State Consumer Disputes Redressal Commission
Mrs.Renuka Ramasamy,B1, Sudarshan, ... vs Lic Of India,Rep. By Senior Divisional ... on 24 December, 2010
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT Tmt.Vasugi Ramanan, M.A. B.L., MEMBER I Thiru.S.Sambandam, B.Sc., MEMBER II F.A.376/2007 [Against order in C.C.594/2005 on the file of the DCDRF, Chennai (South)] DATED THIS THE 24th DAY OF DECEMBER 2010 Mrs.Renuka Ramasamy, | B1, Sudarshan, No.5, 2nd Street, | Appellant / Complainant Dr.Thirumurthy Nagar, Nungambakkam, | Chennai 600 034. | Vs. LIC of India, | Respondent / Opposite Party Rep. by Senior Divisional Manager, | Divisional Office-I, LIC Building, 102, Anna Salai, | Chennai 600 002. | The Appellant / complainant filed a complaint before the District Forum against the opposite party praying for the direction to the opposite party to pay the policy amount of Rs.10 lakhs together with the interest at the rate of 18% per annum from 28.04.2003 till date, to pay compensation of Rs.5 lakhs towards mental agony, hardship and inconvenience suffered by the complainant and to pay Rs.2,000/- towards the cost. The District Forum allowed the complaint, against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.10.04.2007 in C.C.594/2005. This appeal coming before us for hearing finally on 12.11.2010, upon hearing the arguments of either counsels and perused the documents, written submission of respondent as well as the order of the District Forum, this commission made the following order: Counsel for the Appellant /Complainant : Mr.V.Balaji, Advocate. Counsel for the Respondent / Complainant : Mr.S.Chandrasekar, Advocate. M. THANIKACHALAM J, PRESIDENT 1.
The complainant, having failed in her attempt to satisfy the District Forum in claiming the insurance amount, has come to this Commission for the same relief, by way of appeal.
2. The complainants husband by name Ramaswamy Pillai, who was a District & Sessions Judge, had taken a life endowment policy in the month of June 2002, for the sum assured Rs.10 lakhs, at the instance of the LIC Agent, who induced him and canvassed him, to take the policy. The assured though signed in the Proposal Form, the agent alone filled up the proposal form, by himself. The assured who was paying the premium regularly, died on 28.04.2003 due to cardiac arrest. The complainant, as nominee and LR, who is entitled to the benefits of the policy, claimed the sum assured, which was repudiated on flimsy, frivolous and untenable technical grounds, thereby causing mental agony to the complainant, for which, she is entitled to a sum of Rs.5 lakhs, in addition to, the sum assured namely Rs.10 lakhs. Despite repeated requests, since the amount was not paid, the complainant was constrained to file the case for the recovery of the sum assured, with compensation of Rs.5 lakhs.
3. The opposite party admitted the policy taken by the assured, as per the Proposal dated 19.06.2002 as well admitting the payment of premium also, resisted the claim, inter alia contending that though the assured had taken treatment, incurred expenses, which was also reimbursed by the Government to some extent, suppressed the same while giving proposal, thereby he was guilty of, suppressing the number of leave taken for medical treatment and on that basis, the claim was justifiably, legally repudiated, which cannot be termed as deficiency in service, thereby praying for the dismissal of the complaint, denying other averments also.
4. The District Forum, based upon the documents produced by the parties as well as perusing the affidavits and taking into certain unchallenged facts, came to the conclusion, that the assured was suffering from cancer, from 2001 onwards, he was under continuous treatment even during the date of submitting the proposal form on 19.6.2002, wherein, he has suppressed the material facts, including taking medical leave, that should be construed as suppression of material facts.
It is the further conclusion of the District Forum, that on the basis of the above proved fact alone, the opposite party had repudiated the claim, which cannot be treated as deficiency in service.
In this view, the case came to be dismissed on 10.04.2007, which is impugned by the complainant as said above.
5. The opposite party has filed CMP.1341/2010 before this Commission for reception of additional documents and the said petition was allowed on 12.10.2010 and the documents produced along with the petition, are marked as Ex.B12 to Ex.B14.
6. The complainants husband had taken a life endowment policy of insurance, as evidenced by Ex.A1 under which, the opposite party had assured risk coverage of Rs.10 lakhs. At the time of taking the policy, he had given the proposal, namely Ex.B12. The Agent, who canvassed, has submitted a report, which is exhibited as Ex.B13. The Doctor, who examined the assured, based upon query and answers given by the assured, as well as by the clinical examination, issued medical examiners confidential report, marked as Ex.B14. Unfortunately, the assured expired, due to cardiac arrest on 28.4.2003 that is within a year. The claim preferred by the nominee was repudiated, resulting the complaint, which also ended in failure, resulting this appeal.
7. It is the settled preposition of law, that the burden is upon the opposite party, to prove that the assured namely Ramasamy Pillai had suppressed the material facts, and thereby, by his conduct, he made the contract, namely, the policy void or unenforceable. Before going into the question of suppression of material fact, so as to conclude, whether it was suppressed by the assured or not. Let us remind ourselves, what is material fact. The Honble Apex Court had an occasion to consider the suppression of material facts, including, whether the policy had obtained with a fraudulent act, by the insured, wherein, it is held, proposal can be repudiated, if a fraudulent act is discovered.
It is further held, from fact of the records, the insured had intention, to obtain a policy by suppressing the material facts, that would be seen from the deliberate wrong answers given by the assured, which has a great bearing, on the contract of insurance, if discovered may lead to the police being vitiated in law.
8. In the year 2009, in Satwant Kaur Sandhu Vs. New India Assurance Company Ltd., reported in 2009 CTJ 956 (Supreme Court) (CP), the Apex Court had considered, what is the meaning for material fact though it is not defined, in the Insurance Act, wherein, it is held The term material fact is not defined in the Insurance Act. However, any fact which goes to the root of the contract of insurance and has a bearing on the risk involved would be material. Further, as seen from Para 19 of the judgement, the Apex Court has extracted the definition available in the regulation of the Insurance Regulatory and Development Authority, wherein, the explanation reads Material for the purpose of these regulations shall mean and include all important, essential and relevant information in the context of underwriting the risk to be covered by the insurer. Thus, analyzing the meaning for material fact, a conclusion was reached, that if the proposer had knowledge about certain facts, which he is obliged to disclose it particularly for the question framed, giving answer, that should be taken as suppression of material fact. If that kind of facts, which are necessary to conclude the contract, between the parties are suppressed, that should be taken as suppression of material fact. It is also observed in Para 17 The term material fact is not defined in Act and, therefore, it has been understood explained by the Courts in general terms to make as any fact which would influence the judgement a prudent insurer in fixing the premium 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 involve would be material. If the assured had disclosed the disease suffered by him, at the time of taking proposal, the acceptance of the policy or premium may be different.
9. In the proposal form, many questions were framed, expecting correct answers from the proposer or the person to be insured, which is based upon good faith. The very purpose of framing questions, would indicate, that answers to be declared by the assured must be material or material facts. Therefore, a person who was suffering from disease or the person, who was taking treatment for certain disease, had failed to answer the query in this regard correctly for the questions framed, then that should be taken as suppression of material facts. Having the above principles in mind, now we have to see the facts of the case.
10. In the Proposal Form under the heading Personal History, for the following queries, the answers were given as NO and they are:-
(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
(c) Have you remained absent from place of work on ground of health during the last 5 years? :: NO
(e) Are you suffering from or have you ever suffered from Diabetes, Tuberculolsis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other disease? :: NO
(i) What has been your usual state of health? :: GOOD
10. For the above queries, the answers given as NO are not disputed. An attempt was made to say, as if, the assured signed in the place pointed out by the Agent and the other particulars were filled up by the Agent himself. It is not the case of getting the signature in blank form, then the Agent on his own filled up. Therefore, it is evident even from Para 4, that as requested by the Agent, the deceased had signed in the form, probably after filling the same and therefore, the deceased cannot disown the correctness of the statement or he or his heirs cannot take different stand at later point of time. The assured was not an ordinary illiterate or a common man, whereas, he was serving as District and Sessions Judge, holding a responsible post in the district level judicial post. Therefore, the contention of the complainant that, as if, without knowing the contents in the proposal, the assured had signed is not acceptable to us.
If this kind of explanation is accepted, no useful purpose would be served, in getting the answers, in the proposal form.
Therefore, we are unable to accept the case, as if, the agent without knowledge of the complainants husband, filled up the particulars, and the same should be an after thought. In this view, if the answers given in the proposal form are proved to be false, then as pointed out by us supra, it should be construed, as suppression of material facts. The submission of the learned counsel for the appellant, assuming that the complainants husband was suffering from certain disease, the non-disclosure of the same in the proposal form will not amount to suppression of material fact is not acceptable to us. The opposite party, had framed questions aiming to get correct answers, since they thought these are all material facts, to be disclosed, under the good faith for the purpose of accepting the offer, thereby to reach a concluded contract.
Thus, the answers to be given in the proposal form, as indicated above, are material in nature. Now, we have to see, what was the state of health at the time of taking policy, by the insured.
11. The proposal was given on 19.6.2002, commencement of the policy with effect from 15.7.2002. The documents relied on by the opposite party namely Ex.B1 to Ex.B11, as well as Ex.B12 to Ex.B14 are not under challenge. The assured, due to cervical spondylosis had taken medical leave between 13.11.2000 and 22.11.2000, as evidenced by Ex.B1 and for the same problem, he had taken medical leave for the period from 23.11.2000 to 02.12.2000 as evidenced by Ex.B2, in addition to, another medical leave as seen from Ex.B3.
In the year 2001 November, it seems, the assured was suffering from Cancer Cheek Right, for which, he had taken treatment between 1.11.2001 to 16.11.2001, availing medical leave, similarly for a period from 4.10.2001 to 5.12.2001 also, he has taken leave, as seen from Ex.B5 and for the subsequent period, he has taken medical leave, for the treatment of the same disease under Ex.B6, that is in the month of March 2002 as evidenced by Ex.B7, Ex.B8 and Ex.B9. As inpatient, staying at Apollo Specialty Hospital, the assured had taken treatment between 7.2.2001 to 15.3.2001, for which, he claimed reimbursement from the Government, which was sanctioned under Ex.B10 and the disease was Carcinoma in Cheek. By the production of the above documents, the opposite party has made out a case that the assured had not only consulted a medical practitioner for ailment, but also admitted in the hospital, for treatment and remained absent, from the place of work on the ground of health also, which are all suppressed by him, as seen from the answers given to questions a, b and c as indicated above. The assured was suffering from Carcinoma in Cheek is also not in dispute, though it was urged, it was not a cancer, but classified under Oncology, thereby coming more or less as cancer, which he suppressed while giving answer for the question C. Having suffered due to so many disease, as indicated, when he was asked to disclose about his health condition, he declared Good, which is also against the truth, which should be construed as suppression of material facts.
12. The examination of the LIC Doctor, before accepting the insurance by the Medical Examiner as seen from Ex.B14 also will not operate as estoppel against the LIC of India, since this report is given, by the doctor concerned, on the basis of examination, as well on the basis of the answers given by the assured, as seen from the Certificate appended, to the Medical Examiners Confidential Report, wherein also, the assured had signed, which was certified by the doctor that the assured had signed in his presence. We do not find any reason, to say that in these documents, signature of the assured was obtained, later filled up by the Agent.
Thus, it is made out, when the proposal was given, he was suffering from diseases and even prior to that, the assured was suffering from disease as indicated in the leave application filed by him, which are all suppressed, probably to induce the LIC of India, to accept the offer even that can be said as fraud played by the assured, in entering into the contract.
13. The learned counsel for the appellant would urge, that the documents relied on by the opposite party will not prove the suppression of material facts or even assuming that he had suppressed certain disease, that cannot be taken as material facts to be disclosed, which submission, we are unable to endorse, in view of the Supreme Court decisions, cited above. In this case, we are not very much concerned, the cause of death of assured. We are very much concerned, whether he had suppressed the material facts, which he did, according to us, for the reasons recorded supra. In this view, the policy itself is vitiated. Considering all these facts, the Insurance Company has legitimately and justifiably, repudiated the policy, which was accepted by the District Forum, and we find no reason to differ or deviate from the said findings, whereas, we are constrained to concur, with the findings. Thus, the appeal fails, liable to be dismissed.
14. In the result, the appeal is dismissed, confirming the order passed by the District Consumer Disputes Redressal Forum, Chennai [South], in O.P.594/2005, dated 10.04.2007. Under the facts and circumstances of the case, there will be no order as to cost in this appeal.
S. SAMBANDAM VASUGI RAMANAN M.THANIKACHALAM MEMBER II MEMBER II PRESIDENT INDEX : YES / NO Ns/mtjBank