National Consumer Disputes Redressal
Life Insurance Corporation Of India vs Mu Jakia Wife Of Attaurrehman on 23 August, 2013
National Consumer Disputes Redressal Commission New Delhi Circuit Bench at Rajasthan, Jaipur REVISION PETITION NO. 4169 OF 2009 (From the order dated 10.07.2009 in Appeal no. 933 of 2005 of the Rajasthan State Consumer Disputes Redressal Commission, Jaipur) Life Insurance Corporation of India Divisional Manager Post Box no. 18, Patel Circle Udaipur Branch Manager Life Insurance Corporation of India Petitioners Kila Road, Chittorgarh Rajasthan Vs Mu Jakia wife of Attaurrehman Mohd Phurkan son of Atturrehman Phazul Rehman son of Habiburrehman Respondents All resident of Near Khandelwali Haweli Cheepoa Nohalla, Chittorgarh Tehsil and District Chittorgarh Rajasthan BEFORE: HONBLE MR JUSTICE V B GUPTA PRESIDING MEMBER HONBLE MRS REKHA GUYPTA MEMBER For the petitioner MR Ram Kalyan Sharma, Advocate For the Respondent IN PERSON PRONOUNCED ON 23rd August 2013 O R D E R REKHA GUPTA This revision petition no. 4169 of 2009 has been filed against the order dated 10.07.2009 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (the State Commission) in Appeal no. 933 of 2005. The brief facts of the case as given by the respondent/ complainant are that Akhil Khan brother of respondent bought an insurance policy bearing no. 183379899 from the petitioner no. 2. Insurance policy was acquired for a sum of Rs.1,50,000/-. The insured person Akil Khan had filled up the insurance proposal form for his insurance on 01.01.2004. In this insurance policy, Ali Khan being the brother of the respondent nominated him as his nominee. The respondent being the nominee in the said insurance policy, he is entitled to get the entire benefits of the insurance policy after the death of the insured person. On 30.05.2004 the insured person died in the Maharana Bhopal Hospital, Udaipur, due to meningitis. The insured person had got admitted in the general hospital, Chittorgarh on 27.05.2004. Dr Pugaliya had medically treated the insured person. Prior to it, the insured person had never suffered from any kind of illness. The insured person remained under medical treatment for 3-4 days and due to meningitis, the insured person died. The respondent being nominee in the insurance policy, after the death of the insured person sent the death claim form to the petitioner. The petitioner repudiated the claim of the respondent on 01.11.2004 stating therein that the insured person had previously been ill and he acquired the insurance policy by concealing the material fact of his illness, whereas it is absolutely incorrect. The insured person had never been suffering from any serious disease in the past. Merely getting a medical check-up in a hospital, does not mean that he was seriously sick. Even if he might have taken the treatment for minor disease, it does not tantamount to the fact that he was seriously ill. The insured person had never got treatment for more than one week. Further the insurance policy issued by the insurance corporation was issued by the petitioner Life Insurance Corporation (LIC) after the complete health/ medical examination of the insured person by Dr Radhey Shyam Ladhia, approved doctor of the LIC. But it is not admissible/ acceptable to the petitioner that the insurance claim be paid within a short span of time of insurance policy being taken due to the death of the insured person. Therefore, they did not want to make the payment of the insurance claim to the respondent. The insurance claim of the respondent was repudiated by the petitioner as the insured person was admitted in a hospital for the period from 03.06.2003 to 06.06.2003 and the disease diagnosed that whereas the cause of death was not the above mentioned disease, nor the insured person got the treatment of the above said disease. LIC has repudiated the claim of the respondent on the incorrect grounds. The insured person had never suffered any kind of disease prior to acquiring the insurance policy from the insurance corporation. Petitioner/opposite party no. 1 and 2 have admitted that there is no dispute regarding the fact that the insured person died on 30.05.2004. But the insured person had been suffering with serious disease prior to his first premium receipt dated 07.01.2004 and he got his treatment by being admitting in Maharana Bhopal Hospital, Udaipur, which makes it apparently clear that the insurance policy holder had previously been sick. The claim of the respondent has been rejected on justified grounds according to rules. The insurance policy holder had been suffering from serious disease such as CRF, HT, Septicemia, etc. Vide BHT No. 19211 dated 03.06.2003 he got the treatment for HT Nephrology in Maharana Bhopal Hospital, Udaipur. Dr Radhey Shyam did not medically examine the policy holder at the time of proposal of the insurance policy rather he has certified the facts mentioned by the policy holder in reply to question no. 10 and thereafter the insurance proposal form. The insurance policy could survive only for four months and 23 days after taking the policy, therefore, the benefits of section 45 of the Insurance Act cannot be extended to the policy holder. The policy holder has acquired the insurance policy in question by concealing the material facts regarding his state of health in the insurance proposal form and by playing fraud with insurance corporation. He entered into insurance contract/ agreement. This contract is purely based on principle of good faith. By not disclosing the facts of his previous disease, he has violated the principle of absolute good faith, as per law which is null and void. Therefore, the respondent is not entitled to get any amount of this decision. The policy holder remained admitted for a period from 03.06.2003 to 06.06.2003 in Maharana Bhopal Hospital, Udaipur and he got the treatment for the disease HT, Nephrology. He had been suffering from serious disease of CRT, HT, Nephrology, etc., which are based on the facts. The LIC has rejected the claim of the respondent on the justified grounds. The respondent is not entitled to get the double amount of the insurance policy, bonus benefits etc., thereon from the LIC. The respondent has not suffered any kind of mental agony, therefore, they are not entitled to get the damage of Rs.10,000/-. The insurance policy holder Akil Khan had been suffering with disease prior to submission of his insurance proposal form. He remained admitted in Maharana Bhopal Hospital, Udaipur and got his treatment from 03.06.2003 to 06.06.2003 for his disease namely HT, nephrology. The policy holder by not disclosing these facts in his proposal form, got the insurance policy from the LIC by playing fraud, therefore, as per law this contract is null and void. Due to suffering from this disease, he was admitted in General Hospital, Chittorgarh on 27.05.2004 in serious condition and considering his disease serious, he was discharged next day from there. He again got admitted in Maharana Bhopal Hospital, Udaipur on 30.05.2004 and on the same day he died. In this treatment also, the doctors have narrated his above mentioned previous disease. It is clear from this fact that the policy holder had suffered with the above mentioned serious disease prior to acquiring the insurance policy in subject. Therefore, the LIC has correctly rejected the claim of the respondent on the above mentioned ground. The insurance corporation has committed no deficiency in service on its part. The complaint has been instituted on the incorrect and false facts, therefore, the same is liable to be dismissed. The District Consumer Disputes Redressal Forum, Chittorgarh, Rajasthan (the District Forum) vide order dated 10.05.2005 after hearing the counsel for the parties and going through the records of the case, it observed as under: We look into consideration both the above mentioned arguments. We also carefully went through the judgment citation submitted before us. In this case the core issue to be adjudicated is that whether the insured person had acquired the insurance policy by concealing the facts. In this connection, the respondent has denied this fact stating that he had not concealed any fact, on the basis of the material available on record file, it is apparent that the insurance proposal was submitted on 01.01.2004 whereas prior to this the insured person remained admitted in the hospital for the period from 03.06.2003 to 06.06.2003 for the disease CRF, HT, septicaemia and in this regard it is abundantly clear from the produced Indoor patient bed head ticket and discharge ticket in the name of the insured person that the insurance policy could survive only for four months and 23 days. It was very essential to conduct enquiry into this case and under these circumstances and on the basis of the judgment citation submitted by Shri Dad, learned counsel for the opposite parties, which have been mentioned hereinabove. The principles laid down therein apply in the facts of the present case to some extent. Under these circumstances, actually when the insured person got his treatment on 03.06.2003 and on that day he was sick, definitely this fact would have been reflected in the proposal form which was not mentioned. Therefore, being contrary to the principle of good faith and due to concealment of the material facts, it would be appropriate to dismiss the present complaint. Resultantly, the present complaint is dismissed. Aggrieved by the order of the District Forum, the respondents filed an appeal before the State Commission. The State Commission vide their order dated 10.07.2009 has observed as under: There is no dispute on the point that the deceased had taken LIC policy from the petitioner for a sum of Rs.51,000/- bearing policy no. 183379899 on 01.01.2004. 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 01.01.204 he had not mentioned that he was suffering from any kind of disease. There is also no dispute on the point that deceased had died on 30.05.2004 meaning thereby within one year of issuance of the policy. There is no dispute on the point that the claim of the above mentioned policy was repudiated by the petitioner through letter dated 01.01.2004 on the grounds mentioned therein. On file there is a bed head ticket of the Maharana Bhopal Hospital, Udaipur in which it was stated that the deceased was admitted in the hospital on 03.06.2003 and was discharged from the hospital on 06.06.2003 and the diseases which were found diagnosed by the doctors were CRF, HT, septicaemia, nephritis (inflammation of kidney). It may be stated here that from the material available on record, it appears that the deceased was admitted in the Maharana Bhopal Hospital, Udaipur for the period 03.06.2003 to 06.06.2003 and the deceased had filled in up a declaration form regarding his health on 01.01.2004 and since in the declaration form dated 01.01.2004 the deceased had mentioned that he was not suffering from any kind of disease, therefore, it was a case of suppression of material facts regarding health on the part of the deceased and the District Forum had rightly held so. For the reasons stated above, the respondents were justified in repudiating the claim of the original complainant 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 original complainant are based on correct appreciation of entire material and evidence available on record and they do not suffer from any basis infirmity or illegality or perversity and hence, no interference is called for with the same and this appeal deserves to be dismissed. During the course of arguments the learned counsel for the complainants/ appellants 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 complainants/ respondents. 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.51,000/-and on humanitarian consideration, this Commission thinks it just and proper to award ex-gratia amount of Rs.15,000/- in lumpsum to the complainant/ appellant no.1. In view of the discussion made above, this appeal filed by the appellant is dismissed. However, the respondents LIC would pay a sum of Rs.15,000/- in lumpsum as ex-gratia payment to the complainant/ appellant bo.,1 within a period of two month from today. Hence, the present revision petition. The main grounds for the revision petition are that: The Honble State Commission failed to appreciate that when the complaint was dismissed, appeal was also dismissed then there was no question of awarding ex-gratia as lump sum to the tune of Rs.15,000/- to respondents. The Honble State Commission failed to appreciate that payment on humanitarian ground was not justified when the complaint was dismissed and also the Honble State Commission dismissed the appeal as the deceased had suppressed material facts in the declaration form. The Honble State Commission failed to appreciate that the prior to taking the policy i.e., on 01.01.2004 the deceased was suffering from CRF, HT, septicaemia nephritis (inflammation of kidney) and prior to that he was admitted in the Maharana Bhopal Hospital, Udaipur for the period 03.06.2003 to 06.03.2003 and since these facts were not disclosed by the deceased in his declaration form on 01.01.2004 was guilty of suppressing material facts. The Honble State Commission failed to appreciate by directing the petitioner to pay an amount of Rs.15,000/- as ex-gratia by dismissing the complaint filed by the respondents and also the appeal by the respondents. We have heard the learned counsel for the petitioner and the respondent in person and have gone through the records of the case. It is an undisputed fact that Shri Akhil Khan the deceased had taken LIC policy from the respondent for a sum of Rs.51,000/- on 01.01.2004. It is also an admitted fact that as per the bed head ticket of Maharana Bhopal Hospital, Udaipur the deceased was admitted to the hospital on 03.06.2003 for the treatment of chronic renal failure, hypertension, septicaemia nephritis and was discharged from the hospital on 06.06.2003. While the State Commission has correctly come to the conclusion that the petitioner were justified in repudiating the claim of the respondents on the ground of suppression of material fact regarding health and that the finding of the District Forum rejecting the claim of the respondents were based on correct appreciation of entire material 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 the appeal was dismissed. The State Commission erroneously went on to award an ex-gratia payment on humanitarian consideration of Rs.15,000/-. This is beyond the pleadings of the respondents. Further, in P C Chacko and Anr. Vs Chairman Life Insurance Corporation of India and Ors (2007 XAD (SC) 429), in which paragraph 20 which is relevant to us in this case reads as under: We are not unmindful of the fact that Life Insurance Corporation being a state within the meaning of Article 12 of the Constitution of India, its action must be fair, just and equitable but the same would not mean that it shall be asked to make a charity of public money, although the contract of insurance is found to be vitiated by reasons of an act of the insured. This is not a case where the contract of insurance or a clause thereof is unreasonable, unfair or irrational which could make the court carried the bargaining powers of the contracting parties. It is also not the case of the appellants that in framing the aforesaid questionnaire in the application/ proposal form, the respondents had acted unjustifiably or the conditions imposd are unconstitutional. The National Commission in RP Nos. 858, 894, 995, 1435, 1446, 1503, 1504, 1505, 1553, 1554, 1679, 1680, 1722, 1723, 3631 of 2009, 1504 of 2006, 3147, 3789, 3855, 3858 to 3860, 3917, 3918, 4662, 4663, 4726, 4727, 4836, 4837, 5009, 5010, 5030 of 2008, 23, 164, 331, 359, 1909, 1926, 2945, 2946, 3094, 3097 of 2009 decided on 17.12.2009 have stated as under: We are afraid in terms of provisions of Consumer Protection Act, 1986, we are not free to do a favour to a party. As far as the moral obligation is concerned, that has to be done voluntarily by the authority concerned. The Consumer Fora cannot pass or give direction or order to give a favour otherwise the word moral grounds are voluntarily will lose its very meaning. While going through the aim and objectives of the Consumer Protection Bill, 1986, as highlighted by the learned counsel for the respondent we are of the view that a distinction needs to be made between justice natural or otherwise and favour. There is no room for favouritism while dispensing justice. The word ex-gratia has been interpreted/ understood to mean favour, rendered voluntarily and on moral grounds, thus, clearly ousting the jurisdiction of quasi judicial bodies like ours to direct a party to show favour. If we do this, this will not only run counter to the letter and spirit of Consumer Protection Act but also assume/ confer powers which are not conferred upon us by Law/ mandate. Any direction by Consumer Fora to the party concerned to grant ex-gratia payment will defeat the very purpose and meaning of ex-gratia, i.e., favour, grace shown voluntarily on moral grounds. However, this order would not deter directing payment of ex-gratia basis by the Consumer Forums, provided, the concurrence of the sanctioning authority of insurance company, is obtained through their counsel (counsel for the insurance company) for making the payment on ex-gratia basis. Learned counsel for the petitioner have also filed the judgment of this Commission in RP No. 3310 of 2009 decided on 06.01.2010, wherein it has been observed as under: State Commission while allowing the appeal and dismissing the complaint, has awarded Rs.25,000/- by way of ex-gratia. This judgment is contrary to a subsequent judgment passed by this Commission in Life Insurance Corporation of India vs Prahlad Singh and Ors and other connected revision petitions in which we have held that the State Commission, suo moto, cannot order payment of ex-gratia amount. The point in issue is concluded in favour of the petitioner and against the respondent. Respondent is not present despite service. Ordered to be proceeded ex parte. In view of the law laid down by this Commission in Prahlad Singh case (supra), we allow the revision petition, set aside the order passed by the State Commission and dismiss the complaint. Revision petition stands disposed of in above terms. In view of the aforementioned circumstances, we are of the view that Consumer Fora by the very construction of the Act, are not empowered to direct any party for grant of ex-gratia payment, in view of which we are unable to sustain the orders passed by the State Commission directing the LIC to pay ex-gratia amount of Rs.15,000/-. Hence, the revision petition is allowed and the order passed by the State Commission is set aside. Sd/- ......................J [ V B Gupta ] Sd/- .......................
[ Rekha Gupta ] satish