000/- in lumpsum is being given to the complainant appellant who is a widow, not as a matter of right but taken into consideration the facts and circumstances that the condition of a widow in India is not good and in the present case the complainant appellant is a widow lady.
24. In view of the discussions made above, this appeal filed by the appellant is dismissed . However, the respondents LIC would pay a sum of Rs.30,000/- in lumpsum as ex-gratia payment to the complainant appellant within a period of two months from today.
Member President