State Consumer Disputes Redressal Commission
Shanti Devi Jhanwar vs Lic Of India on 1 May, 2009
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION, RAJASTHAN, JAIPUR APPEAL NO: 109/2004 & 104/2004 Smt.Shanti Devi Jhanwar, r/o Damodar Colony, Rammohalolah, Outside Nagauri Gate, Jodhpur. Complainant-appellant Vs. 1. Life Insurance Corporation of India, Chairman, Mumbai. 2. Sr. Divisional Manager, Life Insurance Corporation of India, Jeevan Prakash, Circuit House Road, Jodhpur. 3. Br.Manager, Life Insurance Corporation of India, Unit Ist, Opp.Railway Station, Jodhpur 4. Br.Manager, Life Insurance Corporation of India, Unit IInd, Chaupasani Avasan Mandal, Jodhpur. Opposite parties-respondents Date of judgment 1.5.09 Before: Mr.Justice Sunil Kumar Garg-President Mrs.Vimla Sethia-Member 2 Mr.Manoj Bhardwaj counsel for the complainant appellant Mr. Ram Kalyan Sharma counsel for the respondents LIC JUDGMENT
BY THE STATE COMMISSION ( PER HON. MR.JUSTICE SUNIL KUMAR GARG, PRESIDENT ) The above mentioned two appeals are being decided by this common judgment as in both of them parties are the same and question of law and facts are also the same and the claim of the complainant appellant was decided by the District Forum through common judgment and the claim in respect of LIC policy bearing no. 100493853 ( 31.3.98 ) for a sum of Rs.1 lac was allowed but in respect of two other policies bearing no. 100854727 ( 28.1.2000 ) for a sum of Rs. 1 lac and another policy bearing no. 100856170 ( 15.3.2000 ) for a sum of Rs. 5 lacs was dismissed.
APPEAL NO: 109/2004 ( Complaint no. 166/2002 )( LIC policy bearing no. 100854727 ( 28.1.2000 ) for a sum of Rs.1 lac This appeal has been filed by the complainant appellant against order dated 3.12.03 passed by the District Forum, Jodhpur in complaints no. 166/02 by which the claim in respect of LIC policy bearing no. 100854727 ( 28.1.2000) for a sum of Rs. 1 lac was dismissed.
2. It arises in the following circumstances-
3That the complainant appellant had filed a complaint before the District Forum,Jodhpur on 29.4.02 inter alia stating that her husband Pukhraj Jhanwar, now deceased had taken LIC policy from the respondents for a sum of Rs. 1 lac bearing policy no. 100493853 on 31.3.98 ( there is no dispute on the point that claim in respect of this policy was decreed by the District Forum and no appeal was filed by the respondents LIC) and the deceased had taken another policy bearing no. 100854727 on 28.1.2000 for a sum of Rs. 1 lac. It was further stated in the complaint that the deceased had felt pain in his chest on 22.7.2000 and he was got admitted in the M.G. Hospital, Jodhpur where he had died on the same day. It was further stated in the complaint that after the death of the deceased claim was preferred by the complainant respondent being the wife and nominee of the deceased before the office of the respondents but that claim was repudiated by the respondents through letter dated 31.3.01 on the ground that at the time of taking the policy the deceased had filled in up a declartion form regarding his health on 15.12.99 in which he had not mentioned that he was suffering from any kind of disease but they had the sufficient proof to prove the fact that the deceased was a patient of heart nine years before giving the declaration regarding his health on 15.12.99 for which he had consulted a medical man and since these facts were not disclosed by the deceased in his declaration form on 15.12.99 at the time of taking the policy, therefore, the deceased was guilty of suppression of material facts regarding his health. Thereafter the present complaint was filed.
4A reply was filed by the respondents in shape of the affidavit on 27.9.02 and in the reply they have taken the same pleas which were taken by them in the repudiation letter dated 31.3.01. Apart from that it was stated in the reply that the deceased was admitted in the MG Hospital, Jodhpur on 22.7.2000 where at the time of admission the diseases of CAD, ( Coronary artery disease ) old Antero- Septal - Mycordial Infarction, Accute anterier wall with inferior wall Inschemia was diagnosed. It was further stated in the reply that since the deceased had died on the same day and since in the bed head ticket it was also mentioned that he was a patient of the above mentioned diseases since 1989 , therefore, it was a case of suppression of material facts regarding health on the part of the deceased and it was prayed that complaint of the complainant be dismissed as claim of the complainant was rightly repudiated by the respondents.
After hearing the parties, the District Forum, Jodhpur through impugned order dated 3.12.03 had allowed the complaint in respect of policy bearing no. 100493853 dated 31.3.98 but in respect of policy bearing no. 100854727 dated 28.1.2000 had dismissed the complaint inter alia holding-
(i) That in this case since the respondents had proved the fact that before filing in up the declaration form on 15.12.99 the deceased was a patient of heart and since that fact was not stated in the declartion form dated 15.12.99 , therefore, it was a case of 5 suppression of material facts regarding health on the part of the deceased.
(ii) That the respondents were justified in repudiating the claim of the complainant appellant.
Aggrieved from the said order dated 3.12.03 passed by the District Forum, Jodhpur, this appeal has been filed by the complainant appellant.
3. In this appeal, the main contention of the learned counsel for the appellant complainant is that since there is nothing on record to prove the fact that prior to 15.12.99 the date on which the declaration form was filled in up by the deceased regarding his health, the deceased had taken any treatment from any doctor or had admitted in any hospital for taking the treatment and thus in absence of these facts, it could not be said that the deceased was a patient of heart prior to giving the declaration regarding his health on 15.12.99 and thus the claim of the complainant appellant was wrongly repudiated by the respondents through letter dated 31.3.01 and the District Forum had committed serious error and illegality in dismissing the claim of the complainant appellant. Hence the impugned order could not be sustained and liable to be quashed and set aside and this appeal deserves to be allowed.
4. On the other hand, the learned counsel appearing for the respondents has supported the impugned order of the District Forum.
5. We have heard the learned counsel for the appellant as well 6 as for the respondents and gone through the entire materials available on record.
6. There is no dispute on the point that the deceased had taken LIC policy bearing no. 100854727 on 28.1.2000 for a sum of Rs. 1 lac from the respondents.
7. There is also no dispute on the point that at the time of taking the policy a declaration was made by the deceased on 15.12.99 and in that declaration he had not mentioned that he was suffering from any kind of disease .
8. There is no dispute on the point that after taking the policy the deceased was admitted for the first time in the MG Hospital, Jodhpur on 22.7.2000 and the diagnosis which was made by the doctors was that he was suffering from heart disease though in the bed head ticket it was mentioned that this disease could be since 1989.
9. There is no dispute on the point that the deceased had died on 22.7.2000 because of heart disease , meaning thereby within one year of issuance of the policy.
10. There is no dispute on the point that the claim of the above mentioned policy was repudiated by the appellants through letter dated 31.3.01 on the grounds mentioned therein.
11. Thus, in the facts and circumstances just narrated above, the question for consideration is whether the findings recorded by the District Forum could be sustained or not and whether the 7 repudiation of the claim of the complainant appellant by the respondents was justified or not.
12. In our considered opinion since prior to 15.12.99 the date on which declaration form was filled in up by the deceased, there is nothing on record to show that the deceased had ever taken treatment from any doctor in respect of heart disease or had ever been admitted in any hospital for taking the treatment.
13. It may be stated here that the past history recorded in the bed head ticket of the hospital could not be trated as primary piece of evidence to prove any fact unless and until the doctor who had recorded that history had been produced and primary evidence would be of the doctor who had recorded the information in the bed head ticket. For that law laid down in the case of LIC Vs. Dr. P.S.Agarwal reported in NCJ 2005 181 (NC) may be referred to.
14. In this case the doctor who had recorded the past history had not been produced and,therefore, no reliance could be placed on past history recorded in the bed head ticket.
15. Since in the present case there is no documentary proof or evidence available on record to show that the deceased was admitted in any hospital for taking the treatment of heart disease prior to filling in up the declaration form on 15.12.99 , it could not be said that the deceased was guilty of suppression of material facts about his health. No doubt in the bed head ticket it was mentioned that the deceased was suffering from the disease of heart for the last nine years but to corroborate to prove that entry, no documentary proof or evidence or material has been produced by the respondents showing that the deceased had 8 earlier taken the treatment of heart disease in any hospital.
Symptoms of Heart Attack
16. Atherosclerosis of the coronary arteries may develop slowly to a point where complications occur without warning. Sudden death may occur and advanced diseases of the coronary arteries are the commonest cause of sudden death with or without warning symptoms .
17. Thus, chest pain or discomfort similar to angina but lasting more than 15 minutes may mean a heart attack. This means that a portion of the heart muscle actually dies due to sudden but prolonged oxygen shortage. A heart attack may occur due to insufficient blood flow through a narrowed coronary artery or due to the formation of a blood clot on the diseased lining of the coronary artery.
18. Furthermore, for diagnosing the heart disease, some necessary tests are ECG, echo, doppler, angioraphy etc. and until and unless they are done, heart disease could not be diagnosed.
19. In this case since there is nothing on record to prove the fact that the deceased had undergone any of the abovementioned tests for heart and therefore, the respondents had misrably failed to produce any document or paper to show that the deceased had taken the treatment for the disease of heart prior to filling in up the declaration form regarding his health on 15.12.99 and thus it could not be said that it was a case of suppression of material facts regarding his health on the part of the deceased.
920. For the reasons stated above, the respondents were not justified in repudiating the claim of the complainant appellant on the ground of suppression of material facts rearding heart disease and the respondents have repudiated the claim of the complainant appellant without any basis and on wrong assumption and in an arbitrary manner and it amounted to deficiency in service on the part of the respondents. The findings of the District Forum dismissing the claim of the complainant appellant are not based on correct appreciation of entire materials and evidence available on record and they suffer from any basic infirmity or illegality or perversity and case of the complainant appellant in respect of policy bearing no. 100854727 for a sum of Rs. 1 lac deserves to be accepted and accordingly this appeal filed by the complainant deserves to be allowed to that extent.
APPEAL NO: 104/2004 ( COMPLAINT NO: 171/2002 ) ( LIC policy bearing no. 100856170 ( 15.3.2000 ) for a sum of Rs.5 lacs
21. This appeal has been filed by the complainant appellant against order dated 3.12.03 passed by the District Forum, Jodhpur in complaints no. 171/02 by which the claim in respect of LIC policy bearing no. 100856170 ( 15.3.2000 ) for a sum of Rs. 5 lacs was dismissed.
22. It arises in the following circumstances-
That the complainant appellant had filed a complaint before the District Forum,Jodhpur on 2.5.02 inter alia 10 stating that her husband Pukhraj Jhanwar, now deceased had taken LIC policy bearing no.
100856170 on 15.3.2000 for a sum of Rs. 5 lacs from the respondents and the deceased had also taken a policy earlier to that bearing no. 100854727 for a sum of Rs. 1 lac on 15.12.99. It was further stated in the complaint that the deceased had felt pain in his chest on 22.7.2000 and he was got admitted in the M.G. Hospital, Jodhpur where he had died on the same day. It was further stated in the complaint that after the death of the deceased claim was preferred by the complainant respondent being the wife and nominee of the deceased before the office of the respondents but that claim was repudiated by the respondents through letter dated 31.3.01 on the ground that at the time of taking the policy the deceased had filled in up a declartion form regarding his health on 4.3.2000 in which he had not mentioned that he was suffering from any kind of disease but they had the sufficient proof to prove the fact that the deceased was a patient of heart ten years before giving the declaration regarding his health on 4.3.2000 for which he had consulted a medical man and since these facts were not disclosed by the deceased in his declaration form on 4.3.2000 at the time of taking the policy, therefore, the deceased was guilty of suppression of material facts regarding his health. Thereafter the present complaint was filed.
A reply was filed by the respondents on 1.8.02 and in the reply they have taken the same pleas which were taken by them in the repudiation letter dated 31.3.01. Apart from that it was stated in the reply that the deceased was 11 admitted in the MG Hospital, Jodhpur on 22.7.2000 where at the time of admission the diseases of CAD ( Coronary artery disease ) old Antero- Septal - Mycordial Infarction, Accute anterier wall with inferior wall Inschemia was diagnosed. It was further stated in the reply that since the deceased had died on the same day and since in the bed head ticket it was also mentioned that he was a patient of the above mentioned diseases since 1989 , therefore, it was a case of suppression of material facts regarding health on the part of the deceased. It was further stated in the reply that since the deceased had taken this policy within a short period of four months for a sum of Rs. 5 lacs and this fact goes to show that this policy was taken by the deceased knowingly that he was a patient of heart and, therefore, non-mentioning of the heart disease could certainly amount to suppression of material facts regarding health on the part of the deceased and it was prayed that complaint of the complainant be dismissed as claim of the complainant was rightly repudiated by the respondents.
After hearing the parties, the District Forum, Jodhpur through impugned order dated 3.12.03 had dismissed the complaint in respect of policy bearing no.100854727 dated 28.1.2000 and in respect of policy bearing no.
100856170 dated 15.3.2000 inter alia holding-
(i) That in this case since the respondents had proved the fact that before filing in up the declaration form on 4.3.2000 the deceased was a patient of heart and since that fact was not stated in the declartion form 12 dated 4.3.2000 , therefore, it was a case of suppression of material facts regarding health on the part of the deceased.
(ii) That from a bare perusal of the income tax returns of the deceased, it appears that for the assessment year 1996-97, the deceased had assessed his income for a sum of Rs. 1,10,310/-, for the year 1997-98 for a sum of Rs. 67,690/- and for the year 1998-99 for a sum of Rs. 1,13,000/- and further the premium for the policy in question which was for a sum of Rs. 5 lacs, the deceased was to pay a sum of Rs. 37,936/- as yearly premium and apart from that he was paying the premium for another earlier two policies taken by him and therefore, looking to his status taking the policy for a sum of Rs. 5 lacs comes under the shadow of doubt on the point that it could not be said that the deceased was not aware of the fact that he was a patient of heart .
(iii) That the respondents were justified in repudiating the claim of the complainant appellant.
Aggrieved from the said order dated 3.12.03 passed by the District Forum, Jodhpur, this appeal has been filed by the complainant appellant.
23. In this appeal, the main contention of the learned counsel for the appellant complainant is that since there is nothing on record to prove the fact that prior to 4.3.2000 the date on which 13 the declaration form was filled in up by the deceased regarding his health, the deceased had taken any treatment from any doctor or had admitted in any hospital for taking the treatment of heart and thus the claim of the complainant appellant was wrongly repudiated by the respondents through letter dated 31.3.01 and the District Forum had committed serious error and illegality in dismissing the claim of the complainant appellant. Hence the impugned order could not be sustained and liable to be quashed and set aside and this appeal deserves to be allowed.
24. On the other hand, the learned counsel appearing for the respondents has supported the impugned order of the District Forum.
25. We have heard the learned counsel for the appellant as well as for the respondents and gone through the entire materials available on record.
26. There is no dispute on the point that the deceased had taken LIC policy bearing no.
100856170 on 15.3.2000 for a sum of Rs. 5 lacs from the respondents
27. There is also no dispute on the point that at the time of taking the policy a declaration was made by the deceased on 4.3.2000 and in that declaration on 4.3.2000 , he had not mentioned that he was suffering from any kind of disease .
28. There is no dispute on the point that prior to taking the policy bearing no.
100856170 on 15.3.2000 for a sum of Rs. 5 lacs , the deceased had earlier taken a policy bearing no. 100854727 on 28.1.2000 for a sum of Rs. 1 lac, meaning thereby 14 within three months of taking the policy , the deceased had taken another policy for a sum of Rs. 5 lacs.
29. There is no dispute on the point that after taking the policy the deceased was admitted for the first time in the MG Hospital, Jodhpur on 22.7.2000 and the diagnosis which was made by the doctors was that he was suffering from heart disease though in the bed head ticket it was mentioned that this disease could be since 1989.
30. There is no dispute on the point that the deceased had died on 22.7.2000 because of heart disease, meaning thereby within one year of issuance of the policy.
31. There is no dispute on the point that the claim of the above mentioned policy was repudiated by the appellants through letter dated 31.3.01 on the grounds mentioned therein.
32. Thus, in the facts and circumstances just narrated above, the question for consideration is whether the findings recorded by the District Forum could be sustained or not and whether the repudiation of the claim of the complainant appellant by the respondents was justified or not.
33. It may be stated here that it is the fundamental principle of insurance law that utmost good faith must be observed by the contracting parties and good faith forbids either party from non-disclosure of the facts which the parties known. The insured has a duty to disclose and similarly it is the duty of the insurance company and its agents to disclose all material facts in their knowledge since obligation of good faith applies to both equally 15 and in this respect, the decision of the Hon'ble Supreme Court in M/s.Modern Insulators Ltd. Vs. Oriental Insurance Co. (AIR 2000 SC 1014) may be referred to.
34. The onus probandi, in cases of fraudulent suppression of material facts rests heavily on party alleging fraud namely the insurer. In this respect, the decision of the Hon'ble Supreme Court in LIC Vs. Smt. G.M.Channabasemma (1996 (III) CPJ 8 (SC) may be referred to where it was held that the burden of proving that the insured had made false representation and suppressed material facts is undoubtedly on the LIC of India. Furthermore, mere concealment of some facts will not amount to concealment of material facts and if there is fraudulent suppression of material facts in the proposal, the policy could be vitiated otherwise not.
35. Suppression of fact must be a conscious operation of the giver of the answer which he knowingly did not disclose.
36. The Hon'ble National Commission in National Insurance Co. Ltd. Vs. Bipul Kunda (2005 CTJ 377 (CP) (NCDRC) ) has held that for repudiating a claim of an insured, it is for the insurer to show that a sttement on a fact, which was material for the policy, had been suppressed by the insured and that statement was fraudulently made by him/her with the knowledge of the falsity of that statement.
37. It may be stated here that no doubt in this case the another policy was taken by the deceased on 4.3.2000 after giving a declaration regarding his health in which he had not mentioned that he was suffering from any kind of disease but while deciding this appeal the fact that prior to taking this policy, the deceased 16 had earlier taken a policy on 15.12.99 for a sum of Rs. 1 lac had to be taken into consideration and as per the record of MG Hospital, Jodhpur where the deceased was admitted on 22.7.2000 and the deceased had died on the same day due to heart disease, it could be inferred that after taking the earlier policy for a sum of Rs. 1 lac i.e. on 15.12.99 and before taking the policy for a sum of Rs. 5 lacs on 4.3.2000, the deceased was aware of the fact that he had become a patient of heart as during that period he would have felt some trouble in heart and that is why within a few months of taking the earlier policy , the deceased had taken another policy for a huge amount of Rs. 5 lacs and this amount itself shows that the deceased had taken this policy knowingly that he was a patient of heart and he was also under imagination that he could die at any time due to heart disease and therefore, to save that eventuality he had gone for taking another policy for a huge amount within a period of three months.
38. It may further be stated here that no doubt in respect to deciding the claim of earlier policy for a sum of Rs. 1 lac, it was not found that that was a case of suppression of material facts regarding health on the part of the deceased but taken into consideration the period of three months, it clearly appears that the deceased was cautious that he had become the patient of heart and had taken another policy for a sum of Rs. 5 lacs and since he had not stated in the declaration form dated 4.3.2000 that he was a patient of heart, therefore, non-disclosure of the fact of heart disease, would certainly amount to suppression of material facts regarding health on the part of the deceased as the statement which was made by the deceased for taking the policy for a sum of Rs. 5 lacs on 4.3.2000 was fraudulently made by him and with the knowledge of the falsity of that statement.
1739. Apart from that the fact that the deceased had paid income tax in the year 1998-99 on Rs. 1,13,000/- and the yearly premium of the policy for a sum of Rs. 5 lacs was Rs.38,000/- and this fact also goes to show that this policy was taken by the deceased beyond his capacity for making the payment of premium and when the position is like this, it also goes to prove the fact that it was taken with fraudulent intention and after suppressing material facts regarding his health.
40. It may further be stated here that if the insured had a reason to know of a disease he must disclose it, but if he had no suspicion of the existance thereof, he is not bound to disclose it and in the present case so far as the suppression of material facts in respect of earlier policy bearing no. 100854727 taken by the deceased for a sum of Rs. 1 lac was concerned, this Commission had come to the conclusion that upto that date i.e. 15.12.99 , it could easily be said that the deceased was not a patient of heart but after taking the policy for a sum of Rs. 1 lac on 15.12.99 and taking another policy for a sum of Rs. 5 lacs on 4.3.2000, it could not be said that the deceased was not aware of the fact that he had now become the patient of heart, therefore, non-disclosure of the disease of heart at the time of taking the policy on 4.3.2000 would amount to suppression of material facts regarding health on the part of the deceased.
41. Further what is material information is concerned, this term has not been defined in the Insurance Act and material for the purpose of taking the policy would mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer. When this aspect is considered, it clearly touch the heart that in the present 18 case while taking the policy for a sum of Rs. 5 lacs on 4.3.2000, the deceased was hundered percent sure that he was a patient of heart and non-disclosure of that fact in the declaration form dated 4.3.2000 regarding health on the part of the deceased would certainly amount to suppression of material facts regarding health on the part of the deceased.
42. It may further be stated here that everything is material which will guide a prudent insurer in determining whether he will take the risk and if so, at what premium and on what conditions. In determining the question whether a particular fact is one which ought to be disclosed, the test to be applied is not what the assured thinks but whether a prudent and experienced insurer would be influenced in his judgment if he knew of it. The test is not whether the insurer in question, even if he is a prudent one, would have himself been influenced, but whether applying the standard of the judgment of a prudent insurer, the insurer in question would have been influenced in his judgment. There are dicta to suggest that the test is ' what would a reasonable assured consider material ?
43. Had there would have been no knowledge that he was a patient of heart, he should have not taken another policy for a sum of Rs. 5 lacs within a period of three months and taking the policy for Rs. 5 lacs within a short period of three months from the date of taking the earlier policy i.e. 15.12.99 and raising the insured amount from Rs. 1 lac to Rs. 5 lacs beyond capacity of payment, would certainly lead to the conclusion that this policy was taken by the deceased knowingly that he was a patient of heart and thus he was suppressing the material information regarding his health.
37. Thus, for the reasons stated above, it is held that non-
19mentioning of the disease heart in the declaration form dated 4.3.2000 by the deceased would amount to suppression or concealment of material fact or misstatement in real sense and,therefore, the respondents were justified in repudiating the claim of the complainant appellant in respect of policy bearing no. 100856170 for Rs. 5 lacs on ground of suppression of material facts and the respondents were justified in repudiating the claim of the complainant appellant and in view of this, the findings of the District Forum dismissing the claim of the complainant appellant are liable to be confirmed as they are based on correct appreciation of entire materials and evidence available on record and they do not suffer from any basic infirmity, illegality or perversity and this appeal deserves to be dismissed.
35. In the result both appeals filed by the complainant appellant are decided in the following manner:
(i) That the appeal no. 109/2004 filed by the complainant appellant in respect of policy bearing no. 100854727 ( 15.12.99 ) is allowed in the manner that the respondents would pay a sum of Rs. 1 lac, the amount of the policy in question to the complainant appellant alongwith interest @ 9% p.a. from the date of filing of the complaint i.e. 29.4.02 till the payment is made and further to pay a sum of Rs.3000/- as costs and to that extent the impugned order dated 3.12.03 passed by the District Forum, Jodhpur stands modified.
(ii) That the appeal no. 171/2002 filed by the complainant 20 appellant in respect of policy bearing no. 100856170 ( 4.3.2000 ) for a sum of Rs. 5 lacs is dismissed.
(Vimla Sethia) (Justice Sunil Kumar Garg )Member President