State Consumer Disputes Redressal Commission
Life Insurance Corporation Of India vs Rajeev Sharma on 24 December, 2015
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.43 of 2015
Date of Institution : 14.01.2015.
Date of decision : 24.12.2015.
1. Life Insurance Corporation of India, Zonal Office, Jeewan Bharti,
Connaught Circus, New Delhi through its Zonal Manager.
2. Life Insurance Corporation of India, Malwal Road, Ferozepur City,
through its Branch Manager
(Appellant No.1&2 through Life Insurance Corporation of India,
Jeevan Parkash Building, Sector 17-A, Chandigarh through its
Branch Manager (Legal).
.....Appellants/Opposite Parties
VERSUS
Rajeev Sharma son of Hari Dutt Sharma, resident of village & Post
Office Jhoke Hari Har, Tehsil and District Ferozepur.
.....Respondent/Complainant
First Appeal against the order dated
20.10.2014 passed by the District
Consumer Disputes Redressal Forum,
Ferozepur.
Quorum:
Hon'ble Mr. Justice Gurdev Singh, President
Sh. Vinod Kumar Gupta , Member
Present:
For the appellants : Sh. R.K.Bhatti, Advocate For the respondent : Ex-parte VINOD KUMAR GUPTA, MEMBER This appeal has been preferred by the appellants/opposite parties against the order dated 20.10.2014 passed by the District Consumer Disputes Redressal Forum, Ferozepur (in short "District Forum"), vide which the complaint filed by the complainant/respondent was accepted First Appeal No.43 of 2015 2 and the opposite parties were directed to pay to him the maturity sum assured of Rs.87,520/- along with vested bonus, if any, alongwith interest @ 9% per annum from the date of repudiation of the claim i.e. 7.3.2014 till realization besides Rs. 5,000/- as litigation expenses. The compliance of the order was ordered to be made within 30 days from the receipt of copy thereof.
2. Brief facts of the case are that the complainant, Rajiv Sharma, filed the complaint under the Consumer Protection Act, 1986, against the Opposite Parties (in short 'OPs') on the averments that his father Sh. Hari Dutt Sharma purchased Jeewan Saral (with profits) policy No.473245579 for the period 9.9.2011 to 9.9.2026, for a sum of Rs.87,520/- and death benefits sum assured was Rs.2,00,000/- and further accidental benefit sum assured was Rs.2,00,000/-. He was the nominee in the said policy. At the time of purchasing the said policy, the representative of the OPs obtained signatures of his father on blank stereo typed performa and lateron, he himself filled-up the performas. It was further pleaded that at the time of purchasing the policy, his father was physically and mentally fit. His father died due to heart attack. He filed the claim with OP No.2 and it assured him that his claim would be settled soon. OPs repudiated his claim on the ground of concealment of facts, vide letter dated 7.3.2014. He duly replied the said letter that the death of his father did not occur due to alcohol, tobacco or narcotic substance, but his death occurred due to heart attack. But thereafter, no further communication was done by the OPs. He alongwith his friend Gurlal Singh again approached and requested OP No.2 to reconsider his above claim on the basis of reply given by him thereto, but the First Appeal No.43 of 2015 3 employees of OP No.2 refused to do the needful. This act and conduct of the OPs amounted to deficiency in service and adoption of unfair trade practice on their part. He prayed for the issuance of the following directions to them :
(a) to pay the claim amount alongwith interest @ 24% per annum from the date of filing of the claim till actual realization;
(b) to pay Rs. 2,00,000/- as compensation on account of mental harassment, pain and agony; and
(c) to pay Rs.11,000/- as litigation expenses.
3. The complaint was contested by the OPs by filing the written reply, before the District Forum. Preliminary objections were taken that the deceased life assured (in short 'DLA') remained on medical leave from 6.12.2008 to 15.12.2008, 18.7.2010 to 3.8.2010, 16.8.2010 to 14.9.2010, 15.5.2011 to 30.5.2011 and from 18.8.2011 to 8.9.2011; totaling 125 days, prior to the date of filling of the proposal form dated 8.9.2011 and deliberately concealed that fact. He consulted and took treatment from various doctors and hospitals for his Alcohol narcotics, Fistula, LBA, Perional Sepsis, typhoid and abscess from 5.12.2008 to 1.9.2011, and filled up wrong information to following clauses of the proposal form:
11 (b) Have you ever been admitted to any hospital or nursing home for general check-up, observation, treatment or operation?. No. 11 (e) Are you suffering from or have you suffered from Diabetics etc or any other disease? No. First Appeal No.43 of 2015 4 11 (h) Do you use or have you ever used i) alcohol drinks ii) narcotics iii) any other drugs iv) tobacco in any form ? No. 11(i). What has been your usual state of health? Good.
The DLA made deliberate mis-statement and withheld material facts regarding his health at the time of filling-up the proposal from dated 08.09.2011. It was denied that at the time of purchasing the policy, the concerned agent obtained the signature on the blank proformas and filled it up the same later. The father of complainant had given the declaration that he had signed the proposal form after understanding all the questions in Punjabi. It was further declared by DLA that if any untrue averment is found to be contained therein the said contract shall be absolutely null and void and all the premiums shall stand forfeited to the Corporation. On merits, it was admitted that the father of the complainant purchased the policy from OPs for the period 09.09.2011 to 09.09.2026. The averment of the complainant that there was no nexus between the cause of death of deceased and the alleged fact of concealment and hence, the repudiation of the insurance claim by the OPs is unjustified. At the same time, the law has been settled to the effect that no such nexus is required to be proved between the cause of death and concealed fact by the insurer for repudiation of the contract of insurance. The essential point for repudiation of the contract of insurance is primarily the conduct of the insured with regard to concealment of the fact from insurer because the contract of insurance is based on utmost good faith and the insurer is expected to disclose all the particulars at the time of filling-up the First Appeal No.43 of 2015 5 proposal form. Other allegations contained in the complaint were denied by OPs and dismissal of the complaint was prayed for by OPs.
4. Both the parties produced evi6+dence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf, accepted the complaint, vide impugned order dated 20.10.2014.
5. We have heard the learned counsel for the appellants/OPs. The respondent was proceeded against ex-parte vide order dated 18.5.2015. We have carefully gone through the record of the case.
6. It was submitted by the learned counsel for the appellants/OPs that the District Forum erred in not appreciating the defence raised by them that the contract made between the Insurance Company and life insured is based on the principle of uberrima fides, so it was required by the life insured to disclose every material fact, at the time of filling up the proposal form, but the DLA had not disclosed that he remained on medical leave for 125 days and he consulted and took treatment from various doctors and hospitals for his Alcohol narcotics, Fistula, LBA, Perional Sepsis, Typhoid and abscess. These facts were not disclosed in the proposal form at the time of obtaining the insurance policy. The District Forum had wrongly held that the OPs had not produced any evidence that there was any nexus between the pre- existing disease and cause of death of DLA. The District Forum without appreciating the evidence produced on the record, wrongly allowed the complaint. The findings of District Forum are based on conjectures and surmises. The District Forum did not consider the fact that the DLA was employed as Assistant Lineman in PSEB and he had not taken this First Appeal No.43 of 2015 6 policy for the first time, but he was having two other policies issued in year 2001 & 2005 respectively, which was mentioned in the proposal form. It was prayed that the appeal be accepted and the order of the District Forum be set aside.
7. It is an admitted fact that the father of the complainant purchased LIC Jeevan Saral (with profits) policy bearing No.473245579 for the period 9.9.2011 to 9.9.2026 for a sum insured of Rs.87,520/- after paying the half yearly premium of Rs.4,852/- vide Ex. C-2. He was appointed as nominee under the said policy. DLA died on 18.8.2013. DLA was having two other policies which were issued in the year 2001 and 2005. This fact was disclosed by DLA in the proposal form and complainant admitted the same in his claim form. Hence, we can infer that he was aware of the terms and conditions of insurance policy. We have perused the proposal form Ex.OP-1&2/9. The relevant portion of the proposal form is reproduced as under:-
Personal History Question Answer 11(b) Have you ever been admitted to any hospital or No nursing home for general check-up, observation, treatment or operation ? 11 (c) Have you remained absent from place to work No on grounds of health during the last five years?
11(e) Are you suffering from or have you ever No suffered from Diabetics, Tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Laprosy or any other disease ?
11(h) Do you use or have you ever used (i) alcoholic No First Appeal No.43 of 2015 7 drinks (ii) narcotics (iii) any other drugs (iv) Tobacco in any from?
11(i) What has been your usual state of health ? Good "Declaration by the proposed :
I, HARI DUTT SHARMA, the person whose life herein before proposed to be assured, do hereby declare that the foregoing statements and answers have been given by me after fully understanding the questions and the same are true and complete in every particular and that I have not withheld any information and I do hereby agree and declare that these statements and this declaration shall be the basis of the contract of assurance between me and the Life Insurance Corporation of India and that if any untrue averment be contained therein the said contract shall be absolutely null and void and all premiums which shall have been paid in respect thereof shall stand forfeited to the Corporation."
8. The claim of the complainant was repudiated, vide letter dated 7.3.2014 Ex.C-3 by the OPs. The relevant portion of the letter Ex.C-3 provides as under :
"It is, therefore evident that he made deliberate Mis-statement and withheld the correct & material information from us regarding his ill state of health and consequent treatment at the time of effecting the assurance and hence in terms of the policy contract (condition 5)- Forfeiture in certain events of Conditions and Privileges of Policy Bond) and the declarations contained in the form of proposal for assurance dated 23.2.2011, we hereby repudiate the claim and accordingly, we are not liable for any payment under the policy."
9. We have perused medical certificates of the life assured as under:
First Appeal No.43 of 2015 8
i) Ex OP1 &2/2 medical certificate issued by Dr.Madan Mohan Aggarwal M.B.B.S. which state that Hari Dutt was suffering from fever (Typhoid) and severe backache and was advised rest from 05-12-2008 to 12- 12-2008.
ii) Ex OP1 &2/3 medical certificate issued by Dr. Kamal Kant Badhwar, Bone Joint & Polio Specialist, of Tarlok Hospital to Haridutt, who was advised complete bed rest for t/t C D of Fistula from 18-07-2010 to 23-07- 2010.
iii) Ex OP1 &2/4 medical certificate issued by Dr. Kamal Kant Badhwar, Bone Joint & Polio Specialist, of Tarlok Hospital to Haridutt, son of Parkash Chand, who took treatment from the hospital for the outdoor for alcoholic Necnti with fistula and from 16/8/2010 to 14/9/2010. He attended OPD ...... He was advised rest from 16/8/10 to 14/9/10.
iv) Ex OP1 &2/5 medical certificate issued by Dr. Kamal Kant Badhwar, Bone Joint & Polio Specialist, of Tarlok Hospital to Haridutt son of Parkash Chand, who remained under his treatment with LBA from 15/5/2011 to 29/5/2011. He took outdoor treatment for the ailment.
v) Ex OP1 &2/6 THE PUNJAB HEALTH SYSTEM CORPORATION CIVIL HOSPITAL OPD SLIP Dated 18/08/2011. Diagnosis: Fistula ano.
First Appeal No.43 of 2015 9
vi) Ex OP1 &2/7 Outdoor Ticket of Guru Gobind Singh Medical College and Hospital, Faridkot Dated 19.08.2011. He was advised bed rest for five days.
vii) Ex OP1 &2/8 medical certificate of Guru Nanak Mission Hospital for OPD treatment from 29/8/2011 to 01/09/2011, and advised bed rest from 02/9/2011 to 08/10/2011 for abscess.
The medical certificates Ex.OP-1 &2/2 to Ex. OP-1 &2/5 and OP-1 &2/8 and prescription slips OP1 &2/6 and OP1 & 2/7 respectively show that DLA took treatment for Alcohol narcotics, Fistula, LBA, Perional Sepsis, typhoid and abscess. The DLA availed medical leave from 06.12.2008 to 15.12.2008, 18.7.2010 to 3.8.2010, 16.8.2010 to 14.9.2010, 15.5.2011 to 30.5.2011 and from 18.8.2011 to 8.9.2011, as depicted in the certificate Ex.OP1& 2/1 issued by the employer of the insured.. The proposal form so filled in by the insured at the time of obtaining the policy was proved as Ex.OP-1&2/9, which contained the above said declaration duly signed by DLA. As per that declaration, the statements and the answers were given by DLA after fully understanding the questions and the same were true and complete in every particular. He had also agreed and declared that those statements and declaration would be the basis of the contract of insurance between him and the LIC and that if any untrue averment is contained therein, the contract shall be absolutely null and void.
10. A perusal of the questionnaires, as mentioned in the proposal form OP 1&2/9, makes it very much clear that DLA was asked if he remained absent from the place of work during the last five years First Appeal No.43 of 2015 10 and whether he remained admitted in any hospital for treatment or for general check up. He gave reply in 'No'. Thus, the DLA suppressed the material information with regard to his health asked from him. In case, he would have disclosed these facts, OPs might have refused to accept the proposal or might have undergone for more tests of DLA before issuing the policy. On account of making false statements in the proposal form by the insured, the contract of insurance is rendered void.
11. As per the claimant's statement Ex.C-9, the cause of the death of the DLA was mentioned as Heart Attack. The District Forum has observed that no evidence was produced by OPs that the alleged disease pointed out by them had any nexus with the cause of death of the insured. No doubt that there is no direct evidence that heart attack was suffered by DLA due to the diseases of which he was suffering. The DLA was under an obligation to give correct answers pertaining to his health at the time of issuance of policy and it is immaterial whether cause of death had any nexus or not with the disease suffered and suppressed by him. The contract of insurance is based on utmost good faith and if the insured deliberately suppressed any material facts of his pre-existing disease fraudulently, it renders the contract of insurance as invalid. The findings so recorded by the District Forum are contrary to the evidence brought on record by the OPs and wrongly allowed the complaint. So, the order of the District Forum cannot be sustained in this appeal and the claim repudiated by the OPs is justified.
12. Sequel to the above discussion, the appeal filed by the appellants is accepted and the order passed by the District Forum is set First Appeal No.43 of 2015 11 aside. Consequently, the complaint filed by the complainant is dismissed.
13. A sum of Rs. 25,000/- was deposited by the appellants at the time of filing of the appeal before this Commission. Another amount of Rs.74,740/- was deposited by them, vide receipt No.782392 dated 18.02.2015 as per directions of this Commission. Both these amounts along with interest, which has accrued thereon, if any, shall be remitted by the registry to the appellants by way of a crossed cheque/demand draft after the expiry of 45 days.
14. The arguments in this case were heard on 10.11.2015 and the order was reserved. Now, the order be communicated to the parties. No order as to costs.
15. The appeal could not be decided within the stipulated time frame due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH)
PRESIDENT
(VINOD KUMAR GUPTA)
December 24, 2015 MEMBER
Lb/-