State Consumer Disputes Redressal Commission
Lic Of India & Anr. vs Smt. Raj Rani on 20 August, 2009
H H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA. Appeal No. 124/2009. Date of Decision 20.8.2009. In the matter of: 1. Life Insurance Corporation of India, through its Senior Divisional Manager, Division Office, Sector 17, Chandigarh, UT., 2. Branch Manager, Life Insurance Corporation of India, Branch Office, Near Cinema Hall, Nangal, Distt. Ropar, Punjab. Appellants. Versus Smt. Raj Rani W/o late Shri Darshan Singh R/o Q. No. 126, Type-2, Sector 2, Naya Nangal, Distt. Ropar, Punjab. Respondent. Honble Mr. Justice Arun Kumar Goel (Retd.), President. Honble Mrs. Saroj Sharma, Member. Honble Mr. Chander Shekher Sharma, Member. Whether approved for reporting? Yes. For the Appellants.: Mr. Ratish Sharma, Advocate vice Mr. Navlesh Verma, Advocate. For the Respondent.: Mr. Sanjeev Sharma, Advocate. O R D E R
Justice Arun Kumar Goel (Retd.), President, (Oral).
Heard learned counsel for the parties and with their assistance record of the complaint file has also been examined.
2. Vide order dated 10.3.2009 passed by District Forum Una, Consumer Complaint No. 40/2007 has been allowed. Appellants have been directed to pay Rs. 60,000/- plus vested bonus to the respondent alongwith interest @ 9% per annum from the date of complaint, i.e. 9.3.2007 till realization, besides cost of Rs. 2,000/-.
3. Facts as they emerge from the record of the complaint file are, that late Shri Darshan Singh was working as Operator Grade-I at N.F.L., Naya Nangal, District Ropar. On 11.9.2004 he had obtained an insurance policy in the sum of Rs. 60,000/- with vested bonus and other benefits. Copy of the insurance bond issued by the appellants is Annexure C-2.
Insurance premium was payable monthly in the sum of Rs. 570/-. Original policy bond has been filed by the appellants alongwith their reply. Life assured, i.e. Mr. Darshan Singh died on 25.5.2005. Claim was lodged by the respondent being the widow of the deceased with the appellants. It was not settled. To the contrary it was repudiated by the appellants. Record further shows that the respondent approached the Zonal Office Claims Review Committee. However vide Annexure C-1 repudiation of claim was reaffirmed. This resulted in filing of the complaint on account of deficiency in service on the part of the appellants.
4. When put to notice, while contesting the complaint of the respondent stand of the appellants was, that the contract of insurance is based on utmost good faith and bonafide on the principles of uberrima fides. As such life assured, i.e. the deceased Mr. Darshan Singh was supposed to have given true and correct information in the proposal form regarding his state of health. Copy of the proposal form is Annexure RW-2.
In this according to the appellants, he (Mr. Darshan Singh) denied having undergone treatment etc., and or having remained admitted in the hospital before getting insurance policy. Thus the appellants justified the repudiation and prayed for dismissal of the complaint while allowing this appeal with costs.
5. District Forum below after having examined the pleadings, as well as the evidence produced by the parties, as also the statements of Dr. Vinay Gulati and Mr. G.C. Sahota has allowed the complaint. Hence this appeal.
6. Learned counsel for the appellants submitted that the suppression of facts regarding the state of health before obtaining the insurance policy on 11.9.2004 by the life assured is clearly established in this case. Reason being that the deceased was admitted in hospital on 17.4.2003 for the disease, i.e. Pulmonary Koch, and was discharged on 21.4.2003. In this behalf reference was also made to Form No. 3816, Ext. RW/3. Therefore according to learned counsel, the insurance policy having been obtained by fraudulent means based on suppression of material facts, as such the same stood vitiated under law and the appeal deserves to be allowed on this ground alone.
In support of this plea, learned counsel also drew our attention to the proposal form and laid emphasis on its column No. 11. This plea was seriously contested and resisted on behalf of the respondent. Per Mr. Sharma, the impugned order suffers from no infirmity which may call for interference in this appeal. In order to succeed on the plea on which the claim was not settled by the appellants, they were supposed to prove that the suppression of material facts/information was with fraudulent intent. These facts are not proved by the appellants on record.
7. Before undertaking insurance, the Insurance Agent/Development Officer of the appellants is statutorily required to explain the merits, demerits, exceptions etc. of the policy as per requirement of Insurance Regulatory and Development Authority (Protection of Policyholders Interests) Regulations, 2002. These have been framed by the Insurance Regulatory Development Authority under the Insurance Regulatory Development Authority Act, 1999, as well as under Insurance Act, 1938. There is no material placed on record by the appellants. Best person(s) who could have said something in this behalf was the Insurance Agent/Development Officer who had got the proposal form Ext. RW-2 filled in. Why affidavit of such person was not filed, answer on behalf of the appellants, was that as per page 4 of the proposal form, its contents were fully explained to the life assured-Mr. Darshan Singh at the time of insurance. We are not impressed by this argument urged on behalf of the appellants, even if we hold that there is suppression of material fact regarding state of health as alleged by the appellants, still other requirement that it was fraudulent is not proved. Fraud is question of fact to be established by reliable and acceptable evidence.
8. Suppression of a material fact by itself is no ground to revoke the policy as is the situation in the present case. In order to take benefit of Section 45 of the Insurance Act, 1938, so far the suppression of material fact is concerned, appellants were further supposed to prove that the suppression was of a material matter or fact and made with a fraudulent intent by the person who executed the proposal form, admittedly there is no such material on record. And further there has to be evidence of the fact, that the deceased had known at the time of making statement in the proposal form, that it was false or that he had suppressed facts which were material to be disclosed. This is the ratio of the decision of the Honble Supreme Court in the case of P.C. Chacko and another Vs. Chairman, Life Insurance Corporation of India and others., (2008) 1 SCC 321.
9. In the face of this decision and for want of evidence that suppression was fraudulent in its nature because the deceased failed to disclose his state of health when he obtained policy on 11.9.2004, there is no merit in the plea raised by the appellants.
10. Even on their plea of fraudulent suppression of material facts, appellants were further duty bound in law to show that there was direct nexus between the disease that was directly withheld by the life assured while obtaining policy and the cause of death. Suffice it to say in this behalf, that all exclusions in law are to be proved by the Insurance Company. Again there is no such evidence placed on record by the appellants. For taking this view we are supported by a 3 Member Bench decision of the National Commission in the case of Santosh Kanwar Vs. Life Insurance Corporation of India., 2008 (3) CPC 562, as well as by recent decision of the National Commission in the case of New India Assurance Co. Ltd. Vs. Arun Krishan Puri, III (2009) CPJ 6 (NC).
11. Faced with this situation, learned counsel for the appellants submitted that if the order of the District Forum below is upheld, it will be against the public policy keeping in view the fact that the contract of insurance is based on utmost good faith and bonafide. Suffice it to say in this behalf at the risk of repetition, that mere suppression by itself is no ground to accept this plea, unless it was also shown that such suppression was fraudulent as well as intentional. Both these elements are lacking in this case and none could be pointed out from the complaint file.
12. No other point is urged.
In view of the aforesaid discussion, we find no merit in this appeal which is accordingly dismissed, leaving the parties to bear their own 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 20, 2009. ( Justice Arun Kumar Goel ) (Retd.) President.
(Saroj Sharma) Member.
( Chander Shekher Sharma ) /Karan/ Member.