National Consumer Disputes Redressal
Life Insurance Corporation vs Smt. K.A. Chandrakala on 19 March, 2009
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 691 OF 2005 (From the Order dated 30.11.2004 in Appeal No. 1738 of 2004 of Karnataka State Consumer Disputes Redressal Commission, Bangalore) LIFE INSURANCE CORPORATION OF INDIA & OTHERS PETITIONERS VERSUS SMT. K.A. CHANDRAKALA RESPONDENT BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MR. B.K. TAIMNI, MEMBER FOR THE PETITIONER: MR. MOHINDER SINGH, ADVOCATE. MS. DIKSHA AHUJA, ADVOCATE. FOR THE RESPON DENT: MR. MUNEESH MALHOTRA, ADVOCATE. PRONOUNCED ON : 19.03.2009 O R D E R
ASHOK BHAN J., PRESIDENT Life Insurance Corporation of India-petitioner herein, which was the Opposite Party before the District Consumer Disputes Redressal Forum, Kodagu, Madikeri (hereinafter referred to as the District Forum for short), has filed the present Revision Petition.
Shortly stated, the facts of the case are:-
Life assured-S.M. Arun Kumar approached the Life Insurance Corporation, Madikeri Branch on 30.01.2002 for obtaining Jeevan Shree Policy on his life for a sum of Rs.5,00,000/-. After considering the feasibility of the proposal, a policy for Rs.5,00,000/- was issued under the policy bearing no. 721339844, which commenced w.e.f. 28.01.2002. On 04.04.2002, complainant informed the petitioner that the life assured had died and submitted the claim in respect of the following six policies:-
S.NO.
POLICY NUMBER SUM ASSURED (RUPEES)
1.
614475837 12,000/-
2. 620050882 25,000/-
3. 720316557 42,000/-
4. 720389163 1,00,000/-
5. 61477316 1,75,000/-
6. 721339844 5,00,000/-
The petitioner settled the claim of the respondent in respect of the above-mentioned first 5 policies but repudiated the claim made under the 6th policy on the ground that the life assured had suppressed the material facts regarding the change in his health status while taking the 6th policy. Petitioner being aggrieved filed a complaint before the District Forum.
District Forum directed the petitioner to pay a sum of Rs. 5,00,000/- along with interest @ 12% p.a. from the date of repudiation till the date of payment with accrued bonus. Cost of Rs.1,000/- were also imposed. Being aggrieved, the petitioner filed an Appeal before the Karnataka State Consumer Disputes Redressal Commission, Bangalore (hereinafter referred to as the State Commission for short), which has been dismissed by the impugned Order.
District Forum as well as the State Commission held that on the date on which the life assured took the 6th policy, there was no change in the health condition of the life assured or, in any case, he was not aware of the change in his health condition. The life assured died due to cardiac arrest which has nothing to do with the disease which the life assured had allegedly suppressed.
Counsel for the parties have been heard at length.
S.M. Arun Kumar died on 05.03.2002. As the claim under the 6th policy had arisen within 2 years from the date of commencement of the policy, the petitioner conducted an investigation regarding the genuineness of the claim. It was revealed during investigation that the life assured had consulted Dr. Keshava Murthy V. on 30.01.2002 who found that the deceased had a history of difficulty in swallowing and referred him to higher center for endoscopic examination and evaluation. Deceased was then examined in the Karnataka Cardio Diagnostics Centre, Mysore. The report of the Karnataka Cardio Diagnostics Centre, Mysore reads as follows:-
GROSS : Specimen consists of few gray white tiny bits of tissue. Entire specimen submitted.
MICRO :
Sections show normal stratified squamous opithelium overlying sheets and nests of malignant glandular epithelial cells infiltrating between muscle bundles.
IMPRESSION: INFILTRATING ADENOCARCINOMA SIGNET RING CELL TYPE.
On 17.04.2002, Dr. Victor gave the following certificate:-
This is to certify that Mr. S.M. Arun Kumar was referred to me on 1/2/2002 with difficulty in swallowing. He underwent endoscopic examination on 1/2/2002 and biopsy was taken on the same day. It was confirmed to be infiltrating adenocarcinoma from histopathological examination on 1/2/2002. He was referred for further treatment to other centers.
The Reports clearly spells out that the petitioner was suffering from infiltrating adenocarcinoma, i.e. cancer.
It has repeatedly been held that the Life Insurance Policy is to be governed by the principle of Utmost Good Faith on the part of both the parties. In the present case, in our considered opinion, both the Foras below erred grievously on this account. The life assured, in spite of knowing that he was suffering from cancer, yet decided not to reveal the same in the proposal form on account of which the insured failed on the criteria of Utmost Good Faith. The life assured suppressed information about his ailment while answering the questions in the proposal form which are reproduced below:-
Questions Answer 11(a) During the last five years did you consult a Medical Practitioner for any ailment requiring treatment for more than a week?
No
(b) Have you ever been admitted to any hospital or nursing home for general check-up, observation treatment or operation? No
(d) Are you suffering from or have you suffered any ailments pertaining to liver, stomach, heart, lungs, kidney, brain or nervous system? No
(g) Are you suffering from or have you ever suffered from diabetes, tuberculosis, high blood pressure, cancer, epilepsy, hydrocele, leprosy or any other disease?
No
(j) What have been your usual state of health? Good Soon after the deceased was advised by Dr. Keshav Murthy V. on 30.01.2002 to get endoscopic examination and evaluation done, the life assured rushed to the agent of the Life Insurance Corporation to get the policy in question which was of much higher amount than the earlier five policies put together. The earlier policies were taken in the 90s whereas the policy in question was taken in the year 2002. The deceased failed to act in good faith in not disclosing that he had been advised by Dr. Keshav Murthy V. to get endoscopic examination and evaluation done or that he had difficulty in swallowing. It is too much of a coincidence that the deceased took the policy immediately on being advised to get the endoscopic examination and evaluation done. This fact cannot be ignored while judging as to whether the deceased had acted in good faith or not.
Foras below, in their Orders, have held that the deceased died due to cardiac arrest and not because of the disease which the deceased had allegedly suppressed. We are not impressed with this submission. As we have stated above, insofar as the insurance policy especially the Life Insurance Policy is concerned, the person has to act in utmost good faith. Cancer is a serious disease and in good faith, life assured should have disclosed the information regarding the disease from which he was suffering. To the contrary, the deceased withheld the fact regarding his state of health on the date of taking of the policy in answering the questions contained in the proposal form (reproduced in the earlier paragraph) in the negative, which were evidently false.
The Orders passed by the Foras below cannot be sustained in the eyes of law. It is a clear case of not giving correct answers to the questions contained in the proposal form which shows that the deceased did not act in utmost good faith while giving answers to the questions in the proposal form.
For the reasons stated above, the Orders passed by the Foras below are set aside and the complaint is ordered to be dismissed. The parties shall bear their own costs.
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(ASHOK BHAN J.) PRESIDENT .
. . . . . . . . . . . . . . .
(B.K. TAIMNI) MEMBER REVISION PETITION NO.
691 OF 2005 (From the Order dated 30.11.2004 in Appeal No. 1738 of 2004 of Karnataka State Consumer Disputes Redressal Commission, Bangalore) LIFE INSURANCE CORPORATION OF INDIA & OTHERS PETITIONERS VERSUS SMT. K.A. CHANDRAKALA RESPONDENT Draft Order in the above matter is sent herewith for your kind perusal. If approved, the same may be listed for pronouncement.
(ASHOK BHAN J.) President 16.03.2009 Honble Mr. B.K. Taimni, Member