National Consumer Disputes Redressal
Life Insurance Corporation Of India & ... vs Smt. Maya Devi on 20 August, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1327 OF 2008 (Against the Order dated 30/11/2007 in Appeal No. 1955/2004 of the State Commission Rajasthan) 1. LIFE INSURANCE CORPORATION OF INDIA & ANR. SENIOR DIVISIONAL MANAGER, DIVISIONAL OFFICE, JEEVAN PRAKASH, RANA DE MARG, AHMER 2. LIFE INSURANCE CORPORATION OF INDIA ZONAL MANAGER, ZONAL OFFICE, BHAWANI SINGH ROAD, JAIPUR 3. THROUGH ASSISTANT SECRETARY NORTHERN ZONAL OFFICE, JEEVAN BHARTI, CONNAUGHT CIRCUS, NEW DELHI ...........Petitioner(s) Versus 1. SMT. MAYA DEVI RESIDENT OF KUMBHPURIA, POST OFFICE NANGAL KOJU, TEHSIL CHAUMU, DISTRICT JAIPUR, RAJASTHAN ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE D.K. JAIN, PRESIDENT HON'BLE MRS. M. SHREESHA, MEMBER For the Petitioner : Mr. Ashok Kashyap, Advocate For the Respondent : Ms. S. Janani, Advocate Mr. Sunanda Raha, Advocate Dated : 20 Aug 2015 ORDER
1. This Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), has been filed by the Life Insurance Corporation of India (for short "the Corporation"), the Opposite Party in the Complaint under the Act, against the order, dated 30.11.2007, passed by the Rajasthan State Consumer Disputes Redressal Commission at Jaipur (for short "the State Commission") in Appeal No. 1955 of 2004. By the impugned order, while concurring with the finding recorded by the District Consumer Disputes Redressal Forum at Jaipur, Rajasthan (for short "the District Forum") that there was deficiency in service on the part of the Corporation in repudiating the claim made by the Respondent/Complainant, pursuant to accidental death of her husband, the State Commission has dismissed the Appeal. The Appeal had been preferred against the order, dated 14.09.2004, passed by the District Forum in the Complaint being no.284 of 2004, preferred by the Respondent. While allowing the Complaint, the District Forum had directed the Corporation to pay to the Respondent a sum of ₹1,00,000/-, payable under the policy in question, along with interest @ 9% per annum from the date of the Complaint, i.e. 22.03.2002, till realization, besides ₹1000/- as litigation expenses.
2. Succinctly put, the facts giving rise to the present Revision Petition, as culled out from the Complaint, are that on 25.12.2000, after paying the due premium, one Om Prakash Jangid (for short "the Insured"), the husband of the Respondent/Complainant, had proposed to obtain a life insurance policy, viz., Jeewan Kiran, from the Corporation. The Complainant was made the nominee in the policy in question, which was valid w.e.f. 11.09.2000. The installments as against the said policy were being deducted from the salary of the Insured and paid up-to-date. As per the policy, a sum of ₹50,000/- was payable to the nominee in case of death of the Insured and a sum of ₹1,00,000/- if the death was caused by an accident. During the validity period of the policy, on 10.02.2001, the Insured met with an accident at Chaumu Bus Stand and unfortunately passed away. In this connection, an FIR, No. 42/2001, was also lodged with the Police. Immediately, the Complainant informed the Corporation at Chittorgarh, where the Insured was working, about the death of the Insured. Vide their letter dated 08.03.2001, the Corporation informed her that necessary action in the matter would be taken by their Head Office at Ajmer. Subsequently, the Complainant approached the Corporation's Head Office, claiming a sum of ₹1,00,000/- under the policy in question. All the documents as sought for by the Corporation, viz. the original policy bond, copy of the FIR, FR, Post Mortem Report etc. were furnished. Yet, the Corporation kept on demanding time and again some or the other document. Vide their letter dated 23.06.2001, the Corporation asked for certified copies of the leave record and medical reimbursement forms of the Insured. Vide their letter dated 26.09.2001, the Corporation also sought some other documents from the Complainant, viz. the certified copies of the "Antim Parinam" (perhaps final settlement bills of payments to be made on the death of the Insured) and order sheet. Having failed to elicit any positive response from the Corporation with regard to the processing of her claim, on 05.01.2002 the Complainant got issued a legal notice to the Corporation, asking for immediate settlement of the claim.
3. Vide their letter dated 12.02.2002, the Corporation repudiated the claim, on the ground that the Insured had withheld the correct information regarding his health, at the time of taking the policy in question. According to the Corporation, prior to taking the policy in question, for the last five months the Insured was suffering from Acute & Trensient Psychotic Disorder, for which he had consulted doctors; had taken treatment in the hospital; and was also on medical leave for 15 days from 17.04.2000 to 02.05.2000, but these facts were not disclosed by the Insured at the time of taking the policy in question and, therefore, the claim could not be paid because of concealment of material information.
3. Contending that before taking the policy in question the Insured had been examined by the Corporation's own Doctor and the Insured having died on account of an accident, which had no nexus with the disease, the Insured was alleged to be suffering; the non-disclosure of the previous ailment was not a valid ground for repudiation of the claim, alleging deficiency in service on the part of the Corporation in not honouring the genuine claim, the Respondent/Complainant preferred the afore-noted Complaint before the District Forum, praying for directions to the Corporation to pay to her: (i) ₹1,00,000/- being the sum assured with interest @ 18% per annum w.e.f. 10.02.2002; (ii) ₹10,000/- being the unnecessary expenses on travelling for collecting the documents sought for; (iii) ₹25,000/- towards mental agony suffered; and (v) ₹2000/- as litigation expenses.
4. Upon consideration of the evidence adduced by both the parties and bearing in mind the fact that the death of the Insured was not caused due to any disease but because of an accident, which occurred on 10.02.2001 at the Chaumu Bus Stand, which had not been denied by the Corporation in their written statement, and that the Corporation had failed to prove that the Insured was suffering from Acute & Trensient Psychotic Disorder, the District Forum held that the repudiation of the claim under Section 45 of the Insurance Act, 1938 was not proper. Accordingly, the District Forum allowed the Complaint and issued the afore-stated directions to the Corporation.
5. Being aggrieved, the Corporation preferred Appeal before the State Commission. On re-appraisal of the entire material placed before it, including the statement of Dr. Shiv Gautam, who had treated the Insured for Acute & Trensient Psychotic Disorder, wherein he had deposed that the said disease does not affect the life span of a patient and that such a patient cannot be the victim of an accident, because even with the said disease he would try to save himself if there is apprehension of any accident, the State Commission observed that at the time when the policy was obtained, the Insured had been fully cured; there was nothing on record to show that there was recurrence of the said disease thereafter; the said information was not so material to influence the judgment of the Insurer whether to grant insurance cover or not; and also there was nothing on record to show that because of the said disease, the Insured had met with the accident. Consequently, the State Commission dismissed the Appeal. Hence, the present Revision Petition.
6. The question for consideration is as to whether or not there was suppression of any "material fact" by the Insured, having material bearing on the repudiation of the claim by the Insurance Company under the policy in question?
7. In Satwant Kaur Sandhu vs. New India Assurance Company Ltd. (2009) 8 SCC 316, it has been observed by the Supreme Court that the expression "material fact" is to be understood in general terms to mean as any fact which would influence the judgment of a prudent Insurer, in deciding whether to accept the risk or not. If the proposer has knowledge of such fact, he is obliged to disclose it, particularly while answering questions in the proposal form. Any inaccurate answer will entitle the Insurer to repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance, which is based on the principle of utmost faith - uberrima fides. 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. It has also been emphasized that 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.
8. Bearing in mind the afore-noted principle, governing a contract of insurance, we advert to the facts at hand. The relevant questions in the proposal form, on which strong reliance is placed by the Corporation, and, which were required to be replied by the Insured, were:
"11(a). During the last five years did you consult a medical Practitioner for any ailment requiring treatment for more than a week?
(c) Have you remained absent from place of work on grounds of health during the last 5 years?
(d) Are you suffering from or have you ever suffered from Diabetes, tuberculosis, High Blood Pressure, Low Blood Pressure, Cancer, Epilepsy, Hernia, Hydrocele, Leprosy or any other Disease?"
9. Admittedly, all the questions were answered in the negative by the Insured. Undoubtedly, these were "material facts" and being within the knowledge of the Insured only, he was obliged to disclose the same correctly in the proposal form, issued to him for the purpose of obtaining the policy in question. It is manifest from the statement of Dr. Shiv Gautam, Superintendent, Psychiatric Centre, Jaipur (page 51 of the paper-book) that during the period from 17.04.2000 to 02.05.2000 the Insured was under his treatment for the disease "Acute Transient Psychotic Disorder", as also from the Medical Certificate (Exhibit D-5) and the Office Order issued by the Employer of the Insured (Exhibit D-6), placed at pages 51 and 49 respectively of the paper-book, that during the afore-stated period the Insured was on medical leave. Though learned Counsel for the Complainant has vehemently contended that the ailment, with which the Insured was suffering, had no nexus with the cause of death i.e. by accident, but the question of nexus does not arise for the simple reason that the claim has been repudiated by the Corporation on the ground of non-disclosure of the factum of previous history of his afore-stated disease. As observed by the Hon'ble Supreme Court, the question of relevancy of the said information is to be decided by the Insurer and not the Insured. Further, since the proposal for obtaining the policy in question was made on 25.12.2000 and just seven months prior to the same, he had been treated for the afore-said disease and was also on medical leave, it is not possible to believe that he had forgotten about both the facts, which were to be answered in questions 11(a) and (c), noted above.
11. Having given our anxious consideration to the material on record, we are of the opinion that the answers given by the Insured in the proposal form were untrue to his knowledge. There was clear suppression of "material facts" in regard to the health of the Insured. As afore-stated, it was not for him to decide whether the information sought for in the aforesaid questionnaire was material for the purpose of the policy in question. At any rate, the statements made in the proposal form were untrue and incorrect. We are, therefore, of the opinion that the Corporation was justified in repudiating the claim made by the Complainant.
12. Resultantly, the Revision Petition is allowed and the orders of the Fora below are set aside, leaving the parties to bear their own costs.
......................J D.K. JAIN PRESIDENT ...................... M. SHREESHA MEMBER