National Consumer Disputes Redressal
Smt. A. Sujata, vs Life Insurance Corporation Of India, on 4 March, 2014
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO.776 OF 2011 (From order dated 27.01.2011 in Appeal No.528 of 2010 of Chhattisgarh State Consumer Disputes Redresdsal Commission, Raipur) Smt. A. Sujata, W/o Late Shri A.Venkatravi, R/o 41, B. Runwabandha Sector, Bhilai, Teh. & District Durg (C.G.) ......Petitioner/Complainant Versus 1. Life Insurance Corporation of India, Through : Branch Manager, Divisional Office, Jeevan Bima Marg, Pandri, Raipur(C.G.) 2. Life Insurance Corporation of India, Through: Branch Manager, Branch Office, Padnabhpur, Durg, Teh. & District Durg(C.G.) Respondents BEFORE: HONBLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER HONBLE MRS. REKHA GUPTA, MEMBER For the Petitioner : Mohd. Anis-Ur-Rehman, Advocte For the Respondents : Ms. Ritika Nagpal, Advocate Pronounced on:4th March, 2014 ORDER
PER MR. JUSTICE V. B. GUPTA, PRESIDING MEMBER Petitioner/complainant has filed the present revision petition under Section 21(b) of the Consumer Protection Act, 1986(for short,Act).
2. Brief facts are that Sh. A. Venkatravi,(since deceased)husband of Petitioner/Complainant who was working as a Crane Operator in the Bhilai Steel Plant had purchased life insurance policy of Rs.5,00,000/- on 24.4.2006 from Respondents/Opposite Parties. He died on 07.10.2008 on account of renal failure with other ailments. It is alleged by the petitioner that, on 07.09.2007 deceased was admitted in the Hospital of BSP and after conducting certain tests, it was found that he was having excessive blood urea. His kidney failed on 07.10.08 and he died. Death was intimated to the agent of the respondents and claim was preferred, However, respondents repudiated the claim on 24.10.09, on the ground that deceased was suffering from hypertension with chronic renal disease and cirrhosis of liver from 19.10.04 and deliberately suppressed the information regarding his pre-existing ailments at the time of making proposal for insurance.
3. In its reply, respondents have averred that deceased was guilty of suppression of material facts regarding his pre-existing serious ailments and thus violated the terms of the policy and the mutual confidence between insured and insurer. So, petitioner is not entitled of getting any amount under the insurance policy.
4. District Consumer Redressal Forum Durg (Chhattisgarh) (for short, District Forum) allowed the complaint vide order dated 30.07.2010,with the following directions;
1. The opposite parties will pay the amount of Rs.5,00,000/- to the complainant within one month from the date of order.
2. On the said amount the opposite parties will pay the interest @ 6 % to the complainant from the date of repudiation of claim 20.4.2010 till the payment.
3. The complainant will also be entitled for the amount of Rs.1,000/- as the cost of suit which will be payable by the opposite parties.
4. From the said amount the amount of Rs.2,50,000/- will be fixed deposited in the name of the complainant in any nationalized bank for three years in the saving account. In which the direction may be issued that without the permission of the forum no payment will be made before the time without the permission of the Forum.
5. Being aggrieved, respondents filed appeal before Chhattisgarh, State Consumer Disputes Redressal Commission, Raipur (for short,State Commission) which allowed the same, vide impugned order dated 27.01.2011 and set aside the order of the District Forum. Consequently,complaint of the petitioner was dismissed.
6. Hence, the present revision.
7. We have heard the learned counsel for the parties and gone through the record.
8. It has been contended by the learned counsel for the petitioner that deceased was having almost normal blood pressure all the time and there was no treatment with regard to the problem of liver or kidney, prior to the date of making proposal form for insurance policy. As such, there was no reason so as to suppress the material facts from the respondents
9. Further, it is contended that no affidavit of the concerned doctor was filed. Thus, petitioner was deprived the right to cross examine the doctor. Hence, impugned order is liable to be set aside.
10. On the other hand, it has been argued by the learned counsel for the respondent that contract of insurance is based on principle of utmost good faith. Any deviation from this principle entitles the insurer to cancel the insurance policy. In the present case, this principle has been violated at the time of filing the proposal form. The deceased deliberately concealed the fact that he was suffering from hypertension since 2000. Further, deceased was having Cirrhosis of liver since 2005 and was also on Hemodialysis since one year but this fact was deliberately concealed at the time of filing of proposal form in 2006. Under these circumstances, State Commission rightly dismissed the complaint filed by the petitioner. In support, learned counsel for the respondents has relied upon the following decisions of this Commissions;
(i) Satish Kumar Vs. Branch Manager, Life Insurance Corporation of India (R.P.No. 4678 of 2009)decided on 20.5.2013 and
(ii) The Branch Manager, LIC of India Vs. Lingala Radha @ Radamma(R.P. No. 1486 of 2012) decided on 15.05.2013.
11. As per copy of the Proposal Form dated 28.3.2006, deceased has stated that he was not suffering from any ailment at all. Whereas, the discharge summary dated 5.10.2005 issued by Medical Department of Bhilai Steel Plant shows that deceased was having Cirrhosis of liver and was on Hemodialysis since one year. It is an admitted fact that deceased was admitted in Bhilai Steel Plant Hospital on 07.09.2007 and during investigation it has come on record that his urea had increased and deceased died on 07.10.2008, due to kidney failure. In this regard, State Commission in its impugned order observed;
8.We have taken into consideration aforesaid arguments. We find that the Insurance Corporation has produced sufficient material to show that the deceased was suffering from many serious ailments prior to making proposal for insurance. From the treatment papers, which have been brought on record of the District Forum, it is clear that being an employee of Bhilai Steel Plant, the deceased was having facility of getting treatment in the Hospital of BSP and the Hospital used to keep history of such treatments given to the employees of the BSP. From the Discharge Summary, Annexure D9, it is apparent that, when the deceased came to the Hospital on 05.10.05, then he was having complaints of chest pain, his blood pressure was 160/90 and he was also having complaints of hypertension, cirrhosis of liver and kidney failure. He was on hemodialysis since one year. With this history, some treatments were prescribed to the deceased. As the treatment was with the aforesaid history, so it can well be inferred that the treatments were in respect of foresaid ailments and it was also in the knowledge of the deceased. He was also referred to nephrologist with request to examine him and to put him on hemodialysis. These all show that the deceased was having kidney problem, liver problem and some problem with heart, prior to the date of making proposal for insurance. But when the proposal form was signed by him then he conveniently suppressed all such information and in reply to the question as to whether he was suffering from or has ever suffered from diabetes, tuberculosis, high blood pressure, low blood pressure, cancer, epilepsy, hernia, hydrocele, leprosy or any other disease, he conveniently stated that he was not suffering or had ever suffered from any of all the aforesaid diseases or any other disease. He had also stated that his usual state of health was good. It is clear that these answers were untrue and correct facts have not been stated by him. He has also forgotten to state that he was brought to the Hospital, he was examined in the Hospital or treatments were given there to him prior to the date of making proposal. In reply of questions regarding aforesaid facts also he simply stated that he never got any treatment nor was brought to Hospital for examination or treatment. Thus, when we read the proposal form as well as the treatment papers together, then it is clear that the information given in the proposal form are not true on material aspects.
9.Apart from the treatment papers, the treating Doctor, who attended the deceased in the Hospital, Dr. S.K. Sethi, in his Medical Attendants Certificate, has also stated that the deceased himself gave history regarding his previous ailments, when he was admitted for treatment in the year 2008 and stated that he was having problem of hypertension since 2000 and was having problem of renal failure, detected in the year 2005 and problem of liver cirrhosis. Thus, to the Doctor also it was explained by the deceased himself that he was having all those problems and so it was in his knowledge on the date of making proposal for insurance.
10.So far as filing of affidavit of the Doctor is concerned, we do not find it necessary when photocopies of original treatment papers and certificate of Medical Attendant has also been brought on record. If the complainant is doubting the Medical Attendants Certificate, then the person could have been called for cross-examination by the complainant, but no such exercise was done by her. We find that the District Forum has committed an error in not considering the treatment papers, and in brushing aside the medical history as well as the certificate of Doctor and in taking them lightly.
11. Therefore, this appeal succeeds and is allowed. The order recorded by the District Forum is set aside. The complaint of the respondent is dismissed on the ground that the deceased had fraudulently suppressed material facts at the time of making proposal for insurance and so committed breach of confidence between the insured and insurer under the insurance contract in the terms of Section 45 of the Insurance Act, and also the declaration made by him at the time of proposal. No order as to cost.
12. Apex Court in Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd, IV (2009) CPJ 8(SC),in Paras 12,13,17 and 18 has held;
12.. Nonetheless, it is a contract of insurance falling in the category of contract uberrimae fidei, meaning, a contract of utmost good faith, on the part of the assured. Thus, it needs little emphasis that when an information on a specific aspect is asked for in the proposal form, an assured is under a solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge.It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not.Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses. His opinion of the materiality of that knowledge is of no moment (See: Joel Vs. Law Union & Crown Ins.Co.[1908] 2 K.B. 863).
13. In United India Insurance Co. Ltd. Vs. M.K.J. Corporation, III (1996) CPJ 8 (SC) =(1996)6 SCC 428, this Court has observed that it is a fundamental principle of insurance law that utmost faith must be observed by the contracting parties. Good faith forbids either party from non-disclosure of the facts which the party privately knows, to draw the other into a bargain, from his ignorance of that fact and his believing the contrary.(Also see: Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., II (2000)SLT 323 = I(2000) CPJ 1 (SC)=(2000)2 SCC 734).
17. The term material fact is not defined in the Act and, therefore, it has been understood and explained by the courts in general terms to mean as any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact which goes to the root of the Contract of Insurance and has a bearing on the risk involved would be material.
18. As stated in Pollock and Mullas Indian Contract and Specific Relief Acts, any fact the knowledge or ignorance of which would materially influence an insurer in making the contract or in estimating the degree and character of risks in fixing the rate of premium is a material fact.
13. Since, deceased was suffering from Cirrhosis of liver, CKD and was on Hemodialysis since 2005, we have no hesitation in holding that the deceased had suppressed the material facts from the respondents, while obtaining the insurance policy in question.
14. Under section 21(b) of the Act, this Commission can interfere with the order of the State Commission where such State Commission has exercised jurisdiction not vested in it by law, or has failed to exercise jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.
15. We do not find that there is any error, irregularity or infirmity in the impugned order passed by the State Commission in dismissing the complaint of the petitioner and allowing the appeal of the respondents. Consequently, we affirm the decision of the State Commission. With the result, the complaint filed by the petitioner before the District Forum, stand dismissed.
16. No order as to cost.
..J (V.B. GUPTA) PRESIDING MEMBER . (REKHA GUPTA) MEMBER SSB,