State Consumer Disputes Redressal Commission
Lic Of India vs Vimla Devi on 24 March, 2009
BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION, RAJASTHAN, JAIPUR APPEAL NO: 1077/2008 1. Life Insurance Corporation of India, through Sr.Divisional Manager, Jaipur. 2. Life Insurance Corporation of India, through its Br. Manager, Moti Doonagari, Alwar. Opposite parties-appellants Vs. Smt.Vimla Devi, r/o Village Sajanpara, Post Bhanokhar, Teh.Kathumar Distt. Alwar. Complainant-respondent Date of judgment 24.3.2009 Before: Mr.Justice Sunil Kumar Garg- President Mrs.Vimla Sethia-Member Mr.Ram Kalyan Sharma counsel for the appellants Mr. Ajay Tantia counsel for the respondent 2 JUDGMENT
BY THE STATE COMMISSION, ( PER HON. MR.JUSTICE SUNIL KUMAR GARG, PRESIDENT ) This appeal has been filed by the appellants LIC against order dated 26.9.07 passed by the District Forum, Alwar in complaint no. 111/2006 by which the complaint of the complainant was allowed in the manner that the appellants were directed to pay a sum of Rs. 50,000/- the amount of the LIC policy alongwith interest @ 9% p.a. w.e.f. 16.1.05 and further to pay a sum of Rs.5000/- as amount of compensation for mental agony and R.3000/- as amount of costs.
2. It arises in the following circumstances-
That the deceased complainant respondent had filed a complaint before the District Forum,Alwar on 22.2.06 inter alia stating that her husband Raghuveer Prasad, now deceased was a constable in the Deptt. of Police, Govt. of Rajasthan and he had taken a life insurance policy for a sum of Rs. 50,000/- from the appellants bearing policy no. 193353828 on 30.5.02. It was further stated in the complaint that the deceased had died on 16.1.05 and on the date of death he was also in the employment of the Govt. of Rajasthan and 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 appellants but that claim was repudiated by the appellants through letter dated 4.4.05 on the ground that before taking the policy in question the deceased had 3 filled in up a declartion form regarding his health on 30.5.02 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 prior to that , the deceased was suffering from Para Schizophremia, Disthymia, Insornnia and had consulted the medical man and had taken the treatment from the hospital and medical man and he had also taken medical leave for 447 days from 17.9.99 to 1.1.01 and since these facts were not disclosed by the deceased in his declaration form on 30.5.02 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 appellants on 20.6.06 and they have taken the same pleas which were taken by them in the repudiation letter dated 4.4.05. It was further stated in the reply that prior to giving the declaration regarding health on 30.5.02 the deceased had taken treatment from Johri Hospital & Medical Centre, Alwar on 15.10.01 for the disease known as Para Schizophremia and Disthymia and the deceased was again admitted in the same hospital on 22.1.02 for taking the treatment and he was further admitted in the same hospital on 28.4.01 and the deceased had taken the treatment from Dr.J.S.Sharma, a Psychiatrist for the disease Insomnia. It was further stated in the reply that a person suffering from the disease of Para Schizophremia and Dysthymia would have a tendency to commit suicide and since the deceased had died after committing suicide, therefore, the fact that the deceased was a patient of above 4 mentioned disease prior to filling in up the declaration form on 30.5.02 is well proved. It was further stated in the reply that prior to filling in up the declaration form on 30.5.02 the deceased had taken so many leaves on medical grounds and from that point of view also if the fact of taking medical leave was not mentioned in the declaration form , it would amount to suppression of material facts regarding health on the part of the deceased and it was prayed that claim was rightly repudiated by the appellants and complaint be dismissed.
After hearing the parties the District Forum, Alwar through impugned order dated 26.9.07 had allowed the complaint inter alia holding that -
(i) That since the deceased was performing his duties upto the date of his death, therefore, the fact that he was a patient of mental disease could not be found established.
(ii) That the appellants were not justified in repudiating the claim of the complainant respondent and it had amounted to deficiency in service on the part of the appellants.
Aggrieved from that order dated 26.9.07 passed by the District Forum, Alwar , this appeal has been filed by the appellants.
3. In this appeal the main contention of the learned counsel for the appellants is that before issuance of policy in question on 5 30.5.02 , the deceased was suffering from the disease of Para Schizophremia, Disthymia and Insomnia for which he took medical treatment from the doctor and also remained on medical leave for so many days and since these facts were not disclosed by the deceased deliberately in his declaration form on 30.5.02 , therefore, he was guilty of suppression of material facts regarding health and thus on that ground the claim of the complainant respondent was rightly repudiated by the appellants through letter dated 4.4.05 and the District Forum had committed serious error and illegality in decreeing the claim of the complainant respondent. Hence the impugned order could not be sustained and liable to be quashed and set aside and this appeal be allowed.
4. On the other hand, the learned counsel appearing for the respondent has supported the impugned order of the District Forum and has argued that since the death of the deceased in the present case had taken place after two years of the issuance of the policy, therefore, complainant respondent is entitled to the benefit of S.45 of the Insurance Act and this appeal be dismissed.
5. We have heard the learned counsel for the appellants as well as for the respondent and gone through the entire materials available on record.
6. There is no dispute on the point that the deceased had taken a life insurance policy for a sum of Rs. 50,000/- from the appellants bearing policy no. 193353828 on 30.5.02.
7. There is also no dispute on the point that at the time of taking insurance policy , a declaration was made by the deceased and in that declaration on 30.5.02 , he had not mentioned that he 6 was suffering from any kind of disease or had taken any treatment from any hospital.
8. There is also no dispute on the point that deceased had died on 16.1.05 meaning thereby just after two years of issuance of the policy.
9. There is no dispute on the point that the claim of the above mentioned policy was repudiated by the appellants through letter dated 4.4.05 on the grounds mentioned therein.
10. From the record which has been produced, it is well proved that the deceased had taken treatment from Suraj Devi Mundhra Govt. Hospital, Bikaner on 7.2.98 and a medical sickness certificate was issued by the doctor on 27.10.98 showing that the deceased was a patient of acute depression for the period from 27.10.98 to fifteen days.
11. From the record it is also proved that the deceased had taken treatment from Mansik Rog Nidan Kendra, Johri Hospital, Alwar from Dr. Ajay Saxena on 1.1.02 and thereafter he took the treatment from him regularly and the disease which was diagnosed by the doctor was Para Schizophremia and Disthymia.
12. Further from the record it appears that the treatment for the abovementioned diseases remained continued for so many days as is evident from the record which reveals that the deceased had taken the treatment on 1.1.02, 22.1.02, 10.2.02, 25.2.02, 20.1.03, 3.8.03. 31.8.03, 23.1.04, 8.3.04, 14.3.04 and 25.4.04.
713. From the record it is also established that the complainant respondent had given information to the office of the appellants on 8.2.05 inter alia stating that the deceased had died on 16.1.05 after committing suicide.
14. From the certificate given by the employer of the deceased which had been filed by the appellants before this Commission, it is further clear that the deceased had taken medical leave for the following period:-
1. From 17.9.99 to 30.10.99 44 days
2. From 21.11.99 to 28.1.2000 69 days
3. From 2.2.2000 to 1.1.01 334 days
4. From 6.4.01 to 7.4.01 2 days
5. From 12.7.01 to 2 days
6. From 6.4.01 to 7.4.01 2 days
15. 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 respondent by the appellants was justified or not.
16. Before proceeding further what the disease Schizophrenia and Dysthymia means has to be mentioned here. The disease "schizophremia" means-
" Any of several psychotic disorders characterized by distortions of reality and disturbances of thought and language and withdrawal from social.....8
A psychiatric diagnosis denoting a persistent, often chronic, mental illness variously affecting behavior, thinking and emotion...
Psychosis characterized by the breakdown of integrated personality functioning, withdrawal from reality, emotional blunting and distortion and disturbances in thought and behaviour.
A group of mental disorders characterized by abnormal thoughts, moods, and actions, suffers have a distorted sense of reality and a split personality ( thoughts do not logically fit together) A psychiatric disorder that usually involves problems with perceptions or expressions of reality, significant social or occupational problems, disorganized thinking and delusions or hallucinations.
The most common type psychosis, characterized by extensive withdrawal of the individual's interest from other people and the outside world and the investment of it in his/her own self.
A group of severe mental disorders in which a person has trouble telling the difference between real and unreal experiences, thinking logically, having normal emotional responses to others and behaving normally in social situations.."9
17. The disease " Dysthymia" means-
"Dysthymia, sometimes referred to as chronic depression, is a less severe form of depression but the depression symptoms linger for a long period of time, perhaps years. Those who suffer from dysthymia are usually able to function adequately, but seem consistently unhappy."
18. It may further be clarified here that a patient of the disease of Dysthymia has a tendency to commit suicide as is found in the medical science.
19. Taken into consideration the fact that since the deceased had taken the treatment for the diseases of Schizophremia and Dysthymia from Mansik Rog Nidan Kendra Johri Hospital since January 2001 i.e. prior to 30.5.02 and that treatment remain continued for so many years, therefore, it could easily be said that at the time of filling in up the declaration form regarding health on the part of the deceased on 30.5.02 , the deceased was aware of the fact that he was a patient of the above mentioned diseases and non-mentioning of the above mentioned diseases at the time of taking the policy on 30.5.02 would certainly amount to suppression of material facts regarding his health on the part of the deceased in real sense as such type of diseases could not be said to be a routine diseases.
20. It may further be stated here that merely because the deceased was a government servant and had remained on duty upto the date of death would not mean that he was not a patient of above mentioned diseases as from the record it is very much clear that the deceased had taken medical leave on so many occasions 10 and at one occasion he had taken medical leave for 334 days continuously for the period 2.2.2000 to 1.1.01 and that period also falls prior to filling in up the declaration form regarding health on the part of the deceased. Thus, from the record of medical leave it is well proved that the deceased had remained on medical leave for so many days prior to 30.5.02 and since that aspect was also not mentioned by the deceased in the declaration form on 30.5.02 at the time of taking the policy in question, it would amount to suppression of material facts regarding health on the part of the deceased fraudulently.
21. Taking into consideration the facts and circumstances just mentioned above the next question is whether in the present case benefit of S.45 of the Insurance Act could be given to the complainant respondent or not.
22. It may be stated here that in this case the policy in question was taken by the deceased on 30.5.02 and the deceased had died on 16.1.05 meaning thereby just after two years and seven months of the issuance of the policy.
23. As already stated above, the death of the deceased had taken place after two years of the issuance of the policy and if the policy is called in question after passing of two years of its being effected, heavy burden lies on the insurer and in such case, insurer is required to prove the following facts-
(a) That policy holder concealed or suppressed material facts.
(b) That such suppression or concealment was 11 fraudulently made by the policy holder.
(c) That policy holder was aware at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. In other words, policy holder knowingly and deliberately gave incorrect information in the personal statement.
24. Since in this case from the record it has been proved by the appellants that the policy in question was taken by the deceased on 30.5.02 for a sum of Rs.50,000/- and the deceased had taken the treatment for the diseases of Schizophremia and Dysthymia from Mansik Rog Nidan Kendra Johri Hospital since January 2001 and that treatment remain continued for so many years and further he had taken medical leave on so many occasions and at one occasion he had taken medical leave for 334 days continuously for the period 2.2.2000 to 1.1.01 i.e. prior to 30.5.02 and since in the declaration form which was filled in up by the deceased on 30.5.02 in which he had not mentioned the abovementioned diseases though he was a patient of the abovementioned diseases and should have been aware that he was a patient of the abovementioned diseases, therefore, it could easily be said that the deceased had suppressed the diseases of Schizophremia and Dysthymia with fraudulent intention.
25. Apart from that in the present case, it could be said that there was nexus between the cause of death of the deceased and the diseases known as Schizophremia and Dysthymia as a person suffering from the disease of Dysthymia would have tendency to commit suicide and since in the present case the death of the deceased was the result of suicide, therefore, it could easily be 12 held that there was nexus between the cause of death of the deceased and the diseases known as Schizophremia and Dysthymia and thus this fact of committing suicide would be treated as a material fact so far as the death of the deceased was concerned and non-mentioning of the abovementioned diseases in the declaration form on 30.5.02 would certainly amount to suppression of material facts regarding health on the part of the deceased and further it could be held that the these facts were not disclosed by the deceased deliberately, knowingly, fraudulently and intentionally and, therefore, such suppression and concealment which was made by the deceased would amount to fraudulent suppression on the part of the deceased and thus benefit of S.45 of the Insurance Act could not be made available to the complainant respondent.
26. For the reasons stated above, it is held that repudiation of claim of complainant respondent by the appellants through letter dated 4.4.05 on ground of suppression of material facts regarding health by the deceased was justified and no illegality or irregularity has been committed by the appellants in repudiating the claim of complainant respondent and in view of this, the findings of the District Forum decreeing the claim of the complainant respondent could not be sustained and the same are liable to be quashed and set aside as they are wholly illegal, erroneous and perverse one and the appeal deserves to be allowed.
27. During the course of arguments the learned counsel for the complainant respondent has stated that in case the appeal of the appellants is going to be allowed, in such circumstances; some amount of compensation as ex-gratia be allowed to the complainant respondent who is an illiterate widow and poor lady.
13On ex-gratia payment
28. Ex-gratia payments are made as an act of grace, if the damage caused is outside the scope of the policy terms, or the liability under the policy is doubtful. In such cases the payment is made as an act of grace on humanitarian grounds. As a matter of fact, the loss or damage is outside the terms of the policy but the insurer takes a lenient view on humanitarian grounds. In such cases, full amount to indemnify the damages is not made. Such payments do not place the insurer under an obligation to make such payments in similar circumstances in future.
29. Further ex-gratia payment of claim would arise where there was no legal liability on the Life Insurance Corporation to make payment as in the case of repudiated claim or unconcluded contract. Such claims are paid to mitigate hardship to the claimants by way of equitable relief. The analysis, particularly of a repudiated claim for consideration of an ex-gratia payment, would be a skilful exercise on the part of the concerned officers of the opponent Life Insurance Corporation of India. Ex-gratia payment cannot be claimed as a matter of right. For that the law laid down by the Hon'ble National Commission in the case of LIC Vs. Shashi Gupta ( 1994) 2 CPR 622 (NC) ) may be referred to.
30. Further the word 'ex-gratia' payment itself means a payment which is voluntarily and charitable in nature and since the C.P.Act,1986 is based on the principle of equity, therefore, hypertechnicalities could be ignored and equitable consideration should be kept in mind while deciding the matter.
1431. However, looking to the entire facts and circumstances of the case and looking to the fact the LIC policy was for a sum of Rs.50,000/- and looking to the fact that the deceased had committed suicide and on humanitarian consideration, this Commission thinks it just and proper to award ex-gratia amount of Rs.20,000/- in lumpsum to the complainant respondent.
32. It is further made clear that ex-gratia payment to the tune of Rs.20,000/- in lumpsum is being given to the complainant respondent who is a widow, not as a matter of right but taken into consideration the facts and circumstances that the condition of a widow in India is not good and in the present case the complainant respondent is a widow lady.
33. In view of the discussions made above, this appeal filed by the appellants is allowed and the impugned order dated 26.9.07 passed by the District Forum, Alwar is quashed and set aside and the complaint of the complainant respondent is dismissed. However, the appellants LIC would pay a sum of Rs.20,000/- in lumpsum as ex-gratia payment to the complainant respondent within a period of two months from today.
Member President